Sphere Drake Insurance Ltd v. All American Life Insurance Co.
United States Court of Appeals for the Seventh Circuit
307 F.3d 617 (2002)
- Written by Mary Katherine Cunningham, JD
Facts
Sphere Drake Insurance Ltd (Sphere Drake) (defendant) and All American Life Insurance Co. (All American) (plaintiff) entered six reinsurance contracts. Disputes arose over these contracts between the parties, and All American demanded the parties engage in arbitration under the U.S.-based AIDA Reinsurance and Insurance Arbitration Society (ARIAS I U.S.). The AIDA I U.S. arbitral tribunal consisted of one arbitrator appointed by Sphere Drake, one arbitrator appointed by All American, and one arbitrator appointed by the other two arbitrators to serve as an umpire. The umpire arbitrator entered an award for Sphere Drake, and the Sphere Drake arbitrator joined the umpire to constitute a majority. The All American arbitrator dissented from the majority. All American filed a motion in the district court to set aside the arbitration award, arguing that Sphere Drake’s failure to disclose prior work on litigation on behalf of Sphere Drake compromised the impartiality required under 9 U.S.C. §10(a)(2). The district court set aside the award, finding that Sphere Drake arbitrator displayed “evident partiality,” a ground for refusing to enforce an award under 9 U.S.C. §10(a)(2).
Rule of Law
Issue
Holding and Reasoning (Easterbrook, J.)
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