Preclusive Effect Of Prior Arbitration Is An Arbitrable Issue

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The U.S. District Court for the District of Massachusetts recently applied the First Circuit’s analysis in Employers Insurance Co. of Wausau v. OneBeacon American Insurance Co., Case No. 13-1913 (1st Cir. Feb. 26, 2014), when it held that the preclusive effect of a prior arbitration is itself an arbitrable issue. Faced with one previously concluded and one pending arbitration between insurers and their reinsurer regarding the interpretation of an “Access to Records” clause as it pertained to allegedly privileged documents, the district court was not asked to vacate, modify, or correct the previously concluded arbitration order. Instead, both parties consented to the court confirming that order and sought to argue about the proper forum for the interpretation, application, and performance of the arbitration order. Ultimately, the court emphasized the First Circuit’s “general rule” that the preclusive effect of a prior arbitration is an arbitrable issue, particularly where, as in this case, the plain terms of the parties’ arbitration clause broadly encompasses “any dispute arising out of” the agreement. Liberty Mutual Insurance Co. v. Allstate Insurance Co., Case No. 13-cv-10387 (USDC D. Mass. Mar. 31, 2014).


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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