A federal appeals court on Monday upheld an arbitration award in favor of Lloyd & # 39 ;s of London in a reinsurance dispute with CNA Financial Corp. entities, which stated that it may have decided otherwise, but is limited by federal arbitration.
Between 1966 and 1978, the CNA units Continental Casualty Co and Continental Insurance Co. were included. 15 reinsurance agreements with Lloyd & # 39 ;s, according to Monday's ruling from the 7th U.S. Circuit Court of Appeals in Chicago Continental Casualty Co. and Continental Insurance Co. v Some Underwriters at Lloyd & # 39; s of London.
Lloyd & # 39; s and Continental agreed on the method of calculating reinsurance obligations for more than 40 years, the ruling says. Group unit Resolution Management Inc., based in Boston, which changed the methodology, which resulted in Lloyd paying more.
The dispute over this led to an arbitration award in Lloyd's favor. The CNA unsuccessfully filed the lawsuit in the U.S. District Court in Chicago. Its verdict was upheld by a unanimous panel of three judges.
"It would be difficult to overestimate the strength of the Supreme Court's support for arbitration when the parties have chosen to resolve their dispute using that mechanism," the judgment states. .
The Federal Arbitration Act "sets out a narrow set of grounds that may support a court's confirmation, vacancy or amendment of an award," it said.
"If our job was to assess the benefits of Continental Position in the same way we approach ordinary appeals, it is possible that we may come to a different conclusion.
" But we are limited by the FAA, as interpreted by the Supreme the court ", it stated in the judgment and confirmed the lower court decision.