Gather together any group of reinsurance lawyers in private practice and, at some point in the conversation, there will be a complaint that reinsurance disputes are arbitrated rather than litigated, thus effectively creating a private body of law usually accessible only to those directly involved. This is because arbitration awards are confidential, unlike court judgments, which are publicly accessible. If the recent Advocate General’s opinion in N V Reibel v. JSC VO Stankoimport C802/24¹ (N V Reibel) is followed, those complaining may get their wish for more litigation.²

The Advocate General’s opinion recognises that arbitration has a role to play, as would most of the aforementioned reinsurance lawyers, but sees that role as more limited than one might have expected. Arbitrators are to be “guarantors that EU law will be applied correctly”³ and are required to show particular vigilance when a choice of law or consent agreement may circumvent restrictive EU rules.⁴ More strikingly, regardless of how the arbitrators perform their role, member states must guarantee “effective” judicial review of arbitration awards, not limited to manifest errors,⁵ and address EU public policy questions of their own motion, regardless of the submissions of the parties.

Placed into the context of reinsurance, this has worrying implications if the Court of Justice of the EU (CJEU) decides to follow the Advocate General’s lead. As non-state actors, there is no sense in which arbitrators are guarantors of anything beyond carrying out their role with the necessary competence, diligence, independence, and neutrality. UNCITRAL rules are commonly cited in reinsurance arbitration clauses and make arbitral awards final and binding on the parties, who commit to carry them out without delay. The extent to which national laws permit review despite a final and binding award will vary, including the ability to contract out of some kinds of judicial review of the award in some legal systems. This represents a choice for each national legal and parliamentary system, which cautious market participants factor in when making their choice of applicable law and jurisdiction. The door of the court will always be open to those who wish to litigate their disputes, but reinsurers and cedants generally prefer not to pass through that door, preferring arbitration for its confidentiality, even if the conventional wisdom that it is quicker and cheaper than litigation no longer necessarily holds.

Indeed, this is the fundamental question that the Advocate General’s opinion does not address, why parties actively chose arbitration rather than litigation.⁶ Reinsurance disputes are simply there to be resolved: they do not exist to advance the state of the law or any court or legal system’s public policy objectives. Some disputes will be insoluble without the courts, and some will address serious issues of wider public interest such as the implications of sanctions law, which was the central issue in the N V Reibel case. However, if arbitration awards are generally not capable of being final and thereby remaining confidential, disputes may simply morph into rough and ready settlement deals made between senior executives or forms of alternative dispute resolution outside the purview of the courts.⁷ Whatever the CJEU decides, the industry will adapt if it perceives the need for change, but it would be unfortunate if a drive for greater transparency over the application of sanctions law inadvertently resulted in more opacity overall.