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Declining to decide which of four partially convened arbitration panels should hear various related reinsurance claims; a federal court held that it lacked authority to choose an arbitral forum, as this would amount to an unwarranted intrusion on arbitral proceedings.
In Argonaut Ins. Co. v. Century Indem. Co., No. 05-5355, 2007 WL 2668889 (E.D. Pa Sep. 6, 2007), Argonaut and Century entered into a reinsurance agreement, which contained an arbitration provision. Several disputes regarding claim payments arose between the parties.
Century issued four separate demands for arbitration against Argonaut. In the fourth claim, Century sought to consolidate the first three claims and add additional claims. The parties appointed incomplete arbitration panels for the first three claims. Later, Century informed Argonaut that the fourth arbitration panel superseded the earlier three panels because it incorporated the earlier claims. Argonaut disagreed, arguing that the parties should arbitrate the various claims separately. Argonaut then filed a petition to compel separate arbitration while Century petitioned to compel arbitration in a consolidated proceeding.
The Court held that it lacked authority to dismiss any of the arbitrations and ordered all four arbitrations to proceed. The Court found that the consolidation issue is for the arbitrators to decide. Further, the Court declined to choose which arbitration panel should decide the consolidation question, as this amounts to an unwarranted intrusion on arbitral proceedings. Consequently, the Court concluded that either the parties or the arbitration panels would have to create a procedural framework for how the arbitrations should proceed.
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