Law, Business and Society 11th Edition by Tony McAdams

Exercise 33

From time to time courts are called upon to determine the enforceability of an arbitration clause contained in a contract. One such case was DiMercurio v. Sphere Drake Insurance, 202 F.3d 71 (1st Cir. 2000). DiMercurio was injured in 1994 when the commercial fishing vessel in which he was working sank. The vessel was owned by R M, which was found by a court to be liable to DiMercurio for his injuries and ordered to pay $350,000 in compensation. However, because R M had no other assets, it assigned to DiMercurio all the rights it had against Sphere Drake, the London-based insurer of the fishing vessel. When DiMercurio looked to Sphere Drake for payment, it denied the claim and invoked the arbitration clause in its insurance policy with R M, which required the arbitration to take place in England. Should DiMercurio be required to pursue his claim through arbitration in England