Court Affirms Reinsurance Arbitration Award In Favor Of First State Inurance Company And New England Reinsurance Corporation

Carlton Fields
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Phased arbitration proceedings involving First State Insurance Company and New England Reinsuance Corporation against Nationwide Mutual Insurance Company addressed claims arising under numerous reinsurance agreements between First State and Nationwide. The arbitration panel entered three orders, one as to each phase, in favor of First State and, as part of its decision, crafted certain remedial measures under the reinsurance agreements between the parties. The arbitration panel’s rulings engendered additional litigation on both procedural and substantive grounds before the federal court. Procedurally, the federal court ruled that First State’s motion to confirm the award as to the first phase was premature when filed because the arbitration panel had not yet ruled on the remaining phases. On reconsideration of its prior order dismissing the motion to confirm as premature, the court ruled that the motion should have been deferred and not dismissed as premature. The court consolidated the motion with First State’s other motions seeking to confirm the awards on the subsequent phases of the arbitration proceedings. Substantively, the court rejected Nationwide’s argument that the panel exceeded its authority in crafting the remedial measures in light of the high level of deference given to arbitral awards by reviewing courts. First State Insurance Co. v. Nationwide Mutual Insurance Co., Case No. 13-cv-11322-IT (USDC D. Mass. Mar. 25, 2015).

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