US 29 September 2020 Woodward Design

United States District Court, Eastern District of Louisiana, 29 September 2020, CIVIL ACTION NO: 19-14017 SECTION: T(3)

(Woodward Design + Build, LLC v. Certain Underwriters at Lloyd's London, et al.)

29 - 09 - 2020

US 29 September 2020 Woodward Design

Jurisdiction United States
Summary

Woodward filed claims against the Underwriters in state court; the Underwriters removed the case to federal court under the New York Convention and the Federal Arbitration Act, and filed a motion to compel Woodward to arbitrate their claims in accordance with the arbitration clause in an insurance policy. Woodward moved to remand. The Court denied the remand motion, finding that the Woodward state-court claims were related to their claims governed by the arbitration clause. The Court also found that the arbitration clause was not NULL and void as a violation of public policy because it would force the parties to apply New York law, and Woodward would, therefore, not be able to claim bad-faith damages. The Court explained that Woodward failed to cite any support for its position that the arbitration clause violated public policy, and noted, moreover, the strong policy in both the United States and the Fifth Circuit in favor of enforcing arbitration clauses. Nor did the Insurers waive their right to arbitrate by issuing policy endorsements and amendments referring to the court of competent jurisdiction as determined by the Service of Suit Clause. These references did not amount to a "clear and unequivocal" waiver of arbitration. Having thus found that it had original jurisdiction under the FAA, the Court then compelled arbitration, finding that the four jurisdictional requirements for compelling arbitration under the New York Convention were met: there was an agreement in writing within the meaning of the Convention, which provided for arbitration in the territory of a Convention signatory and arose out of a legal relationship, whether contractual or not, which was considered commercial; and a party to the agreement was not an American citizen, or the commercial relationship had some reasonable relation with one or more foreign states.

Related topics
217

The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.

Referral to arbitration in general
220

The court discusses how to interpret the Convention’s requirement that the agreement is not null and void etc., as well as specific cases of invalidity: e.g., lack of consent (misrepresentation, duress, or fraud), vague wording of the arbitral clause; other terms of the contract contradict the intention to arbitrate, etc.

"Null and void", etc.
US 29 September 2020 Woodward Design