In American International Specialty Lines Insurance Company v. Allied Capital Corporation the New York Court of Appeals wrestles with a simple yet significant question: When is an arbitration award truly final such that it may not be altered? 2020 N.Y. Slip Op. 02529 (2020).
The matter arose out of dispute between an insurer and its insureds that was adjudicated in arbitration. By way of background, the insureds had previously settled a federal qui tam action involving allegations of their participation in loan origination fraud.
Following this settlement, the insureds sough payment from their insurer for their defense costs and indemnification for the settlement. When the insurer denied coverage, the insureds demanded arbitration based on the insurer’s alleged breach of two relevant insurance policies.