The U.S. Court of Appeals for the Second Circuit recently affirmed a district court decision that remanded to state court a lawsuit asserted by the Liquidator of Midland Insurance Company against its reinsurer, Dunav Re, finding that the Service of Suit clause in the reinsurance treaties at issue unambiguously waived Dunav Re's right to remove the dispute to federal court. See Dinallo, Superintendent of Insurance of the State of New York, in his capacity as Liquidator of Midland Ins. Co. v. Dunav Ins. Co., No. 09-Civ-235 (2d Cir. 2010).
The Service of Suit clause provided that, in the event of a dispute concerning Dunav Re’s alleged failure to pay an amount due under the treaties, Dunav Re would, at the request of Midland, submit to the jurisdiction of any court of competent jurisdiction within the U.S., and comply with all requirements necessary to give such court jurisdiction. On appeal, Dunav Re argued that this provision was ambiguous and should be interpreted as only reflecting an agreement to submit to the personal jurisdiction of U.S. courts, but not its waiver of removal. In affirming the district court's decision, the Second Circuit held that the Service of Suit clause clearly operated as a waiver of Dunav Re’s right to remove, as it required Dunav Re to submit to the jurisdiction of any court within the U.S. that Midland chose, including state courts.