Yasuda Fire & Marine Ins. Co. v. Continental Cas. Co.
Issue Discussed: “Interim” v. “Final” Decisions
Submitted by Aluyah I. Imoisili, H. Josh Ji*
Date Promulgated: October 7, 1994
Yasuda Fire & Marine Ins. Co. v. Continental Cas. Co., 37 F.3d 345 (7th Cir. 1994)
Court: United States Court of Appeals, Seventh Circuit
Issues Decided: Whether an arbitrator’s interim order requiring a party to post a letter of credit to preserve assets pending final arbitration is judicially reviewable
The reinsurer and cedent entered into four reinsurance agreements, all containing nearly identical provisions requiring, inter alia, that the reinsurer post letters of credit upon the cedent’s request. After the reinsurer failed to pay its share of losses arising under the agreements, reinsured demanded arbitration. At a preliminary hearing, the arbitration panel ordered the reinsurer to post a letter of credit in the amount of $2,549,660, pending final arbitration. The reinsurer sought to vacate the order, but the district court refused.
The Seventh Circuit affirmed the district court’s decision. The Seventh Circuit held that the award requiring reinsurer to post an interim letter of credit—a “temporary equitable order calculated to preserve assets”— was a final award subject to judicial review, because it determined a separate, independent, and severable issue from the claims submitted for arbitration.
A pre-hearing security award is a final award that may immediately be challenged in court.
* Aluyah I. Imoisili is a Partner and H. Josh Ji is an Associate at Greenberg Gross LLP, where they specialize in commercial litigation and arbitration.