Flintkote Co v. Aviva PLC, No. 13-4055 (3d Cir. 2014)
Annotate this CaseFlintkote was a major supplier of asbestos-based products and was covered by insurance policies from London insurance firms, including Aviva, one of the world’s largest insurers. It became apparent that claims under these policies would result in protracted disputes regarding the scope of coverage. In 1985, Flintkote and several insurers, but not Aviva, entered into the Wellington Agreement, which required that coverage disputes be resolved through ADR consisting of open mediation, binding arbitration, and an expedited appellate process; that the insurers make payments to Flintkote; and that Flintkote reimburse with interest, if it also received those same payments from another insurer. In 1989, Flintkote and Aviva entered into a separate agreement, similar to the Wellington Agreement, including as to reimbursement for claims also paid by other insurers. The1989 Agreement explicitly reserves each party’s right to resolve disputes through litigation. Flintkote filed for bankruptcy in 2004. In 2006, invoking the Wellington Agreement, Flintkote initiated coverage-related mediation with the insurers. Aviva, although not obligated to participate, opted to join. During mediation, Flintkote reached settlements with some insurers, but not with Aviva. In 2012, Aviva and the remaining other insurers sought reimbursement or off-set with respect to prior payments and interest under the Wellington Agreement. Flintkote took no action. Aviva, acting separately, moved to lift the automatic bankruptcy stay. Before the Bankruptcy Court ruled on Aviva’s motion, Flintkote moved to compel arbitration pursuant the Federal Arbitration Act. The district court granted Flintkote’s motion to compel arbitration, concluding that Aviva was equitably estopped from avoiding arbitration by virtue of its participation in the lengthy mediation process. The Third Circuit reversed.
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