Arbitration Deadlines Have Teeth

Insurers often think of arbitration proceedings as less formal than courtroom litigation. In its recent decision in Certain Underwriters at Lloyd's v. Argonaut Ins. Co.,¹ the 7th U.S. Circuit Court of Appeals has made clear that, at least with respect to contractual arbitrator appointment deadlines, a party who presumes that arbitration proceedings will allow it freedom from strict enforcement of contractual terms may be in for a rude awakening.

The Argonaut case involved a reinsurance dispute over an asbestos claim. Argonaut had settled with one of its insureds and sought reimbursement from a Lloyd's syndicate under several reinsurance treaties. When the syndicate asked for more information rather than offering payment, Argonaut responded with an arbitration demand.