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<i>Res Judicata</i> and Collateral Estoppel In Subsequent Arbitration Proceedings

BY Benjamin L. Hincks
November 30, 2014

The doctrines of res judicata (aka “claim preclusion”) and collateral estoppel (aka “issue preclusion”) are closely related: They both aim to foreclose a party from re-litigating a right, question or fact previously adjudicated by a court or tribunal of competent jurisdiction between the same or related parties. Because both doctrines have long been recognized as available in arbitration ( Commonwealth Ins. Co. v. Thomas A. Greene & Company, Inc., 709 F. Supp. 86, 88 (S.D.N.Y. 1989); Restatement (Second) Judgments ' 84(1)), it is not uncommon in the realm of reinsurance disputes ' where the reinsurance contracts at issue very often require an arbitral forum ' for a party that has been victorious on an issue or claim in an initial arbitration (or lawsuit) to attempt to preclude its opponent or a related party from re-adjudicating that same claim or issue in a subsequent arbitration.

The predominantly confidential nature of reinsurance arbitrations makes less clear how successful res judicata or collateral estoppel arguments before arbitrators are in ultimately barring the subsequent claims or issues. Indeed, as discussed further herein, the inherent attributes of the arbitration process, designed in part to bring greater efficiency and less formality to the dispute resolution process, may undermine the effectiveness of a preclusion argument.

Who Decides Whether a Claim or Issue Is Precluded?

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