## Facts

- Marine Towing, Inc. engaged an insurance broker, Schade & Co., to obtain protection and indemnity (P&I) coverage for its vessels.
- Schade procured a marine insurance policy issued by Sphere Drake Insurance PLC that contained a clause requiring arbitration of coverage disputes in London.
- During the policy period, but before Marine Towing physically received the policy, one insured vessel sank.
- After receiving the policy, Marine Towing learned of the London arbitration clause and filed a Louisiana state-court action against Sphere Drake and Schade seeking coverage-related relief.
- Sphere Drake removed the state action to federal court and moved to compel arbitration, but the district court remanded due to a procedural removal defect (failure to join all defendants) and dismissed the arbitration motions as moot.
- While the removed action was pending, Sphere Drake filed a separate federal action seeking to compel arbitration and stay litigation under the New York Convention and Chapter 2 of the Federal Arbitration Act (FAA).
- The district court denied Marine Towing’s motion to dismiss, compelled arbitration in London, and stayed all litigation between the parties; Marine Towing appealed.

## Issues

1. Whether an order compelling arbitration and staying all litigation in the federal action is a “final decision with respect to an arbitration” appealable under 9 U.S.C. § 16(a)(3).
2. Whether the district court lacked subject-matter jurisdiction over the separate federal Convention action because a related removed case had been remanded to state court.
3. Whether the New York Convention’s “agreement in writing” requirement is satisfied when the arbitration clause appears in an insurance policy procured by an authorized broker but not signed by the insured and delivered after the loss.

## Decision

- The court of appeals held it had appellate jurisdiction because the district court’s order compelling arbitration and staying all litigation disposed of the entire federal action, making it a final decision under 9 U.S.C. § 16(a)(3).
- The court held the district court had subject-matter jurisdiction over the separate Convention-based action; the prior remand on procedural removal grounds did not bar an independent federal proceeding to compel arbitration.
- The court held there was an enforceable “agreement in writing” under the New York Convention; Marine Towing was bound by the London arbitration clause in the policy obtained by its broker.
- The judgment compelling arbitration and staying litigation was affirmed.

## Legal Principles

- An order that compels arbitration and stays all litigation in the action may qualify as a “final decision with respect to an arbitration” appealable under 9 U.S.C. § 16(a)(3) when it leaves nothing for the court to do but allow arbitration to proceed.
- A remand of a removed state action for procedural defects does not divest a federal court of jurisdiction over a separate, independent action to compel arbitration under the New York Convention and the FAA’s implementing provisions.
- The New York Convention’s “agreement in writing” requirement can be satisfied by a written insurance policy containing an arbitration clause when the policy was procured by an authorized broker acting for the insured and the insured seeks benefits under the policy, even absent the insured’s signature.

## Conclusion

The Fifth Circuit affirmed an order compelling London arbitration and staying litigation, holding the order was appealable as final, the separate Convention action remained within federal jurisdiction despite a prior remand in related litigation, and the broker-procured written policy satisfied the Convention’s requirement of an agreement in writing.


Sphere Drake Ins. PLC v. Marine Towing, Inc., 16 F.3d 666 (5th Cir. 1994)