Two international sophisticated insurance entities engage in multi-million dollar insurance-reinsurance agreements.  What could go wrong?  White Rock Ins. Co. PCC Ltd. v Lloyd’s Syndicate 4242
2021 NY Slip Op 31675(U)  May 18, 2021 Supreme Court, New York County Docket Number: 652867/2020 Judge: Andrew Borrok illustrates how court view arbitration and the deference paid to it.

“The parties previously engaged in an arbitration (the Prior Arbitration) that commenced on March 1, 2019 (NYSCEF Doc. Nos. 13-27). The following three issues were submitted to the Prior Arbitration panel: (1) whether White Rock was liable to the Syndicate under the Reinsurance Agreement for the full amount of its exposure in respect of subject Loss Occurrences or whether its liability was limited to the amount in the trust, (2) whether White Rock was required to “claw-back” collateral to top-up the trust account to the current reserve positions, and (3) whether the principles of equitable estoppel barred the Syndicate from prevailing on its claim.”

“A review of the Prior Arbitration record (see NYSCEF Doc. Nos. 13-27), and as discussed above, makes clear that the provisions of Article 14 of the Trust Agreement – which are at the core of the instant action – were clearly considered and litigated as part of the Prior Arbitration
(e.g., NYSCEF Doc. No. 15 at 8; NYSCEF Doc. No. 18 at 3, 24). White Rock expressly raised these provisions in the Trust Agreement as one of several defenses to its liability under the parties’ Reinsurance Contract both in its memoranda and at the hearing (e.g., NYSCEF Doc. No. 18 at 2-4, 7-11, 24-26; NYSCEF Doc. No. 23 at 29-30). The fact that the Trust Agreement (contrary to the Reinsurance Agreement) lacked an arbitration clause is simply not material as the parties, and specifically White Rock, asked the Prior Arbitration panel to address both agreements in the Prior Arbitration. Having been unsuccessful in its arguments, White Rock cannot now have a second bite at the apple in this proceeding (Chapman Steamer Collective, LLC v KeyBank Natl Assn., 163 AD3d 760, 761 [2d Dept 2018] [party cannot relitigate any claim which was, could or should have been litigated in prior proceeding]; John Grace & Co., Inc. v Tunstead, Schecter & Torre, 186 AD2d 15, 19-20 [1st Dept 1992] [collateral estoppel and res judicata barred legal malpractice where, in prior fee action, plaintiff had alleged legal malpractice as a defense]). ”