Circuit Court Holds That The New York Convention Pre-empts State Laws Prohibiting Arbitration of Insurance Disputes (JD Supra)

Circuit Court Holds That The New York Convention Pre-empts State Laws Prohibiting Arbitration of Insurance Disputes

  Tuesday, August 24th, 2021 Source: JD Supra

On August 12, 2021, the U.S. Court of Appeals for the Ninth Circuit held that Article II, Section 3, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (commonly known as the New York Convention), which obligates signatory nations to enforce agreements to arbitrate that fall under the Convention, preempts state insurance laws that preclude the arbitration of insurance disputes and/or prohibit the inclusion of mandatory arbitral provisions in insurance policies. CLMS Mgmt. Servs. Limited P’ship, et al. v. Amwins Brokerage of Georgia LLC, et al.[i]

With this decision, the Ninth Circuit has joined the U.S. Courts of Appeals for the Fourth and Fifth Circuits on this point of law.[ii]

Conversely, the U.S. Courts of Appeals for the Second and Eighth Circuits have held that the Convention does not override state insurance laws.[iii]

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