Do Louisiana Cases Against Lloyds Have to Go to Arbitration if the Policy Has an Arbitration Clause? | Property Insurance Coverage Law Blog


The legislation generally has some unusual twists. Right now, if a Louisiana policyholder have been to problem Lloyds claims that arbitration was mandated and accomplish that in a federal Louisiana court docket, the policyholder would lose. But, if Louisiana policyholder challenged the identical subject in a New York federal court docket, the policyholder would win. 

A scorching off the press ruling from New York says that states can stop Lloyds and different overseas insurers from mandating arbitration and acknowledged that the federal courts in Louisiana are coming to a unique ruling:1

To make certain, ‘[i]n cases involving at least some foreign insurers, Fifth Circuit courts have: 1) held that the MFA does not preempt the Convention, which in turn preempts Section 22:868, making arbitration clauses in insurance contracts enforceable; and 2) extended the enforceability of arbitration clauses to domestic insurers that jointly insure property with foreign insurers through a type of equitable estoppel known as Grigson estoppel.’ 3131 Veterans Blvd LLC, 2023 WL 5237514, at *5; see additionally Georgetown Home Owners Ass’n, Inc. v. Certain Underwriters at Lloyd’s, London, 2021 WL 359735, at *8 (M.D. La. Feb. 2, 2021) (‘[W]here the Convention applies, La. Rev. Stat. § 22:868 has no effect.’); Port Cargo Serv., LLC v. Certain Underwriters at Lloyd’s London, 2018 WL 4042874, at *7 (E.D. La. Aug. 24, 2018) (making use of Grigson estoppel).

But the Fifth Circuit caselaw coping with overseas insurers can’t save the Insurers’ declare right here as a result of ‘[t]his caselaw is predicated on the Fifth Circuit’s ruling that the MFA doesn’t preempt the Convention.’ 3131 Veterans Blvd LLC, 2023 WL 5237514, at *6. The Second Circuit, against this, has held that the Convention doesn’t preempt a state act which regulates the enterprise of insurance coverage. See Stephens, 66 F.3d at 45 (‘The Convention itself is simply inapplicable in this instance.’); see additionally p. 5, above. Section 22:868 thus applies ‘without regard for the effect of the Convention.’

Louisiana policyholders ought to clearly be difficult these clauses in New York. 

My prediction is that this authorized distinction of opinion is essential sufficient to have the United States Supreme Court evaluation the matter. Parties shouldn’t be racing to at least one courthouse versus one other to realize a bonus. 

Thought For The Day 

It’s okay to disagree with one another. It’s not okay to hate one another due to it.

—Ellen DeGeneres

1 Certain Underwriters at Lloyd’s, London v. Mpire, No. 22-cv-9607 (S.D. N.Y. Sept. 28, 2023).


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