Court Directs Cedents To Indicate Whether They Will Continue To Argue Against The Finality Of An Arbiration Award To Preclude Its Confirmation

Carlton Fields
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In a pending dispute in the Southern District of New York arising from a quota share contract of reinsurance between Employers Insurance of Wausau, as reinsurer, and Nutmeg Insurance and Twin City Fire, as cedents, Nutmeg and Twin City argue that issues relating to the parties’ obligations with respect to specific claims arising out of the parties’ reinsurance treaties, and a process to resolve issues relating to those claims, are not yet final and the court therefore lacks jurisdiction to confirm those portions of an arbitration award. The petition to confirm the award, found here, sought to confirm, in part, the arbitration panel’s directive that Nutmeg and Twin City produce certain information and documentation to Wausau supporting the claimed loss at issue. Specifically, the panel directed Nutmeg and Twin City to produce evidence of proof of payment of the loss at issue, copies of the underlying policies at issue, and a narrative and reasonable documentation demonstrating that the loss was within the treaty’s terms.

At issue was the quantum and type of information that must accompany billing in order to trigger Wausau’s payment obligations and whether Wausau may withhold payment pending its request for additional, sometimes privileged, information and documentation. Wausau informed the court that Nutmeg and Twin City’s objections were moot because all parties had performed their obligations and the entire award was now final. The court directed Nutmeg and Twin City to file a letter with the court within five days from the date of its order indicating whether they will persist with their objections to the court’s confirmation of the entire arbitration award. Employers Insurance of Wausau v. Nutmeg Insurance Co., No. 14-CV-9284 (USDC S.D.N.Y. Feb. 25, 2015).

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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