United States / 23 March 1994 / United States, U.S. Court of Appeals, Fifth Circuit / Sphere Drake Insurance PLC v. Marine Towing, Inc. / 93-3200
|United States, U.S. Court of Appeals, Fifth Circuit
|23 March 1994
|Sphere Drake Insurance PLC v. Marine Towing, Inc.
|Applicable NYC Provisions
|II | II(2)
|Marine Towing contacted Schade & Co. (“Schade”) to acquire protection and indemnity insurance for its vessels. Schade eventually secured a policy from Sphere Drake, a London marine insurer. Before Schade delivered the policy to Marine Towing, but during the policy period, an insured vessel sank. Marine Towing sued Sphere Drake and Schade in state court for a declaration of rights under the policy and coverage. Sphere Drake moved to stay litigation and compel arbitration before the United States District Court for the Eastern District of Louisiana pursuant to an arbitration agreement contained in the policy. The District Court ordered arbitration. Marine Towing appealed, arguing that it had not signed the insurance contract and therefore could not be bound by the arbitration agreement under the NYC. The United States Court of Appeals for the Fifth Circuit confirmed the judgment of the District Court and compelled arbitration. The Court reasoned that the definition of “agreement in writing” contained in Article II(2) NYC includes either (i) an arbitral clause in a contract; or (ii) an arbitration agreement which must be signed by the parties or contained in an exchange of letters or telegrams. The Court held that since, in the present case, an arbitral clause contained in the insurance contract was at issue, as opposed to an arbitration agreement, the NYC requirements for arbitration agreements did not apply to the arbitral clauses. The Court concluded that the arbitration clause in the contract should be enforced even though Marine Towing had not signed the policy, as it constituted an agreement in writing under the NYC.
|see also :
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