Court Defers Ruling On Appointment Of Umpire Pending Disclosures To Determine Neutrality

We previously reported on December 17, 2013, about a dispute in federal court between Nationwide Mutual Insurance Company, National Casualty Company, and Employers Insurance Company of Wausau (collectively, “Nationwide”) and Arrowood Indemnity Company. The dispute concerned the process for appointing a “tie-breaking” umpire in a series of reinsurance coverage arbitrations. Most of the reinsurance agreements contained express provisions regarding the steps to be taken to select the umpire, including the “drawing of lots.” However, certain of the treaties – referred to as the 1967 Treaties – did not provide a clear process for what to do if the two party-appointed arbitrators failed to agree on the selection of the umpire. The court instructed the parties to follow the procedure set forth in the other treaties, and then report back regarding how to handle the appointment under the 1967 Treaties. Once an umpire had been validly appointed pursuant to the terms of the other treaties, the same umpire would be “presumptively appropriate for appointment by the Court” for the remaining disputes under the 1967 Treaties.

After the court issued those instructions, Joseph Goldberg was selected as the umpire pursuant to the terms of the other treaties. Thereafter, Nationwide moved the court to appoint Goldberg as the umpire for the remaining disputes regarding the 1967 Treaties. Arrowood objected, arguing that the decision about Goldberg’s appointment under the 1967 Treaties was premature because the parties had not yet had an opportunity to obtain disclosures from Goldberg in connection with organizational meetings to determine whether he could be neutral. On April 9, 2014, the court agreed with Arrowood and deferred ruling until after the organizational meetings have been held and the parties have had sufficient opportunity to consider the resulting disclosures. Employers Insurance Co. of Wausau v. Arrowood Indemnity Co., Case No. 12-cv-08005-LLS (USDC S.D.N.Y April 9, 2014).


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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