In a commercial arbitration dispute, the United States Court of Appeals for the First Circuit affirmed the district court's decision concerning the authority of an arbitral tribunal to determine the preclusive effect of a prior award, even though the award was confirmed by the federal court. Emp'rs Ins. Co. of Wausau v. OneBeacon Am. Ins. Co., 744 F.3d 25 (1st Cir. 2014).
Background and Procedural History
Two insurance companies, Employers Insurance Company of Wausau and National Casualty Company, filed a petition for declaratory relief regarding the preclusive effect of a prior arbitration confirmed by a federal court order. The plaintiffs contended that the question of preclusion is a matter for the federal court. The defendants, OneBeacon American Insurance Company and other insurance companies, filed a motion to dismiss and a cross-petition to compel arbitration. The district court granted the defendants' motion to dismiss, and the First Circuit affirmed.