On December 1, 2009 my friend and colleague Costas Frangeskides , a partner at Holman Fenwick Willan (“HFW” or “Holmans”), and I gave a presentation at HFW’s London offices entitled “Reinsurance Arbitration: Approaching Things Differently Either Side of the ‘Pond.'” The program was moderated by Holmans partner Andrew Bandurka, who, like Costas, focuses his practice on reinsurance and insurance dispute resolution. I have known Costas and Andrew for several years as we were co-counsel in a long-running matter handled by Holmans and my former law firm, Cadwalader, Wickersham & Taft LLP.
The presentation was designed to provide reinsurance professionals with some insights concerning the differences between U.S. and English reinsurance arbitration practice and procedure. The principal theme was that U.S. arbitration law is designed principally to enforce the parties’ arbitration agreement as written, placing it on the same footing as all other contracts, while English arbitration law favors party automony, but also imposes a greater number of policy-based norms regulating arbitration, which limit to some extent the parties’ ability to structure their dispute resolution procedure exactly as they see fit.
We explored the application of this general rule and its exceptions to four areas of arbitration practice:
- The parties expectations of neutrality;
- Consolidation of arbitration proceedings;
- Contractual choice-of-law; and
- Court support and interference, with an emphasis on challenging arbitration awards.
For example, we explained how the two bodies of law treat differently the expectations of neutrality applicable to party-appointed and third arbitrators. While U.S. law permits vacatur of arbitration awards for “evident partiality” of the arbitrators, what constitutes impermissible “evident partiality” is defined principally by the parties’ agreement. That is why, absent contract langugage to the contrary, party-appointed arbitrators in U.S. reinsurance arbitrations may act as advocates of a sort, and why third arbitrators or umpires are not held to the same standards as federal judges, and may have institutional predispositions based on their experience in the market.
But English law imposes on arbitrators — including party-appointed arbitrators — the same strict standards of neutrality applicable to English judges. And, while there is some degree of leeway built in to compensate for the realities of the marketplace (which might burden an arbitrator with some degree of institutional predisposition), parties cannot bargain away their right to impartial decision makers, party-appointed or otherwise.
The talk was well attended by a number of market participants and we received a lot of positive feedback. Costas and I will in all likelihood give one or more future talks on subject, perhaps in a U.S. forum.
We would like to take this opportunity to thank Holmans solicitor Rupert Warren and marketing-director Melanie McBride for their hard work in helping Costas and me prepare for the presentation and for handling the arrangements.
If you are interested in learning more about the differences between English and U.S. arbitration law, practice and procedure, last year Costas and I wrote a two-part article entitled “Arbitration Practice and Procedure in U.S. and U.K. Reinsurance Disputes: Is the Grass any Greener on the Other Side of the Pond?,” which was published in AIRROC Matters, the newsletter of the Association of Insurance and Reinsurance Run-Off Companies. The article appears in Vol. 4, No. 1, at 24 (Spring ed. 2008) (Part I) (here) and Vol. 4, No. 2, at 28 (Fall ed. 2008) (Part II) (here).
Tags: AIRROC Matters, Andrew Bandurka, Arbitration Act 1996, Association of Insurance and Reinsurance Run-Off Companies, Costas Frangeskides, English Law, Evident Partiliaty, Federal Arbitration Act, London Market, Reinsurance Arbitration
