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The Consolidation Circus Continues | Insurance and Reinsurance Disputes Blog



 Ethnic Tug of War

In December 201

8, we blogged about a new reinsurance arbitration consolidation case. We mentioned that the reinsurer filed several other petitions to arbitration in various jurisdictions, all seeking to allow for consolidation of these disputes in three arbitrations based on the different reinsurance programs. The facts are the same so read the December 2018 post for the details. The most recent decision in this series of cases came down in February 2019. We discuss this case below

In Employers Ins. Co. of Wausau v. The Hartford no. HHDCV 186099158S, 2019 Conn. Super. LEXIS 354 (Ct. Super. Feb. 13, 2019), a Connecticut motion court denied and reinsurer's motion to complete arbitration and granted the cedent's cross-motion to arbitration. Sounds strange, but the issue is whether or not the arbitration panel should be the one arbitration panel as the most sought-after or multiple arbitration panels. The cedent demanded arbitration on the treaty in issue and 18 other contracting out of 8 different reinsurance programs (this is all about asbestos losses). The cedent appointed 1 arbitrator and the reinsurer insisted on 3 separate arbitrators and appointed 3 arbitrators. When the parties reached an impasse on consolidation, they were filed by the reinsurer, including this one requiring the appointment of an arbitrator during this specific treaty. This action was similar to the other collateral actions requested for the arbitrator on specific disputes.

In granting the cedent's motion and denying the reinsurer's motion, the court ruled that consolidation was for the arbitration panel to decide and not for the court. The court noted that the parties here did not dispute that they entered into a valid arbitration agreement and that their dispute falls within the scope of that agreement. “, Court court need and court court The procedural question of consolidation is for the arbitrators, not for the court, to decide. The court rejected each of the reinsurer's arguments, finding that by ordering the reinsurer to arbitrate it is merely enforcing the agreement as the parties drafted it. Essentially, the reinsurer's act of naming 3 arbitrators instead of one in response to the cedent's arbitration demand allowed the court to compile the reinsurer with the treaty and appoint a single arbitrator and proceed to form a panel.

It will be the panel's job on this treaty to determine whether there should be consolidation or three separate arbitrations. But given the separate litigation, through which each court granted either the cedent's or the reinsurer's motion, there may be several arbitration panels addressing this same issue. One would hope to avoid further collateral litigation.


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