A Louisiana state court issued a temporary restraining order preventing Chubb Bermuda Insurance from enforcing an arbitration clause that sought to move a COVID-19 business interruption dispute to the High Court in London. The ruling also halted the insurer’s attempts to continue proceedings in the U.K.
The case stems from Landry, a Louisiana-based hospitality and entertainment group, which filed a claim under an excess and surplus policy for pandemic-related shutdown losses.
The policy included an arbitration clause requiring disputes to be heard in London. Landry argued this clause would force the company to relitigate settled issues instead of focusing on damages.
The plaintiffs further challenged the arbitration provision’s validity under Louisiana law. State statute prohibits insurers from compelling arbitration, and the Louisiana Supreme Court reaffirmed that position in Nov. 2024, ruling that carriers cannot force policyholders into arbitration outside narrow exceptions.
The court stressed that arbitration erodes state jurisdiction in cases against insurers.
Chubb Bermuda, meanwhile, received support from the English High Court, which issued an interim anti-suit injunction to block the Louisiana action.
That injunction was extended on Feb. 14, though Landry continued to dispute the English court’s jurisdiction.
Following the Louisiana restraining order, Chubb Bermuda moved the case to federal court, seeking to dissolve the order.
The U.S. District Court for the Western District of Louisiana, Lake Charles Division, granted a motion for preliminary injunction, pausing enforcement of the arbitration clause until further hearings.
Deadlines have now been set. Chubb Bermuda must submit its initial response to the motion for preliminary injunction by Sept. 9, while Landry has until Sept. 12 to reply.
A hearing is scheduled for Sept. 16, when the insurer will present arguments against a permanent injunction.
