1

Respondents have requested an oral argument on this Petition which, in

light of this Court s disposition, will be denied. See LOCAL R. CIV. P. 7.1

(f) (noting that [t]he Court may dispose of a motion without oral argument ).

2

Case No. 05-CV-2809 involves Century s General Casualty Treaty

( Treaty 101 ) reinsurance program for years 1951 through 1967; Case No. 05-

CV-2810 involves Century s Blanket Excess of Loss Treaty ( Global Slip )

reinsurance program for years 1968 through 1972; Case No. 05-CV-2811 involves

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CERTAIN UNDERWRITERS AT LLOYD S : CIVIL ACTION

AND EXCESS INSURANCE : NO. 05-2809

COMPANY LTD., et al., : 05-2810

 : 05-2811

Petitioners, : 05-2812

 : 05-2813

v. :

 :

CENTURY INDEMNITY COMPANY, AS :

SUCCESSOR TO INSURANCE COMPANY :

OF NORTH AMERICA, et al., :

 :

Respondents. :

NEWCOMER, S.J. August 1st, 2005

MEMORANDUM AND ORDER

Presently before the Court are Petitioners  Petitions to

Compel Arbitration (in part) and Stay Arbitration (in part). For

the reasons set forth below, the relief sought in the Petitions

is denied. An appropriate order follows.1

I. BACKGROUND

The Parties have become embroiled in a dispute over

reinsurance pay-outs as a result of asbestos litigation. The

relevant reinsurance contracts underlying this dispute were

entered into during the 1950's and 1960's. A series of these

layered contracts constitutes a reinsurance program.2 There are

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 1 of 7
Century s Casualty Quota Share Treaty ( CQS ) reinsurance program for years

1951 through 1964; Case No. 05-CV-2812 involves Century s Excess General

Liability Excess of Loss reinsurance program for years 1975 through 1986; and

Case No. 05-CV-2813 involves ACE P&C s Casualty Excess of Loss ( Treaty 4002 )

reinsurance program for years 1963 through 1982.

2

five such programs at issue, as reflected by the five civil

actions before the Court for resolution. Each reinsurance

contract contained a unique arbitration clause. The issue for

this Court to resolve is whether to compel arbitration as

structured by the Petitioners or as structured by the

Respondents. Petitioners seek to compel arbitration as it is

provided for in each reinsurance contract, while Respondents

seeks to group each arbitration by the reinsurance program.

II. LEGAL STANDARD

The well-settled summary judgment standard set forth in FED.

R. CIV. P. 56(c) governs a motion to compel arbitration. See

Bellevue Drug Co. v. Advance PCS, 333 F. Supp.2d 318, 322 (E.D.

Pa. 2004) (citations omitted). Movants must prove through

 pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, . . .

that there is no genuine issue of material fact and that [they

are] entitled to judgment as a matter of law.  FED. R. CIV. P.

56(c). In considering a motion to compel arbitration, the Court

must consider all of the non-moving party s evidence and construe

all reasonable inferences in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 2 of 7
3

255 (1986); Versarge v. Township of Clinton N.J., 984 F.2d 1359,

1361 (3d Cir. 1993).

III. DISCUSSION

A. The Dispute Is Arbitrable.

There is a strong federal policy in favor of resolving

disputes through arbitration. See Alexander v. Anthony Int l,

L.P., 341 F.3d 256, 263 (3d Cir. 2003). Before the Court can

order a reluctant party to arbitrate, however, the district court

must conduct a limited review to ensure that the dispute is

arbitrable, that is that there is a valid agreement to arbitrate

and that the dispute falls within the substantive scope of the

agreement. See Bellevue, 333 F. Supp. 2d at 323 (quoting

PaineWebber, Inc. v. Hartmann, 921 F.2d 507, 511 (3d Cir.

1990))(overruled on other grounds by Howsam v. Dean Witter

Reynolds, Inc., 537 U.S. 79 (2002)). In this case, the Parties

do not dispute the validity of multi-layered agreements. In

fact, the Parties have had a number of prior disputes under the

reinsurance programs and, when necessary, the disputes were

arbitrated in accordance with the arbitration clauses in the

reinsurance contracts. 

The present dispute is within the scope of the series of

reinsurance agreements. According to Respondents, Lloyds

unilaterally announced in 2001 that it was imposing new, onerous

documentation requirements that would have to be satisfied before

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 3 of 7
4

it would pay asbestos losses under any of Respondents 

reinsurance programs. One requirement was that Respondents must

provide documentation regarding specific asbestos claims paid by

other insurers decades ago, as well as submitting sworn

certifications to accompany asbestos billings. Respondents

objected to the new requirements, arguing that they were extracontractual. As a result, Lloyds has refused to pay Respondent

for asbestos losses because of the Respondents  alleged failure

to meet these new requirements. Thereafter, on May 13, 2005,

Respondents attempted to arbitrate their dispute with Lloyds,

structuring the arbitrations according to the reinsurance

programs in order to prevent delay and promote efficiency in the

dispute resolution process. Lloyds challenges this method,

arguing that none of the reinsurance contracts provide for

consolidation of arbitration proceedings, and that it has not

consented to the arrangement as proposed by Respondents. The

Court agrees with Lloyds.

B. The Number of Arbitrations Is Tied to the Reinsurance 

 Contracts.

Petitioners persuasively argue that the number of

arbitrations must be tied to the contracts and not to the

reinsurance programs. This Court will not order consolidation of

these arbitrations as sought by Respondents because there is no

explicit agreement to do so. See Phila. Reinsurance Corp. v.

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 4 of 7
5

Emplrs. Ins. of Wausau, 61 Fed. Appx. 816, 820 (3d Cir. 2003)

(finding that [a] district court may order the consolidation of

separate arbitrations when the parties have an explicit agreement

to do so ). It should be noted that Respondents did not file an

action specifically seeking a court-ordered consolidation of

multiple arbitrations, but instead initially submitted a single

demand for arbitration, that is, one arbitration panel for each

reinsurance program. Although Respondents have not sought to

consolidate the arbitrations, the Court finds that there is no

contractual agreement, express or implied, to structure the

arbitrations by the reinsurance programs as opposed to by the

reinsurance contracts.

After considering the affidavits of both Parties, there does

not appear to be any course of business  dealings that would

establish a practice of arbitrating by the reinsurance program as

opposed to by the reinsurance contract. See Aff. s of Patrick

Benedict Robin Coldstream & Judith A. Harnadek (reflecting that

while the Parties have arbitrated several times by reinsurance

program, the cases involved a single policy holder); Philadelphia

Reinsurance Corporation, 61 Fed. Appx. at 819-20 (finding that

the district court properly ordered the consolidation of separate

arbitrations when the parties had an informal contract, which may

be expressed through a course of business). Accordingly,

Respondents must arbitrate in separate proceedings under each

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 5 of 7
6

contract, and if they desire consolidation, they must direct such

a request to the respective arbitration panels.

An appropriate order follows.

S/ Clarence C. Newcomer 

United States District Judge

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 6 of 7
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CERTAIN UNDERWRITERS AT LLOYD S : CIVIL ACTION

AND EXCESS INSURANCE : NO. 05-2809

COMPANY LTD., et al., : 05-2810

 : 05-2811

Petitioners, : 05-2812

 : 05-2813

v. :

 :

CENTURY INDEMNITY COMPANY, AS :

SUCCESSOR TO INSURANCE COMPANY :

OF NORTH AMERICA, et al., :

 :

Respondents. :

O R D E R

AND NOW, on this 1st day of August, 2005, upon 

consideration of Petitioners  Petition (Doc. 1), Respondents 

Response, and Petitioners  Reply, said Petition is GRANTED. All

Motions seeking leave to file reply briefs are GRANTED. It is

further ORDERED that: 

1. Century shall produce all reinsurance agreements

within the scope of its arbitration demand;

2. Century is compelled to arbitrate under separate

proceedings under each agreement;

3. The arbitration proceeding commenced by Century s

May 13, 2005 demand letter is STAYED.

AND IT IS SO ORDERED.

S/ Clarence C. Newcomer 

 United States District Judge

Case 2:05-cv-02810-GEKP Document 12 Filed 08/03/05 Page 7 of 7