Law360, New York (August 13, 2015, 5:08 PM ET) — General Dynamics Land Systems Inc. on Wednesday slammed a bankrupt metal fabrication shop’s $3.7 million fraud suit lodged in Texas federal court over an alleged breach of the pair’s contract to build tanks for the Israeli government, saying the contract in question clearly dictates arbitration.

General Dynamics asked the federal court to dismiss Elite Precision Fabricators Inc.’s fraud and fraudulent inducement claims and compel it to arbitrate its allegation that the contractor failed to uphold an agreement in which the two companies agreed to a work stoppage after initially joining forces to fulfill General Dynamics’ contract with the Israeli government to construct combat vehicles.

“Elite fails to allege … that GDLS made any material false representations, much less that it made such representations knowing that they were false or intending that Elite would rely upon them,” the motion to dismiss said. “Rather, Elite simply alleges that GDLS promised to perform and subsequently failed to do so — a breach of contract claim.”

Additionally, the parties agreed to arbitrate any disputes over their contract and, as a result, the disagreement does not belong in federal court, General Dynamics said.

In its 2014 lawsuit, Elite alleged its costs for manufacturing the parts it was obligated to contribute to the tanks 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. The company alleges it sent a $3.7 million invoice to General Dynamics but was never paid.

The Montgomery, Texas-based fabrication shop filed for Chapter 11 bankruptcy protection in March 2014. Elite filed an adversary proceeding against General Dynamics in the bankruptcy court case that bring identical claims to those in the immediate suit, the defendant said.

It has also filed a motion to dismiss the adversary complaint and to compel arbitration in that proceeding, General Dynamics told the court Wednesday.

Counsel for Elite did not immediately respond to a Thursday request for comment.

GDLS, a Michigan-based division of General Dynamics, is represented by Jean C. Frizzell and Solace Kirkland Southwick of Reynolds Frizzell LLP.

Elite is represented by Robert R. Burford 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 Tom Zanki. Editing by Philip Shea.