Insurance and reinsurance disputes are often resolved through arbitration. With arbitration, the dispute is resolved by a single arbitrator or, in certain instances, a panel of arbitrators. The composition and qualifications of the panel are generally determined in advance based on what is set forth in the arbitration clause in the operative policy. While finding qualified arbitrators with the requisite experience is laudable and encouraged, sometimes the qualifications may limit the pool of potential arbitrators too narrowly, excluding qualified neutral arbitrators.

A recent English decision, Allianz Insurance PLC v. Sirius International Insurance Corporation (Allianz) [2017] EWHC 2753 (Comm), illustrates how tricky qualification provisions can be and the importance of having such provisions drafted in a clear and unambiguous fashion.

While this article focuses on arbitration clauses in insurance and reinsurance policies, the principles discussed apply broadly. Parties to any agreement containing an arbitration clause must pay careful consideration to the law applicable to the agreement, to any clauses regarding the construction and interpretation of the agreement, and to any clauses regarding the qualifications of the arbitrators.


In Allianz, the arbitration arose out of a reinsurance dispute relating to liabilities stemming from the 9/11 terrorist attacks. The reinsurance contract at issue contained the following provision regarding arbitrator qualifications:

Unless the parties otherwise agree the arbitration tribunal shall consist of persons with not less than ten years’ experience of insurance or reinsurance.

On its face, this clause would seem to be less restrictive than other clauses typical to the arbitration of insurance and reinsurance disputes. Such clauses, for example, might contain some iteration of the following language:

The arbitrators shall be active or retired executive officers of insurance or reinsurance companies.

The distinction between the Allianz clause and the sample provided above, based on plain language, would seem to be that a risk manager of a corporation, an insurance broker, or perhaps even a lawyer could serve as an arbitrator under the Allianz arbitration clause language.

In that vein, the Respondents in the Allianz arbitration appointed an English barrister to serve as arbitrator, one who both parties admitted has considerably more than 10 years of experience in insurance or reinsurance matters. Despite this admission, the Claimant in the Allianz arbitration sought judicial intervention to have the barrister removed as an arbitrator on the grounds that he was not qualified to act as an arbitrator.

Although the court appeared to have been swayed by the argument against the removal of the arbitrator that such limiting language was not included in the clause, the court considered itself bound by precedent to take a different tack and remove the arbitrator. See Allianz, ¶ 9.

In the precedential case that the court determined controlling, it was held that parties who adopted the clause intended a “trade arbitration” and thus the “tribunal was to consist or persons from the trade or business of insurance and reinsurance.” See id., ¶ 6. Going further, the court noted that the rationale behind this interpretation included the notion that, “[I]t was [not] the intention of the parties that those with experience of insurance and reinsurance acquired otherwise than by working in the business of insurance and reinsurance, for example, as auditors, PR consultants or shipowners, should be appointed arbitrator.” See id.

Going Forward

It is likely that the decision will be appealed so it is possible that a future court will rethink this construction of the provision. Meanwhile, the Lloyd’s entity—from which the Court derived the “intent” of the contested provision—recently circulated the latest iteration of its wordings. Contrary to the Allianz decision, the latest version of provision expressly permits those with experience within the industry “or as lawyers or other professional advisers serving the industry” to serve as arbitrators.

At the very least, this decision highlights the importance of having clear language in an arbitration provision, in general as well as specifically with regard to arbitrator qualifications. The broader the pool of potential arbitrators with the requisite knowledge to hear the dispute, the more likely the parties will be able to find the appropriate panel. For example, there is language in some policies that broadens the pool of potential arbitrators to include the following: “active or retired Risk Management Officials in the same or similar industries or active or retired executive officials of Insurance Brokers or Insurance Agents.”

The inclusion of this language expressly permits corporate and captive risk managers and brokers to act as arbitrators, as individuals who no doubt have knowledge of insurance and reinsurance pertinent to an insurance coverage dispute. Similarly, a qualifications provision that requires a former federal or state judge to serve as sole arbitrator or umpire can be preferable to a clause requiring the arbitrators to be current or former insurance executives. The most prudent course, however, might be to negotiate away any such qualification requirement so that each party has maximum flexibility in selecting an arbitrator. The time to address such provisions, as well as any other wrinkles in an arbitration clause, is not after a dispute has occurred but when the contract is being negotiated. To that end, an attorney, risk manager, or broker negotiating a contract or insurance policy should pay close attention to the dispute resolution provision and try to negotiate a fair and neutral process.

If the clause cannot be changed via negotiation prior to contracting or if a policyholder is otherwise saddled with a challenging dispute resolution clause, the best course is to seek out experienced outside counsel who can assist in finding the right arbitrators, despite such clauses, who will give all parties a fair hearing.

UPDATE [March 28, 2018]:  Since the publication of this article, and as the authors suggested might happen, the Court of Appeal examined the construction of the provision and reversed the lower court’s decision. [2018] EWCA Civ 434 (March 13, 2018). In concluding its decision, the Court of Appeal referenced a recent revision to the operative language which made clear that the provision was intended to include “lawyers or other professional advisors serving the industry.” Id., at para. 27. In the words of the Court of Appeal, “This makes explicit what, as I interpret it, was already the effect of the previous wording.” Id.

 Joshua Gold ( is a shareholder and Peter A. Halprin ( is an attorney in Anderson Kill’s New York office.