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UNITED STATES 2 August 2023 DAK Property
United States District Court, Middle District of Florida, Fort Myers Division, 2 August 2023, Case No.: 2:23-cv-497-SPC-KCD
(DAK Property Holdings, Inc. ... Read more
United States District Court, Middle District of Florida, Fort Myers Division, 2 August 2023, Case No.: 2:23-cv-497-SPC-KCD
(DAK Property Holdings, Inc. v. Independent Specialty Insurance Company and Certain Underwriters at Lloyd’s London, Subscribing to Certificate Number B604510568622021)
UNITED STATES 2 August 2023 DAK Property
DAK filed two actions against the defendants for breach of contract, alleging that the defendants failed to fully pay its Hurricane Ian insurance claims. In this second action, the Magistrate Judge granted the defendants’ motion to compel arbitration. The Judge found that the four jurisdictional requirements for compelling arbitration under the New York Convention were satisfied: there was an arbitration agreement in writing, providing for arbitration in a Convention State (the United States) and arising from a commercial legal relationship, and at least one of the parties was not a US citizen. Once the four jurisdictional factors are satisfied, the Judge explained, arbitration must be compelled unless an affirmative defense applies. The only available defenses are provided in the Convention itself, that is, the arbitration agreement must be “null and void, inoperative or incapable of being performed”. DAK argued that the arbitration agreement was invalid, among others, because Florida law prohibits arbitration clauses in insurance contracts, and the McCarran-Ferguson Act states that federal law cannot overturn state statutes regulating insurance. The Judge rejected this argument, pointing out that the McCarran-Ferguson Act applies only to arbitration agreements within the United States, and has no effect on an international arbitration agreement that the Convention governs. (See also the identical decision rendered in the first action on 31 July 2023, and the decision of the District Court, dated 14 September 2023, affirming both of the Judge’s findings.)
The court discusses whether a certain dispute could be settled by arbitration, and the law applicable to that determination.