1019-00001 · Haber Reinhardt Schlosser Partners · Correspondence/Client

strategy-update-post-document-production.docx DOCUMENT M&A / Corporate

7 / 35 ← → ✕

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP Counselors at Law

600 Lexington Avenue New York, NY 10022

Telephone: (212) 486-7200 Facsimile: (212) 486-7201 www.calderwoodharkness.com

April 30, 2023

Dana Prescott, Esq. Vice President & General Counsel Whitmore Aerospace LLC 4200 Wilson Boulevard, Suite 1100 Arlington, VA 22203

Re: ICC Case No. 27914/MHM — Kestrel Dynamics GmbH v. Whitmore Aerospace LLC Engagement No.: 1019-00001 Subject: Strategy Update Following Document Production Under Procedural Order No. 2

Dear Dana:

I. Purpose and Overview

This letter provides a comprehensive update on the results of the document production phase completed pursuant to Procedural Order No. 2 ("PO No. 2"), issued by the Tribunal on March 17, 2023. Since our last status report, significant developments have occurred in the arbitration that bear directly on the strength of Whitmore Aerospace LLC's ("WAL" or "Respondent") defensive and affirmative positions. We write to ensure that you and the broader WAL leadership team have a thorough understanding of the current posture of this matter and the strategic considerations that will guide our work over the coming weeks and months.

Specifically, this letter (i) summarizes the key categories of documents obtained from Kestrel Dynamics GmbH ("Kestrel" or "Claimant") during the document exchange phase and analyzes their implications for WAL's defense against Kestrel's claims of material breach of the Master Supply Agreement dated June 15, 2018 (the "MSA"); (ii) assesses the impact of the produced documents on WAL's counterclaim of €5.17 million for replacement-component costs incurred as a direct consequence of Kestrel's quality failures; and (iii) outlines the work plan and timeline leading to the filing of Respondent's Statement of Defense and Counterclaim, which is due on June 30, 2023.

As you are aware, Kestrel filed its Statement of Claim on April 28, 2023 (the "SOC"). Kestrel's SOC sets forth total damages claimed of €47.3 million, encompassing lost profits for the remaining term of the MSA and two optional renewal periods, unreimbursed rework costs on rejected lots, and a substantial claim for reputational damages. We provide our initial assessment of the SOC below in Section V. As a preliminary matter, however, we are pleased to report that the documents obtained during the production phase materially strengthen WAL's position on the central factual and legal issues in this arbitration.

This letter is intended solely for the purpose of providing legal advice in connection with the above-referenced arbitration and is protected by the attorney-client privilege and the work-product doctrine. It should not be disseminated beyond the individuals identified on the copy line without prior consultation with this office.

II. Procedural Background

For ease of reference, we set forth below a recap of the key procedural milestones that have occurred since our last status report, together with the upcoming deadlines that will govern the next phase of the arbitration.

The Tribunal was constituted on January 20, 2023. It consists of Prof. Dame Eleanor Fitzwilliam, who serves as Presiding Arbitrator, Dr. Hans-Ulrich Perren, who was nominated by Claimant, and the Hon. Robert A. Castillo (ret.), who was nominated by Respondent. As we discussed at the time of their appointment, this is a well-credentialed panel with substantial experience in complex commercial and industrial-supply disputes. Prof. Dame Fitzwilliam, in particular, has presided over several high-value ICC arbitrations involving international manufacturing and supply agreements, and her published writings suggest a rigorous approach to contractual interpretation and evidentiary standards. We believe the composition of the Tribunal is favorable to WAL's position.

A preliminary procedural conference was held on February 14, 2023, at which the parties and the Tribunal addressed the procedural timetable, applicable rules of evidence, and the scope and mechanics of document production. Following that conference, the Tribunal issued Procedural Order No. 1 ("PO No. 1"), which established the overall procedural calendar for the arbitration, including deadlines for written submissions, expert reports, and the evidentiary hearing.

Procedural Order No. 2 was issued on March 17, 2023. PO No. 2 established the document production schedule and directed that requests and objections be submitted in Redfern Schedule format, consistent with Article 3 of the IBA Rules on the Taking of Evidence in International Arbitration, which the parties agreed at the procedural conference would serve as guidelines for document production. In accordance with the schedule set forth in PO No. 2, Calderwood & Harkness filed Respondent's document production requests on behalf of WAL, together with objections to certain categories of documents requested by Claimant. Our objections were directed primarily at Kestrel's requests for WAL's internal supplier diversification strategy documents and communications relating to WAL's negotiations with Valkyr Precision Components Inc. ("Valkyr"), which we argued were irrelevant to the issues in dispute and protected by commercial sensitivity concerns. The Tribunal ruled on the objections and largely sustained WAL's position on these categories, as discussed further in Section III.E below.

The document exchange was completed in accordance with the deadlines established under PO No. 2. Both parties made their respective productions, and we have now had the opportunity to conduct a thorough initial review of the documents received from Kestrel. The analysis set forth in this letter is based on that review.

Kestrel filed its Statement of Claim on April 28, 2023, within the deadline established by PO No. 1. Respondent's Statement of Defense and Counterclaim is due on June 30, 2023. The remaining procedural calendar, including deadlines for Claimant's Reply and Defense to Counterclaim, Respondent's Rejoinder, expert reports, and the evidentiary hearing, is set forth in Section VI.C below.

III. Summary of Documents Obtained from Kestrel

The document production phase yielded a substantial volume of material from Kestrel. Following our initial review and analysis, we have identified five principal categories of documents that are of particular significance to WAL's defense and counterclaim. We summarize each category below, together with our assessment of its evidentiary value.

A. Internal Quality Testing Records

Among the most consequential documents produced by Kestrel are its internal quality-assurance testing reports for the fourteen rejected lots that are at the center of this dispute. These lots, designated Lot KDG-2022-0307 through Lot KDG-2022-0919, encompass a total of 1,680 units of precision titanium-alloy turbine housings delivered by Kestrel to WAL between March and September 2022. WAL rejected each of these lots pursuant to the quality-control procedures set forth in the MSA and WAL's Quality Control Procedure WAL-QCP-100, on the grounds that the units failed to meet the contractual porosity specification of ≤0.25%, as set forth in WAL-SPEC-TH-401, Appendix C, Table 3.

The central factual dispute in this arbitration is whether WAL's lot rejections were substantively justified. Kestrel has alleged in its Statement of Claim that WAL applied an unpublished or improperly strict porosity tolerance of ≤0.15% — a standard that Kestrel contends was never contractually agreed upon and was unilaterally imposed by WAL as a pretext for terminating the MSA. The documents produced by Kestrel during this phase significantly undermine that allegation.

Specifically, Kestrel's own internal porosity measurements for several of the rejected lots show readings that exceed the contractual porosity specification of ≤0.25%. While not all of Kestrel's internal test results exceed this threshold, the data for at least five of the fourteen rejected lots reflect porosity readings in the range of 0.27% to 0.34%. These readings are above the contractual limit by a meaningful and, in certain instances, substantial margin. Notably, these findings are consistent with and corroborative of the independent test results obtained by Dr. Raymond Chow of Arclight Materials Science Inc. ("Arclight"), WAL's retained metallurgical expert. In his preliminary assessment, Dr. Chow identified porosity levels ranging from 0.19% to 0.38% across the fourteen rejected lots, with the majority of lots testing above the 0.25% contractual limit.

In addition to the raw test data, the production included several internal Kestrel quality memoranda that reference awareness among Kestrel's quality-assurance team of porosity control challenges during the March through September 2022 production period. These memoranda include communications to and from Dr. Stefan Voss, Kestrel's Head of Quality Assurance, in which Dr. Voss and members of his team acknowledge difficulties in maintaining porosity within acceptable parameters. One memorandum, dated approximately June 2022, expressly references "persistent challenges in achieving target porosity levels" in the titanium-alloy casting process used for the WAL turbine housings. Another memorandum, from later in the summer of 2022, discusses the results of internal re-testing of certain lots and notes that "several samples remain outside the ≤0.25% specification."

These documents are highly probative. They provide direct, contemporaneous evidence from Kestrel's own records that corroborates WAL's position on the central factual issue in this case. They undermine Kestrel's theory that WAL applied an unpublished or improperly strict porosity tolerance, because Kestrel's own internal testing — conducted independently of and prior to WAL's receiving-inspection testing — identified the same quality failures. We anticipate that these documents will be central to both our written submission and the cross-examination of Kestrel's witnesses at the evidentiary hearing.

B. Internal Communications Between Kestrel Personnel

In addition to the quality testing records discussed above, Kestrel produced a number of internal email chains and communications between its senior management personnel regarding the lot rejections and WAL's quality complaints. These communications provide a valuable window into Kestrel's internal understanding of the situation as it unfolded.

The produced emails include exchanges between Friedrich Brenner (Managing Director), Luisa Erdmann (Commercial Director), and Dr. Stefan Voss (Head of Quality Assurance) discussing the lot rejections by WAL and Kestrel's response. Several of these emails are significant for multiple reasons.

First, a number of the email exchanges suggest that Kestrel was aware that its cure efforts for the rejected lots were not completed within the 45-calendar-day cure period specified in the MSA as amended. As you will recall, the original MSA provided for a 30-calendar-day cure period under Section 8.4. This period was extended to 45 calendar days by Amendment No. 2 to the MSA, dated September 3, 2021, which the parties negotiated in recognition of the complexity of the rework process for the high-temperature titanium-alloy components. Despite this extension, Kestrel's own internal communications indicate that cure efforts for multiple lots extended well beyond the 45-day period, and in certain instances were never completed at all. An email from Dr. Voss to Mr. Brenner, dated in mid-2022, expressly notes that the rework timeline for two specific lots "will exceed the contractual cure window," and discusses options for requesting a further extension from WAL, which WAL ultimately did not grant.

Second, the internal communications reflect a clear awareness within Kestrel's management team that WAL had documented multiple uncured rejections that were approaching — and ultimately exceeded — the Persistent Quality Failure threshold defined in Section 8.4 of the MSA. Under that provision, three or more uncured rejections within a rolling twelve-month period constitute a "Persistent Quality Failure," which entitles the non-breaching party to terminate the MSA for cause under Section 14.2(b). Several emails from mid-to-late 2022 discuss this risk explicitly, with Mr. Brenner asking in one communication whether there was "any way to dispute the count of uncured rejections." This awareness is significant because it directly undermines Kestrel's claim that WAL's termination was pretextual and unexpected.

Third, we identified a particularly notable communication from Luisa Erdmann to Friedrich Brenner, sent in late September 2022 — prior to WAL's October 3, 2022 Notice of Termination — in which Ms. Erdmann references Kestrel's inability to meet WAL engineering specifications for the high-temperature variant of the turbine housing that was added to the MSA by Amendment No. 1, dated February 10, 2020. The high-temperature variant is governed by WAL-SPEC-TH-410, which imposes additional performance and material specifications beyond those applicable to the standard turbine housing. Ms. Erdmann's email acknowledges that Kestrel has been "unable to consistently meet the [WAL-SPEC-TH-410] requirements" and suggests that this has been a contributing factor in the quality issues experienced during the March through September 2022 period. This communication is valuable because it further demonstrates that the quality failures underlying WAL's lot rejections were genuine and well-documented, rather than pretextual.

Collectively, these internal communications provide a powerful evidentiary foundation for cross-examination of Kestrel's witnesses — particularly Mr. Brenner, Ms. Erdmann, and Dr. Voss — at the evidentiary hearing currently scheduled for January 8–12, 2024. We are cataloguing these documents and preparing detailed cross-examination outlines that will be refined as we proceed through the written submission phase.

C. Financial and Commercial Records

Kestrel also produced certain financial and commercial records underlying its damages claim, including internal margin analyses, financial projections, and cost-of-goods-sold data. These documents are relevant both to WAL's defense against the quantum of Kestrel's claims and to the assessment of Kestrel's reputational damages claim.

Our initial review of the financial records, conducted in conjunction with our preliminary analysis of Kestrel's damages expert report by Prof. Dieter Langfeld of Rheinsberg Advisory AG, suggests that Kestrel's claimed profit margin of 22.4% on the WAL contract may be significantly inflated. Prof. Langfeld relied upon this 22.4% margin in calculating Kestrel's lost-profit damages for both the remaining MSA term and the two optional renewal periods. However, Kestrel's own internal financial documents — including monthly margin analyses and contract-level profitability summaries — reflect actual margins closer to 16% to 18% on the WAL contract during Contract Years 3 and 4 (approximately mid-2020 through mid-2022). The discrepancy between the claimed 22.4% margin and the actual margins reflected in Kestrel's own records is substantial and has significant implications for the damages analysis. If the actual margin is in the 16% to 18% range rather than 22.4%, Kestrel's lost-profit claim for the remaining term and renewal periods would be reduced by approximately 20% to 30%, depending on the assumptions applied to other variables such as volume projections and pricing escalations.

We have shared the relevant financial documents with Sandra Gillespie at Canfield & Thorpe LLP, who is conducting a forensic accounting review of Kestrel's financial data. Ms. Gillespie's analysis will inform the expert report to be prepared by Dr. Nadia Ostrovsky of Ridgeline Economic Consulting LLC, WAL's retained damages expert. We expect to receive Ms. Gillespie's preliminary findings in the coming weeks, which will be incorporated into the expert instruction memorandum being prepared for Dr. Ostrovsky.

With respect to the reputational damages claim, Kestrel also produced limited documentation regarding its communications with other potential customers, which Kestrel contends demonstrate that WAL's termination of the MSA caused Kestrel to lose other business opportunities valued at €3.90 million. Our review of these documents, however, reveals that they do not demonstrate any concrete lost business opportunities that are causally attributable to WAL's termination. The communications consist largely of general marketing correspondence and preliminary expressions of interest from potential customers, none of which progressed to the point of binding commitments or detailed negotiations. Moreover, several of the potential customers referenced in the documents appear to have declined to engage with Kestrel for reasons unrelated to the WAL termination, including pricing, capacity constraints, and competing bids from other suppliers. We will develop this point more fully in the Statement of Defense, and Dr. Ostrovsky's expert report will address the causation and quantification deficiencies in Kestrel's reputational damages claim.

D. AS9100 Rev D Audit Records

Kestrel produced its most recent AS9100 Rev D quality management system certification and related internal audit records. AS9100 Rev D is the internationally recognized quality management standard for organizations in the aviation, space, and defense industries, and compliance with this standard is a prerequisite for Kestrel's eligibility as a supplier to WAL and other aerospace manufacturers.

The produced audit records are significant because they indicate that Kestrel received nonconformance findings during an internal audit conducted in early 2022 — a date that predates the first rejected lot (Lot KDG-2022-0307, delivered in March 2022). The nonconformance findings related specifically to Kestrel's porosity testing and process-control protocols, including the calibration of porosity measurement equipment and the frequency of in-process quality checks during the casting process. While the audit records reflect that Kestrel initiated corrective action plans in response to these findings, the subsequent quality failures documented in the March through September 2022 lot rejections suggest that these corrective actions were either inadequate or not effectively implemented.

These records further support WAL's position that the quality failures underlying the lot rejections were genuine and systemic in nature, and that WAL's decision to reject the lots pursuant to WAL-QCP-100 was well-founded and consistent with both the contractual specifications and industry best practices. We expect these documents to be persuasive to the Tribunal, particularly when presented in conjunction with Dr. Chow's metallurgical expert report and the internal Kestrel quality memoranda discussed in Section III.A above.

E. Documents Kestrel Declined to Produce / Tribunal Rulings on Objections

As noted in the procedural background above, both parties raised objections to certain categories of document requests during the Redfern Schedule process.

Kestrel objected to producing certain categories of documents relating to its quality issues with customers other than WAL. In its objections, Kestrel asserted that such documents were commercially sensitive, contained proprietary business information regarding third-party relationships, and were not sufficiently relevant to the issues in dispute. While we maintained that such documents were relevant to establishing a pattern of quality-control deficiencies at Kestrel and would corroborate WAL's position, the Tribunal ruled that the request was overbroad in its current form. The Tribunal invited us to submit a more narrowly tailored request if appropriate, a course of action we are currently evaluating.

On the other side, our letter to the Tribunal objecting to certain of Kestrel's document requests was largely sustained. Specifically, Kestrel had requested production of WAL's internal documents relating to its negotiations with Valkyr Precision Components Inc. and WAL's internal supplier diversification strategy communications. We objected on the grounds that these documents were irrelevant to the contractual issues in dispute, were protected by commercial sensitivity, and that their production would impose an undue burden on WAL. The Tribunal agreed and did not order the production of these documents. This ruling is important because it limits Kestrel's ability to construct a pretextual-termination narrative based on WAL's exploration of alternative suppliers, a line of argument that Kestrel has nonetheless attempted to advance in its Statement of Claim, as discussed in Section V below.

IV. Implications for WAL's Defense

In light of the document production results summarized above, we set forth below our assessment of the implications for WAL's principal defensive positions and counterclaim.

A. Strengthened Position on Justified Rejections

The documents produced by Kestrel during this phase substantially reinforce WAL's core defense: that the fourteen lot rejections were substantively justified by porosity levels exceeding the contractual limit of ≤0.25% as set forth in WAL-SPEC-TH-401, Appendix C, Table 3. This is the single most important factual issue in the arbitration, and the evidentiary picture following document production is strongly favorable to WAL.

Kestrel's own internal quality-assurance testing records, as discussed in Section III.A, corroborate the independent test results that will be presented through Dr. Chow's expert report. The convergence between Kestrel's internal data and Dr. Chow's findings is significant because it eliminates any suggestion that WAL's testing methodology was flawed or that the test results were an artifact of calibration or measurement error. When the Tribunal considers the porosity data from both Kestrel's internal records and Dr. Chow's independent analysis, we expect it to find that the contractual porosity specification was exceeded for the majority of the rejected lots by a meaningful margin.

Moreover, the contractual porosity standard of ≤0.25% is expressly stated in the MSA's technical appendices, having been specifically negotiated and agreed upon by the parties at the time the MSA was executed in June 2018. There is no textual or extrinsic basis for Kestrel's allegation that WAL imposed an unpublished or unilaterally modified tolerance of ≤0.15%. The MSA's integration clause (Section 21.3) provides that the agreement, together with its appendices and amendments, constitutes the entire agreement of the parties and supersedes all prior negotiations and understandings. Kestrel's attempt to introduce extrinsic evidence of an alleged informal industry-standard tolerance is inconsistent with this provision and with New York law governing contract interpretation.

B. Proper Termination Under § 14.2(b)

The document production results also reinforce WAL's position that its Notice of Termination for Cause, issued on October 3, 2022, was properly invoked under Section 14.2(b) of the MSA, which permits termination upon the occurrence of a Persistent Quality Failure.

As defined in Section 8.4 of the MSA, a "Persistent Quality Failure" exists when three or more lot rejections remain uncured within the applicable cure period during a rolling twelve-month period. WAL documented seven uncured rejections in the rolling twelve-month period from March 7, 2022 (the delivery date of the first rejected lot, Lot KDG-2022-0307) through September 19, 2022 (the delivery date of the last rejected lot, Lot KDG-2022-0919). This is far in excess of the three-rejection threshold, giving WAL a clear contractual right to terminate.

The documents produced by Kestrel further validate this position by demonstrating Kestrel's failure to cure within the 45-calendar-day amended cure period for at least five of the seven uncured rejections. Kestrel's own internal communications, including the emails discussed in Section III.B, reflect that Kestrel's management was aware that cure efforts were not being completed within the contractual timeframe. The emails from Dr. Voss and others expressly acknowledge that rework timelines were exceeding the 45-day window and that the number of uncured rejections was approaching — and ultimately exceeding — the Persistent Quality Failure threshold.

These internal communications substantially weaken Kestrel's argument that WAL's termination was pretextual. If Kestrel's own management team recognized that cure efforts were failing and that the contractual threshold was being exceeded, it is difficult for Kestrel to credibly maintain that the termination came as a surprise or that it was motivated by reasons other than genuine quality concerns. We will develop this theme in the Statement of Defense and will use these documents prominently in our cross-examination plan for the evidentiary hearing.

C. Consequential Damages Waiver (§ 8.7)

Independent of the factual merits of WAL's lot rejections and termination, WAL's defense benefits from a strong contractual limitation on Kestrel's available remedies. Section 8.7 of the MSA contains an express mutual waiver of consequential damages arising from or related to quality failures and lot rejections. The provision states, in relevant part:

"In no event shall either Party be liable to the other Party for any indirect, incidental, special, consequential, or punitive damages of any kind, including without limitation lost profits, loss of revenue, loss of business opportunity, or reputational harm, arising out of or relating to any quality failure, lot rejection, cure failure, or termination pursuant to Section 14.2(b), regardless of whether such damages are based on contract, tort, strict liability, or any other theory. The non-breaching Party's sole and exclusive remedy in the event of a Persistent Quality Failure shall be limited to replacement, credit, or termination of this Agreement in accordance with Sections 8.4 through 8.6 and Section 14.2(b)."

The vast majority of Kestrel's damages claim — including the lost-profit claims of €12.83 million for the remaining MSA term and €27.15 million for the two optional renewal years, as well as the reputational damages claim of €3.90 million — is consequential in nature and is directly barred by this provision. Only Kestrel's claim for unreimbursed rework costs on the rejected lots (€3.42 million) arguably falls outside the scope of the consequential damages waiver, and even that claim is subject to challenge on the merits.

Our internal memoranda analyzing New York law on contractual limitations of liability confirm that such provisions are generally enforceable under New York law, which governs the MSA pursuant to Section 22.1. New York courts have consistently upheld broadly worded consequential damages waivers in sophisticated commercial agreements between parties of comparable bargaining power, and we are confident that the Tribunal will give effect to Section 8.7 in this case. We have also prepared separate analyses addressing (i) the recoverability of reputational damages under New York law, which is subject to significant limitations even in the absence of a contractual waiver, and (ii) the treatment of lost profits for the two optional renewal periods, which presents an additional analytical layer because Kestrel's entitlement to those renewal periods was contingent upon the exercise of options that may not have been exercised in any event. Each of these analyses supports WAL's position that Kestrel's damages claim is substantially overstated even before the factual issues are addressed.

D. Counterclaim of €5.17 Million

WAL's counterclaim for €5.17 million in replacement-component costs remains well supported by the available evidence and has not been undermined by any documents produced by Kestrel during this phase.

As set forth in our prior correspondence, the counterclaim is based on the replacement costs incurred by WAL when it sourced 1,680 replacement units from Valkyr Precision Components Inc. to replace the defective units delivered by Kestrel. Valkyr supplied the replacement units at a unit price of €8,432.92, compared to Kestrel's Contract Year 4 unit price of €5,222.92. The resulting per-unit premium of €3,210.00, reduced by a 4.2% introductory discount negotiated with Valkyr, yields a net premium of approximately €3,077.22 per unit. Multiplied by the 1,680 replacement units, the total counterclaim is approximately €5,169,729.60, which we have rounded to €5.17 million for purposes of the pleadings.

Kestrel's produced documents do not contain any material that undermines this calculation or the underlying factual basis for the counterclaim. We anticipate, however, that Kestrel will argue in its Defense to Counterclaim that WAL failed to mitigate its damages by not seeking competitive bids from other qualified suppliers before engaging Valkyr. We are preparing evidence — including testimony from Gerald Huang (VP Global Supply Chain Operations) and contemporaneous procurement records — demonstrating that WAL acted with reasonable urgency in sourcing replacement components given the critical nature of the aerospace components, the limited number of qualified alternative suppliers holding the necessary AS9100 Rev D certification and manufacturing capabilities, and the operational imperative to avoid disruption to WAL's production lines and downstream customer commitments. We believe this evidence will be more than sufficient to defeat any mitigation defense.

V. Review of Kestrel's Statement of Claim (Filed April 28, 2023)

Kestrel's Statement of Claim, filed on April 28, 2023, sets forth total damages of €47.3 million, broken down as follows:

1. Lost profits for remaining MSA term (Contract Year 5): €12.83 million (Claimant's SOC ¶ 87), calculated based on projected deliveries of 3,600 units at the Contract Year 5 unit price of €5,353.49, applying a claimed profit margin of 22.4%.

2. Lost profits for two optional renewal years: €27.15 million (Claimant's SOC ¶ 92), calculated on the assumption that both renewal options would have been exercised and that Kestrel would have continued to supply components at escalating unit prices with the same 22.4% margin.

3. Unreimbursed rework costs on rejected lots: €3.42 million (Claimant's SOC ¶ 96), representing the costs Kestrel claims to have incurred in attempting to cure the rejected lots, including labor, materials, re-testing, and administrative overhead.

4. Reputational damages / loss of other business opportunities: €3.90 million (Claimant's SOC ¶ 101), representing alleged lost revenues from other potential customers that Kestrel contends it was unable to secure as a result of the negative market perception caused by WAL's termination.

Kestrel's primary legal theory, as articulated in the SOC, is that WAL committed a material breach of the MSA by (i) wrongfully rejecting fourteen lots of turbine housings by applying inspection criteria stricter than the contractual specifications — specifically, the alleged imposition of an unpublished ≤0.15% porosity tolerance rather than the contractual ≤0.25% standard — and (ii) issuing a Notice of Termination for Cause on October 3, 2022, as a pretext to replace Kestrel with a lower-cost domestic supplier, namely Valkyr Precision Components Inc. Kestrel characterizes the termination as a bad-faith exercise of WAL's contractual rights, motivated by economic considerations rather than genuine quality concerns.

Our initial assessment, informed by the thorough review of the document production described above, is that the document production results significantly weaken Kestrel's factual narrative on both prongs of its theory. As to the first prong, Kestrel's own internal quality testing records demonstrate that the porosity failures were genuine and measurable against the contractual ≤0.25% standard, not an unpublished ≤0.15% standard. As to the second prong, Kestrel's own internal communications reflect that its management was aware of the quality failures, the cure-period expirations, and the approaching Persistent Quality Failure threshold — facts that are fundamentally inconsistent with a pretextual-termination narrative.

We will prepare a comprehensive response to each element of Kestrel's SOC in the Statement of Defense and Counterclaim. We will also address the damages claim in detail, including the challenges to Kestrel's margin assumptions, the consequential damages waiver, and the speculative nature of the renewal-period lost-profit and reputational damages claims.

VI. Work Plan and Timeline to Filing of Statement of Defense and Counterclaim

A. Statement of Defense and Counterclaim — Due June 30, 2023

Drafting of the Statement of Defense and Counterclaim is underway. The team assigned to this submission consists of Simone Laroche (Senior Associate) and Jeffrey Park (Associate), working under the supervision of the undersigned and Vivienne St. Claire (Partner). We have established an internal drafting schedule designed to produce a near-final draft by mid-June, allowing sufficient time for review, revision, and finalization before the June 30 filing deadline.

The Statement of Defense and Counterclaim will set forth the detailed factual narrative regarding all fourteen rejected lots, organized chronologically from Lot KDG-2022-0307 through Lot KDG-2022-0919. For each lot, we will cite the specific porosity test data from both WAL's receiving-inspection records and Kestrel's own internal quality testing records, together with the cure-period timelines documenting Kestrel's failure to cure within the contractual 45-calendar-day period. This lot-by-lot analysis will be supported by references to the relevant documentary evidence and will be presented in a manner designed to demonstrate the systematic nature of Kestrel's quality failures.

The submission will present WAL's affirmative defenses in full, including:

• Compliance with rejection and cure procedures under § 8.4: WAL followed the contractually prescribed lot-rejection procedures, provided timely written notice of each rejection with specification of the grounds, and afforded Kestrel the full 45-calendar-day cure period for each rejected lot.

• Proper termination for Persistent Quality Failure under § 14.2(b): WAL's Notice of Termination for Cause, issued October 3, 2022, was properly invoked upon the occurrence of a Persistent Quality Failure as defined in Section 8.4, with seven uncured rejections in a rolling twelve-month period — more than double the contractual threshold of three.

• Enforceability of the consequential damages waiver under § 8.7: The MSA's mutual waiver of consequential damages bars the vast majority of Kestrel's damages claim, including all lost-profit and reputational damages claims.

The counterclaim section will detail the calculation of €5.17 million in replacement-component costs from Valkyr, with supporting documentation including the Valkyr purchase orders, invoices, and pricing schedules, as well as evidence of WAL's reasonable mitigation efforts.

B. Expert Engagement

Expert engagement letters have been issued to WAL's two retained experts, both of whom were engaged in March 2023:

• Dr. Nadia Ostrovsky, Ridgeline Economic Consulting LLC (damages expert): Dr. Ostrovsky is an economist and damages expert with extensive experience in commercial arbitration. She will prepare an expert report addressing the quantum of Kestrel's damages claim, including a critique of Prof. Langfeld's methodology and assumptions.

• Dr. Raymond Chow, Arclight Materials Science Inc. (metallurgical expert): Dr. Chow is a metallurgical engineer and materials scientist specializing in titanium alloys and aerospace-grade castings. He will prepare an expert report presenting his independent analysis of the porosity data for all fourteen rejected lots.

Expert instruction memoranda are currently being finalized for delivery to both experts in May 2023. The instruction memoranda will direct Dr. Ostrovsky and Dr. Chow to address the following specific issues:

Dr. Ostrovsky's instruction memorandum will direct her to:

(a) analyze and rebut Prof. Langfeld's damages methodology, including his use of the discounted cash flow approach and his assumptions regarding volume projections, pricing escalations, and cost trajectories;

(b) challenge Kestrel's claimed profit margin of 22.4% in light of the internal financial records reflecting actual margins of 16% to 18% during Contract Years 3 and 4;

(c) address the renewal-period lost-profit issue, including the contingent nature of the renewal options and the probability that they would have been exercised; and

(d) analyze and critique the causation and quantification of Kestrel's reputational damages claim.

Dr. Chow's instruction memorandum will direct him to:

(a) perform an independent metallurgical analysis of the porosity data for all fourteen rejected lots, comparing WAL's receiving-inspection test results with Kestrel's internal test results and his own independent testing;

(b) opine on whether the porosity levels identified in the rejected lots exceeded the contractual specification of ≤0.25% as set forth in WAL-SPEC-TH-401, Appendix C, Table 3;

(c) address the likely causes of the elevated porosity levels, including potential process-control failures in Kestrel's casting operations; and

(d) respond to any expert opinions offered by Kestrel regarding the appropriateness of the porosity specification or WAL's testing methodology.

Under the procedural calendar established by PO No. 1, expert reports are to be exchanged simultaneously on October 16, 2023, with rebuttal expert reports due on November 13, 2023. We are managing the expert work streams to ensure that both Dr. Ostrovsky and Dr. Chow are well positioned to meet these deadlines.

C. Key Upcoming Deadlines

The following table summarizes the key remaining deadlines in the arbitration, as established by Procedural Orders Nos. 1 and 2:

We will provide updated status reports in advance of each major milestone and will consult with you regarding any strategic decisions that arise in the interim.

VII. Budget Update

As you are aware, WAL's engagement of Calderwood & Harkness in this matter is structured on an hourly-rate basis, with no contingency or success-fee element. The current billing rates for the principal timekeepers assigned to this matter are as follows:

Total professional fees billed to date remain within the preliminary budget range communicated to you in our November 2022 status report. We have been mindful of cost efficiency throughout the document production phase, including through the use of technology-assisted review protocols and the strategic allocation of review tasks between partner, senior associate, and associate timekeepers.

Disbursements to date include expert retainer fees paid to Arclight Materials Science Inc. and Ridgeline Economic Consulting LLC, the ICC advance on costs (WAL's share, as fixed by the ICC Secretariat), and various administrative costs associated with document management and production. All disbursements have been processed in accordance with the terms of our engagement letter dated October 28, 2022.

We recognize that the most intensive — and most costly — phases of the arbitration lie ahead, including the completion of the written submissions, the expert report phase, witness preparation, and the evidentiary hearing. We are preparing updated budget projections covering the period through the conclusion of the evidentiary hearing in January 2024, which we will provide to you in a forthcoming communication. We will, of course, consult with you regarding any significant changes in scope or budget expectations as the matter progresses.

VIII. Recommended Actions for WAL

To ensure that WAL is well positioned for the next phase of the arbitration, we recommend the following actions:

1. Continue compliance with the litigation hold. The litigation hold notice issued on November 8, 2022, remains in effect and applies to all documents and electronically stored information potentially relevant to this arbitration. Please ensure that all WAL personnel who received the litigation hold notice continue to comply with its terms, including the obligation to preserve all relevant documents and refrain from any destruction, alteration, or deletion of potentially responsive materials. If any questions arise regarding the scope of the hold, please direct them to our attention.

2. Make key witnesses available for preparation sessions. We respectfully request that WAL make Gerald Huang (Vice President, Global Supply Chain Operations) and Dr. Ingrid Vollmer (Senior Vice President, Engineering & Manufacturing) available for witness preparation sessions in the coming months. Mr. Huang's testimony will be central to establishing WAL's quality-control procedures, the lot-rejection process, and the procurement of replacement components from Valkyr. Dr. Vollmer's testimony will address the engineering specifications, the porosity requirements, and the technical basis for WAL's quality standards. We will coordinate scheduling with your office as we approach the appropriate phase of preparation.

3. Assemble additional documentary evidence. Please coordinate with the relevant WAL departments to assemble any additional inspection records, internal communications regarding the rejected lots, and Valkyr procurement files that may be needed for the Statement of Defense and Counterclaim. Specifically, we would like to ensure that we have complete records for the receiving inspection of each of the fourteen rejected lots, all correspondence with Kestrel regarding the rejections and cure periods, and the full procurement file for the Valkyr replacement order, including bid solicitation materials, evaluation records, and contract documents.

4. Provide updated financial information to advisory teams. Please provide any updated financial information that may be requested by Sandra Gillespie at Canfield & Thorpe LLP and Dr. Nadia Ostrovsky at Ridgeline Economic Consulting LLC in connection with their forensic accounting review and damages analysis, respectively. Timely provision of this information will be important to ensuring that Dr. Ostrovsky's expert report is well-supported and filed on schedule.

IX. Lender and Insurance Considerations

We note briefly two ancillary matters that warrant continued monitoring.

Lender Notification. As previously discussed, Veltrano National Bank, N.A. ("Veltrano"), WAL's senior secured lender under the $350 million revolving credit facility dated March 12, 2021, has been kept apprised of the status of this arbitration in accordance with the reporting obligations set forth in the credit agreement. Kestrel's claim of €47.3 million, if sustained in full or in substantial part, could have implications for WAL's compliance with certain financial covenants under the credit facility. However, as discussed throughout this letter, we believe that WAL's defense position is strong and that the likelihood of an adverse award in an amount approaching Kestrel's full claim is low. The document production results have materially strengthened our confidence in WAL's defensive position, and we believe this assessment will be reassuring to Veltrano. We will continue to coordinate with you regarding the timing and content of any further notifications to Veltrano as the arbitration progresses.

Insurance Coverage. As you are aware, Pinnacle Continental Insurance Co. ("Pinnacle") issued a coverage reservation letter under Policy No. PCE-GL-2021-08854 in response to WAL's notice of the Kestrel arbitration. Pinnacle's reservation letter indicated that, in its preliminary assessment, the policy's commercial-supply exclusion precludes any defense or indemnity obligation with respect to claims arising from the commercial supply of components under the MSA. There has been no change in this status. We do not currently anticipate that Pinnacle will alter its coverage position, but we will continue to monitor the situation and advise you if any developments warrant further engagement with Pinnacle or its coverage counsel.

X. Conclusion and Next Steps

In summary, the document production phase has been a significant development in this arbitration and has materially strengthened WAL's defense position across all key issues. Kestrel's own internal records — including quality testing data, management communications, financial analyses, and AS9100 audit findings — corroborate WAL's factual narrative and undermine Kestrel's claim that the lot rejections were pretextual or that WAL applied improperly strict quality standards. The consequential damages waiver in Section 8.7 of the MSA provides an additional, independent basis for limiting Kestrel's recovery, and WAL's counterclaim of €5.17 million remains well supported.

Our team is now focused on completing the Statement of Defense and Counterclaim for the June 30, 2023 deadline and finalizing the expert instruction memoranda for Dr. Ostrovsky and Dr. Chow. We are confident that the submission will present a compelling and thoroughly documented defense of WAL's position.

We would welcome the opportunity to schedule a call with you to discuss the matters addressed in this letter in greater detail. If it would be helpful, we are also available to present this update to Marcus J. Whitmore III or other members of WAL's senior leadership team. Please let us know your preferred timing, and we will arrange accordingly.

As always, please do not hesitate to contact me or Vivienne St. Claire with any questions or concerns regarding this matter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Theodore Langston Partner

600 Lexington Avenue New York, NY 10022 Telephone: (212) 486-7244

Email: t.langston@calderwoodharkness.com

cc: Marcus J. Whitmore III, Chief Executive Officer, Whitmore Aerospace LLC cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Simone Laroche, Senior Associate, Calderwood & Harkness LLP cc: Jeffrey Park, Associate, Calderwood & Harkness LLP

Encl.: Updated Procedural Calendar (per Procedural Orders Nos. 1 and 2)

Deadline	Event
June 30, 2023	Respondent's Statement of Defense and Counterclaim due
August 11, 2023	Claimant's Reply and Defense to Counterclaim due
September 29, 2023	Respondent's Rejoinder due
October 16, 2023	Simultaneous exchange of expert reports
November 13, 2023	Simultaneous exchange of rebuttal expert reports
January 8–12, 2024	Evidentiary hearing (ICC Hearing Centre, New York, NY)
Timekeeper	Role	Hourly Rate
Theodore Langston	Partner	$1,475/hr
Vivienne St. Claire	Partner	$1,425/hr
Simone Laroche	Senior Associate	$895/hr
Jeffrey Park	Associate	$625/hr

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Counselors at Law
600 Lexington Avenue New York, NY 10022
Telephone: (212) 486-7200 Facsimile: (212) 486-7201 www.calderwoodharkness.com
April 30, 2023
Dana Prescott, Esq. Vice President & General Counsel Whitmore Aerospace LLC 4200 Wilson Boulevard, Suite 1100 Arlington, VA 22203
Re: ICC Case No. 27914/MHM — Kestrel Dynamics GmbH v. Whitmore Aerospace LLC Engagement No.: 1019-00001 Subject: Strategy Update Following Document Production Under Procedural Order No. 2
Dear Dana:
I. Purpose and Overview
This letter provides a comprehensive update on the results of the document production phase completed pursuant to Procedural Order No. 2 ("PO No. 2"), issued by the Tribunal on March 17, 2023. Since our last status report, significant developments have occurred in the arbitration that bear directly on the strength of Whitmore Aerospace LLC's ("WAL" or "Respondent") defensive and affirmative positions. We write to ensure that you and the broader WAL leadership team have a thorough understanding of the current posture of this matter and the strategic considerations that will guide our work over the coming weeks and months.
Specifically, this letter (i) summarizes the key categories of documents obtained from Kestrel Dynamics GmbH ("Kestrel" or "Claimant") during the document exchange phase and analyzes their implications for WAL's defense against Kestrel's claims of material breach of the Master Supply Agreement dated June 15, 2018 (the "MSA"); (ii) assesses the impact of the produced documents on WAL's counterclaim of €5.17 million for replacement-component costs incurred as a direct consequence of Kestrel's quality failures; and (iii) outlines the work plan and timeline leading to the filing of Respondent's Statement of Defense and Counterclaim, which is due on June 30, 2023.
As you are aware, Kestrel filed its Statement of Claim on April 28, 2023 (the "SOC"). Kestrel's SOC sets forth total damages claimed of €47.3 million, encompassing lost profits for the remaining term of the MSA and two optional renewal periods, unreimbursed rework costs on rejected lots, and a substantial claim for reputational damages. We provide our initial assessment of the SOC below in Section V. As a preliminary matter, however, we are pleased to report that the documents obtained during the production phase materially strengthen WAL's position on the central factual and legal issues in this arbitration.
This letter is intended solely for the purpose of providing legal advice in connection with the above-referenced arbitration and is protected by the attorney-client privilege and the work-product doctrine. It should not be disseminated beyond the individuals identified on the copy line without prior consultation with this office.
II. Procedural Background
For ease of reference, we set forth below a recap of the key procedural milestones that have occurred since our last status report, together with the upcoming deadlines that will govern the next phase of the arbitration.
The Tribunal was constituted on January 20, 2023. It consists of Prof. Dame Eleanor Fitzwilliam, who serves as Presiding Arbitrator, Dr. Hans-Ulrich Perren, who was nominated by Claimant, and the Hon. Robert A. Castillo (ret.), who was nominated by Respondent. As we discussed at the time of their appointment, this is a well-credentialed panel with substantial experience in complex commercial and industrial-supply disputes. Prof. Dame Fitzwilliam, in particular, has presided over several high-value ICC arbitrations involving international manufacturing and supply agreements, and her published writings suggest a rigorous approach to contractual interpretation and evidentiary standards. We believe the composition of the Tribunal is favorable to WAL's position.
A preliminary procedural conference was held on February 14, 2023, at which the parties and the Tribunal addressed the procedural timetable, applicable rules of evidence, and the scope and mechanics of document production. Following that conference, the Tribunal issued Procedural Order No. 1 ("PO No. 1"), which established the overall procedural calendar for the arbitration, including deadlines for written submissions, expert reports, and the evidentiary hearing.
Procedural Order No. 2 was issued on March 17, 2023. PO No. 2 established the document production schedule and directed that requests and objections be submitted in Redfern Schedule format, consistent with Article 3 of the IBA Rules on the Taking of Evidence in International Arbitration, which the parties agreed at the procedural conference would serve as guidelines for document production. In accordance with the schedule set forth in PO No. 2, Calderwood & Harkness filed Respondent's document production requests on behalf of WAL, together with objections to certain categories of documents requested by Claimant. Our objections were directed primarily at Kestrel's requests for WAL's internal supplier diversification strategy documents and communications relating to WAL's negotiations with Valkyr Precision Components Inc. ("Valkyr"), which we argued were irrelevant to the issues in dispute and protected by commercial sensitivity concerns. The Tribunal ruled on the objections and largely sustained WAL's position on these categories, as discussed further in Section III.E below.
The document exchange was completed in accordance with the deadlines established under PO No. 2. Both parties made their respective productions, and we have now had the opportunity to conduct a thorough initial review of the documents received from Kestrel. The analysis set forth in this letter is based on that review.
Kestrel filed its Statement of Claim on April 28, 2023, within the deadline established by PO No. 1. Respondent's Statement of Defense and Counterclaim is due on June 30, 2023. The remaining procedural calendar, including deadlines for Claimant's Reply and Defense to Counterclaim, Respondent's Rejoinder, expert reports, and the evidentiary hearing, is set forth in Section VI.C below.
III. Summary of Documents Obtained from Kestrel
The document production phase yielded a substantial volume of material from Kestrel. Following our initial review and analysis, we have identified five principal categories of documents that are of particular significance to WAL's defense and counterclaim. We summarize each category below, together with our assessment of its evidentiary value.
A. Internal Quality Testing Records
Among the most consequential documents produced by Kestrel are its internal quality-assurance testing reports for the fourteen rejected lots that are at the center of this dispute. These lots, designated Lot KDG-2022-0307 through Lot KDG-2022-0919, encompass a total of 1,680 units of precision titanium-alloy turbine housings delivered by Kestrel to WAL between March and September 2022. WAL rejected each of these lots pursuant to the quality-control procedures set forth in the MSA and WAL's Quality Control Procedure WAL-QCP-100, on the grounds that the units failed to meet the contractual porosity specification of ≤0.25%, as set forth in WAL-SPEC-TH-401, Appendix C, Table 3.
The central factual dispute in this arbitration is whether WAL's lot rejections were substantively justified. Kestrel has alleged in its Statement of Claim that WAL applied an unpublished or improperly strict porosity tolerance of ≤0.15% — a standard that Kestrel contends was never contractually agreed upon and was unilaterally imposed by WAL as a pretext for terminating the MSA. The documents produced by Kestrel during this phase significantly undermine that allegation.
Specifically, Kestrel's own internal porosity measurements for several of the rejected lots show readings that exceed the contractual porosity specification of ≤0.25%. While not all of Kestrel's internal test results exceed this threshold, the data for at least five of the fourteen rejected lots reflect porosity readings in the range of 0.27% to 0.34%. These readings are above the contractual limit by a meaningful and, in certain instances, substantial margin. Notably, these findings are consistent with and corroborative of the independent test results obtained by Dr. Raymond Chow of Arclight Materials Science Inc. ("Arclight"), WAL's retained metallurgical expert. In his preliminary assessment, Dr. Chow identified porosity levels ranging from 0.19% to 0.38% across the fourteen rejected lots, with the majority of lots testing above the 0.25% contractual limit.
In addition to the raw test data, the production included several internal Kestrel quality memoranda that reference awareness among Kestrel's quality-assurance team of porosity control challenges during the March through September 2022 production period. These memoranda include communications to and from Dr. Stefan Voss, Kestrel's Head of Quality Assurance, in which Dr. Voss and members of his team acknowledge difficulties in maintaining porosity within acceptable parameters. One memorandum, dated approximately June 2022, expressly references "persistent challenges in achieving target porosity levels" in the titanium-alloy casting process used for the WAL turbine housings. Another memorandum, from later in the summer of 2022, discusses the results of internal re-testing of certain lots and notes that "several samples remain outside the ≤0.25% specification."
These documents are highly probative. They provide direct, contemporaneous evidence from Kestrel's own records that corroborates WAL's position on the central factual issue in this case. They undermine Kestrel's theory that WAL applied an unpublished or improperly strict porosity tolerance, because Kestrel's own internal testing — conducted independently of and prior to WAL's receiving-inspection testing — identified the same quality failures. We anticipate that these documents will be central to both our written submission and the cross-examination of Kestrel's witnesses at the evidentiary hearing.
B. Internal Communications Between Kestrel Personnel
In addition to the quality testing records discussed above, Kestrel produced a number of internal email chains and communications between its senior management personnel regarding the lot rejections and WAL's quality complaints. These communications provide a valuable window into Kestrel's internal understanding of the situation as it unfolded.
The produced emails include exchanges between Friedrich Brenner (Managing Director), Luisa Erdmann (Commercial Director), and Dr. Stefan Voss (Head of Quality Assurance) discussing the lot rejections by WAL and Kestrel's response. Several of these emails are significant for multiple reasons.
First, a number of the email exchanges suggest that Kestrel was aware that its cure efforts for the rejected lots were not completed within the 45-calendar-day cure period specified in the MSA as amended. As you will recall, the original MSA provided for a 30-calendar-day cure period under Section 8.4. This period was extended to 45 calendar days by Amendment No. 2 to the MSA, dated September 3, 2021, which the parties negotiated in recognition of the complexity of the rework process for the high-temperature titanium-alloy components. Despite this extension, Kestrel's own internal communications indicate that cure efforts for multiple lots extended well beyond the 45-day period, and in certain instances were never completed at all. An email from Dr. Voss to Mr. Brenner, dated in mid-2022, expressly notes that the rework timeline for two specific lots "will exceed the contractual cure window," and discusses options for requesting a further extension from WAL, which WAL ultimately did not grant.
Second, the internal communications reflect a clear awareness within Kestrel's management team that WAL had documented multiple uncured rejections that were approaching — and ultimately exceeded — the Persistent Quality Failure threshold defined in Section 8.4 of the MSA. Under that provision, three or more uncured rejections within a rolling twelve-month period constitute a "Persistent Quality Failure," which entitles the non-breaching party to terminate the MSA for cause under Section 14.2(b). Several emails from mid-to-late 2022 discuss this risk explicitly, with Mr. Brenner asking in one communication whether there was "any way to dispute the count of uncured rejections." This awareness is significant because it directly undermines Kestrel's claim that WAL's termination was pretextual and unexpected.
Third, we identified a particularly notable communication from Luisa Erdmann to Friedrich Brenner, sent in late September 2022 — prior to WAL's October 3, 2022 Notice of Termination — in which Ms. Erdmann references Kestrel's inability to meet WAL engineering specifications for the high-temperature variant of the turbine housing that was added to the MSA by Amendment No. 1, dated February 10, 2020. The high-temperature variant is governed by WAL-SPEC-TH-410, which imposes additional performance and material specifications beyond those applicable to the standard turbine housing. Ms. Erdmann's email acknowledges that Kestrel has been "unable to consistently meet the [WAL-SPEC-TH-410] requirements" and suggests that this has been a contributing factor in the quality issues experienced during the March through September 2022 period. This communication is valuable because it further demonstrates that the quality failures underlying WAL's lot rejections were genuine and well-documented, rather than pretextual.
Collectively, these internal communications provide a powerful evidentiary foundation for cross-examination of Kestrel's witnesses — particularly Mr. Brenner, Ms. Erdmann, and Dr. Voss — at the evidentiary hearing currently scheduled for January 8–12, 2024. We are cataloguing these documents and preparing detailed cross-examination outlines that will be refined as we proceed through the written submission phase.
C. Financial and Commercial Records
Kestrel also produced certain financial and commercial records underlying its damages claim, including internal margin analyses, financial projections, and cost-of-goods-sold data. These documents are relevant both to WAL's defense against the quantum of Kestrel's claims and to the assessment of Kestrel's reputational damages claim.
Our initial review of the financial records, conducted in conjunction with our preliminary analysis of Kestrel's damages expert report by Prof. Dieter Langfeld of Rheinsberg Advisory AG, suggests that Kestrel's claimed profit margin of 22.4% on the WAL contract may be significantly inflated. Prof. Langfeld relied upon this 22.4% margin in calculating Kestrel's lost-profit damages for both the remaining MSA term and the two optional renewal periods. However, Kestrel's own internal financial documents — including monthly margin analyses and contract-level profitability summaries — reflect actual margins closer to 16% to 18% on the WAL contract during Contract Years 3 and 4 (approximately mid-2020 through mid-2022). The discrepancy between the claimed 22.4% margin and the actual margins reflected in Kestrel's own records is substantial and has significant implications for the damages analysis. If the actual margin is in the 16% to 18% range rather than 22.4%, Kestrel's lost-profit claim for the remaining term and renewal periods would be reduced by approximately 20% to 30%, depending on the assumptions applied to other variables such as volume projections and pricing escalations.
We have shared the relevant financial documents with Sandra Gillespie at Canfield & Thorpe LLP, who is conducting a forensic accounting review of Kestrel's financial data. Ms. Gillespie's analysis will inform the expert report to be prepared by Dr. Nadia Ostrovsky of Ridgeline Economic Consulting LLC, WAL's retained damages expert. We expect to receive Ms. Gillespie's preliminary findings in the coming weeks, which will be incorporated into the expert instruction memorandum being prepared for Dr. Ostrovsky.
With respect to the reputational damages claim, Kestrel also produced limited documentation regarding its communications with other potential customers, which Kestrel contends demonstrate that WAL's termination of the MSA caused Kestrel to lose other business opportunities valued at €3.90 million. Our review of these documents, however, reveals that they do not demonstrate any concrete lost business opportunities that are causally attributable to WAL's termination. The communications consist largely of general marketing correspondence and preliminary expressions of interest from potential customers, none of which progressed to the point of binding commitments or detailed negotiations. Moreover, several of the potential customers referenced in the documents appear to have declined to engage with Kestrel for reasons unrelated to the WAL termination, including pricing, capacity constraints, and competing bids from other suppliers. We will develop this point more fully in the Statement of Defense, and Dr. Ostrovsky's expert report will address the causation and quantification deficiencies in Kestrel's reputational damages claim.
D. AS9100 Rev D Audit Records
Kestrel produced its most recent AS9100 Rev D quality management system certification and related internal audit records. AS9100 Rev D is the internationally recognized quality management standard for organizations in the aviation, space, and defense industries, and compliance with this standard is a prerequisite for Kestrel's eligibility as a supplier to WAL and other aerospace manufacturers.
The produced audit records are significant because they indicate that Kestrel received nonconformance findings during an internal audit conducted in early 2022 — a date that predates the first rejected lot (Lot KDG-2022-0307, delivered in March 2022). The nonconformance findings related specifically to Kestrel's porosity testing and process-control protocols, including the calibration of porosity measurement equipment and the frequency of in-process quality checks during the casting process. While the audit records reflect that Kestrel initiated corrective action plans in response to these findings, the subsequent quality failures documented in the March through September 2022 lot rejections suggest that these corrective actions were either inadequate or not effectively implemented.
These records further support WAL's position that the quality failures underlying the lot rejections were genuine and systemic in nature, and that WAL's decision to reject the lots pursuant to WAL-QCP-100 was well-founded and consistent with both the contractual specifications and industry best practices. We expect these documents to be persuasive to the Tribunal, particularly when presented in conjunction with Dr. Chow's metallurgical expert report and the internal Kestrel quality memoranda discussed in Section III.A above.
E. Documents Kestrel Declined to Produce / Tribunal Rulings on Objections
As noted in the procedural background above, both parties raised objections to certain categories of document requests during the Redfern Schedule process.
Kestrel objected to producing certain categories of documents relating to its quality issues with customers other than WAL. In its objections, Kestrel asserted that such documents were commercially sensitive, contained proprietary business information regarding third-party relationships, and were not sufficiently relevant to the issues in dispute. While we maintained that such documents were relevant to establishing a pattern of quality-control deficiencies at Kestrel and would corroborate WAL's position, the Tribunal ruled that the request was overbroad in its current form. The Tribunal invited us to submit a more narrowly tailored request if appropriate, a course of action we are currently evaluating.
On the other side, our letter to the Tribunal objecting to certain of Kestrel's document requests was largely sustained. Specifically, Kestrel had requested production of WAL's internal documents relating to its negotiations with Valkyr Precision Components Inc. and WAL's internal supplier diversification strategy communications. We objected on the grounds that these documents were irrelevant to the contractual issues in dispute, were protected by commercial sensitivity, and that their production would impose an undue burden on WAL. The Tribunal agreed and did not order the production of these documents. This ruling is important because it limits Kestrel's ability to construct a pretextual-termination narrative based on WAL's exploration of alternative suppliers, a line of argument that Kestrel has nonetheless attempted to advance in its Statement of Claim, as discussed in Section V below.
IV. Implications for WAL's Defense
In light of the document production results summarized above, we set forth below our assessment of the implications for WAL's principal defensive positions and counterclaim.
A. Strengthened Position on Justified Rejections
The documents produced by Kestrel during this phase substantially reinforce WAL's core defense: that the fourteen lot rejections were substantively justified by porosity levels exceeding the contractual limit of ≤0.25% as set forth in WAL-SPEC-TH-401, Appendix C, Table 3. This is the single most important factual issue in the arbitration, and the evidentiary picture following document production is strongly favorable to WAL.
Kestrel's own internal quality-assurance testing records, as discussed in Section III.A, corroborate the independent test results that will be presented through Dr. Chow's expert report. The convergence between Kestrel's internal data and Dr. Chow's findings is significant because it eliminates any suggestion that WAL's testing methodology was flawed or that the test results were an artifact of calibration or measurement error. When the Tribunal considers the porosity data from both Kestrel's internal records and Dr. Chow's independent analysis, we expect it to find that the contractual porosity specification was exceeded for the majority of the rejected lots by a meaningful margin.
Moreover, the contractual porosity standard of ≤0.25% is expressly stated in the MSA's technical appendices, having been specifically negotiated and agreed upon by the parties at the time the MSA was executed in June 2018. There is no textual or extrinsic basis for Kestrel's allegation that WAL imposed an unpublished or unilaterally modified tolerance of ≤0.15%. The MSA's integration clause (Section 21.3) provides that the agreement, together with its appendices and amendments, constitutes the entire agreement of the parties and supersedes all prior negotiations and understandings. Kestrel's attempt to introduce extrinsic evidence of an alleged informal industry-standard tolerance is inconsistent with this provision and with New York law governing contract interpretation.
B. Proper Termination Under § 14.2(b)
The document production results also reinforce WAL's position that its Notice of Termination for Cause, issued on October 3, 2022, was properly invoked under Section 14.2(b) of the MSA, which permits termination upon the occurrence of a Persistent Quality Failure.
As defined in Section 8.4 of the MSA, a "Persistent Quality Failure" exists when three or more lot rejections remain uncured within the applicable cure period during a rolling twelve-month period. WAL documented seven uncured rejections in the rolling twelve-month period from March 7, 2022 (the delivery date of the first rejected lot, Lot KDG-2022-0307) through September 19, 2022 (the delivery date of the last rejected lot, Lot KDG-2022-0919). This is far in excess of the three-rejection threshold, giving WAL a clear contractual right to terminate.
The documents produced by Kestrel further validate this position by demonstrating Kestrel's failure to cure within the 45-calendar-day amended cure period for at least five of the seven uncured rejections. Kestrel's own internal communications, including the emails discussed in Section III.B, reflect that Kestrel's management was aware that cure efforts were not being completed within the contractual timeframe. The emails from Dr. Voss and others expressly acknowledge that rework timelines were exceeding the 45-day window and that the number of uncured rejections was approaching — and ultimately exceeding — the Persistent Quality Failure threshold.
These internal communications substantially weaken Kestrel's argument that WAL's termination was pretextual. If Kestrel's own management team recognized that cure efforts were failing and that the contractual threshold was being exceeded, it is difficult for Kestrel to credibly maintain that the termination came as a surprise or that it was motivated by reasons other than genuine quality concerns. We will develop this theme in the Statement of Defense and will use these documents prominently in our cross-examination plan for the evidentiary hearing.
C. Consequential Damages Waiver (§ 8.7)
Independent of the factual merits of WAL's lot rejections and termination, WAL's defense benefits from a strong contractual limitation on Kestrel's available remedies. Section 8.7 of the MSA contains an express mutual waiver of consequential damages arising from or related to quality failures and lot rejections. The provision states, in relevant part:
"In no event shall either Party be liable to the other Party for any indirect, incidental, special, consequential, or punitive damages of any kind, including without limitation lost profits, loss of revenue, loss of business opportunity, or reputational harm, arising out of or relating to any quality failure, lot rejection, cure failure, or termination pursuant to Section 14.2(b), regardless of whether such damages are based on contract, tort, strict liability, or any other theory. The non-breaching Party's sole and exclusive remedy in the event of a Persistent Quality Failure shall be limited to replacement, credit, or termination of this Agreement in accordance with Sections 8.4 through 8.6 and Section 14.2(b)."
The vast majority of Kestrel's damages claim — including the lost-profit claims of €12.83 million for the remaining MSA term and €27.15 million for the two optional renewal years, as well as the reputational damages claim of €3.90 million — is consequential in nature and is directly barred by this provision. Only Kestrel's claim for unreimbursed rework costs on the rejected lots (€3.42 million) arguably falls outside the scope of the consequential damages waiver, and even that claim is subject to challenge on the merits.
Our internal memoranda analyzing New York law on contractual limitations of liability confirm that such provisions are generally enforceable under New York law, which governs the MSA pursuant to Section 22.1. New York courts have consistently upheld broadly worded consequential damages waivers in sophisticated commercial agreements between parties of comparable bargaining power, and we are confident that the Tribunal will give effect to Section 8.7 in this case. We have also prepared separate analyses addressing (i) the recoverability of reputational damages under New York law, which is subject to significant limitations even in the absence of a contractual waiver, and (ii) the treatment of lost profits for the two optional renewal periods, which presents an additional analytical layer because Kestrel's entitlement to those renewal periods was contingent upon the exercise of options that may not have been exercised in any event. Each of these analyses supports WAL's position that Kestrel's damages claim is substantially overstated even before the factual issues are addressed.
D. Counterclaim of €5.17 Million
WAL's counterclaim for €5.17 million in replacement-component costs remains well supported by the available evidence and has not been undermined by any documents produced by Kestrel during this phase.
As set forth in our prior correspondence, the counterclaim is based on the replacement costs incurred by WAL when it sourced 1,680 replacement units from Valkyr Precision Components Inc. to replace the defective units delivered by Kestrel. Valkyr supplied the replacement units at a unit price of €8,432.92, compared to Kestrel's Contract Year 4 unit price of €5,222.92. The resulting per-unit premium of €3,210.00, reduced by a 4.2% introductory discount negotiated with Valkyr, yields a net premium of approximately €3,077.22 per unit. Multiplied by the 1,680 replacement units, the total counterclaim is approximately €5,169,729.60, which we have rounded to €5.17 million for purposes of the pleadings.
Kestrel's produced documents do not contain any material that undermines this calculation or the underlying factual basis for the counterclaim. We anticipate, however, that Kestrel will argue in its Defense to Counterclaim that WAL failed to mitigate its damages by not seeking competitive bids from other qualified suppliers before engaging Valkyr. We are preparing evidence — including testimony from Gerald Huang (VP Global Supply Chain Operations) and contemporaneous procurement records — demonstrating that WAL acted with reasonable urgency in sourcing replacement components given the critical nature of the aerospace components, the limited number of qualified alternative suppliers holding the necessary AS9100 Rev D certification and manufacturing capabilities, and the operational imperative to avoid disruption to WAL's production lines and downstream customer commitments. We believe this evidence will be more than sufficient to defeat any mitigation defense.
V. Review of Kestrel's Statement of Claim (Filed April 28, 2023)
Kestrel's Statement of Claim, filed on April 28, 2023, sets forth total damages of €47.3 million, broken down as follows:
1. Lost profits for remaining MSA term (Contract Year 5): €12.83 million (Claimant's SOC ¶ 87), calculated based on projected deliveries of 3,600 units at the Contract Year 5 unit price of €5,353.49, applying a claimed profit margin of 22.4%.
2. Lost profits for two optional renewal years: €27.15 million (Claimant's SOC ¶ 92), calculated on the assumption that both renewal options would have been exercised and that Kestrel would have continued to supply components at escalating unit prices with the same 22.4% margin.
3. Unreimbursed rework costs on rejected lots: €3.42 million (Claimant's SOC ¶ 96), representing the costs Kestrel claims to have incurred in attempting to cure the rejected lots, including labor, materials, re-testing, and administrative overhead.
4. Reputational damages / loss of other business opportunities: €3.90 million (Claimant's SOC ¶ 101), representing alleged lost revenues from other potential customers that Kestrel contends it was unable to secure as a result of the negative market perception caused by WAL's termination.
Kestrel's primary legal theory, as articulated in the SOC, is that WAL committed a material breach of the MSA by (i) wrongfully rejecting fourteen lots of turbine housings by applying inspection criteria stricter than the contractual specifications — specifically, the alleged imposition of an unpublished ≤0.15% porosity tolerance rather than the contractual ≤0.25% standard — and (ii) issuing a Notice of Termination for Cause on October 3, 2022, as a pretext to replace Kestrel with a lower-cost domestic supplier, namely Valkyr Precision Components Inc. Kestrel characterizes the termination as a bad-faith exercise of WAL's contractual rights, motivated by economic considerations rather than genuine quality concerns.
Our initial assessment, informed by the thorough review of the document production described above, is that the document production results significantly weaken Kestrel's factual narrative on both prongs of its theory. As to the first prong, Kestrel's own internal quality testing records demonstrate that the porosity failures were genuine and measurable against the contractual ≤0.25% standard, not an unpublished ≤0.15% standard. As to the second prong, Kestrel's own internal communications reflect that its management was aware of the quality failures, the cure-period expirations, and the approaching Persistent Quality Failure threshold — facts that are fundamentally inconsistent with a pretextual-termination narrative.
We will prepare a comprehensive response to each element of Kestrel's SOC in the Statement of Defense and Counterclaim. We will also address the damages claim in detail, including the challenges to Kestrel's margin assumptions, the consequential damages waiver, and the speculative nature of the renewal-period lost-profit and reputational damages claims.
VI. Work Plan and Timeline to Filing of Statement of Defense and Counterclaim
A. Statement of Defense and Counterclaim — Due June 30, 2023
Drafting of the Statement of Defense and Counterclaim is underway. The team assigned to this submission consists of Simone Laroche (Senior Associate) and Jeffrey Park (Associate), working under the supervision of the undersigned and Vivienne St. Claire (Partner). We have established an internal drafting schedule designed to produce a near-final draft by mid-June, allowing sufficient time for review, revision, and finalization before the June 30 filing deadline.
The Statement of Defense and Counterclaim will set forth the detailed factual narrative regarding all fourteen rejected lots, organized chronologically from Lot KDG-2022-0307 through Lot KDG-2022-0919. For each lot, we will cite the specific porosity test data from both WAL's receiving-inspection records and Kestrel's own internal quality testing records, together with the cure-period timelines documenting Kestrel's failure to cure within the contractual 45-calendar-day period. This lot-by-lot analysis will be supported by references to the relevant documentary evidence and will be presented in a manner designed to demonstrate the systematic nature of Kestrel's quality failures.
The submission will present WAL's affirmative defenses in full, including:
• Compliance with rejection and cure procedures under § 8.4: WAL followed the contractually prescribed lot-rejection procedures, provided timely written notice of each rejection with specification of the grounds, and afforded Kestrel the full 45-calendar-day cure period for each rejected lot.
• Proper termination for Persistent Quality Failure under § 14.2(b): WAL's Notice of Termination for Cause, issued October 3, 2022, was properly invoked upon the occurrence of a Persistent Quality Failure as defined in Section 8.4, with seven uncured rejections in a rolling twelve-month period — more than double the contractual threshold of three.
• Enforceability of the consequential damages waiver under § 8.7: The MSA's mutual waiver of consequential damages bars the vast majority of Kestrel's damages claim, including all lost-profit and reputational damages claims.
The counterclaim section will detail the calculation of €5.17 million in replacement-component costs from Valkyr, with supporting documentation including the Valkyr purchase orders, invoices, and pricing schedules, as well as evidence of WAL's reasonable mitigation efforts.
B. Expert Engagement
Expert engagement letters have been issued to WAL's two retained experts, both of whom were engaged in March 2023:
• Dr. Nadia Ostrovsky, Ridgeline Economic Consulting LLC (damages expert): Dr. Ostrovsky is an economist and damages expert with extensive experience in commercial arbitration. She will prepare an expert report addressing the quantum of Kestrel's damages claim, including a critique of Prof. Langfeld's methodology and assumptions.
• Dr. Raymond Chow, Arclight Materials Science Inc. (metallurgical expert): Dr. Chow is a metallurgical engineer and materials scientist specializing in titanium alloys and aerospace-grade castings. He will prepare an expert report presenting his independent analysis of the porosity data for all fourteen rejected lots.
Expert instruction memoranda are currently being finalized for delivery to both experts in May 2023. The instruction memoranda will direct Dr. Ostrovsky and Dr. Chow to address the following specific issues:
Dr. Ostrovsky's instruction memorandum will direct her to:
(a) analyze and rebut Prof. Langfeld's damages methodology, including his use of the discounted cash flow approach and his assumptions regarding volume projections, pricing escalations, and cost trajectories;
(b) challenge Kestrel's claimed profit margin of 22.4% in light of the internal financial records reflecting actual margins of 16% to 18% during Contract Years 3 and 4;
(c) address the renewal-period lost-profit issue, including the contingent nature of the renewal options and the probability that they would have been exercised; and
(d) analyze and critique the causation and quantification of Kestrel's reputational damages claim.
Dr. Chow's instruction memorandum will direct him to:
(a) perform an independent metallurgical analysis of the porosity data for all fourteen rejected lots, comparing WAL's receiving-inspection test results with Kestrel's internal test results and his own independent testing;
(b) opine on whether the porosity levels identified in the rejected lots exceeded the contractual specification of ≤0.25% as set forth in WAL-SPEC-TH-401, Appendix C, Table 3;
(c) address the likely causes of the elevated porosity levels, including potential process-control failures in Kestrel's casting operations; and
(d) respond to any expert opinions offered by Kestrel regarding the appropriateness of the porosity specification or WAL's testing methodology.
Under the procedural calendar established by PO No. 1, expert reports are to be exchanged simultaneously on October 16, 2023, with rebuttal expert reports due on November 13, 2023. We are managing the expert work streams to ensure that both Dr. Ostrovsky and Dr. Chow are well positioned to meet these deadlines.
C. Key Upcoming Deadlines
The following table summarizes the key remaining deadlines in the arbitration, as established by Procedural Orders Nos. 1 and 2:
We will provide updated status reports in advance of each major milestone and will consult with you regarding any strategic decisions that arise in the interim.
VII. Budget Update
As you are aware, WAL's engagement of Calderwood & Harkness in this matter is structured on an hourly-rate basis, with no contingency or success-fee element. The current billing rates for the principal timekeepers assigned to this matter are as follows:
Total professional fees billed to date remain within the preliminary budget range communicated to you in our November 2022 status report. We have been mindful of cost efficiency throughout the document production phase, including through the use of technology-assisted review protocols and the strategic allocation of review tasks between partner, senior associate, and associate timekeepers.
Disbursements to date include expert retainer fees paid to Arclight Materials Science Inc. and Ridgeline Economic Consulting LLC, the ICC advance on costs (WAL's share, as fixed by the ICC Secretariat), and various administrative costs associated with document management and production. All disbursements have been processed in accordance with the terms of our engagement letter dated October 28, 2022.
We recognize that the most intensive — and most costly — phases of the arbitration lie ahead, including the completion of the written submissions, the expert report phase, witness preparation, and the evidentiary hearing. We are preparing updated budget projections covering the period through the conclusion of the evidentiary hearing in January 2024, which we will provide to you in a forthcoming communication. We will, of course, consult with you regarding any significant changes in scope or budget expectations as the matter progresses.
VIII. Recommended Actions for WAL
To ensure that WAL is well positioned for the next phase of the arbitration, we recommend the following actions:
1. Continue compliance with the litigation hold. The litigation hold notice issued on November 8, 2022, remains in effect and applies to all documents and electronically stored information potentially relevant to this arbitration. Please ensure that all WAL personnel who received the litigation hold notice continue to comply with its terms, including the obligation to preserve all relevant documents and refrain from any destruction, alteration, or deletion of potentially responsive materials. If any questions arise regarding the scope of the hold, please direct them to our attention.
2. Make key witnesses available for preparation sessions. We respectfully request that WAL make Gerald Huang (Vice President, Global Supply Chain Operations) and Dr. Ingrid Vollmer (Senior Vice President, Engineering & Manufacturing) available for witness preparation sessions in the coming months. Mr. Huang's testimony will be central to establishing WAL's quality-control procedures, the lot-rejection process, and the procurement of replacement components from Valkyr. Dr. Vollmer's testimony will address the engineering specifications, the porosity requirements, and the technical basis for WAL's quality standards. We will coordinate scheduling with your office as we approach the appropriate phase of preparation.
3. Assemble additional documentary evidence. Please coordinate with the relevant WAL departments to assemble any additional inspection records, internal communications regarding the rejected lots, and Valkyr procurement files that may be needed for the Statement of Defense and Counterclaim. Specifically, we would like to ensure that we have complete records for the receiving inspection of each of the fourteen rejected lots, all correspondence with Kestrel regarding the rejections and cure periods, and the full procurement file for the Valkyr replacement order, including bid solicitation materials, evaluation records, and contract documents.
4. Provide updated financial information to advisory teams. Please provide any updated financial information that may be requested by Sandra Gillespie at Canfield & Thorpe LLP and Dr. Nadia Ostrovsky at Ridgeline Economic Consulting LLC in connection with their forensic accounting review and damages analysis, respectively. Timely provision of this information will be important to ensuring that Dr. Ostrovsky's expert report is well-supported and filed on schedule.
IX. Lender and Insurance Considerations
We note briefly two ancillary matters that warrant continued monitoring.
Lender Notification. As previously discussed, Veltrano National Bank, N.A. ("Veltrano"), WAL's senior secured lender under the $350 million revolving credit facility dated March 12, 2021, has been kept apprised of the status of this arbitration in accordance with the reporting obligations set forth in the credit agreement. Kestrel's claim of €47.3 million, if sustained in full or in substantial part, could have implications for WAL's compliance with certain financial covenants under the credit facility. However, as discussed throughout this letter, we believe that WAL's defense position is strong and that the likelihood of an adverse award in an amount approaching Kestrel's full claim is low. The document production results have materially strengthened our confidence in WAL's defensive position, and we believe this assessment will be reassuring to Veltrano. We will continue to coordinate with you regarding the timing and content of any further notifications to Veltrano as the arbitration progresses.
Insurance Coverage. As you are aware, Pinnacle Continental Insurance Co. ("Pinnacle") issued a coverage reservation letter under Policy No. PCE-GL-2021-08854 in response to WAL's notice of the Kestrel arbitration. Pinnacle's reservation letter indicated that, in its preliminary assessment, the policy's commercial-supply exclusion precludes any defense or indemnity obligation with respect to claims arising from the commercial supply of components under the MSA. There has been no change in this status. We do not currently anticipate that Pinnacle will alter its coverage position, but we will continue to monitor the situation and advise you if any developments warrant further engagement with Pinnacle or its coverage counsel.
X. Conclusion and Next Steps
In summary, the document production phase has been a significant development in this arbitration and has materially strengthened WAL's defense position across all key issues. Kestrel's own internal records — including quality testing data, management communications, financial analyses, and AS9100 audit findings — corroborate WAL's factual narrative and undermine Kestrel's claim that the lot rejections were pretextual or that WAL applied improperly strict quality standards. The consequential damages waiver in Section 8.7 of the MSA provides an additional, independent basis for limiting Kestrel's recovery, and WAL's counterclaim of €5.17 million remains well supported.
Our team is now focused on completing the Statement of Defense and Counterclaim for the June 30, 2023 deadline and finalizing the expert instruction memoranda for Dr. Ostrovsky and Dr. Chow. We are confident that the submission will present a compelling and thoroughly documented defense of WAL's position.
We would welcome the opportunity to schedule a call with you to discuss the matters addressed in this letter in greater detail. If it would be helpful, we are also available to present this update to Marcus J. Whitmore III or other members of WAL's senior leadership team. Please let us know your preferred timing, and we will arrange accordingly.
As always, please do not hesitate to contact me or Vivienne St. Claire with any questions or concerns regarding this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Theodore Langston Partner
600 Lexington Avenue New York, NY 10022 Telephone: (212) 486-7244
Email: t.langston@calderwoodharkness.com
cc: Marcus J. Whitmore III, Chief Executive Officer, Whitmore Aerospace LLC cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Simone Laroche, Senior Associate, Calderwood & Harkness LLP cc: Jeffrey Park, Associate, Calderwood & Harkness LLP
Encl.: Updated Procedural Calendar (per Procedural Orders Nos. 1 and 2)
Deadline | Event
June 30, 2023 | Respondent's Statement of Defense and Counterclaim due
August 11, 2023 | Claimant's Reply and Defense to Counterclaim due
September 29, 2023 | Respondent's Rejoinder due
October 16, 2023 | Simultaneous exchange of expert reports
November 13, 2023 | Simultaneous exchange of rebuttal expert reports
January 8–12, 2024 | Evidentiary hearing (ICC Hearing Centre, New York, NY)
Timekeeper | Role | Hourly Rate
Theodore Langston | Partner | $1,475/hr
Vivienne St. Claire | Partner | $1,425/hr
Simone Laroche | Senior Associate | $895/hr
Jeffrey Park | Associate | $625/hr

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts