Ronald S. Gass
Reinsurance and Insurance Arbitrator and Umpire
Reinsurance and Insurance Dispute Resolution Services Consultant

Reinsurance and Insurance Arbitration - Case Notes Archive

October 29, 2014 - In a confirmation proceeding, Mich. fed. dist. ct. refused to seal or redact the substantive rulings of the arbitration panel majority's final award because doing so would conflict with the ct.'s "long-established legal tradition" of public access to ct. documents in the absence of compelling reasons to justify non-disclosure. Reinsurer's concern that its financial interests would be harmed because it would likely face additional reinsureds attempting to cite the majority's substantive rulings to support their claims despite the confidential nature of the arbitration was held to be insufficient to justify entry of a protective order; however, the redaction of the award and other filed documents identifying non-parties to the arbitration was appropriate and consistent with protecting their privacy rights. Amerisure Mut. Ins. Co. v. Everest Reins. Co., 2014 U.S. Dist. LEXIS 153013 (E.D. Mich. Oct. 29, 2014).

October 21, 2014 - Reinsurance arbitration panel's interim "Final Award" resolving a separate independent claim but not all of the parties' claims held by Mass. fed. dist. ct. not to be ripe for FAA § 9 confirmation because the parties had not jointly agreed to bifurcate the arbitration even though the panel, at the request of one of parties, had agreed to proceed in phases. First State Ins. Co. v. Nationwide Mut. Ins. Co., 2014 U.S. Dist. LEXIS 149649 (D. Mass. Oct. 21, 2014).

October 16, 2014 - 2nd Cir. summary order upholds N.Y. fed. dist. ct. ruling that fac reinsurer's denial of cedent's cession of $4.9M in loss and $2.4M in interest arising under $10M D&O policy inclusive of defense costs did not trigger $5M excess of $5M SIR fac cert. when cert. provided that reinsurer would pay loss plus its proportion of expense, ct. costs, and interest incurred by the cedent in the ratio that the reinsurer's loss payment bore to the cedent's gross loss payment. Because the cedent's loss cession excluding interest did not exceed the cert.'s $5M trigger, neither loss nor expense was payable. Seneca Ins. Co. v. Everest Reins. Co., 2014 U.S. App. LEXIS 19929 (2d Cir. Oct. 16, 2014) (affirming 2013 U.S. Dist. LEXIS 151594 (S.D.N.Y. Oct. 16, 2013)).

May 23, 2014 - Evident partiality of neutral party-appointed arbitrator on AAA tripartite panel found by Tex. Sup. Ct. due to his failure to disclose the full extent of his litigation discovery outsourcing business's contacts with the law firm representing the appointing party, generally, and the party's 2 arbitration attorneys, in particular, because such non-disclosures might yield a "reasonable impression" of the arbitrator's evident partiality to an objective observer. Because the opposing party making the evident partiality challenge was unaware of the undisclosed information, it did not knowingly waive its claim. Sup. Ct. reversed Tex. App. Ct., which had reversed trial ct.'s finding of evident partiality, and ordered a new arbitration. Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, No. 12-0789, 2014 Tex. LEXIS 427 (Tex. May 23, 2014).

April 9, 2014 - UPDATE -- 6th Cir. reverses Mich. fed. dist. ct.'s mid-arbitration preliminary injunction (see 9/12/13 case note at halting reinsurance arbitration prior to issuance of a final award based on a party's allegations of unfairness and lack of impartiality of the arbitrators, and it reaffirms the well-settled rule under the FAA and similar Mich. arbitration law that parties to an arbitration generally may not challenge the proceedings on such grounds until after the conclusion of the arbitration and rendition of a final award. Savers Prop. & Cas. Ins. Co. v. National Union Fire Ins. Co., Nos. 13-2288/13-2289, 2014 U.S. App. LEXIS 6488 (6th Cir. Apr. 9, 2014).

March 11, 2014 - Arbitration clause providing that "the arbitration laws of New York State" shall govern the parties' arbitration held by N.Y. App. Div. to require court, not arbitrator, determination of arbitration time bar defenses in case involving Thorpe Insulation/T.J. Thorpe asbestos-related claims even though the controlling FAA would have presumptively reserved resolution of statute of limitations defenses to the arbitrator.  App. Div. reversed trial court finding that the parties must have unambiguously intended CPLR Art. 75 to apply, thereby encompassing N.Y.'s rule that threshold statute of limitations questions are for the courts.  ROM Reins. Mgt. Co., Inc. v. Continental Ins. Co., Inc., Nos. 11809, 654480/12, 2014 N.Y. App. Div. LEXIS 1509, 2014 N.Y. Slip Op. 1546 (N.Y. App. Div. March 11, 2014).

February 26, 2014 - Determination of preclusive effect of a prior arbitration award, which was later confirmed by fed. dist. ct., on a subsequent arbitration held by 1st Circuit to be a matter for the arbitrator, not the court, to decide under FAA. Employers Ins. Co. of Wausau v. OneBeacon Am. Ins. Co., No. 13-1913, 2014 U.S. App. LEXIS 3613 (1st Cir. Feb. 26, 2014).

February 14, 2014 - Arbitration panel's "conceptual" award resolving payment dispute over insurer's cession of Gould Pumps asbestos-related claims to fac reinsurer held by fed. dist. ct. to be final and enforceable and not subject to remand as an interim or otherwise incomplete award because the amounts due were not specifically calculated but left to the parties to compute based on the 4 compensable versus non-compensable categories recognized by the panel. R&Q Reinsurance Co. v. Utica Mut. Ins. Co., 13 Civ. 8013 (PAE), 2014 U.S. Dist. LEXIS 19040 (S.D.N.Y. Feb. 14, 2014).

January 23, 2014 - Arbitration clause in worker's comp reinsurance contract involving offshore segregated protected cell arrangement held unenforceable by Tenn. fed dist. ct. interpreting Neb. arbitration statute, Neb. Rev. Stat. § 25-2602.01(f)(4), because insured's reinsurance participation in protected cell structure "concerned" or "related" to the insurance policies issued by the participating worker's comp insurers thereby barring enforcement. Milan Express Co. v. Applied Underwriters Captive Risk Assur. Co., No. 13-1069, 2014 U.S. Dist. LEXIS 8317 (W.D. Tenn. Jan. 23, 2014).

October 8, 2013 - Party's inadvertent disclosure to panel that it had nominated the selected umpire ruled not a basis for adversary's post-organizational mtg. fed. dist. ct. motions for a TRO and prelim. injunction and for the umpire's removal for alleged bias prior to the panel's final arbitration award when such disclosure, while not customary, did not violate any contractual provision.  Allstate Ins. Co. v. OneBeacon Am. Ins. Co., 2013 U.S. Dist. LEXIS 146826 (D. Mass. Oct. 8, 2013). [read entire case note]

September 12, 2013 - Mich. fed. dist. ct. grants rare mid-arbitration preliminary injunction staying the proceedings to allow moving party time to investigate whether evidence of party-arbitrator's ex parte communications with counsel for appointing party constituted a breach of the reinsurance agreement's arbitration provision requiring that disputes be submitted to 3 arbitrators not under the control of either party to the treaty.  Star Ins. Co. v. Nat'l Union Fire Ins. Co., 2013 U.S. Dist. LEXIS 130379 (E.D. Mich. Sept. 12, 2013).

January 15, 2013: "New York Court Decides Whether Party-Arbitrators Must First Disagree Before Appointing the Umpire"

September 24, 2012: " Federal Court Denies Second Bite at the Evidentiary Apple Finding No Refusal by Panel to Hear Pertinent and Material Evidence"

April 12, 2012: "Manifest Disregard" Not Quite Dead Yet — New York Federal Court Declines to Vacate Arbitration Tribunal's Award

February 3, 2012: Second Circuit Reverses Scandinavian Re v. St. Paul – Arbitrators’ Failure to Disclose Concurrent Service in Arguably Similar Arbitrations Does Not Constitute “Evident Partiality”

November 29, 2011: Federal Court Reluctantly Permits Replacement of Arbitrator by Appointing Party Who Solicited His Resignation Prior to Umpire Selection

June 28, 2011: Texas Court of Appeals Vacates Award for Evident Partiality Due to Arbitrator's Failure to Supplement Disclosures

June 20, 2011: Federal Court Decides Arbitrator Disqualification Issue Despite Agreement to Refer Selection Disputes to State Court

May 19, 2011: Federal Court Rules That Consolidation Question is for the First Fully Constituted Panel to Decide

Dec. 23, 2010: Panel Limits on Depositions and Hearing Testimony Did Not Amount to Arbitral Misconduct

June 23, 2010: When Arbitrators Resign: Second Circuit Affirms New Rule That a Substitute Arbitrator Should Be Appointed Instead Of Starting Arbitration Anew

February 1, 2010: Federal Court Denies Pre-Award Arbitrator Disqualification for Alleged Anticipatory Breach of Confidentiality Agreement

July 29, 2009: Federal Court Rules That Party-Arbitrator’s Resignation Due To Illness And Subsequent Recovery Does Not Require Arbitration To Start Anew

April 9, 2009: Second Circuit Rules 2-To-1 That Panel Award of Bad Faith Attorney’s and Arbitrator’s Fees Is Not Trumped by Conflicting Arbitration Clause

November 25, 2008: Second Circuit Rules that FAA Does Not Authorize Arbitrators to Issue Third-Party Pre-Hearing Document Subpoenas

April 21, 2008: California Federal District Court Rejects Extension of “Extraordinary” Tort Liability Remedy to Alleged Breach of Reinsurance Contract

April 18, 2008: Federal Court Rules Public Right to Access Requires Unsealing of Arbitration Awards Filed in Support of Confirmation Petition

February 6, 2008: The Functus Officio Doctrine And The Finality (Or Not) Of Partial “Final” Awards

September 6, 2007: Pennsylvania Federal Court Rejects “First in Time” Rule to Determine Which of Four Arbitration Panels Should Decide Consolidation Question

August 29, 2007: 7th Circuit Rules that Party-Arbitrator Appointment Deadlines Must Be Strictly Enforced

August 27, 2007: California Supreme Court Rules that Nonparty Insurer’s Reinsurance Agreements Are Not Discoverable by Plaintiffs

June 12, 2007: New York Appellate Division Rejects Cedent’s Post-Settlement Reinsurance Allocation as Unreasonable and Inconsistent with Its Pre-Settlement Allocation Positions

June 12, 2007: 3rd Circuit Rules that Consolidation Is for the Arbitrators, Not the Court, to Decide

March 27, 2007 : Party Refusing to Sign Arbitration Panel Hold Harmless Agreement Ordered to Do So by Court

January 18, 2007 : Summary Case Note – En Banc Fifth Circuit Denies Vacatur for Alleged “Evident Partiality” Due to Arbitrator Nondisclosure of Past Relationship with Counsel

September 29 , 2006: Summary Case Note – Federal Court Breaks Umpire Selection Deadlock

May 31 , 2006: Summary Case Note – Texas Court Reaffirms Arbitral Immunity From Civil Liability Notwithstanding Neutral Arbitrator’s Nondisclosure

April 4, 2006 : Summary Case Note -- 7th Circuit Rules That Arbitrators Must Decide Consolidation Question in First Instance

December 2, 2005: Enforcing Discovery Orders – First Circuit Upholds Panel’s Negative Inference” Sanction

August 30, 2005: When Declaratory “Final Awards” Clash With the Functus Officio Doctrine

August 3, 2005: Reference to “Arbitration Clause” in Binding Placement Slip Sufficient to Compel Arbitration

June 13, 2005: Arbitration Clause Does Not Require “All-American” Umpire Slates

December 28 , 2004: Treaty's Access to Records Clause Does Not Constitute a Blanket Waiver of Attorney-Client Privileg e

December 9, 2004: Sealing Confidential Arbitration Documents – Federal Court Takes A Cautious Approach

October, 2004: Federal Magistrate Judge Appoints "Most Qualified" Umpire after Deadlock

September 16, 2004: When an Arbitrator Dies: Federal Court Rules That the Arbitration Must "Begin Afresh"

July 19, 2004: Arbitrators, Not the Court, Must Decide Scope of Counterclaims to Be Resolved In an Arbitration

July 9, 2004: Consolidation of Related Reinsurance Disputes: Who Decides – Arbitrators or The Courts?

March 15, 2004: 2nd Circuit Rules That Reinsurer Must Follow Cedent's Post-Settlement Allocation

March 12, 2004: 3rd Circuit Rules That FAA Does Not Authorize Use of Pre-Hearing Non-Party Document Discovery Subpoenas in Arbitrations

February 3, 2004: Seventh Circuit Rejects As Unreasonable Motion to Remand for Clarification Eight Years after Panel Award

January 14, 2004: No "Second Bite at the Apple" for Losing Party to Challenge Arbitral Award's Treaty Interpretation and Application a Year Later

September 30, 2003: Facultative Reinsurer Not Bound to Follow Cedent’s $257 Million Non-Products Asbestos Single Occurrence Settlement Allocation

October 6, 2003: Court Appoints Umpire When Party-Arbitrators Reach Impasse

August 26, 2003: D.J. Expense Claims under Facultative Certificates Rejected by Second Circuit

June 3, 2003: 6th Circuit Vacates Award Ordering Party’s Payment to Nonparty

May 13, 2003: 8th Circuit Rules New Panel Need Not Be Appointed and Arbitration Commenced Anew When Arbitrator Resigns

April 7, 2003: U.S. Supreme Court Declines to Hear Appeal of 7th Circuit's Sphere Drake “Evident Partiality” Decision</p>

March 31, 2003: Multi-Year Fac Certs’ Liability Limits Trump “Follow Form” Clause – Annualization Denied Despite Conflicting Settlement Allocation

February 20, 2003: House of Lords Rules in Phoenix Film Financing Case on Insurers' Claims of Fraudulent Misrepresentation and Nondisclosure

January 3, 2003: Panel's Monetary Award Upheld as not "Indefinite" or the Product of a "Rough Justice" Compromise

December 17, 2002: Reinsurer's Action to Recover Claims Payments Erroneously Billed by Cedent Not Arbitrable Under "Narrow" Fac Cert Arbitration Clause

October 9 , 2002: 7th Circuit Reverses Vacation of Award for "Evident Partiality" Due to Party-Appointed Arbitrator's Failure to Make Full Disclosure

September 25, 2002: Court Refuses to Bar Depositions of Reinsurer's Top Executives Regarding Unicover and MGA Policies

September 9, 2002: 8th Circuit Rejects "Anti-Follow-The-Fortunes" Argument and Adopts Familiar "Bad Faith" Standard

August 30, 2002: Fifth Circuit Holds That Court Is Without Authority to Disqualify Arbitrator Prior to Award's Issuance

August 6, 2002: Uruguayan Reinsurer Not Immune from Arbitration Panel Pre-hearing Security Order

August 2, 2002: Party-Appointed Arbitrator's Prior Adverse Position Regarding Similar Dispute Held Not "Evident Partiality"

August 1, 2002: Second Circuit Holds That Reinsurers' Rescission Action Is Not Subject to Fac Certs' "Narrow" Arbitration Clause

July 11, 2002: "Follow the Settlements" Doctrine Held Inapplicable When Reinsurer Funded Settlement under a Reservation of Rights

July 29, 2002: Reinsurance Agreement Discoverable by Policyholder but Not Cedent Reinsurer Underwriting and Claims Communications

June 26, 2002: 2nd Circuit Refuses to Compel Arbitration When Reinsurer Contended That Its Agents Had No Bindng Authority

June 12, 2002: Retrocedent in Informal Fronting Deal Compelled to Arbitrate with Line Slip Pool Cedents

June 7, 2002: Argentine Reinsurer Not Immune from Pre-Judgment Security Order

June 3, 2002: “Follow-the-Settlements"" Doctrine Not Inherent in 1974 Casualty Fac Cert Based on Industry Custom and Practice

May 17, 2002: Reinsurance Arbitration Award Vacated Due to Arbitrator "Evident Partiality"

May 2, 2002: Film Financing Litigation Stayed on Federal Abstention Grounds

May 1, 2002: Certain Expert Testimony in D.J. Expense Litigation Inadmissible

April 15, 2002: Umbrella Policy Covers Liability Otherwise Capped by Primary Policy's Household Exclusion in Absence of Explicit "Follow Form" Clause Maryland's Highest Court Rules

March 29, 2002: "Follow the Settlements" Doctrine Applied to Cedent's Asbestos Loss Allocation Methodology Based on Seven Provinces Decision

March 29, 2002: Life Reinsurance Agreement Not Executory as to Claims Presented by Insolvent's Policyholders Still Living as of Liquidation Date

March 12, 2002: Arbitrator Incapacity 12 Months after Panel Convened Does Not Require Appointment of New Panel to Fill Vacancy

March 11, 2002: "Follow the Settlements" Clause Held Not Implicit in a Fac Cert as a Matter of Law

March 5, 2002: Party Must Be "Aggrieved" by an Alleged Failure, Neglect or Refusal of an Adverse Party to Arbitrate Before a Federal Court Has Jurisdiction to Compel Arbitration under the Convention Act


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