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Appellate court upholds ruling in favor of Lloyd’s underwriters

Posted On: Mar. 2, 2023 10:11 AM CST

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A federal appeals court on Wednesday affirmed a lower court ruling in favor of Lloyd’s of London underwriters, stating it had no authority to vacate an arbitration award even when it is based on factual errors.

Omaha, Nebraska-based Martinique Properties LLC owned apartments in the city for which it had property coverage through certain underwriters at Lloyd’s, according to the ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in Martinique Properties LLC v. Certain Underwriters at Lloyd’s of London et al.

In May 2016, the apartments sustained hail and wind damage and Martinique submitted an insurance claim for reimbursement of its repair costs, but there was a dispute between Martinique and underwriters over the amount.

Under a policy provision, a panel of appraisers was to determine the amount of loss, which would be binding. Martinique invoked the provision and an appraiser panel agreed on a binding appraisal in June 2020.

Martinique filed suit, stating the award had incorporated incorrect figures and measurements.

The U.S. District Court in Omaha granted Lloyd’s’ motion to dismiss and was affirmed by a three-judge panel. 

“Martinique Properties has alleged only factual errors that challenge the merits of the appraisal award” and the court has no authority to reconsider an arbitration award’s merits under the Federal Arbitration Act even when this is the case, the ruling said.

Attorneys in the case could not be reached for comment.