Baldwin Haspel Burke & Mayer LLC

Maritime Update: 9th Circuit Finds Arbitration Clause in Marine Insurance Policy Enforceable Despite State Law to the Contrary

Bill Schwartz - 

The question presented to the Court in the case of “Galilea, LLC v. AGCS Marine Insurance Company” was: “Is an arbitration provision in a maritime insurance policy enforceable despite law in the forum state assertedly precluding its application?”

In its decision rendered on January 16, 2018, the 9th Circuit determined that: (1) the plaintiff’s insurance application was not a contract, (2) the insurance policy was a contract subject to the Federal Arbitration Act, (3) the insurance policy’s arbitration clause concerned a maritime transaction, therefore falling under the Federal Arbitration Act, and (4) Montana law inapplicable under both federal maritime law choice-of-law principles and the policy itself.

In reaching its conclusion, the Court held the arbitration agreement showed a clear and unmistakable intent to resolve arbitrability questions in arbitration. The panel, in rendering its decision, affirmed the lower trial court order finding the policy’s arbitration clause was enforceable and remanded the case to the district court with instructions to grant the motion to compel arbitration in its entirety.

The case can be found here.

If you have any questions regarding this maritime matter, please contact Bill Schwartz at (504) 569-2900 or wschwartz@bhbmlaw.com.


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