ExxonMobil Oil Corporation v. TIG Insurance Company
United States District Court for the Southern District of New York
2020 U.S. Dist. LEXIS 87407 (2020)

- Written by Samuel Omwenga, JD
Facts
ExxonMobil Oil Corporation (Exxon) (plaintiff) had an insurance policy with TIG Insurance Company (TIG) (defendant) to cover its operations. A number of lawsuits were filed against Exxon seeking damages for contamination involving a gasoline additive Exxon once used. At least some of the alleged contamination came from leaks from Exxon’s underground storage. The dispute was heard in arbitration, where resolution of the dispute turned on the meaning of “end-user” in the parties’ contract. Exxon said the term had a meaning that included insurance coverage of its underground storage. TIG argued the opposite. The arbitration panel accepted neither interpretation and rendered its own interpretation of the term, which it noted was guided by an interpretive method used by New York courts in interpreting insurance policies. TIG objected, arguing the method was based on contra proferentem and was therefore contrary to the parties’ intent to have the contract construed in an even-handed manner. The arbitration panel used its interpretation, which favored Exxon, and rendered a final award on that basis. Exxon moved in district court to confirm the award. TIG cross-moved to vacate the award on grounds the arbitration panel manifestly disregarded the law.
Rule of Law
Issue
Holding and Reasoning (Ramos, J.)
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