The US Supreme Court’s pronouncements on class arbitration
have little to do with reinsurance arbitrations. But, when the
Supreme Court speaks on arbitrations and construes the Federal Arbitration Act
(“FAA”), there may be statements or even holdings by
the court that could affect aspects of reinsurance arbitrations, so
we pay attention. In the most recent class arbitration decision,
the Supreme Court provided some useful tidbits.
In Lamps Plus, Inc. v. Varela,
No. 17-988 (U.S. Sup. Ct. Apr. 24, 2019), the Court, in a 5-4
decision, held that under the FAA, an ambiguity in an arbitration
provision does not provide the necessary contractual basis for a
court to order class arbitration. The majority held that for class
arbitration to be ordered, the arbitration provision must provide
an affirmative contractual basis for concluding that that parties
agreed to class arbitration. In reaching its conclusion, the
majority provides guidance that affects all arbitrations,
