USA Law and Practice Contributed by: Christina Culver, Rhonda Thompson and L. Michael Brooks, Thompson, Coe, Cousins & Irons, LLP
2.3 Cross-Border Disputes and Conflicts Issues Cross-border insurance disputes in the United States present a range of jurisdictional and choice-of-law challenges. State courts apply their own choice-of- law rules, with most states using the most-significant- relationship test from the Restatement (Second) of Conflict of Laws. Federal courts sitting in diversity (ie, hearing a case arising under states law), follow the choice-of-law rules of their sitting state, focusing on significant contacts and state interests to avoid arbitrary or unfair selection of law. The Restatement (Second) of Conflict of Laws §§ 6, 188 and 193 guide courts to consider the state with the most significant relationship to the contract or insured risk, frequently favouring the insured’s domicile or the place where the insurance contract was negotiated, performed, or executed. Where multiple jurisdictions are implicated, most courts analyse policy interests such as the pro- tection of justified expectations, regulation of conduct within state borders, and fairness to insured parties, often weighing these against the place of contracting and the location of the insured risk. Practical challenges in cross-border disputes include interpreting conflicting choice-of-law and forum- selection clauses, balancing local interests of the dif- ferent jurisdictions with contractual provisions, and addressing forum non conveniens (a defendant’s objection to the plaintiff’s choice of forum) issues, which generally favour the insured’s forum choice if it is rationally related to the dispute. Ultimately, the out- come will depend on the balancing of statutory direc- tives, judicial precedents, public-policy concerns, and procedural considerations unique to each dispute. 2.4 Anti-Suit Injunctions When a party files suit in breach of an exclusive forum- selection clause or an arbitration clause, US federal courts possess a range of remedies: transfer under 28 USC § 1404 (a), dismissal on forum non conveniens grounds, stay and compel-arbitration orders under the Federal Arbitration Act (FAA), and – in limited circum- stances – anti-suit or anti-arbitration injunctions. The governing frameworks differ depending on whether the clause designates another federal forum, a state or foreign forum, or an arbitral tribunal.
Federal and state courts in the United States gen- erally enforce exclusive forum-selection and arbitra- tion clauses according to principles established in the Federal Arbitration Act and Supreme Court prec- edents, including Atlantic Marine Construction Com- pany v US District Court for Western District of Texas , 571 US 49 (2013) and M / S Bremen v Zapata Off - Shore Company , 407 US 1 (1972). The courts will enforce these clauses unless it would be unreasonable, unjust, or fraudulent to do so. When parties agree to arbi- trate, courts can stay proceedings under § 3 of the Federal Arbitration Act or compel arbitration under § 4. The courts may dismiss rather than stay cases when all claims are arbitrable. The New York Conven- tion governs international arbitral awards, overlapping with Federal Arbitration Act provisions but differing in that the courts often dismiss rather than stay pro- ceedings post-referral, and the courts do not retain jurisdiction pending arbitration under the Convention. Limited discovery is allowed concerning the existence and scope of arbitration agreements, while challenges to arbitration orders fall under the Federal Arbitration Act’s appellate review rules. Circuit splits exist about interlocutory appealability and power to grant injunc- tions related to arbitration proceedings. Anti-suit injunctions are disfavoured due to interna- tional comity principles and must meet strict require- ments, including showing that foreign litigation threat- ens the issuing court’s jurisdiction or infringes public policy. Federal courts may enjoin foreign suits when a valid forum-selection clause exists, particularly to pre- vent frivolous or vexatious litigation and forum shop- ping. However, such injunctions are rare. Enforcement of forum-selection clauses in state courts varies and can be denied if enforcement would cause undue hardship or injustice. 2.5 AI-Related Dispute Resolution and Jurisdiction US courts have not yet developed a particular choice- of-law framework specifically for AI disputes. Instead, federal and state courts apply traditional jurisdictional and conflicts-of-law doctrines – personal jurisdiction under long-arm statutes, the most-significant-rela- tionship test, lex loci delicti, and other well-estab- lished doctrines – to AI systems whose training data,
294 I NSURANCE L I T IGATI O N 2026
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