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Compelling arbitration of an automobile insurance coverage dispute, a federal court held that the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Award mandated enforcement of an arbitration provision between a Canadian citizen and a Canadian insurer.
In Clow v. Insurance Corp. of British Columbia, Civil No. 07-0403-ST, 2007 WL 2292689 (D. Or. Aug. 3, 2007), Clow suffered an injury after a stolen vehicle operated by a driver who was fleeing the police hit Clow’s vehicle while he was in Oregon. Being a Canadian citizen, Clow registered his vehicle in British Columbia. British Columbia law requires drivers to purchase automobile insurance through Insurance Corporation of British Columbia (ICBC).
A dispute arose between Clow and ICBC regarding coverage for the accident. Clow sued ICBC in Oregon. ICBC moved to compel arbitration pursuant to an arbitration provision contained in its contract with Clow.
The Court held that Clow’s claims against ICBC were subject to arbitration because the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Award required the Court to compel arbitration, as there was a valid arbitration agreement between the parties. Additionally, Canada is a signatory to the Convention. Moreover, the insurance contract between the parties was commercial and both parties were foreign citizens.
The Court also concluded that the Convention supersedes the McCarran-Ferguson Act. Although McCarran-Ferguson prevents federal law from preempting state statutes governing insurance, Clow’s insurance policy was not “delivered or issued for delivery” in Oregon, as required by the Act. Moreover, ICBC is not subject to the Act’s provisions, as it is a British Columbia Sovereign Crown corporation, rather than an entity doing business in Oregon.
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