Century Indemnity Company (“Century”) sued Clearwater Insurance Company (“Clearwater”) seeking payment under a facultative reinsurance certificate which contained an arbitration clause. Clearwater moved to stay the litigation and compel arbitration.
A New York district court granted Clearwater’s motion finding that the parties’ dispute, which involved differences of opinion with respect to the interpretation of the contract provisions, clearly fell within the purview of the arbitration clause. Additionally, the court concluded that Clearwater did not waive its right to arbitrate its dispute by waiting five months after the commencement of the litigation to demand arbitration. To the contrary, the court considered the five month period a “relatively short period of time.” Century Indemnity Company v. Clearwater Insurance Company, Case No. 06-0424 (S.D.N.Y. June 4, 2007).