Opinion ID: 1436064
Heading Depth: 1
Heading Rank: 22

Heading: The Retrocessional Agreements. (1) The Agreement's Language and Structure

Text: With the cases we have discussed in mind, we turn to the agreements at issue in this case. The three reinsurance treaties between Century and Argonaut largely contain identical language and, so far as germane here, do not differ materially. Article 15 of each treaty contains an arbitration clause under which Century and the Company, defined previously as Argonaut, agree to submit disputes to arbitration: If any dispute shall arise between the Company [Argonaut] and INA [Century] with reference to the interpretation of this Agreement or their rights with respect to any transaction involved, the dispute shall be referred to three arbitrators, one to be chosen by each party and the third by the two so chosen. ... The arbitrators shall consider this Agreement an honorable engagement rather than merely a legal obligation; they are relieved of all judicial formalities and may abstain from following the strict rules of law. The decision of a majority of the arbitrators shall be final and binding on both the Company [Argonaut] and INA [Century]. The expense of the arbitration and arbitrators shall be equally divided between the Company [Argonaut] and INA [Century]. Any such arbitration shall take place in San Francisco, California, unless some other location is mutually agreed upon by the Company [Argonaut] and INA [Century]. App. at 59-60, 101, 127 (bracketed material added). Notably, this arbitration provision specifies the parties to whom it applies. Cf. Progressive Cas., 991 F.2d at 47-48 (holding that arbitration provision referring only to contracting parties was worded broadly enough to allow its incorporation by reference into other contracts). We next turn to the three corresponding retrocessional agreements between Century and Lloyd's, each containing essentially the same terms. Under the retrocessional agreements' Paragraph 1, Century ceded to Lloyd's 90% of the premiums and losses resulting from Century's reinsurance treaties with Argonaut: Century would pay Lloyd's 90% of the premiums it received from Argonaut, and, in exchange, Lloyd's would pay Century 90% of the losses that Century paid to Argonaut under the reinsurance treaties. [25] Paragraph 1 of each retrocessional agreement also refers to and incorporates the corresponding reinsurance treaty in stating that a copy of the treaty is attached and made a part hereof. App. at 30, 71, 109 (Para.1). Paragraph 2 of the retrocessional agreements provides: Subject to the percentage allocation in the preceding paragraph, all terms and provisions of the [reinsurance treaty] shall be applied to this agreement as if contained herein, and [Lloyd's] shall receive prompt notice of any change in the Policy. Material changes are not binding on [Lloyd's] unless agreed. App. at 30, 71, 109 (Para.2). Thus, immediately after Paragraph 1 incorporates the corresponding reinsurance treaties, Paragraph 2 applie[s] them.