Reinsurance Focus

The trial court had granted the motion to compel arbitration of Flintkote Company against one of its asbestos liability insurers, Aviva PLC, despite the fact that Aviva was a non-signatory to the subject Alternative Dispute Resolution Agreement (“ADR Agreement”). Flintkote had entered into the ADR Agreement with its other asbestos liability insurers, but not with Aviva, which would not accept the ADR Agreement’s arbitration provision. The trial court compelled arbitration based on equitable estoppel, reasoning that Aviva had agreed to participate in mediation with Flintkote and the other insurers (which had been initiated further to the ADR Agreement). On appeal, the Third Circuit reversed. The court held that there was “simply no evidence that Aviva embraced the [ADR] Agreement when it opted to participate in mediation alongside the other London insurers.” The court also ruled that certain correspondence sent by the joint mediation counsel that referenced the ADR Agreement or suggested joint action with Aviva did not constitute sufficient reliance on the ADR Agreement to compel Aviva to arbitrate. The court further held that Flintkote could not have reasonably relied on an “unspoken” agreement with Aviva to arbitrate, given that Aviva had previously “negotiated for and specifically reserved the right to resolve all disputed issues through litigation.” Flintkote Co. v. Aviva PLC, No. 13-4055 (3d Cir. Oct. 9, 2014).

This post written by Michael Wolgin.

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