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Fifth Circuit rules en banc that arbitration treaty trumps state insurance laws

By natalie • Jan 9th, 2010 • Category: Arbitration, Arbitration Cases, Arbitration News

USA
November 21 2009

In Safety National Casualty Corporation v. Certain Underwriters At Lloyd’s, London, — F.3d —-, 2009 WL 3722727 (5th Cir. (La.)), the Fifth Circuit considered en banc the question of whether the McCarran-Ferguson Act caused Louisiana state law to “reverse-preempt” the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) or its implementing legislation (the Convention Act).

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Arbitrability of statutory discrimination claims

By natalie • Jan 8th, 2010 • Category: Arbitration

Edwards Angell Palmer & Dodge

Windy Rosebush Catino and Jennifer Geiser Chiampou

USA
December 4 2009

Congress enacted the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”) in 1925 as a solution to the “costliness and delays of litigation,” but arbitration has other benefits as well, including keeping potentially embarrassing discrimination claims private. Whether statutory discrimination claims are arbitrable has been the subject of debate and conflicting legal analysis, leaving employers with no reliable option other than defending claims publicly and at great expense. However, a few recent cases shed some light on the subject for employers who wish to take advantage of the benefits of arbitration to resolve statutory discrimination claims.

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Court holds that question of arbitrability is reserved to arbitrators by parties’ agreement

By natalie • Jan 8th, 2010 • Category: Arbitration, Arbitration Cases, Arbitration News

Jorden Burt LLP

Brian Perryman

USA
November 30 2009

A New York court has affirmed the trial court’s denial of the plaintiff’s motion to stay or enjoin arbitrations pending before the American Arbitration Association. Although noting that the question of arbitrability is generally an issue for judicial determination, the parties’ agreement incorporated the AAA rules, which provide that the arbitration panel had the power to rule on its own jurisdiction. The court therefore found that the scope and validity of the arbitration agreement were properly presented to the arbitators. One justice filed a concurring opinion expressing his view that the United States Supreme Court decision in Hall Street Associates v. Mattel, Inc., 128 S. Ct. 1396 (2008), rendered unenforceable the agreement’s provision allowing for judicial review of legal errors by the arbitrator. The panel opinion had declined to reach that issue since it was included among the arbitrability issues to be decided by the arbitrators. Life Receivables Trust v. Goshawk Syndicate 102 at Lloyd’s, No. 194N 601244/08 (N.Y. App. Div. Oct. 13, 2009).

Notable 2009 U.S. reinsurance arbitration decisions

By natalie • Jan 4th, 2010 • Category: Arbitration News

Edwards Angell Palmer & Dodge

E. Paul Kanefsky and Robert W. DiUbaldo

USA
December 1 2009

While 2009 has not been a momentous year for United States case law involving, or having an impact on, reinsurance arbitrations, there have been interesting developments in the following key areas: (1) a party’s ability to challenge arbitration awards arising under the Federal Arbitration Act (the FAA); (2) arbitrator appointment; and (3) enforceability of arbitration agreements. These developments are summarized below.

Challenging Arbitration Awards

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Contracting parties can continue to exercise rights under contract including right to terminate, even if dispute resolution process has started

By natalie • Jan 4th, 2010 • Category: International Arbitration

Matthew Arnold & Baldwin LLP

Paul Gershlick

C contractually agreed to provide D with software and IT services. The dispute resolution clause in the contract provided for mediation and adjudication. A dispute arose. C suggested mediation, to which D agreed. D also gave notice of material default and required C to correct. C gave notice requiring adjudication. D gave notice of termination when the material default had not been corrected. Each party objected to the action taken by the other party. C sought an injunction to prevent D terminating until the adjudication process had been completed; meanwhile, D sought an injunction to prevent C going to adjudication while mediation was still in play.

The High Court refused both injunction requests. Unless there was very clear wording in the contract to the contrary: the dispute resolution process did not stop a party exercising its contractual rights including the right to terminate; and different dispute resolution mechanisms provided for in the contract were not mutually exclusive.