In a memorandum and order unsealing final reinsurance arbitration awards, a New York federal district court weighed the “close question” of whether those awards were judicial documents to which the presumption of public access attaches when submitted as part of a confirmation petition. Acknowledging that arbitrations are essentially confidential proceedings, the court determined that the balance shifted in favor of the public’s right to access when the “‘fruits of their private agreement to arbitrate, i.e., the arbitration award,’” form part of a petition to enforce that award under § 9 of the Federal Arbitration Act absent compelling arguments that disclosure would cause “direct or immediate harm.”
In this case, the retrocedent sought to seal certain arbitration awards submitted as part of the confirmation petitions. The court had previously agreed to seal portions of the record on the basis that “‘disclosure of the decretal portions of the awards does present the risk that it will impair [the retrocedent's] negotiating position with other reinsurers and that such interest outweigh [sic] the public’s right of access’”; however, it reserved the right to revisit the issue.
Subsequent to the retrocessionaire’s motion for reconsideration, the retrocedent was unable to persuade the court at oral argument that disclosure of these arbitration awards would directly or immediately impair or otherwise harm its relationships with its retrocessionaires and other reinsurance industry participants. The retrocedent contended that there was a “danger of a slippery slope” that “might” impair the exchange of information between parties to a reinsurance agreement because of fear of eventual disclosure. The court held that such a “fear” was not justified as applied to the “bare bones relief granted or denied” in the arbitration proceeding and did not overcome the presumption of public access in this case.
In a coda to its order, the court also observed that a final judgment compelling actions under pain of the court’s contempt power is a form of injunction and that the Federal Rules of Civil Procedure require every injunction to state its terms specifically and place the parties and all readers on notice of what is required or prohibited. When a court references and confirms an arbitration award in a final judgment, the public, according to the judge, has a right to know what the court has done and to see any referenced award absent a party demonstrating why the presumption of access should be overcome.
Global Reinsurance Corp.—U.S. Branch v. Argonaut Insurance Co., No. 07 Civ. 8196 (PKC) & 07 Civ. 8350 (PKC), 2007 U.S. Dist. LEXIS 32419 (S.D.N.Y. April 18, 2008).
TELEPHONE: (203) 227-9431
FAX: (212) 208-3003