The United States Court of Appeals for the Fifth Circuit has held that the arbitration provision in two fiduciary liability insurance policies issued to Enron Corporation did not apply to require arbitration of competing claims asserted by multiple insureds to the limits of two policies that were interpleaded by the insurers. Tittle v. Enron Corp., Case No. 05-20380 (5th Cir. Sept. 1, 2006).
Arbitration Process Issues
Court enforces agreement regarding appointment of arbitrators
A District Court has entered an Order to enforce the contractually agreed-upon procedure for appointing a third arbitrator in an insurance matter, setting deadlines for each step of the process. The Court also held that whether arbitrations regarding four different insurance agreements should be consolidated was a matter to be decided by the arbitrators. Clearwater Insurance Co. v. Granite State Insurance Co., Case No. 06-4472 (USDC N.D. Cal. Oct. 2, 2006).
Court enforces contractual arbitrator appointment procedure and holds that arbitrators should decide whether to consolidate multiple arbitrations
A District Court has entered an Order to enforce the contractually agreed-upon procedure for appointing a third arbitrator in an insurance matter, setting deadlines for each step of the process. The Court also held that whether arbitrations regarding four different insurance agreements should be consolidated was a matter to be decided by the arbitrators. Clearwater Insurance Co. v. Granite State Insurance Co., Case No. 06-4472 (USDC N.D. Cal. Oct. 2, 2006).
UK Court permits substitution of party in arbitration and expanded damage request
The UK Commercial Court has approved an arbitrator's decision to permit the substitution of one Claimant for another to reflect what in effect was a corporate reorganization. It also permitted the Claimant to use a pending arbitration to seek an award of all balances that would come due under the treaty during the pendency of the arbitration, instead of requiring a filing of separate arbitrations for amounts that became due after the commencement of the pending arbitration. Harper Versicherungs AG v. Indemnity Marine Assurance Co., [2006] EWHC 1500 (QB) (June 23, 2006).
State court rules that Liquidation Act does not force payment of IBNR claims or avoid arbitration agreements
A New Jersey Appellate Court has agreed with arguments made by the Reinsurance Association of America, holding that a court could not, under the authority of New Jersey's Insurer Liquidation Act, adopt a plan that forced reinsurers to pay claims based upon IBNR estimates, and could not abrogate arbitration provisions contained in reinsurance agreements to force that disputes be litigated in the liquidation court. In re Liquidation of Integrity Insurance Company, Case No., C-7022-86, 2006 WL 2795343 (N.J. Super. A.D. Oct. 2, 2006).
