3rd Circuit Upholds Vacatur of $6 Million Arbitration Award

PHILADELPHIA - A federal appellate court has upheld the vacatur of a $6 million arbitration award issued in favor of Platinum Underwriters Bermuda Ltd., ruling that it is "irrational" because it eliminates an "essential" provision in a 2003 reinsurance contract. PMA Capital Insurance Co. v. Platinum Underwriters Bermuda Ltd., No. 09-84 (3rd Cir.).

On Nov. 8, the 3rd Circuit U.S. Court of Appeals ruled that the arbitration panel exceeded its power by rewriting the terms of the contract and ordering unrequested relief.

St. Paul Re originally reinsured PMA Capital Insurance Co. for the period 1999 through 2001. In 2002, St. …