Third Circuit Rejects Estoppel Finding and Reverses Order Compelling Arbitration

October 22, 2014

Publication| Bankruptcy & Corporate Restructuring

On October 9, 2014, in Flintkote Co. v. Aviva PLC, No. 13-4055, the Third Circuit reversed an order holding on an estoppel theory that an insurer was required to arbitrate even though it had no written arbitration agreement with the debtor. The Third Circuit held that the debtor had not presented clear and convincing proof that estoppel should apply.

The Flintkote Company (Flintkote) manufactured asbestos-based products and purchased insurance from leading insurers including Aviva PLC (Aviva). In 1985, Flintkote entered into an agreement with insurers other than Aviva that contained an arbitration clause (the 1985 Agreement). In 1989, Flintkote entered into a similar agreement with Aviva, but Aviva did not consent to arbitration and expressly reserved its right to litigate any disputes.

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