U.S. court upholds British Arbitration Award

Thursday, May 27, 2004
In an unpublished opinion, the U.S. Court of Appeals for the Sixth Circuit affirmed a district court’s confirmation of a British arbitration award in favor of a protection and indemnity (P&I) club against plaintiff seamen. Acting on behalf of the seamen, a law firm sued States Steamship Company for alleged asbestos-related injuries. When States, which was in bankruptcy, did not answer, plaintiffs obtained a default judgment. Suit was then brought against two P&I Clubs that had insured States. One club prevailed on the “pay to be paid” provision in its policy. The suit against the second club was referred to arbitration in Britain in accordance with terms in the policy. The British arbitration was in favor of the club and included an award of legal costs and fees against plaintiffs. When defendant club sought to recover the award in U.S. court, plaintiffs contended that the award violated basic notions of morality and justice. The court found no useful purpose in issuing a detailed opinion affirming the district court order upholding the award. Aasma v. West of England Shipowners Mutual Insurance Assoc., No. 03-3223 (6th Cir., May 19, 2004). (HK Law)

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