The Second Circuit Court of Appeals has weighed in (again) on a still unsettled issue in the realm of insurance law: whether arbitration provisions in insurance policies issued by foreign insurers are enforceable notwithstanding states’ anti-arbitration statutes? If they are, coverage disputes between policyholders and insurers are likely to be relegated to arbitral decision under insurer-favored arbitration clauses; if not, policyholders may pursue their rights in a more favorable forum. In Certain Underwriters at Lloyds, London v. 3131 Veterans Blvd LLC, the Second Circuit abrogated its previous decision in Stephens v. American International Insurance and answered this question in the affirmative, finding such provisions enforceable under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the “New York Convention”).
