Certain Underwriters at Lloyd's London v. Argonaut Insurance Co.

500 F.3d 571 (2007)

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Certain Underwriters at Lloyd’s London v. Argonaut Insurance Co.

United States Court of Appeals for the Seventh Circuit
500 F.3d 571 (2007)

Facts

Certain Underwriters at Lloyd’s London (Underwriters) (plaintiff) entered a reinsurance contract with Argonaut Insurance Co. (Argonaut) (defendant). The contract provided that if a dispute arose between the parties about the interpretation of the contract or the rights within the contract, each party would appoint an arbitrator. The contract also provided that if either party refused to appoint an arbitrator within 30 days, the party requesting the arbitration may nominate the two arbitrators. The contract then provided the two arbitrators appointed by the parties would appoint the third arbitrator. When a dispute arose between the parties, Argonaut demanded arbitration with a request that Underwriters name its arbitrator within 30 days on August 4, 2004. Underwriters named an arbitrator on September 3, 2004. However, on August 6, 2004, Underwriters sent a competing demand that Argonaut nominate its arbitrator within the 30-day time limit contained in the contract. When Argonaut failed to name its arbitrator by September 6, 2004, Underwriters sent a letter to Argonaut invoking the default provision of the treaty’s arbitration clause and naming a second arbitrator. On September 7, 2004, Argonaut replied by email, claiming Argonaut was not bound by the deadline of September 6 because that date was a holiday in the United States. Argonaut claimed that it was not obligated to name the arbitrator until September 7 and that it nominated the second arbitrator within the timeline set by the treaty. Underwriters then filed a petition under 9 U.S.C. § 5 with the district court, seeking an order confirming the appointment of the two arbitrators appointed by Underwriters. The parties disputed the applicable law for the dispute before the district court. Underwriters argued that the court should determine the matter under principles of federal common law, but Argonaut argued that California law controlled. The district court granted summary judgement for Underwriters, finding that federal law controlled. Argonaut appealed to the Seventh Circuit.

Rule of Law

Issue

Holding and Reasoning (Ripple, J.)

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