This month, we discuss Scandinavian Reinsurance Co. Ltd. v. St. Paul Fire & Marine Insurance Co.,1 in which the U.S. Court of Appeals for the Second Circuit overruled a lower court decision vacating an arbitral award. Circuit Judge Robert Sack wrote the court’s opinion; he was joined by Circuit Judge Debra Livingston and District of Vermont Judge J. Garvan Murtha, sitting by designation. The court concluded that the circumstances at issue— two members of the arbitral panel failed to disclose that they served together on a panel in another, similar case—were insufficient to support a finding of “evident partiality.”
Background
In 1999, Scandinavian and St. Paul entered into a specialized reinsurance contract called a stop-loss retrocessional agreement. The contract essentially was a form of reinsurance that contemplated that St. Paul would pay its premiums not to Scandinavian directly, but instead to an interest-bearing “experience account”; any payments owed St. Paul would come out of the experience account before Scandinavian would be required to expand its own funds.
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