Endorsement Preemption: Eighth Circuit Says Forum Selection Endorsement Supersedes Policy's Arbitration Provision

Insurance Coverage Case Advisory, Issue 45

In Union Electric Company v. AEGIS Energy Syndicate 1225, No. 12-3546, 2013 WL 1688859 (8th Cir. Apr. 19, 2013), the US Court of Appeals for the Eighth Circuit held that under Missouri law, a choice-of-law and forum-selection endorsement to an excess insurance policy superseded the policy's mandatory arbitration clause, thereby affirming the trial court's denial of the foreign insurer's motion to compel arbitration.

The dispute over the arbitration provision arose after the policyholder utility company faced nearly $200 million in product liability and environmental claims after an accident at its hydroelectric power plant operations.  The policyholder filed an action against its insurer seeking to recover under its $25 million excess liability policy.  The foreign insurer filed a motion to compel arbitration under the policy's arbitration clause, which stated that "any controversy or dispute arising out of or relating to"