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DB&P Removes Case to Federal Court. Arbitration successfully compelled.

Llyods of London

The case.

Southwestern Electric Power Co. (SWEPCO) and American Electric Power Service Corp. (AEPSC) filed a petition in the Caddo Parish First Judicial District Court against Certain Underwriters at Lloyd’s of London and others, seeking indemnity for heat steam recovery generators that were damaged during transportation.

The removal.

Donato, Brown & Pool removed the case to the U.S. District Court for the Western District of Louisiana under the Convention on Recognition and Enforcement of Foreign Arbitral Awards. They then moved to stay the case and to compel arbitration under the policy.

The policy.

The policy provided that all disputes be submitted to arbitration in Texas. SWEPCO unsuccessfully argued that the arbitration provision was not binding as written and required that it give additional consent to be enforceable. Additonally, SWEPCO argued that the parties were not bound by the arbitration agreement because it never gave additional consent. 

The decision.

Magistrate Judge Hornsby said in a report and recommendation that when SWEPCO and Lloyd’s entered the policy, SWEPCO agreed to submit all related disputes to arbitration. 

Judge Donald E. Walter adopted the report and recommendation, ordering that the case be stayed in favor of arbitration.