An insured brought an action against international insurers for breach of an insurance contract.
The insurers moved to stay the action and refer the dispute to arbitration in London, England pursuant to an arbitration clause in the policy.
The motion judge dismissed the stay motion, finding that the "Action Against Insurer" endorsement provided an alternative method of dispute resolution allowing domestic court proceedings.
The appellate court reversed, holding that the arbitration clause was mandatory and the sole method of dispute resolution, and that the "Action Against Insurer" clause was a service of suit provision that did not conflict with the arbitration clause.
The court also clarified that the Model Law on International Commercial Arbitration applies to agreements providing for arbitration of certain disputes, not only those providing for arbitration as the sole method of dispute resolution.