Late last month, a federal district court in New York tackled procedural challenges to an arbitration confirmation proceeding. The arbitration arose from a dispute between an insurer and its reinsurer over the amount due to the insurer following a claim. Following an arbitration in which the insurer was awarded over $1 million by the arbitrator, the reinsurer tried to procedurally attack the court’s ability to confirm the arbitration award, arguing that the court lacked subject-matter jurisdiction to hear the confirmation proceeding because: 1) the amount in controversy requirement for diversity jurisdiction was not met; 2) there was no controversy remaining; and 3) the arbitration agreement does not include consent to a confirmation proceeding.
As to the amount in controversy requirement for diversity jurisdiction, the court followed the “demand approach,” in which the amount demanded in the arbitration serves as the amount in controversy; thus, it found no merit in the argument. Regarding the mootness argument, the court found that there was still a dispute until the court had confirmed the award; thus, there was no merit in this argument either. Finally, the court found that because the Federal Arbitration Act allows confirmation, any parties that include an arbitration provision implicitly agree to confirmation of the same. National Casualty Co. v. Resolute Reinsurance Co., Case No. 15-cv-09440-DLC (USDC S.D.N.Y. Mar. 24, 2016).
