Arbitrator Must Decide Preclusive Effect of Arbitration Awards, 7th Cir. Affirms

CHICAGO — Arbitrators, not a court, should determine the preclusive effect of earlier arbitration awards that have been judicially confirmed, the 7th Circuit U.S. Court of Appeals has affirmed in a reinsurance action.

On Nov. 22, the appellate panel upheld an Illinois federal judge’s denial of reinsurers’ motion to bar an insurer from arbitrating a reinsurance billing dispute, agreeing that the preclusion issue should be arbitrated.

The appellate panel explained that in Howsam v. Dean Witter Reynolds, Inc., the U.S. Supreme Court has repeatedly instructed that under the Federal Arbitration Act, arbitrators presumptively decide procedural issues, such as preclusion, that …