Law360, Los Angeles (September 18, 2015, 10:12 PM ET) — General Dynamics Land Systems Inc. urged a Texas federal judge on Thursday to consolidate twin fraud suits brought by a bankrupt metal fabrication shop accusing the defense contractor of not paying for $3.7 million worth of parts, saying the other suit could endanger its pending bid to compel arbitration.

GDLS said it filed the emergency motion because it is concerned that Elite Precision Fabricators Inc. will argue in a parallel adversary proceeding in Texas bankruptcy court that GDLS has lost its rights to compel arbitration “simply by the virtue of the passage of time” and told U.S. District Judge Sim Lake that Elite was attempting to begin discovery, flouting the parties’ arbitration agreement.

“As a result of Elite’s attempts to force discovery, GDLS has been placed in the position of being compelled to choose between standing on its rights to arbitration and consolidation of these two identical lawsuits in one forum or participating in the second-filed lawsuit without objection, and facing Elite’s arguments that it has waived its rights,” the company wrote in a four-page motion.

But Elite shot back on Friday, saying GDLS’ actions “reek of forum shopping in a desperate attempt to avoid the bankruptcy court determining its motions to dismiss and abate in lieu of arbitration.”

The filings are the latest in a case first brought in July 2014 accusing GDLS of fraud and breach of contract in connection with a work stoppage agreement that the Montgomery, Texas-based company says cost it $3.7 million and forced it into bankruptcy.

Elite Precision Fabricators Inc. has been trying to keep the case out of arbitration, blasting the validity of an arbitration agreement between the companies by arguing its existence was not obvious in GDLS’s first purchase order in June 2011.

GDLS argued earlier this month that the contract to build armored personnel carriers for the Israeli military contained an “explicit” arbitration agreement included in terms and conditions on its website to which sellers are directed.

“Elite, a commercial party, agreed to be bound by the purchase terms and conditions by transacting with GDLS,” it said in a Sept. 11 filing. “The purchase terms and conditions, referred to herein along with the purchase orders as the ‘APC contract,’ have not varied substantially since June 2011 and at all times have contained an arbitration clause.”

GDLS blasted Elite’s contention that the lawsuit is secondary to the adversary proceeding, as the suit was filed first, and that General Dynamics has sought to delay the litigation, arguing instead that it has sought speedy proceedings. On top of the dismissal bid, GDLS has sought to combine the two cases in Article III proceedings.

“The adversary proceeding and this lawsuit are not, as Elite represents, two entirely distinct pieces of litigation. As GDLS noted in the consolidation motion, these two lawsuits: (a) are based upon nearly identical facts; (b) will involve common discovery issues and legal issues … and (c) seek recovery of the same damages,” GDLS said.

In its initial complaint, Elite alleged its costs for manufacturing the parts it was obligated to contribute to the armored vehicles quickly exceeded its expectations. After realizing that it could not continue with the project, claiming financial burden resulting from borrowing millions to finance the project, Elite negotiated a work stoppage agreement with General Dynamics in 2012 to end its involvement with the project, according to court documents.

The agreement provided for payment of all finished product, work in progress and third-party purchases of materials, Elite claimed in its suit, product for which it said it was never paid.

GDLS, a Michigan-based division of General Dynamics Corp., is represented by Jean C. Frizzell and Solace Kirkland Southwick of Reynolds Frizzell LLP and Catherine L. Steege of Jenner & Block LLP.

Elite is represented by Robert R. Burford and Matt E. Parks of Burford Perry LLP.

The case is Elite Precision Fabricators Inc. v. General Dynamics Land Systems Inc., case number 4:14-cv-02086, in U.S. District Court for the Southern District of Texas.

–Additional reporting by Bryan Koenig, Aebra Coe and Tom Zanki.  Editing by Aaron Pelc.