Rain Forest Adventures (Holdings) Ltd. and Harald Joachim von der Glotz v. AIG Insurance Hong Kong Limited

At a glance

Parties

Rain Forest Adventures (Holdings) Ltd. and Harald Joachim von der Glotz v. AIG Insurance Hong Kong Limited

Case no.

No. 19-cv-23698-GAYLES

Court

U.S. District Court, Southern District of Florida (Judge Darrin P. Gayles)

Forum and rules

Court proceeding under the New York Convention (9 U.S.C. §§ 201–08); arbitration agreement provides for HKIAC mediation, then HKIAC arbitration under its Domestic Arbitration Rules

Treaty

Disputes Clause of an insurance policy; New York Convention

Sector

Insurance (liability coverage for a tourist excursion)

Outcome

Motion to compel arbitration granted; motion to dismiss, anti-suit injunction motion, intervention motion and sanctions motion denied (18 March 2020).

The dispute

Lynn McCullough was injured during a cruise excursion in St. Lucia. She and her husband obtained a settlement from the insureds, Rain Forest Adventures (Holdings) Ltd. and Harald Joachim von der Glotz, which the court described as potentially exceeding sixty million dollars. The McCulloughs then brought a third-party bad faith action under Florida law against the insurer, AIG Insurance Hong Kong Limited. In that case (McCullough v. Royal Caribbean Cruises), the court refused to compel arbitration against the McCulloughs because they had not signed the policy. AIG appealed and started arbitration in Hong Kong against the insureds on the policy's applicability and limits. The insureds then sued AIG for a declaration that arbitration was not required and for an anti-suit injunction. They relied on the policy's Global Liberalization Clause, which applies the terms of a more favourable foreign policy. AIG moved to dismiss, to compel arbitration under the policy's Disputes Clause, and for sanctions.

Key holdings

1. The McCulloughs were denied leave to intervene under Rule 24(a)(2). Their only interest, the settlement, is purely economic and not a legally protectable interest. The plaintiffs also share their goals and strategy, so they represent that interest adequately. The McCulloughs forfeited their Rule 24(b) argument because they did not support it. pp. 3–4
2. The parties agreed that the New York Convention governs. Through the Disputes Clause ("any dispute regarding any aspect of this policy or any matter relating to cover thereunder"), the policy clearly and unmistakably delegates threshold questions of arbitrability to the HKIAC. The court therefore cannot decide whether the Global Liberalization Clause requires litigation in Florida. pp. 4–5
3. The plaintiffs produced no evidence of a more favourable foreign policy that would require litigation in the court, and they did not seek discovery of one. In any event, whether the Global Liberalization Clause bars arbitration is itself a question of the scope of arbitrability, and that question belongs to the arbitrators. Arbitration was compelled. p. 6
4. The court did not reach AIG's objections of lack of personal jurisdiction and forum non conveniens. It noted that AIG's extensive litigation without a reservation of rights could support an inference that AIG had waived its personal jurisdiction objection. The motion to dismiss was denied. pp. 6–7
5. The anti-suit injunction was denied because, once arbitration was compelled, the plaintiffs had no likelihood of success. AIG's sanctions motion was also denied: the issues were sufficiently disputed that the plaintiffs' position was not objectively frivolous. pp. 6–7

Procedural history

1. 10 May 2019In McCullough v. Royal Caribbean Cruises (No. 16-cv-20194), the court denies AIG's motion to compel arbitration against the non-signatory McCulloughs and stays that case pending a coverage determination. AIG appeals and starts arbitration in Hong Kong against the insureds.
2. The insureds file this action seeking a declaration that arbitration is not required and an anti-suit injunction. AIG moves for sanctions and to dismiss and compel arbitration. The McCulloughs move to intervene.
3. 27 January 2020Hearing on all the motions; the court rules orally.
4. 18 March 2020Written omnibus order: arbitration under HKIAC procedures is compelled, and all other motions are denied.

Tribunal, counsel and experts

Decided by

• Darrin P. Gayles Judge, U.S. District Court, Southern District of Florida

Run a conflict check on these names →

Keywords

• New York Convention
• motion to compel arbitration
• delegation of arbitrability
• clear and unmistakable
• HKIAC
• insurance policy
• Global Liberalization Clause
• anti-suit injunction
• intervention
• Rule 24
• third-party bad faith
• St. Lucia excursion
• waiver of personal jurisdiction
• sanctions
• AIG

Summary generated with AI from the published documents — refer to the award for the authoritative text.