A Louisiana contractor must submit his insurance question to insurers including the Munich Reinsurance Co. and Hannover Re SE entities and Lloyds of London syndicates for arbitration, a federal appeal court said in maintaining a lower court.
2015 Metairie, Louisiana-based McDonnel Group LLC bought a builder's risk policy from Munich Re Unit Great Lakes Insurance SE, Hannover Re unit International Insurance Co., Hannover SE and Lloyd's syndicate for a property project in New Orleans, according to Monday's judgment of 5th United States Circuit Court of Appeal in New Orleans in McDonnel Group LLC v Great Lakes Insurance SE, UK Branch et. al.
The policy contained a written agreement on arbitration disputes, according to the ruling. Two years later, according to McDonnel, the property suffered significant water damage. McDonnel claimed that the insurers refused to pay.
McDonnel brought an action against the insurance companies, called for breach of contract and breach of good faith and fair trade. The insurers responded by invoking the arbitration agreement under the Convention on the Recognition and Enforcement of Foreign Arbitration.
However, the police also contained a provision on compliance with statutes that state law prevails and Louisiana prohibits arbitration agreements in insurance contracts covering property in the state, they said.
The US District Court in New Orleans held the state charter persecuted by federal law and the arbitration agreement was still valid. The verdict was confirmed by a unanimous three-judge appeal panel.
The Statute of the State is ordained by the Convention, said the verdict. The Charter does not apply and cannot be applied to McDonnel's policy. And since the law does not apply to the policy, there is no conflict between the policy and the state's statute. its usability only leads to the conclusion that the arbitration tribunal survives, non-existent under state law, "said the court in confirmation of the court's decision.
Lawyers in the case could not be reached or commented.
In April, a federal appeal court twisted a lower court that required a Brazilian reinsurer to pay a $ 5 million arbitrage award to a Berkshire Hathaway Inc. unit.