Judicial principles and studies
Interpreting Arbitration Clauses in Insurance Contracts and a Responsive Pleading Filed under Article (5)
An arbitration clause referring valuation disputes to arbitration confines arbitrators' jurisdiction to both entitlement and quantum of compensation. A responsive pleading filed pursuant to Article (5) of the Courts of Peace law may not be used to decide an arbitration referral request.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
Where an insurance contract contains an arbitration clause providing that disputes over the determination of compensation value arising from the policy are to be referred to arbitration, that clause is interpreted as confining the arbitral forum’s competence to decide both whether the claimant is entitled to compensation and, if so, the amount of that compensation. A responsive pleading filed by the defendant pursuant to Article (5) of the Courts of Peace law—submitted to avoid forfeiting the deadline for filing a defence—may not be relied upon for the purpose of deciding an arbitration referral request; the arbitration request must be considered independently of that pleading.
Summary
In short, an arbitration clause addressing valuation disputes limits arbitral jurisdiction to questions of entitlement and quantum. A defensive pleading submitted under Article (5) should not determine the admissibility or resolution of a petition to refer the matter to arbitration. This is an educational summary only; it is not a judicial text or legal advice and does not represent any court, council, or law office.
Practical significance
- Interpreters of arbitration clauses, parties, and arbitrators should treat valuation disputes as encompassing both entitlement and amount. - Courts and practitioners must handle arbitration referral requests separately from any responsive pleading filed pursuant to Article (5) of the Courts of Peace law. - Filing a responsive pleading to protect procedural rights should not preclude consideration of an application to refer the dispute to arbitration.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.