Endurance Specialty Ins. Ltd. v. Horseshoe Re Ltd.

OPINION AND ORDER The petitioner, Endurance Specialty Insurance Limited (“Endurance”) brought this action in the New York State Supreme Court, New York County, against respondent Horseshoe Re Limited, which acts on behalf of and for the benefit of Separate Accounts HS0083 and HS0084 (“Horseshoe”). Endurance petitioned the state court to remove the presiding arbitrator in Endurance’s ongoing arbitration proceedings with Horseshoe in Bermuda. Endurance alleged that the arbitrator was biased. Horseshoe removed the case to this Court, asserting federal subject-matter jurisdiction and removal authority pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 (the “New York Convention” or “Convention”), as incorporated into the Federal Arbitration Act (“FAA”), 9 U.S.C. §§201-208. Two motions are now before the Court: the petitioner’s motion to remand the action to New York State Supreme Court, ECF No. 18; and the respondent’s motion to dismiss the petition for failure to state a claim, ECF No. 20. For the following reasons, the petitioner’s motion to remand is denied and the respondent’s motion to dismiss is granted. I. A. Petitioner Endurance is an insurance company organized under the laws of Bermuda, with its principal place of business in Bermuda. See Resp.’s Memo. on Dismissal, ECF No. 21, at 2; Pet. 1, Notice of Removal, Ex. A, ECF No. 6-1 (“Ex. A”) at 2.¹ Respondent Horseshoe is comprised of collateralized Separate Accounts HS0083 and HS0084, organized under the laws of Bermuda and belonging to a Bermuda limited liability company with its principal place of business in Bermuda. See Resp.’s Memo. on Dismissal at 2; Pet. 2, Ex. A at 2. In 2022, the parties initiated arbitration proceedings in Bermuda regarding a dispute subject to their materially identical reinsurance contracts, which contain identical arbitration provisions. See Resp.’s Memo. on Dismissal at 2-3; Pet.

8-10, Ex. A at 4. The arbitration clauses require disputes to be arbitrated in Hamilton, Bermuda, pursuant to Bermuda procedural law, namely the Bermuda Arbitration Act 1986 (“Bermuda Arbitration Act”), and pursuant to New York substantive law. In particular, the contracts state: The seat of the arbitration shall be in Hamilton, Bermuda and the arbitration tribunal shall apply the laws of the state of New York as the proper law of th[e] Reinsurance Contract. The arbitration shall be conducted under, and the arbitration tribunal shall be governed by, the provisions of the Bermuda Arbitration Act 1986 and/or any statutory modifications or amendments thereto for the time being in force. Contract No. XA200910M at 22, Ex. A at 39; Contract No. XA200911M at 21, Ex. A at 64. The arbitration clauses also call for each party to appoint an arbitrator and for the party-appointed arbitrators to agree upon an Umpire. If the party-appointed arbitrators cannot agree on an Umpire, the parties may ask the Secretary General of the Court of Arbitration of the International Chamber of Commerce (“ICC Court”) to appoint one. The clauses specify that all arbitrators must “be completely impartial and disinterested in their respective appointing parties and in the result of the arbitration.” Contract No. XA200910M at 22, Ex. A at 39; Contract No. XA200911M at 21, Ex. A at 64. After the party-appointed arbitrators failed to agree on an Umpire in the Bermuda arbitration proceeding at issue in this case, Horseshoe applied to the ICC Court for an appointment. Resp.’s Memo. on Dismissal at 3. On October 6, 2022, the ICC Court appointed Sir Bernard Eder as presiding arbitrator. See ICC Appointment Ltr. at 2, Ex. A at 104. Endurance challenged the appointment of Sir Bernard before the ICC Court, alleging that Sir Bernard is biased because the ICC Court provided him with correspondence in which Endurance “aggressively opposed” the appointment of an Umpire with his precise background and because of his treatment of Endurance’s counsel in a recent unrelated arbitration. ICC Decision