Policy’s Arbitration Provision Mandatory, Not Permissive, Colo. Federal Judge Rules

DENVER — A Colorado federal judge has compelled arbitration of a dispute in which a contractor seeks coverage for damage to building materials, ruling the policy’s mediation/arbitration provision is mandatory and broadly requires the parties to arbitrate any dispute that “arises out of connection with the policy.”

In a May 9 order, Judge Christine M. Arguello of the U.S. District Court for the District of Colorado rejected the policyholder’s argument that the provision is permissive because it contains the word “may.” The judge found “may” indicates that if a dispute remains unresolved after mediation, a party may pursue further dispute …