Arbitration / Court Decisions

FIFTH CIRCUIT CONFIRMS INTERNATIONAL ARBITRATION AWARD FROM NETHERLANDS

June 24, 2009 by Carlton Fields

On June 9, 2009, the U.S. Court of Appeals for the Fifth Circuit affirmed an arbitration award against Saipem America, which arose out of an international commercial insurance dispute. The Fifth Circuit reviewed the arbitration award handed down by a tribunal in The Hague, Netherlands for $1 million in damages and $400,000 in attorneys' fees. In addressing the parties' dispute over whether the U.S. Supreme Court's decision in Hall Street Associates prevented review of the award on nonstatutory grounds, the Fifth Circuit concluded that it may vacate the award only if a statutory ground supported the vacatur. With respect to the negligence claim, the Court ruled that the tribunal was within its authority to rule on the issue of negligence because the parties had submitted the issue in the “Terms of Reference” to the arbitration tribunal. Further, the Court ruled that the award of attorneys' fees was statutorily proper under Texas Code Section 172.145. Finally, the Court found no basis to overturn the tribunal's ruling as to indemnity. Saipem Am. v. Wellington Underwriters Agencies Ltd., No. 08-20247 (5th Cir. Jun. 9, 2009).

This post written by John Black.

RECENT ARBITRABILITY DECISIONS: THE GOOD, THE BAD, AND THE VOID

June 18, 2009 by Carlton Fields

There have been a number of decisions recently on the issue of arbitability:

Denial of motion to compel affirmed: Arbitration provision void due to agreement’s non-compliance with California workers compensation insurance laws. Ceradyne, Inc. v. Argonaut Ins. Co., G039873 (Cal. Ct. App. June 2, 2009)

Motion to compel individual arbitration denied: Class arbitration waiver void as unconscionable under Washington state law. Coneff v. AT&T Corp., No. C06-944 (W.D. Wa. May 22, 2009)

Denial of motion to compel affirmed: Arbitration provision void under California arbitration statute for possibility of conflicting rulings. Schwartz v. Vista Pointe Salton Sea, LLC, D052988 (Cal. Ct. App. June 2, 2009)

Motion to compel granted, no procedural or substantive unconscionability: Nayal v. Hip Network Services IPA, Inc., 08-10170 (S.D.N.Y. May 28, 2009)

Motion to vacate order compelling arbitration granted for defendant’s waiver: Apple & Eve, LLC v. Yantai North Andre Juice Co., Ltd., 07-745 (E.D.N.Y. April 27, 2009)

This post written by John Pitblado.

VARIOUS RULINGS WITH RESPECT TO ARBITRATION AWARDS

June 17, 2009 by Carlton Fields

Manifest Disregard of Law: Macromex Srl v. Globex Int’l Inc., No. 08-2255 (2d Cir. May 26, 2009) (affirming district court’s confirmation of award, finding no manifest disregard of law); Brezden v. Associated Sec. Corp., Case No. 09-2771 (USDC C.D. Cal. June 1, 2009) (denying petition to vacate, finding no manifest disregard of law) (respondents have since filed a Notice of Appeal); Holland v. Wachovia Sec., LLC, Case No. 08-1772 (USDC S.D. Cal. May 15, 2009) (dismissing petition to vacate; manifest disregard of law allegation did not necessarily depend on resolution of a substantial question of federal law). None of these opinions discuss the continued viability of this doctrine after the Supreme Court’s Hall Street Associates opinion.

Petitions to Vacate: United Gov’t. Sec. Officers of Am., Int’l Union v. Pinkerton Gov’t Servs., Inc., Case No. 08-285 (USDC E.D. Tenn. June 03, 2009) (denying defendant’s motion to dismiss an action to vacate and modify an award, finding the court was not deprived of its concurrent jurisdiction); Steward v. H & R Block Fin. Advisors, Inc., Case No. 08-5994 (USDC D. Minn. May 28, 2009) (dismissing petition to vacate, rejecting petitioner’s numerous claims).

Public Policy: Columbia Gas of Ohio, Inc. v. Util. Workers Union of Am., Local 349, No. 08-3616 (6th Cir. May 15, 2009) (affirming the district court’s confirmation of award, enforcement of the contract agreement not contrary to public policy).

Miscellaneous: Parham v. Am. Bankers Ins. Co. of Fla., Case No. 07-706 (Ala. May 29, 2009) (finding no indication that the clerk entered the arbitrator’s order as the judgment of that court as required, ruling that the trial court’s order is void and vacated, dismissing the appeal for lack of subject matter jurisdiction as no final judgment exists); Med. Shoppe Int’l., Inc. v. Turner Invs., Inc., Case No. 09-00102 (USDC E.D. Mo. May 7, 2009) (granting application to confirm award as the allegations of bias failed and the court lacked jurisdiction to review allegations of factual errors); Dzanoucakis v. The Chase Manhattan Bank, USA, Case No. 06-5673 (USDC E.D.N.Y. Mar. 31, 2009) (granting motion to confirm award, finding sufficient evidentiary basis to establish the existence of an arbitration agreement and no evidence of impartiality).

This post written by Dan Crisp.

REINSURANCE INFORMATION NOT DISCOVERABLE

June 16, 2009 by Carlton Fields

The Flintkote Company (“Flintkote”), an insolvent asbestos manufacturer, brought this action against its insurers for failure to defend or indemnify for claims allegedly covered under a policy in force between 1958 and 1961 and requested discovery of its insurer’s reserves and reinsurance information. In allowing discovery of reserves information, the district court found this information relevant to the plaintiff’s claims of bad faith in that the information could be relevant to show the difference between what the insurers expected to pay for claims and communication with the plaintiff regarding the scope of loss. The court then denied plaintiff’s request to discover reinsurance documents, determining that the reinsurance agreements were not directly at issue or relevant to the litigation. The Flintkote Co. v. Gen. Accident Assurance Co., Case No. 04-01827 (USDC N.D. Cal. May 26, 2009).

This post written by Dan Crisp.

ENGLISH COURT CIRCUMVENTS ARBITRATION CLAUSE AND RETAINS JURISDICTION OVER DISPUTE BETWEEN FRENCH AND ENGLISH CO-INSURERS

June 11, 2009 by Carlton Fields

A UK appellate court recently dismissed a French insurer’s jurisdictional challenge to a lawsuit initiated against it by an English insurer. After settling a personal injury claim, the French insurer sought to recover $2.45 million from the English insurer as its proportionate share of the settlement. The English insurer, however, denied coverage for the claim, and commenced proceedings in England for a declaration of non-liability. In response, the French insurer argued that the English court lacked jurisdiction because of an arbitration clause in the insurance policy that required all disputes to be arbitrated in Paris. It further noted that European Union Regulation 44/2001 has an arbitration exclusion that precluded English jurisdiction. The lower court rejected this argument, and the French insurer appealed.

The appellate court rejected the French insurers’ jurisdictional argument, holding that—under the EU Regulation—both the subject matter of the claim and the preliminary issue of the enforceability of the arbitration clause were within the English court’s jurisdiction. The court reasoned that “the mere fact that a claim is the subject of an arbitration agreement does not deprive a court of its jurisdiction to determine the dispute.” Rather, a court has to look at the subject matter of the proceeding to decide whether it is within the scope of the arbitration agreement or the EU Regulation. Applying this standard, the court found that the English insurer’s claim did not arise from the insurance policy’s arbitration agreement; instead, it arose out of a separate liability agreement between the co-insurers. Youell v. La Reunion Aerienne [2009] EWCA Civ 175.

This post written by John Black.