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Posts Tagged ‘Arbitrator Fees’

Global Arbitration Review Quotes Loree Reinsurance and Arbitration Law Forum’s Critical Analysis of ReliaStar Life Ins. Co. v. EMC Nat’l Life Co.

August 10th, 2009 Arbitrability, Authority of Arbitrators, United States Court of Appeals for the Second Circuit 2 Comments »

On April 28, 2009 we published “ReliaStar Life Insurance Co. v. EMC National Life Co.: Critical Analysis of an Important Reinsurance Arbitration Decision,”  available here.  On July 13, 2009 the London-based  Global Arbitration Review published an interesting article about the Second Circuit’s decision in ReliaStar, which quoted from our critical analysis:  

Writing shortly after the appeal court’s decision, Philip Loree Jr of New York firm Loree & Loree, said the court had “violated New York contract interpretation rules.” He said that, according to New York law, “to ascertain whether a contract is ambiguous, courts are required to focus on what is said, not what is omitted.” “Given that the pre-eminent purpose of the Federal Arbitration Act is to enforce the parties’ arbitration agreement as written, this case may be one of those rare Second Circuit decisions that warrant rehearing and reversal en banc,” he added.

You can find the article (subscription only) here:  ‘Bad Faith’ Costs Decision Upheld, Global Arbitration Review, July 13, 2009, our summary of the decision here, our critical analysis here, and further commentary here.  Disputing’s coverage of the case can be found here and here.

Recent United States Supreme Court Decision May Further Undermine ReliaStar Life Ins. v. EMC National Life Co. Holding

May 8th, 2009 Arbitrability, Authority of Arbitrators, Awards, Life Reinsurance, New York Court of Appeals, United States Court of Appeals for the Second Circuit, United States Supreme Court 1 Comment »

We recently critiqued ReliaStar Life Ins. Co. v. EMC National Life Co., ___ F.3d ___ (2009) (Raggi, J.), in which the United States Court of Appeals for the Second Circuit held that an arbitration panel was authorized to award under the bad faith exception to the American Rule attorney and arbitrator fees to a ceding company in a case where the parties had agreed that each “shall bear the expense of its own arbitrator.  .  .  and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.”  We believe that the majority opinion did not faithfully apply New York’s strict rules of contract interpretation and construction, which the parties expressly agreed would apply.  You can find our critique here, and a report on the case here.   Continue Reading »

ReliaStar Life Insurance Co. v. EMC National Life Co.: Critical Analysis of an Important Reinsurance Arbitration Decision

April 28th, 2009 Arbitrability, Authority of Arbitrators, Awards, Life Reinsurance, New York Court of Appeals, United States Court of Appeals for the Second Circuit 3 Comments »

Introduction

We recently reported on ReliaStar Life Ins. Co. v. EMC National Life Co., ___ F.3d ___, ___ (2009) (Raggi, J.) (blogged here), in which the United States Court of Appeals for the Second Circuit held that an arbitration panel was authorized to award under the bad faith exception to the American Rule attorney and arbitrator fees to a ceding company in a case where the parties had agreed that “[e]ach party shall bear the expense of its own arbitrator.  .  .  and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.”  This post takes a critical look at ReliaStar.  

The Second Circuit is one of the most influential and respected  Circuit Courts of Appeal in the United States, yet on occasion even this prestigious court renders a decision that is open to question.  ReliaStar is one of those decisions.  The majority opinion lost sight of what the parties agreed about the arbitrators’ power to award attorney fees.  Rather than adhere to the plain meaning of the parties’ agreement as required by New York  law, the Court construed an unambiguous limitation on arbitral authority to mean something other than what it said. 

No doubt that the Court believed that its decision would encourage resort to arbitration by construing arbitral authority broadly.  But the Court would have done a far better job encouraging resort to arbitration had it simply enforced the parties’ agreement as written.  One of the most attractive features of arbitration is that parties get to dictate how they want their dispute decided, including, among other things, how best to allocate the costs, fees and expenses of deciding it.   But that feature falls by the wayside if courts cannot be relied upon to enforce arbitration agreements as written.  Continue Reading »

ReliaStar Life Insurance Co. v. EMC National Life Co.: Second Circuit Holds That Life Reinsurer Must Pay Ceding Company Attorney and Arbitrator Fees Notwithstanding Contract Language to the Contrary

April 21st, 2009 Arbitrability, Authority of Arbitrators, Awards, Life Reinsurance, Reinsurance Arbitration, United States Court of Appeals for the Second Circuit 3 Comments »

Introduction

On April 9, 2009 the United States Court of Appeals for the Second Circuit decided a case that may significantly expand the power of arbitrators to award attorney and arbitrator fees in cases involving reinsurance and other contracts.  The Court held that an arbitration panel was authorized to award under the bad faith exception to the American Rule attorney and arbitrator fees to a ceding company in a case where the parties had agreed that “[e]ach party shall bear the expense of its own arbitrator.  .  .  and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.”  ReliaStar Life Ins. Co. v. EMC National Life Co.,  ___ F.3d ___, ___ (2009) (Raggi, J.).  This post briefly discusses the majority and dissenting opinions.  Our critical analysis will be provided in a subsequent post.  Continue Reading »