Parties to reinsurance arbitrations often file in court to confirm (or vacate) arbitral awards. Some file even though the adverse party has complied with the arbitration award. When doing so, they invariably invoke the confidentiality agreement in the proceeding to seal the award and other related documents used in the petition to confirm. Must the court confirm and must the court seal the documents? We have seen this movie before.
Reinsurance arbitrations are typically cloaked in confidentiality, often through a written confidentiality agreement or order. Some arbitration agreements include confidentiality provisions as well. In recent years, parties have gone to court to confirm reinsurance arbitration awards, sometimes as an end-around the confidentiality agreement. In 2023, the Second Circuit, in a non-reinsurance case, rejected an attempt to do an end-around an arbitration confidentiality provision.
Reinsurance arbitrations are typically confidential and generally proceed with a confidentiality agreement in place protecting all arbitration information, including the final award, from disclosure. This is in contrast to legal proceedings, including proceedings collateral to arbitrations, where generally the public’s right to judicial documents outweighs the parties’ privacy. In recent years, when parties to reinsurance arbitrations have gone into court to confirm, enforce, modify or vacate arbitration awards, courts have been reluctant to keep the final awards under seal. In fact, some parties have used this trend as a litigation strategy to “unseal” confidential final arbitration awards by going to court to confirm an award where there was no indication that the losing party would not comply with the award.
Bucking that trend, a New York federal court recently allowed the final arbitration award to remain sealed. Is the tide turning?
Traditionally, all aspects of reinsurance arbitrations were considered confidential, including the arbitration award. Most reinsurance arbitrations today still include agreement on a confidentiality order. Nevertheless, when one of the parties to a reinsurance arbitration goes to court to either confirm, modify or vacate the final award, a tension arises between accessing the public court system and maintaining confidentiality. Over the last several years, multiple courts have addressed that tension by unsealing arbitration awards.
In a recent case, the Third Circuit Court of Appeals, followed this trend and unsealed what was a confidential arbitration award. This time at the request of a reinsurer that was not a party to the award.
