On May 7, 2021, the operator of a major pipeline system that transports fuel across the East Coast fell victim to a ransomware attack that resulted in a six-day shutdown. Over the following week, East Coast stockpiles of gasoline dropped by about 4.6 million barrels and gas prices surged to their highest levels in six and a half years. The 5,500-mile-long pipeline provides roughly 45 percent of the fuel supplies for the East Coast, representing critical infrastructure for consumers from the Gulf Coast to Linden, New Jersey. Under mounting public pressure to respond and devastating losses to the company’s operational income, the operator authorized a ransom payment of $4.4 million to hackers. On May 31, 2021, one of the world’s largest meat suppliers disclosed that it was targeted by a ransomware attack that forced the company to shut down its meat processing plants in North America. As the meat processing plants depend on automation and computers for the production process, as well as processing of orders, billing and shipping, the company had no choice but to shut down operations. The company has not disclosed if it paid a ransom as part of its efforts to get back online.
High Court’s Upcoming Decision May Have Major Impact on Foreign Arbitrations
By Andrew Gann, Stephen Foresta & Matthew D. Fender on
Posted in London Market Coverage
On March 22, 2021, the U.S. Supreme Court granted a petition for writ of certiorari in Servotronics, Inc. v. Rolls-Royce PLC, a decision that will likely resolve a circuit split over the power of an arbitrator to issue third-party discovery subpoenas to obtain document discovery in foreign arbitrations.
The issue involves Title 28, Section 1782(a) of the United States Code, which governs a district court’s authority to provide discovery assistance in litigation in “foreign and international tribunals.” The interpretation of “tribunal” has caused confusion among courts.
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Arbitration vs. Litigation: More Than Just a Preference for RWI Policyholders
Posted in Representations and Warranties
On Jan. 15, 2021, a New York state court judge issued an opinion denying an insurer’s motion to dismiss a claim for coverage under a representations and warranties insurance (RWI) policy in WPP Group USA, Inc. v. RB/TDM Investors, LLC et al. More specifically, the court rejected the insurer’s argument that the claim was subject to certain exclusions under the policy and ordered the parties to proceed with discovery.
The court’s decision is interesting in several respects — not the least of which is that judicial opinions relating to RWI policies are quite rare. RWI policies are generally purchased by transactional buyers seeking to guard against misrepresentations made by sellers during the acquisition process without having to seek recourse against the sellers themselves for any potential losses. Typically, these policies provide that any disputes concerning an insurer’s coverage or payment obligations are to be resolved in confidential arbitration proceedings that do not generate public opinions. The RWI policy at issue in WPP Group, however, provided the insured with the option of bringing claims regarding the policy in either confidential arbitration or in New York state or federal courts.
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