Court Opinion

ID: 6933374
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:16:59.095203+00
Date Added: 2024-06-11T16:07:19.305363
License: Public Domain

REINHARDT, Circuit Judge,
dissenting.
I dissent from the majority opinion because I believe that the panel incorrectly interpreted the arbitrator’s award. While the language is concededly unclear, I believe that there is a logical interpretation that may be given to the arbitrator’s award that effectively obviates any need to examine its rationality under the standards articulated by this court. See Todd Shipyards Corp. v. Cunard Line Ltd., 943 F.2d 1056, 1060 (9th Cir.1991).
I disagree with the majority’s decision to interpret the award to relieve the Retroces-sionaires of all future obligations. Even if the majority correctly found that the award, as the majority construes it, is not in manifest disregard of the law, such a construction at the very least renders the award an absurd, even a bewildering decision. I cannot accept that the arbitrators were so lacking in common sense and legal knowledge that they would have intended the award to be so construed.
Instead, I believe that we should find that the award merely denied Unigard’s request for payments under the INSLIC contract— that is, the arbitrators rejected Unigard’s request for an order declaring the continuing obligation of the Retrocessionaires to pay for INSLIC claims and structured the award to create an incentive for Unigard to share the information necessary for a rescission inquiry. Three grounds support a finding that the award does not bar Unigard from seeking recovery for claims that may arise in the future if it presents the appropriate information relating to those claims in a timely manner.
First, and most important, the arbitrators allowed the Retrocessionaires, and the Re-trocessionaires alone, to reopen to seek rescission. There would be no reason to provide such a remedy for the Retrocessionaires unless Unigard had the right to file claims in the future. If Unigard were barred from filing claims in the future, the Retrocessio-naires would be better off doing nothing than they would be if they sought rescission, and the provision of this remedy would be nonsensical. Indeed, Decision Statement 6(a) & (e), as well as the “Reasons” justification for the award, make clear that the arbitrators believed that a discussion about the Retro-cessionaires’ right to rescind the contract would arise in the future. There would be no justification for such a belief if the arbitrators intended the award to bar all future claims.
Second, the arbitrators barred Unigard’s claim because they found that, due to Uni-gard’s recalcitrance, there was insufficient evidence to support the Retrocessionaires’ request for rescission. There is no reason at all to assume that Unigard’s failure to provide the information necessary for the specific claims at issue in this proceeding should forever bar it from raising claims in the future (assuming that it presents the appropriate information when it raises them).
Finally, it would make little sense for the arbitrators explicitly to decline to determine whether rescission should take place but then to award the Retrocessionaires a remedy that exceeds the award that they would have received had the appropriate information *834been presented and had that information favored their request for rescission. Indeed, such an interpretation of the award contravenes the explicit language in Decision Statement 6(a), which concerns the arbitrators’ decision not to grant or deny the Retroces-sionaires’ request for rescission. Decision Statement 6(a) specifically states that subsections (b) and (c) represent “more limited findings in [the Retrocessionaires’] favor.” One could hardly characterize a decision to relieve the Retrocessionaires of all future obligations, an award that would exceed the Retrocessionaires’ request for rescission, to be “more limited” than a decision not to address the rescission question itself. Taken together, subsections (a) and (c) suggest that the arbitrators relieved the Retrocessionaires of all current obligations to pay for future claims unless and until Unigard presents the information necessary for a determination of the rescission question.1
The interpretation outlined above represents, I believe, the only reasonable construction of the award. It represents a fair and rational solution to the disagreement presented to the arbitrators, and it obviates any need to determine whether the award is in “manifest disregard of the law.” Accordingly, I believe that the majority, like the district court, erred in interpreting the award; it should instead have adopted the only possible rational construction of the award and affirmed the district court’s decision on that basis.

. Indeed, the language of the "Reasons” section notes that the arbitrators "sought to structure [their] INSLIC decisions so that the denials of relief to Cedant ... can only be reopened ... in a subsequent arbitration proceeding for rescission ... and only on the basis of new facts as countenanced by 6.a. and 6.e. above” (emphasis added).