Thank you for your question. I look forward to working with you to provide you the information you are seeking.
The contractor hired to do work on a property is liable for any damages they cause when doing that work. Thus, if they damaged your property while doing the trenching, they are liable to fix it under the common law of negligence and liability.
The fact that your contract
has an arbitration
clause for disputes means you cannot sue and you must submit a written request demanding arbitration to resolve your dispute over the damages caused by the work they performed under that contract.
I do not see how the manager is saying "by rights" they do not have to pay for damage they caused unless your contract had a waiver of liability clause for this type of damage.
I truly aim to please you as a customer, but please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.
Kindly remember the ONLY WAY experts receive any credit at all for spending time with customers is if you click on OK, GOOD or EXCELLENT SERVICE even though you have made a deposit or are a subscription customer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT, if not the site keeps your money on deposit.
Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.