Plaintiff B.D. Cooke & Partners Limited, as Assignee of Citizens Casualty Company of New York (in Liquidation) (“Cooke”), filed a lawsuit against defendant Certain Underwriters at Lloyd’s, London (“Underwriters”). Underwriters moved to compel arbitration, which was granted by the U.S. District Court for the Southern District of New York. Cooke then filed a motion for reconsideration of the District Court’s Order.

Soon thereafter, Cooke proposed that the parties move forward with the arbitration and exchange the names of potential arbitrator candidates. Underwriters refused, arguing that it would be more cost-effective to wait until the court determined the motion for reconsideration before proceeding with the arbitration. Underwriters then moved to stay the arbitration on the grounds that it would suffer harm by incurring unnecessary expenses if the arbitration progressed and Cooke’s motion for reconsideration was ultimately granted.

The court began its analysis by noting that motions to stay an arbitration pending the outcome of a related action are generally denied unless “equities tip decisively in the direction of a stay,” such as where the moving party would suffer irreparable harm or clear hardship if the stay is not granted. However, the court found that the expenses Underwriters might incur in proceeding with the arbitration did not satisfy this threshold. Thus, the court held that Cooke’s interest in moving forward to resolve the dispute outweighed the alleged harm Underwriters would sustain if Cooke’s motion for reconsideration was ultimately granted, and denied Underwriters' motion to stay.

Click here to review a copy of the District Court’s decision, captioned B.D. Cooke & Partners Limited, as Assignee of Citizens Casualty Company of New York (in liqudation) v. Certain Underwriters at Lloyd’s, London, No. 08-cv-3435 (S.D.N.Y. 2009).