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Catalina Worthing Ins. Ltd. v. NEM RE Receivables LLC

State Law Entitles Insurer to Stay of Arbitration Over Reinsurance Recoverables

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OPINION AND ORDER Plaintiff Catalina Worthing Insurance, Ltd. (“Catalina”), formerly known as The Excess Insurance Company Ltd. (“Excess”), initiated this action to stay the arbitration demanded by Defendant NEM-RE Receivables, LLC (“NEM RE”). Additionally, Catalina seeks a declaratory judgment that NEM RE’s claims are time barred or, alternatively, that NEM RE cannot demand arbitration because it is not a party to the reinsurance agreements that purportedly contain arbitration provisions. For the reasons discussed below, Catalina’s petition to stay arbitration is GRANTED, and its request for declaratory judgment that NEM RE’s claims are time barred is DENIED without prejudice. BACKGROUND The factual background underlying this action dates back more than 50 years. From 1973 through 1981, Excess (now Catalina), a United Kingdom insurance company, entered into several reinsurance agreements (the “Reinsurance Contracts”) with Federated Reinsurance Company (“Federated Re”). Petition for Stay of Arbitration and Declaratory Judgment, Dkt. 1 (“Petition”), 2, Ex. 1.¹ Federated Re was an insurance company organized under the laws of the State of New York. Petition 15. In August 1990, Federated Re became insolvent. Id. 16. The Commissioner of Insurance of the State of New York and the Supreme Court of New York supervised its liquidation. Id.

16-17. From 1997 through 2003, the liquidator assessed the claims of creditors of Federated Re, as well as the obligations of its debtors. See id.

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