The Fifth Circuit Denies a Motion to Overturn an Arbitration Decision

The Fifth Circuit Denies a Motion to Overturn an Arbitration Decision

By: Max Schellenberg

Edited by: Tiffany Morales

Why Nada Cruz, LLC v. Ace Insurance Co., 569 Fed. Appx. 339 (5th Cir. 2014)

In Why Nada Cruz, LLC v. Ace Insurance Co., the United States Court of Appeals for the Fifth Circuit confirmed an arbitration award concerning an insurance claim of a sunken vessel. The insurance contract between the plaintiff and defendant contained an express clause requiring disputes to be resolved through arbitration. The provision was modified temporally, providing “request for arbitration must be filed within one (1) year of the date of loss or damage.”Initially the claimant, Why Nada Cruz, filed suit in state court to recover damages for the incident. In response, the defendant, Ace Insurance, removed the action to federal court and subsequently filed a motion to compel arbitration coupled with a demand to abate the court proceedings. The federal court granted both motions, thereby dismissing the action in favor of arbitration.Once in the hands of the arbitrator, he dismissed the action holding, “the arbitration was not filed in a timely manner [and] did not meet the specific requirements, as detailed within the Insurance Policy.” In support of his decision, he stated, “the filing for arbitration dated 25th October 2012, was over two (2) years [and] two (2) months after the date of loss.”The plaintiff sought to appeal the arbitrator’s decision, arguing “the arbitrator erred both by: (1) failing to interpret properly the Policy language in concluding that Anderson failed to timely request arbitration, and (2) declining to entertain a motion for reconsideration.”Predictably, the court rejected both arguments on the basis that an independent arbitrator is vested with an “exceedingly deferential standard of review.”