NEW YORK SUPREME COURT CREATES A NEW METHOD FOR APPOINTING AN UMPIRE IN AN ARBITRATION
In a dispute between two insurance companies and their reinsurer over appointment of an umpire or third party arbitrator in an arbitration proceeding required by their reinsurance treaties, the New York Supreme Court crafted a new approach for appointing the umpire or third arbitrator. The approach blends the “ranking” method and the “strike and draw” method to require each party’s chosen arbitrator to nominate 5 candidates, strike 3 candidates from the other party’s list, and rank the remaining candidates. The candidate with the highest cumulative rating becomes the umpire or third arbitrator, and in the event of a tie between the highest ranking candidates, a coin toss decides the winner. The court also allowed for the appointment of an umpire at the outset of the arbitral proceedings, concluding that the language in one of the treaties requiring the two chosen arbitrators to select an umpire “in the event of the arbitrators failing to agree” does not create a condition precedent to appointment of the umpire. American Home Assurance Co. v. Clearwater Insurance Co., No. 653079/2012 (N.Y. Sup. Ct. Jan. 15, 2013).
This post written by Abigail Kortz.
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