EMPLOYERS INSURANCE COMPANY OF WAUSAU V. CERTAIN UNDERWRITERS AT LLOYDS OF LONDON, et al.
(W.D.Wis. September 29, 2009)
A cedent and reinsurer could not agree on an impartial third arbitrator. The cedent brought a petition in the United States District Court for the Western District of Wisconsin seeking the court to appoint a neutral arbitrator. The reinsurer cross-petitioned, raising a statute of limitations defense and seeking disqualification of the cedent’s appointed arbitrator.
The court denied the reinsured’s petition. With regard to the statute of limitations, the court found that the arbitration clause was broad and required arbitration of the procedural issues. The arbitration clause required the parties to arbitrate “any dispute arising out of the interpretation, performance or breach of this Contract.” Based on the broad language, the court held that the parties were required to arbitrate the issues of timeliness/statute of limitations, estoppel and laches.
With regard to disqualification of the cedent’s appointed arbitrator, the court found that an allegation that an arbitrator may have had an ex parte communication with the petitioner was insufficient to demonstrate bias. Further, the arbitrator’s membership in a national organization of which senior counsel for the petitioner is vice president was likewise too tenuous to create “actual or apparent impartiality.” The court then appointed the neutral arbitrator. The arbitrator was appointed because he had the longest experience (47 years) and most experience as an umpire (65).
For a copy of the decision, click here
Sarah Delaney and Dan Gerber