Paul Hastings Defeats Claims for $1.2B Damages in International Arbitration Win for Subsidiary of BYD North America

Paul Hastings LLP won a final arbitration award dismissing claims for over $1.2 billion in damages against their client Global Healthcare, a subsidiary of BYD North America. The team petitioned the Los Angeles County Superior Court to confirm the award yesterday.

The arbitration concerned a deal between Global Healthcare and a purported network of healthcare providers based in Florida (care provider network or CPN). During the height of the COVID-19 pandemic, CPN promised to purchase over 1.2 billion BYD N95 respirator masks from Global Healthcare (which, during COVID, converted some of its operations to producing PPE). However, CPN had few customers for the masks and was unable to fulfill its commitment. Instead of the massive orders that CPN promised to make, CPN placed a series of tiny orders with quantities as low as 960 masks, supposedly as “samples” for major customers that never materialized. CPN also secretly filmed the inside of the BYD warehouses in violation of the supply agreement’s confidentiality provisions, allowing fraudsters to misuse the video to market their own counterfeit BYD masks.

After Global Healthcare terminated the parties’ agreement for material breach, CPN sued BYD and Global Healthcare in Los Angeles Superior Court for approximately $1 billion in “lost profits” resulting from the alleged “wrongful termination,” among other claims. The case was successfully moved to arbitration and Global brought its own claims against CPN. The arbitrator ultimately found that CPN’s breach of the agreement’s confidentiality provision was a material breach that, under Delaware law, excused Global Healthcare from further performance and thereby eliminated any liability for wrongful termination and subsequent lost profits. Accordingly, the arbitrator dismissed all of CPN’s claims for damages. 

The arbitration was conducted at Signature Resolution in Los Angeles before a single arbitrator, the Honorable Daniel Buckley (Ret.), the former presiding judge of the Los Angeles Superior Court. 

Paul Hastings partner Susan Leader led the team, which also included of counsel Ali Rabbani and Josh Gordon, and associates Stephanie Balitzer, Taylor Farias, Paul Gross and Will Ostrander.

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