A Wisconsin federal district court determined, pursuant to the parties’ arbitration clause, it is the job of an arbitrator, not the court, to decide whether a present billing issue was resolved in a prior arbitration. The broad arbitration clause at issue stated “if any dispute shall arise . . . with reference to the interpretation of this Agreement . . . [it] shall be submitted to three arbitrators.” Previously, the parties had disagreed as to whether certain reinsurance treaties covered billings relating to a claim, which was resolved in a final order confirmed by the Court in 2004. In 2015, CNA demanded arbitration from Wausau for unpaid billings with respect to the same insured party, arguing the billings are part of a new and different dispute and subject to arbitration. Wausau disagreed, insisting they were improper “rebillings” already resolved in the 2004 arbitration.
The Court held under either party’s characterization, the dispute was subject to arbitration because whether or not CNA is, or is not, in compliance with the 2004 order is itself a dispute arising “with reference to the interpretation” of the party’s agreement. Essentially, Wausau was asking the Court to determine how the 2004 order should be treated in future arbitration disputes. The Court declined to do so, holding the “law is clear that arbitrators must determine in the first instance how a previous arbitration award affects a current dispute.” The parties were ordered to submit to arbitration and the action was dismissed.
Employers Ins. of Wausau, f/d/a Employers Ins. of Wausau a Mut. Co. v. Cont’l. Cas. Co., Case No. 15-cv-226 (USDC W.D. Wis. Feb. 17, 2016)
