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Pa. Nat’l Mut. Cas. Ins. Co. v. Everest Reinsurance Co.

Issue Discussed: Motion To Compel Arbitration; Motion To Seal Reinsurance Information.

Submitted by J.P. Jaillet

Date Promulgated: March 14, 2019

ARIAS LAW COMMITTEE CASE SUMMARY

Case:  Pa. Nat’l Mut. Cas. Ins. Co. v. Everest Reinsurance Co., 2019 U.S. Dist. LEXIS 41285 (M.D. Pa., March 14, 2019).

Issue Discussed: Motion To Compel Arbitration; Motion To Seal Reinsurance Information.

Court:    U.S. District Court for the Middle District of Pennsylvania.

Date Decided:  March 14, 2019.

Issues Decided:

(1)        Whether an existing arbitration Panel or a new arbitration Panel should decide whether a newly-demanded arbitration should be consolidated into the existing arbitration.

(2)        Whether the Court should permit the filing under seal of reinsurance treaties, an arbitration demand and related correspondence.

Submitted by J.P. Jaillet, a partner at Choate, Hall & Stewart, LLP

Issue 1

            In May, 2018, Penn National (cedent) demanded arbitration against Everest (reinsurer).  Everest argued that the dispute should have been decided in connection with an earlier arbitration.  As a result, the core issue was whether the Court should “order the parties to appoint a new panel to decide the consolidation issue or whether [the Court] should send the parties back to [the] prior arbitration panel”.

The Court ordered the parties to appoint a new panel.  The Court reasoned that it would be inappropriate for the Court to engage in an interpretation of the reinsurance contract’s consolidation provision.  Instead, the Court concluded that a new arbitration Panel should engage in that analysis, because it involved a question of arbitration procedure.  The Court also reasoned that Everest could raise consolidation issues and “the impact of the prior arbitration” on the present dispute with the new panel.

Issue 2

            The Court granted the filing under seal of reinsurance treaties, an arbitration demand and related correspondence.  The Court reasoned that public interest in disclosure was minimal, and the documents in question involved “private commercial agreements between entities setting forth the terms of a private business relationship”.