International Litigation & Arbitration: May 2019 Archives

The New York Convention Preempts State Law Regulating The Business of Insurance - Fifth Circuit Affirms Dismissal In Favor of Arbitration

In McDonnel Group, LLC v. Great Lakes Insurance SE, UK Branch (5th Cir. 2019)the Fifth Circuit recently held that the New York Convention trumps state insurance law.  When its insurance claim was denied, McDonnel Group, LLC ("McDonnel") sued the insurers seeking a declaratory judgment that it was entitled to coverage.  The insurers moved to dismiss arguing that the policy contained a provision to arbitrate all disputes between the parties.  The policy, however, also contained a conformity to statute provision, meaning that if any term of the policy conflicts with a state statute, then "the terms are amended to conform to such statutes."  Invoking that provision, McDonnel argued that it had no obligation to arbitrate because the arbitration clause was void as it conflicted with a Louisiana statute forbidding arbitration in insurance contracts.  

Fitch Arguments Prevail as Supreme Court Rules on How Foreign Governments May Be Served with Process

On March 26, 2019, the Supreme Court reversed the Second Circuit in the case of Sudan v. Harrison, which involved how foreign states may be served under the Foreign Sovereigns Immunities Act ("FSIA").  28 USC § 1608 governs service of process on foreign states, and explains that a foreign state may be served (1) "in accordance with any special arrangement," (2) "in accordance with an applicable international convention on service of judicial documents," (3) "by sending a copy of the summons and complaint and a notice of suit ... by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned," or (4) by requesting the State Department to make service on the foreign state.  In Sudan v. Harrison, the plaintiffs mailed service of process to the head of the ministry of foreign affairs care of Sudan's US embassy.  When Sudan did not answer the complaint, a $314 million default judgment entered, which Sudan then challenged asserting that the mailing should have gone to the head of the ministry of foreign affairs at the actual ministry of foreign affairs, where that official works.

  • Best Lawyers | Best Law Firms | U.S. News and World Report | 2021
  • Super Lawyers
  • Best Lawyers | 2020
  • Preeminent AV | LexisNexis Martindale-Hubbell Peer Review Rated For Ethical Standards and Legal Ability