STORY FROM: Reinsurance & Arbitration

Arbitration Clause Allowed Party to Reject Demand, Court Affirms

HOUSTON - An arbitration agreement between a cedent and a reinsurer clearly allowed either party to reject the other party's arbitration demand, a Texas appeals court ruled July 17, affirming denial of the reinsurer's motion to compel arbitration. Travelers Indemnity Co. v. Texas Municipal League Joint Self-Insurance Fund, No. 01-08-00062-CV (Texas App., 1st Div.).

The Texas Court of Appeals, 1st Division ruled that if it required the cedent to arbitrate, the optional language of the arbitration clause would be rendered meaningless.

In November 2002, Travelers entered into a reinsurance agreement with Texas Municipal League Joint Self-Insurance Fund (TML-JSIF), which provides ...

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