Originally from:

Journal of American Arbitration (JAA) - Vol. 2, No. 2

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ARTICLES

Sphere Drake Insurance Limited v. All
American Life Insurance Company: The
Seventh Circuit Continues the Evisceration of
the Dictum in Commonwealth Coatings.
By Alexander Panio
 

I. OVERVIEW
The original dispute arose regarding the validity of seven
reinsurance policies and who, the court or an arbitrator, should decide
their validity.1 All American Life Insurance Co. (All American), the
reinsurer, contended that the contracts were effective and the dispute
should be arbitrated.2 Sphere Drake Insurance Ltd., (Sphere Drake), the
reinsured party, believed the contracts were void and the matter should
be settled by a court.3 The United States Court of Appeals for the
Seventh Circuit compelled all but one of the policies to arbitration.4
Sphere Drake, “[w]hile litigating with respect to one of the seven
policies, . . . submitted the other six to arbitration at All American’s
insistence.”5 The arbitration proceeding took place under the
Association Internationale de Droits des Assurances (AIDA) and its U.S.
affiliate, the AIDA Reinsurance and Insurance Arbitration Society
(ARIAS).6 Because ARIAS utilized tripartite panels, All American and
Sphere Drake each selected an arbitrator who then jointly selected a