Arbitration Clause Upheld In Coverage Dispute

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Coverage disputes between US policyholders and non-US insurers like Underwriters at Lloyd’s of London continue to raise jurisdictional and related issues in US courts. The issues become further exacerbated when there is an arbitration clause in the insurance contract and the non-US insurer seeks to stay the coverage litigation and compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention), to which the US and the UK and most EU countries are signatories.

In a recent case, a Louisiana federal court, hearing the case after removal from the state court, granted the insurers’ motion to stay litigation and compel arbitration.

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