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Century Indemnity Co. v. Certain Underwriters at Lloyd's

January 12, 2009


The opinion of the court was delivered by: Eduardo C. Robreno, J.


Century Indemnity Company ("Plaintiff") filed the instant motion to seal an arbitration award under Fed. R. Civ. P. 26(c)(1)(F). For the reasons that follow, the motion will be granted.


Plaintiff and Certain Underwriters at Lloyd's, London ("Defendant") entered into a reinsurance treaty whereby Defendant agreed to indemnify Plaintiff with respect to a specified portion of Plaintiff's obligations under insurance policies it issued in exchange for a portion of the premium paid to Plaintiff for the underlying insurance policies. Plaintiff is a corporation organized under the laws of Pennsylvania. Defendant is a business organized under the laws of London, England.

The instant dispute arose under the Plaintiff's Contingency First Excess of Loss Cover ("Treaty 6"), in which Defendant participated as Plaintiff's reinsurer for the period between April 1, 1969 to December 31, 1971. Specifically, Plaintiff advised Defendant in 2003 and 2005 that it anticipated billing Defendant under Treaty 6 for its share of amounts Plaintiff paid for asbestos-related product liability claims. Defendant refused to pay and initiated a single arbitration against Plaintiff on October 26, 2007, pursuant to the arbitration clause in Treaty 6.

In anticipation of the arbitration hearing, the parties entered into a confidentiality agreement on May 1, 2008 (the "Confidentiality Agreement"). The Confidentiality Agreement requires that the parties keep confidential "Arbitration Information," including the final award. Ex. 1, Pet'r Memo. Mot. Seal § 2. As an exception to the Confidentiality Agreement, an award may be disclosed "in connection with court proceedings related to any aspect of the arbitration . . . ." Id. at § 3(h). However, in the event of such disclosure "the parties agree, subject to court approval, that all submissions of Arbitration Information to a court shall be sealed." Id. at § 3.

After discovery and briefing, the arbitration panel (the "Panel") held a four-day evidentiary hearing on November 17 through November 20. The Panel issued a final award on November 28, 2008 (the "Award"). The arbitration clause in Treaty 6 provides that the decision of the Panel shall be final and binding upon all parties. Plaintiff has moved to confirm the arbitration award. Plaintiff argues that the Award should remain under seal while the instant case is being adjudicated. Defendant does not contest this motion.


Jurisdiction is based on the Federal Arbitration Act, 9 U.S.C. §§ 201-08. The instant proceeding involves a commercial arbitration agreement that is not entirely between citizens of the United States. See § 202. Therefore, this Court has subject matter jurisdiction under § 203 of the Federal Arbitration Act, which provides:

An action or proceeding falling under the [Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (the "Convention")] shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.

Id.; accord 28 U.S.C. § 1331 (proclaiming "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.") (emphasis added).


Plaintiff argues the Award should remain under seal for two reasons. First, the parties seek to uphold the terms of the Confidentiality Agreement. Second, the integrity of the arbitration process in the reinsurance industry, where such proceedings are typically confidential, could be jeopardized. In support of the second argument, Plaintiff appends reinsurance procedure statements from ARIAS-U.S. and Insurance and Reinsurance Dispute Resolution Task Force. See Exs. 2-3, Pet'r Mot. Seal.

The strong common law presumption of public access to judicial records is not absolute. In re Cendant Corp., 260 F.3d 183, 194 (3d Cir. 2001). However, this presumption is rebutted only when a court is satisfied, after balancing the competing interests, that the need for secrecy outweighs the presumption of access. Id. The party seeking to have the record sealed "bears the burden of showing that the material is the kind of information that courts will protect" and that "disclosure will work a clearly defined and serious injury to the party seeking closure." Id. (quoting ...

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