SECOND ARBITRATION COMPELLED ON REINSURANCE CLAIMS MADE UNDER TREATY PREVIOUSLY CONSTRUED IN PRIOR ARBITRATION AWARD
In a complicated web of proceedings, the initial dispute involved whether the reinsurer, Nationwide Mutual Insurance Co., was permitted to condition payment of reinsurance claims on receiving access to the claim records of the cedent, Liberty Mutual Insurance Co. The arbitration award construed the treaty’s payment provisions as independent of the access to records provision, and ruled that Nationwide must take a coverage position within 60 days of submission of a claim. An additional dispute then arose when Nationwide disputed enforcement of the award against certain reinsurance claims subsequently re-submitted by Liberty Mutual. Various filings were made in state and federal court and with the arbitration panel, including Liberty’s motion to enforce the arbitration award (in state court), and Nationwide’s motion to compel another arbitration (in federal court). The federal district court stayed Nationwide’s motion, pending a ruling by the state court on Liberty’s motion (see our March 13, 2014 post). Ultimately, the panel issued a ruling purporting to “clarify” the initial award, and the state court entered a ruling enforcing the initial award to the extent it had prospective application.
The federal court has now lifted its stay, and compelled arbitration on the meaning of “future claims” under the treaty and whether Liberty Mutual’s resubmitted claims would qualify as such. The federal court declined, however, to compel arbitration again on the issue of access to records under the treaty, which the court deemed barred by the doctrine of issue preclusion. The court also vacated the arbitration panel’s interim ruling purporting to clarify the initial award. The court held that the panel’s clarification was untimely, having been sought more than six months after the original award was entered and after the award had been confirmed. Nationwide Mutual Insurance Co. v. Liberty Mutual Insurance Co., Case Nos. 13-cv-12910, 14-cv-12046 (USDC D. Mass. Nov. 6, 2014).
This post written by Michael Wolgin.
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