District of Massachusetts Finds Subsequent Arbitration Not a Collateral Attack on Confirmed Award

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In a dispute centering on the preclusive effect of an arbitration award, the defendant sought to enjoin the plaintiff’s arbitration demand as it was an attempt to collaterally attack the confirmed award. The plaintiff argued that it was not seeking to challenge the validity of the award but that the award did not address the manner of new reinsurance billings. The plaintiff further argued that the defendant was improperly asking the court to determine the preclusive effect of the arbitration award on their arbitration demand. The court denied the defendant’s request to enjoin the arbitration.

The issue before the court was not whether the plaintiff was seeking to attack the prior arbitration proceeding, but whether the award precluded arbitration regarding the new reinsurance billings. The court distinguished the cases cited by the defendant regarding impermissible collateral attacks on arbitration awards because the subsequent action challenged the arbitration proceeding. Ultimately, the preclusive effect of an arbitration award remains an arbitral issue, not for the court to resolve.

Century Indemnity Co. v. Certain Underwriters at Lloyd’s, London, No. 1:19-cv-11056 (D. Mass. Mar. 6, 2020).

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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