The Insurance Policy

The arbitration clause in the school's insurance policy stated:

If the Assured and the Underwriters fail to agree in whole or in part regarding any aspect of this Policy, each party shall, within ten (10) days after the demand in writing by either party, appoint a competent and disinterested arbitrator and the two chosen shall before commencing the arbitration select a competent and disinterested umpire. The arbitrators together shall determine such matters in which the Assured and the Underwriters shall so fail to agree and shall make an award thereon, and if they fail to agree, they will submit their differences to the umpire and the award in writing of any two, duly verified, shall determine the same.

The Court's Decision

The court granted the motion to dismiss and to compel arbitration.

In its decision, the court explained that the Convention, codified into Chapter 2 of the Federal Arbitration Act (the “FAA”), allows citizens of signatory countries the right to enforce arbitration clauses in contracts.

The court added that it could compel arbitration under the Convention if:

(1) There is an agreement in writing within the meaning of the Convention;

(2) The agreement provides for arbitration in the territory of a signatory of the Convection;

(3) The agreement arises out of a legal relationship, whether contractual or not, considered commercial; and

(4) A party to the agreement is not an American citizen, or the commercial relationship has some reasonable relation with one or more foreign states.

The court then found that this case met all of those requirements.

First, the court noted that the parties disagreed as to the Underwriters' duty to cover damage allegedly caused by Hurricane Irma, and that this was “an aspect of the Policy.”

Next, the court pointed out that although the arbitration clause did not specifically provide for the location of arbitration, there was a provision immediately preceding the arbitration clause stating that any action brought against the Underwriters must be in the United States of America, “in a court having proper jurisdiction.” This language, coupled with the arbitration clause, was sufficient to meet the second factor, the court ruled.

Third, the court found that the relationship between the school and the Underwriters arose out of an insurance contract in which the Underwriters agreed to insure property owned by the school in the event of certain losses, which was a “commercial relationship between the insurer and insured.”

Finally, the court observed, the Underwriters was a syndicate and a portion of the insurance policy was subscribed to by Syndicate 2001, which was not a citizen of the United States but, rather, was wholly owned by Amlin Underwriting Ltd., which was organized and which maintained its principal place of business in the United Kingdom.

Accordingly, the court concluded that it had to compel arbitration, and it dismissed the school's lawsuit.

The case is German International School of Fort Lauderdale, LLC v. Certain Underwriters at Lloyd's, London, No. 19-60741-Civ-Scola (S.D. Fla. May 14, 2019). Attorneys involved include: For German International School of Fort Lauderdale, LLC, Plaintiff: Frantz C Nelson, LEAD ATTORNEY, Vernis & Bowling of Broward, PA, Hollywood, FL; Jose Pete Font, Font & Nelson, LLC, LEAD ATTORNEY, Fort Lauderdale, FL. For Certain Underwriters at Llyod's, London, Defendant: Matthew L. Litsky, LEAD ATTORNEY, Phelps Dunbar, Tampa, FL; Sarah Jean Manthey Smith, Phelps Dunbar LLP, Tampa, FL.