Convention Self-Executing, Not Subject to Reverse Preemption, 1st Cir. Affirms

BOSTON — A 1st Circuit U.S. Court of Appeals panel has affirmed that a coverage dispute between a Puerto Rican company and its insurer must be arbitrated because the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Chapter II of the Federal Arbitration Act (FAA) preempt the Puerto Rico Insurance Code, which prohibits arbitration clauses in insurance policies.

In a May 19 published opinion addressing an issue of first impression, the panel found the Convention is self-executing and is not subject to the McCarran-Ferguson Act’s reverse preemption.

Puerto Rican recycling company Green Enterprises LLC filed an insurance …