Full opinion text
OPINION AND ORDER DENYING MOTIONS TO COMPEL ARBITRATION HARMON, District Judge. Pending before the Court in the above referenced cause, relating to four proposed partial settlements, are a number of motions to dismiss or stay interpleader and compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 2, 3, 4 and 206, and under the terms of Excess D & 0 Liability Insurance Policies purchased by Enron Corporation, filed by Third-Party Counterclaim Defendants Shelby, Yeager, Howard and Krautz (“EBS Defendants”) (instrument #2527), Jeffrey K. Skilling (# 2632), Kevin Hannon (# 2827), and Mark Koenig (# 3063). Insurance Policies Enron purchased one primary directors and officers liability insurance policy: Policy No. D0079A1A98 § IV(Q)(3) issued by Associated Electric & Gas Insurance Services United (“Primary AEGIS Policy”), which provided a $35 million limit of liability. In addition, Enron purchased ten excess liability policies, the first three of which, like the Primary AEGIS Policy, have been exhausted: (1) Policy No. 900630-00D0 issued by Energy Insurance Mutual (“EIM Policy”), providing a $65 million limit excess of the underlying primary coverage of $35 million; (2) Policy No. 8142-05-47C issued by Federal Insurance Company, providing a $25 million limit excess of the $100 million in underlying coverage; (3) Policy No. NDA 0131301-98H issued by Twin City Fire Insurance Company (“Twin City Policy”), providing a $25 million limit excess of the $125 million in underlying coverage; (4) Policy No. ELU 82248-01 issued by Greenwich Insurance Company (“Greenwich Policy”), providing coverage from $150 million to $175 million; (5) Policy No. 901/LK9802531 issued by certain Underwriters at Lloyd’s of London, providing coverage from $175 million to $200 million; (6) Policy No. 568CM0934 issued by St. Paul Mercury Insurance Company (“St. Paul Policy”), providing coverage from $200 million to $225 million; (7) Policy No. 8181-43-14 issued by Federal Insurance Company, providing coverage from $225 million to $250 million; (8) Policy No. PSF000633 issued by Royal Insurance Company of America, providing coverage from $250 million to $275 million; (9) Policy No. ENE-9459D issued by ACE Bermuda Insurance Ltd. (“ACE Policy”), providing coverage from $275 million to $300 million; and (10) Policy No. 8179-41-03 SWH issued by Federal Insurance Company in a Quota Share Policy with five participating insurers (Federal Insurance Company (50%), Kemper Insurance Indemnity Co. (20%), EIM (15%), Greenwich (5%), and AEGIS (10%)), providing coverage from $300 million to $350 million. Copies of the various policies, all of which are implicated in the $200 million demand by the settling parties, are attached as exhibits to a number of the pleadings. The policies are layered, with each triggered only when the lower one is exhausted. All the excess policies contain language that at minimum follows form of the Primary AEGIS Policy, to be discussed further infra. The Primary AEGIS Policy and the first three excess policies have been exhausted by payment of defense costs and settlements of various insureds, leaving approximately $200 million of proceeds remaining before the filing of the Interpleader. Procedural Background In October 2004 three different settlement demands from different insureds were made upon the Excess Insurers for payment from these remaining proceeds. First, eighteen of Enron’s former Outside Directors sent a letter dated October 12, 2004 informing the carriers that they had reached a settlement with Newby Lead Plaintiff, an agreement which would require payment of the entire $200 million, in addition to personal contributions from some of the insureds. Another letter dated October 14, 2004 informed the Excess Insurers of a settlement in Pirelli between the Official Creditors Committee and some insureds (the Outside Directors, James Derrick, and Rick Buy) for payment of 17.2% of the remaining insurance proceeds, which would reduce the amount to be paid to the Newby plaintiffs. Subsequently Stowers demands were made on the Excess Insurers in connection with these settlements. Finally, in a letter dated October 20, 2004, Kenneth Lay made a demand that Greenwich pay $10.25 million to settle claims against him in two Enron-related suits: The Retirement Systems of Alabama, et al. v. Merrill Lynch & Co., et al., No. CV-03-F-69-N (M.D.Ala.), and City of Montgomery, et al. v. Lay, et al., No. CV-03-F-1152-N (M.D.Ala.). The Outside Directors argue that Lay’s settlement is subordinate to the Newby and Pirelli settlements. Furthermore, legal proceedings were commenced by various parties. On October 12, 2004 certain former Outside Directors of Enron filed in Newby a Third-Party Complaint for Contract Enforcement and Injunctive Relief regarding D & O Policy Proceeds against a number of excess insurance carriers (#2450). They amended it on October 18, 2004 (#2462), announcing the settlement with Newby Plaintiffs and with the Official Committee of Unsecured Creditors of Enron in Pirelli and seeking a declaratory judgment acknowledging their right to use all of the remaining proceeds of the excess insurance policies to fund their settlements, regardless of the defense needs of other insureds, as well as for a preliminary and permanent injunction to prohibit the Excess Insurers from paying out any more of the remaining proceeds to others. After notice and a hearing on October 18, 2004, this Court entered a temporary restraining order enjoining Greenwich, the Excess Insurer responsible for providing the first layer of the remaining $200 million of coverage, from processing any claims from or disbursing any funds to insureds, and thus in essence all the layers above it. On October 20, 2004 Ken Harrison sued the Excess Insurers in New York, seeking to compel them to binding arbitration regarding claims for his defense costs that they had rejected and all claims for allocation of the $200 million in policy proceeds. Harrison v. AEGIS, et al., Case No. 04-CV-08319 (S.D.N.Y.). Alternatively Harrison sought to compel litigation to be filed exclusively in New York. In response to the demands from the Outside Directors and complaints from other insureds, on October 21, 2004, the Enron Excess Insurers filed their First Amended Third-Party Counterclaim for Interpleader (Part 2 of # 2483), pursuant to 28 U.S.C. §§ 1335, 1397 and 2361 and Rule 22 of the Federal Rules of Civil Procedure, to interplead the contested policy proceeds, as a compulsory counterclaim to the Outside Directors’ Third-Party Complaint for Contract Enforcement and In-junctive Relief regarding D & 0 Policy Proceeds against them, before the Excess Insurers knew of Harrison’s suit. The Excess Insurers then amended that counterclaim the next day (# 2488). The inter-pleader names as defendants all the known persons and entities who are actual or alleged insureds under the Excess Policies and against whom or which one or more claims have been made. Meanwhile the EBS Defendants also filed a suit similar to Harrison’s against the Excess Insurers in New York on October 22, 2004. Krautz, et al. v. Greenwich Ins. Co., et al., Case No. 04 CV 8389 (S.D.N.Y.). That same day this Court enjoined Harrison, and any other of the interpleader defendants, from prosecuting this suit or initiating any action or arbitration proceedings in New York and any other suit relating to D & O policies. #2478. It noted that Harrison had appeared by telephone through counsel at the October 18, 2004 injunction hearing, argued against the requested TRO, and was present when the Court granted the restraining order. The Court found that Harrison’s filing of the suit in the Southern District of New York “directly contravened the relief already granted” in the temporary restraining order and interfered with this Court’s jurisdiction over the interpleader action. # 2478. On November 1, 2004 the Former Outside Directors of Enron answered the Excess Insurers’ interpleader and filed a counterclaim for a declaratory judgment and injunctive relief (# 2552). On December 8, 2004 the Court entered a preliminary injunction enjoining anyone claiming an interest in the remaining excess insurance proceeds from pursuing action outside the interpleader and restraining any disbursement of those proceeds by the Excess Insurers without a court order. # 2782. Then on December 22, 2004 (# 2865), after the parties obtained Judge Gonzalez’s leave to lift the automatic stay in the bankruptcy court, the Court authorized payment of all the remaining excess insurance proceeds into the registry of the Court to fund the interpleader. Movants’ Arguments Movants now further argue that an order compelling arbitration and staying this action should issue under the sections 3, 4, and 206 of the Federal Arbitration Act because this Court lacks jurisdiction over this matter based on the mandatory arbitration provisions, express or incorporated by reference, in the excess insurance policies. Furthermore they contend under other terms of the policies (specifically the EIM Policy and all other higher layers that follow form), all disputes “arising under or relating to” coverage under the policies and to allocation of insurance proceeds are governed by New York law, not Texas law, and, in accordance with the forum selection clause, any non-arbitrable issues must be tried in the Southern District of New York. Seeking to compel arbitration, Movants, who are all to some degree undisputed insureds under the policies, have made demands upon the insurers, and after rejection of those claims, now seek arbitration, contend that the terms of the excess liability policies, in particular the two agreements to arbitrate found in Primary AEGIS Policy No. D0079A1A98 § IV(Q)(3) and in Policy No. 900630-00D0, § 111(G)(2)(a) and (f) and § 111(G)(3) and 4, and § III(F), issued by Energy Insurance Mutual (“EIM Policy”), require the submission to arbitration of any disputes “arising out of or relating to” the policies. Section Q of the Primary AEGIS Policy states, “Any controversy or dispute arising out of or relating to this POLICY, or the breach, termination or validity thereof, shall be resolved in accordance with the procedures specified in this Section IV(Q), which shall be the sole and exclusive procedures for the resolution of any such controversy or dispute.” Section IV(Q)(3) of the Primary AEGIS Policy provides, Any controversy or dispute arising out of or relating to this POLICY, or the breach, termination or validity thereof, which has not been resolved by nonbinding means [negotiation and mediation] as provided herein within ninety (90) days of the initiation of such procedure, shall be settled by binding arbitration in accordance with the CPR Institute Rules for Non-Administered Arbitration of Business Disputes (the “CPR Rules”) by three (3) independent and impartial arbitrators. The terms of this POLICY are to be construed ... in accordance with the jurisdiction in which the situation forming the basis for the controversy arose. Movants also rely upon the following provisions of the EMI Policy, the first layer of excess insurance that was exhausted before the Outside Directors made their settlement demand and before the inter-pleader was filed, and argue that “[a]ll of the non-exhausted Policies follow the form of this policy” and incorporate the following EIM Policy provisions: In the event of any dispute between the Insured and the Company as to any matters arising out of or relating to any provision of this Policy, the parties shall resolve the dispute by use of a mini-trial .... [Section 111(G)(2)(a) ] If the parties are unable to agree on the ground rules of the mini-trial, either party may make a demand in writing for arbitration upon the other party. [Section 111(G)(2)(f) ] Any claim or controversy between the Insured and the Company not settled in accordance with Section (2) above, shall be submitted to arbitration in New York City before three arbitrators at the request of either the Insured or the Company. ... [Section 111(G)(3) ] To the extent that any claim or controversy between the Insured and the Company [EMI] hereunder is not subject to arbitration for any reason, whatsoever, the United States District Court for the Southern District of New York shall have exclusive jurisdiction thereof.... [Section 111(G)(4) ] In view of the diverse locations of the parties purchasing insurance from the Company and the desirability of unified regulation, the parties agree that the Policy shall be construed and enforced in accordance with and governed by the internal law of the State of New York, except in so far as such law may prohibit payment in respect of punitive damages hereunder. [Section III(F) ] The Outside Directors observe that outside of the Primary AEGIS Policy and the EIM Policy, only the ACE and Royal Poli-des have independent provisions with arbitration agreements. Movants further argue that under New York law, in contrast to the Stowers doctrine under Texas law, the payment of the remaining insurance proceeds solely to the Settling Defendants under the circumstances here would violate the D & 0 carriers’ contractual and fiduciary duties to the Movants and other nonsettling insureds. Smoral v. Hanover Ins. Co., 37 A.D.2d 23, 322 N.Y.S.2d 12, 14 ([1st Dept.] 1971). Their interpretation of Smoral will be addressed later. Although the proceeds of the Primary AEGIS and the EIM Policies have been exhausted by payments to the insureds and thus are not part of the Interpleader Action, Movants argue that the Excess Polices use “follow form” language to incorporate provisions of underlying policies. Specifically Movants argue that they incorporate the arbitration, choice-of-law, and forum selection provisions of the EIM Policy by reference. See, e.g., § I of Policy No. ELU 82248-01 issued by Greenwich Insurance Company (“Greenwich Policy”). This Greenwich Policy was the first unexhausted layer regarding which this Court entered an injunction to stay the distribution of its proceeds. The policy states, “Coverage hereunder will apply in conformance with the terms, conditions, endorsements and warranties of the Primary Policy together with the terms, conditions, endorsements and warranties of any other Underlying Insurance.” Greenwich Policy § I, Ex. A.2.e to # 3121. Nevertheless, the policies are not consistent with respect to following form. Expressly following form of only the Primary AEGIS Policy, the Lloyd’s of London Policy specifies, “[T]his Policy is subject to the same insuring clauses, definitions, items, conditions, exclusions, and other provisions, as those set forth in the Primary Policy .... No changes to the Primary Policy as so described shall be binding upon Underwriters under this Policy unless specifically endorsed.” Ex. A.2.f to # 3121 at 5. The first of the two Federal Insurance Company’s Policies similarly states, “Coverage hereunder then shall apply in conformance with the terms and conditions of the Primary Policy except as otherwise provided herein.” Ex. A.2.h to # 3121, in ¶ 4' of an Endorsement dated October 27, 1999. Thus EIM’s arbitration, forum-selection, and choice-of-law provisions are irrelevant to these two policies. The St. Paul’s Policy, Ex. A.2.g at I, provides that “this policy incorporates by reference and affords coverage in accordance with and subject to the insuring clauses, warranties, definitions, terms, conditions, exclusions and other provisions contained in the Primary Policy and to the extent that coverage is further limited or restricted thereby, in any other Underlying Insurance .... [emphasis added by the Court]” Likewise the two Federal Insurance Company Policies and the Quota Share Policy, Exhibits A.2.c at f 1, A.2.h at If 1, and A.2.k at ¶ 1 to # 3121, state, “Coverage hereunder shall then apply in conformance with the terms and conditions of the Primary Policy as amended by any more restrictive terms and conditions of any other policy designated in Item 4(B) of the Declarations, except as otherwise provided herein, [emphasis added by the Court]” In addition, two of the excess policies contain their own independent arbitration provisions, one conditional and the other mandatory: (1) § V of Policy No. PSF 000633 issued by Royal Insurance Company of America (“Royal Policy”) (following form as to AEGIS and any more restrictive provisions of any underlying insurance, § 1, and adding in § V(f), “Only if requested by the Insureds, the Insurer shall submit any dispute, controversy or claim arising out of or relating to this Policy or the breach, termination or invalidity thereof to final and binding arbitration pursuant to such rules and procedures as the parties may agree.”); and (2) § IV(H) of Policy No. ENE-9459D issued by ACE Bermuda Insurance Ltd. (“ACE Policy”) (“Any dispute controversy or claim arising out of or relating to this Policy or the breach, termination or invalidity thereof shall be finally and fully determined in London, England under the provisions of the Arbitration Acts of 1950, 1975, and 1979, and/or any statutory modifications thereto, for the time being in force, by a Board composed of three arbitrators.”). Exs. A.2.i and A.2.j to 3121. The Outside Directors point out that neither of these policies provides for the New York forum or application of New York law sought by Movants. Movants argue that provisions “restricting” coverage in the EIM Policy include the ehoice-of-New York-law provision and New York venue provision because under the circumstances here, New York law restricts coverage, specifically pursuant to Smoral v. Hanover Ins. Co., 37 A.D.2d 23, 322 N.Y.S.2d 12,14 ([1st Dept.]1971) (Good faith duty of insurer requires it to adequately protect the interests of all insureds and not to prefer one over the other by tendering the full limits of the policy to one and leaving others exposed). Under Smoral, Movants insist they are entitled as a matter of law to a portion of the remaining insurance proceeds and threaten to sue the Excess Insurers for breach of fiduciary duty and bad faith. The Outside Directors respond that these choice-of-law and forum-selection clauses do not “restrict or limit” coverage, but merely specify a forum in which disputes can or must be resolved; thus the St. Paul, Federal Insurance, Royal and ACE Policies do not “follow form” as to the EIM arbitration provision because the provisions do not “restrict or limit” coverage. This Court disagrees with the Movants’ interpretation of Smoral. The facts in Smoral limit the scope of its holding. In Smoral, an insured driver of a company car sued the insurer for breach of contract, specifically of an insurer’s duty of good faith, because the insurer, which was actively defending the driver, without notice to or consent of the insured driver tendered the full limits of an automobile liability policy in return for a complete release of two coinsureds, the corporate policy holder and the president of the corporation, while leaving the driver fully exposed. The trial judge found the insurer had an adverse interest to the driver and ordered the insurer’s attorneys to withdraw from representation of the driver. 322 N.Y.S.2d at 13. The New York Supreme Court, highlighting an insurer’s duty of good faith, i.e., the “adequate protection of the interests of the assured,” wrote, “It is absolutely no answer for the company to say that it paid the full amount of its policy if in so doing it fully protected one of its insureds and left the other completely exposed.” 322 N.Y.S.2d at 14. Thus the insurer, which had undertaken a duty to defend as well as to indemnify, went behind its insured’s back in surreptitiously settling claims against the others for the limits of the policy, to the detriment of the truck driver. Furthermore the Fifth Circuit has noted that not only has Texas rejected the Smo-ral rule, but that Smoral is followed only in New York and California. Travelers Indemnity Co. v. Citgo Petroleum Corp., 166 F.3d 761, 766 (5th Cir.1999); In the Matter of Vitek, 51 F.3d 530, 536 (5th Cir.1995). Moreover, Smoral does not stand for the rule that an insurer may never enter into a partial settlement that exhausts policy limits while leaving other insureds exposed. The Fifth Circuit opined in Vitek, 51 F.3d at 537, “Nowhere in either Smoral or Sori-ano do we find true support for a general principle of insurance law that forbids an insurer from settling with one of its coin-sureds to the disadvantage of another one. Rather, those cases recognize nothing more than the aggrieved insured’s right to seek damages from the insurance company for making such a settlement, by initiating a suit for breach of good faith.” Moreover, other post-Smoral New York cases have held expressly or implicitly that “[a]n insurer may settle with less than all of the claimants under a particular policy even if such settlement exhausts the policy proceeds _” See, e.g., STV Group, Inc. v. American Continental Properties, Inc., 234 A.D.2d 50, 51, 650 N.Y.S.2d 204, 205 ([1st Dept.]1996) (citing Duprey v. Security Mut. Cas. Co., 22 A.D.2d 544, 546 (3d Dept.1965)), leave to appeal denied, 90 N.Y.2d 806, 686 N.E.2d 223, 663 N.Y.S.2d 511 (1997) (Table). In the Newby and Pirelli litigation, the Excess Insurers have not assumed the duty to defend the Criminal Defendants and thus far there have been no proceedings instigated charging any conflict of interest or bad faith by the Excess Insurers regarding the partial settlements. Furthermore the Outside Directors have cited a number of New York cases that demonstrate that New York law allows insurers to pay claims on a chronological basis until policy proceeds are exhausted without breaching their duty of good faith. See, e.g., State Farm Ins. Co. v. Credle, 228 A.D.2d 191, 643 N.Y.S.2d 97, 98 ([1st Dept.] 1996); Richter v. Vitale, 59 Misc.2d 374, 376, 299 N.Y.S.2d 293, 296 (1969) (“Generally, insurance proceeds are distributed on a flrst-come-first-served basis according to priority of judgment.”). Unlike New York, Texas has rejected a common law cause of action for breach of duty of good faith against an insurer settling a third-party claim. According to the Fifth Circuit, the Texas Supreme Court has held that “the Stowers duty is the only common law tort duty Texas currently recognizes in third party insurance claims.” Ford v. Cimarron Ins. Co., 230 F.3d 828, 831-32 (5th Cir.2000) (quoting American Physicians Ins. Exchange v. Garcia, 876 S.W.2d 842, 849 (Tex.1994)) (“In the context of a Stowers lawsuit, evidence concerning claims investigation, trial defense, and conduct during settlement negotiations is necessarily subsidiary to the ultimate issue of whether the claimant’s demand was reasonable under the circumstances, such that an ordinarily prudent insurer would accept it.”). Regardless, under the Court’s reading of Smoral, it concludes that Movants have not demonstrated that the choice of venue and choice of law provisions “restrict” or “limit” coverage. Thus the Court finds that the St. Paul, Federal Insurance, Royal and ACE Policies do not “follow form” as to the EIM arbitration provision based on such an argument. Movants insist generally that the language of the policies clearly require mandatory, binding arbitration. They contend that under the broad language of Section 2 of the FAA, 9 U.S.C. § 2, a written agreement to arbitrate in “a contract evidencing a transaction involving commerce ... shall be valid, irrevocable, and enforceable, save upon grounds as exist at law or in equity for the revocation of any contract.” This statutory language “is a congressional declaration of a liberal federal policy favoring arbitration.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). In light of this presumption in favor of arbitration, any doubts about arbitrability should be resolved in favor of arbitration, urge Movants. Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir.2002). Nevertheless, this Court notes that the Supreme Court has held that the federal policy favoring arbitration does not override the contractual choices of the parties and that no party can be required to submit to arbitration any dispute to which he has not agreed to submit. Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 476, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (“Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit”; federal policy under the FAA aims to “ensure the enforceability, according to their terms, of private agreements to arbitrate.”), quoted in Ford v. NYLCare Health Plans of the Gulf Coast, Inc., 141 F.3d 243, 247-48 (5th Cir.1998). In addition Movants maintain that the filing of the interpleader was improper and merely an attempt to circumvent the requirement that the claims be submitted to and resolved by arbitration. This Court disagrees. The interpleader does not nullify the arbitration issue here, as will be discussed subsequently. The Court would stay or dismiss the interpleading and compel arbitration if it, or the Fifth Circuit on appeal, determines that the mandatory arbitration clauses govern this dispute. Finally, Movants object that even if Texas law applies, the settlement with the Outside Directors and the Official Committee of Unsecured Creditors, whose Stow-ers demand exhausts the remaining $200 million in excess insurance policies’ proceeds, is not reasonable in amount, as well as unfair to the nonsettling insured Defendants who would be left without any coverage for their ongoing defense costs. Movants further complain that claims for substantial defense costs already incurred have been presented for payment from the insurance proceeds, but either disclaimed or still in the payment process, and they have priority over the settling Defendants’ claims to the proceeds. Also at issue here is whether defense costs in criminal actions are covered by the policies. “Claim” is defined in § IV(D(1) in the EIM policy, mirroring that in § 11(A)(1) of the AEGIS Policy, as “any demand, suit or proceeding against any DIRECTORS and/or OFFICERS during the POLICY PERIOD or during the DISCOVERY PERIOD, if any, which seeks actual monetary damages or other relief and which may result in any Directors and/or officers becoming legally obligated to pay Ultimate Net Loss by reason of any Wrongful Act actually or allegedly caused, committed or attempted „ Movants who have been indicted, including the non-Newby EBS Defendants, Mark Koenig, and Fastow, have been denied coverage by the insurers for their defense costs in criminal actions against them on the grounds that the term “claim” under the policies does not cover criminal proceedings or investigations since criminal proceedings do not seek “monetary damages or other relief.” The Outside Directors, too, maintain that the policy covering claims for defense costs is limited to civil actions by the phrase “actual monetary damages or other relief,” which refers to compensatory awards or equitable remedies available to a plaintiff. See Foster v. Summit Medical Systems, Inc., 610 N.W.2d 350, 354 (Minn.App.2000) (“[T]he ordinary understanding of the term ‘relief is assistance or something that lessens pain or discomfort.... In the legal context, the term ‘relief refers to redress or benefit, especially equitable redress such as an injunction or specific performance.”); Deluxe Black’s Law Dictionary at 1292 (6th ed.l990)(“relief’ defined as “general designation of the assistance, redress, or benefit which a complainant seeks at the hands of a court in equity.... [including] such remedies as specific performance, injunction, or the reformation or rescission of a contract.”). The mon-Newby EBS Defendants object that them defense costs in the criminal proceedings against them are covered under the “other relief’ portion of the definition of “CLAIM”, which term at the very minimum is ambiguous. EBS Defendants maintain that a conviction in the criminal case may result in fines, mandatory restitution and statutory monetary special assessments, all of which would fall under “other relief.” Polychron v. Crum & Forster Ins. Co., 916 F.2d 461 (8th Cir.1990) (finding that in the absence of any definition in the D & O insurance policy, the ordinary meaning of “claim” included a grand jury indictment, that possible penalties in a criminal proceeding are monetary “other relief,” and that any ambiguity should be resolved in favor of the insured). Should the Court determine that there is no coverage under the insuring clause for defense costs in criminal actions, the EBS Criminal Defendants alternatively argue that there is an exclusion to coverage in the policies that nevertheless creates coverage for at least their criminal defense costs under the particular circumstances here. Section 111(A)(1) of the Primary AEGIS Policy provides, III. Exclusions The INSURER shall not be liable to make any payment for ULTIMATE NET LOSS arising from any CLAIM(S) made against any DIRECTOR or OFFICER: (a)(1) for any fines or penalties imposed in a criminal suit, action or proceeding They interpret this passage as establishing an exclusion from coverage of criminal fines or penalties if the Criminal Defendants are ultimately assessed (the fines or penalties are “imposed”) in a criminal case, but they highlight the fact that it does not preclude coverage for defense costs for the ongoing proceedings leading-up to conviction. They argue that otherwise this narrow exclusion, a small portion of ULTIMATE NET LOSS embracing both indemnity and defense costs, would be unnecessary and that the carriers remain otherwise liable for costs of criminal proceedings (e.g., investigating, settling, defending). They make the same argument, under Section 111(B)(3), that coverage exists for defense costs incurred prior to the “final adjudication” of dishonest acts, if ever, even though it excludes coverage for specific claims that are brought about or contributed to by the dishonest, fraudulent, criminal or malicious act or omission of such DIRECTOR or OFFICER if a final adjudication establishes that acts of active and deliberate dishonesty were committed or attempted with actual dishonest purpose and intent and were material to the cause of action so adjudicated. They also note that in the year following their claim, EIM added an express exclusion for defense costs for criminal proceedings, indicating there was no such exclusion earlier. EBS Criminal Defendants and Fastow contend that since there has been no “final adjudication” of acts of dishonesty by them, the D & 0 carriers must pay their criminal defense costs. National Union Fire Ins. Co. of Pittsburgh, Pa. v. Brown, 787 F.Supp. 1424, 1429 (S.D.Fla.1991)(without final adjudication that insured engaged in fraud, dishonesty or criminal acts, the policy exclusion for such conduct did not apply), aff'd, 963 F.2d 385 (11th Cir.1992); United States v. Gottlieb, 817 F.2d 475, 476 (8th Cir.1987) (orders regarding a guilty plea are not final decisions until after sentencing); Aguilerar-Enriquez v. INS, 516 F.2d 565, 571 (6th Cir.1975) (“Once sentencing [on guilty plea] is completed ... the conviction is final for deportation purposes”), cert. denied, 423 U.S. 1050, 96 S.Ct. 776, 46 L.Ed.2d 638 (1976); Fed. Rule of Crim. P. 11 (allowing a defendant to withdraw guilty plea; providing that a guilty plea is not final until “the court imposes sentence”). Some note that the Cooperation Agreements that they signed with the Enron Task Force permit the Task Force, in its sole and exclusive discretion, to withdraw the plea agreements and prosecute them on all counts of their indictments. Finally the non -Newby EBS Defendants point out that the SEC has filed a civil enforcement lawsuit against them, for which EIM, after some dispute, has agreed to pay the defense costs. The defense overlaps with much of the criminal action and any fact finding in the criminal case will have a preclusive effect in the SEC suit. Thus, they argue, their defense costs in the criminal action should also be covered. COURT’S RULING This Court has reviewed carefully all of the pleadings filed not just relating to the motions to compel arbitration, to stay in-terpleader, and for summary judgment, but also arguments made regarding the preliminary injunction, in order to fully understand the arguments in the motions to compel arbitration. After reviewing the record and the applicable law, it reaches the following determinations regarding the issues raised above and others raised in the briefing but thus far not mentioned. I. Does the Court Have Subject Matter Jurisdiction Over The Inter-pleader Action? The Court has supplemental jurisdiction under 28 U.S.C. § 1391(b) over the First Amended Third-Party Complaint for Contract Enforcement and Injunctive Relief Regarding D & 0 Policy Proceeds (#2462). The Court has previously rejected arguments that it lacks federal subject matter jurisdiction over the inter-pleader and will not reiterate its conclusions. In re Enron Corporation Securities, Derivative & “ERISA” Litigation, No. MDL-1446, Civ. H-01-3624, 2004 WL 2889891 (S.D.Tex. Dec.9, 2004)(concluding that the Court has jurisdiction under both 28 U.S.C. §§ 1335 for a statutory inter-pleader action and 1367(a) for supplemental jurisdiction for claims relating to indemnification relating to the underlying lawsuits). In the Third-Party Counterclaim for Interpleader, the Third-Party Defendants/Third-Party Counterclaim Plaintiffs initially state that the interpleader is both statutory and brought under Rule 22. # 2483 at 22. When addressing jurisdiction, however, they state there is federal subject matter jurisdiction based on the statutes, i.e„ 28 U.S.C. §§ 1367 and 1335. Moreover, the Counterclaim in identifying the citizenship of the numerous parties reflects that not all the parties on both sides are diverse. Therefore the inter-pleader does not meet the requirement of complete diversity of citizenship under Rule 22. Aetna Casualty and Surety Co. v. Ahrens, 414 F. Supp. 1235, 1253 (S.D.Tex.1975, supplemented 1976)(Bue, J.)(Rule 22 interpleader actions require complete diversity; statutory interpleader under 28 U.S.C. § 1335 requires only minimum diversity of citizenship between two [or more] adverse claimants), citing State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967)(§ 1335 “has been uniformly construed to require only ‘minimal diversity,’ that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens.”). Therefore this Court treats the interpleader as a statutory action. II. Does An Arbitration Provision Apply, and If So, Which? While there is a strong federal policy favoring enforcement of arbitration agreements, arbitration is a matter of contract and the parties must have expressly-agreed to arbitrate the disagreement before the court or the court will not compel arbitration. Texaco Exploration & Prod. Co. v. AmClyde Engineered Prods. Co., 243 F.3d 906, 909 (5th Cir.2001). To determine whether there is an express agreement to submit a dispute to arbitration, the court must decide (1) whether a valid agreement to arbitrate exists between the parties, under ordinary state-law principles of contract interpretation; if so, (2) whether the dispute or particular claims before the court falls within the scope of that agreement, with any doubts usually to be resolved in favor of arbitration; and (3) whether other external legal constraints preclude arbitration, such as a preempting federal statute. Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); Personal Security & Safety Systems, Inc. v. Motorola, 297 F.3d 388, 392 (5th Cir.2002); OPE Intern. L.P. v. Chet Morrison Contractors, 258 F.3d 443, 446 (5th Cir.2001); Woodmen of the World Life Ins. Co. v. Lewis, 118 Fed. Appx. 826, 828 & nn. 6-7(5th Cir.2004). A. May a Non-Signatory to the Insurance Contract Compel Arbitration? The meritless argument has been made that Movants as non-signatories to the agreement cannot invoke an arbitration clause in an insurance policy. D & O insurance policies are third-party beneficiary contracts, with the insurer the promissor, the insured company (here Enron) the promisee, and the insured officers and directors the third-party beneficiaries. 17 Couch on Insurance § 242:28 (3d ed. updated June 2005), citing Wedtech Corp. v. Fed. Ins. Co., 740 F.Supp. 214, 219 (S.D.N.Y.1990). It is established law in the Fifth Circuit that non-signatories may enforce arbitration clauses if they were intended third-party beneficiaries of the agreement in question. Bridas S.A.P.I.C. v. Turkmenistan, 345 F.3d 347, 356 (5th Cir.2003)(“Six theories for binding a nonsignatory to an arbitration agreement have been recognized: (a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing/alter ego; (e) estoppel; and (f) third-party beneficiary.”), cert. denied, 541 U.S. 937, 124 S.Ct. 1660, 158 L.Ed.2d 357 (2004); Westmoreland v. Sadoux, 299 F.3d 462 (5th Cir.2002); see also E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 195-97 (3d Cir. 2001). The Second Circuit also recognizes that because arbitration is contractual, under “ordinary principles of contract” a nonsignatory who is a third-party beneficiary of an agreement can compel arbitration under that agreement. Spear, Leeds & Kellogg v. Central Life Assurance Co., 85 F.3d 21, 27-28 (2d Cir.1996); Thomson-CSF, S.A v. Am. Arbitration Ass’n, 64 F.3d 773, 776, 778-79 (2d Cir.1995)(a signatory can also compel a nonsignatory to arbitrate a dispute under a theory of equitable estoppel if the nonsignatory has knowingly accepted benefits derived from the agreement), cert. denied, 519 U.S. 1040, 117 S.Ct. 609, 136 L.Ed.2d 534 (1996). It is clear that the former Officers and Directors of Enron were the intended beneficiaries of the D & O Policies. B. Insured v. Insured or Insurer v. Company (Enron) Both the Outside Directors and the Insurers have argued that because the insurers conceded that the Settling parties’ claims impaired the limits of the excess policies’ liability and because the insurers tendered the remaining insurance proceeds into the Court’s registry, the dispute is no longer between insurers and Enron, but among the insureds themselves, and that the insureds have not agreed to arbitrate disputes among themselves. Therefore the dispute does not fall within the arbitration provision of any of the policies. Specifically, insisting that the dispute is among the insureds, not between the insureds and the Excess Insurers, the Excess Insurers urge that the dispute resolution and forum selection clauses, as well as the arbitration clause, of the EIM Policy therefore do not apply. Section 111(G)(3) of EIM Policy, the arbitration clause, requires a “claim or controversy between the Insured and the Company .... ” Section 111(G)(4), the forum selection clause, also applies only to a “claim or controversy between the Insured and the Company.” Fastow objects strenuously to this argument, insisting that he “does not have a right of coverage from any other insured; he has a right to coverage from the Insur-erswhich “have refused his demands for payment of his continuing defense costs.” Instrument #3115 at 9. In his reply, he adds, “The fact that the reason for the dispute [between the Insurers and Fastow] is that other people are demanding the Insurers’ money does not somehow eliminate the dispute.” # 3153 at 11. AEGIS’ arbitration provision applies to “[a]ny controversy or dispute arising out of or relating to the POLICY,” no matter who the party to the dispute is. Id. He further insists that the EIM Policy’s dispute resolution provision, Section III(G), “expressly contemplates that one of the potential subjects of dispute between the Insurers and an insured is the equitable allocation of available proceeds among insureds.” Id. (observing that according to Section III(G) the dispute resolution procedures are designed to have “ ‘the Company serve as a financially stable and reliable entity, responsive to the coverage needs of its participants and providing coverage fairly and equitably as to each insured, but taking equally into account fairness and equity to all insureds as a group.’” [emphasis added]). It is well established that under the federal interpleader statute, where two or more adverse claimants of diverse citizenship claim to be entitled to insurance proceeds valued at $500 or more, an insurer may opt to file an interpleader or an action for declaratory relief action to protect its own interests. See State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 534, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967)(“[W]here a stakeholder, faced with rival claims to the [single] fund ... acknowledges — or denies — his liability to one or the other of the claimants[,] ... the fund itself is the target of the elaimants[,] ... [i]t marks the outer limits of the controversy[, and] ... [i]t is, therefore, reasonable and sensible that interpleader, in the discharge of its office to protect the fund, should also protect the stakeholder from vexatious and multiple litigation.”) (iciting 28 U.S.C. § 1335(a), authorizing district court to hear actions with two or more claimants of diverse citizenship who “are claiming or may claim to be entitled” to money or property valued at $500 or more; 28 U.S.C. § 2361, authorizing district court to “hear and determine the case,” determine the rights of competing claimants, “discharge plaintiff from further liability,” and enjoin all parties from instituting proceedings in any court regarding the property at issue). Furthermore, three Circuit Courts of Appeals, including the Second and the Fifth, have held that the district court normally determines the rights of the parties and the priority of claims in an inter-pleader action as they existed at the time the interpleader action was commenced. Avant Petroleum, Inc. v. Banque Paribas, 853 F.2d 140, 143-44 (2d Cir.1988) (holding “that where an interpleader action is brought to have the court determine which of two parties has priority with respect to the interpleader fund, the court should normally determine priority as of the time the fund was created”); White v. FDIC, 19 F.3d 249, 252 (5th Cir.1994)(holding that “activity subsequent to the initiation of an interpleader action is normally immaterial in determining which claimant has a superior right to the interpleader fund”); Texaco, Inc. v. Ponsoldt, 118 F.3d 1367, 1369-70, 1371 (9th Cir.1997) (“The priority of claims to the res in an interpleader action must normally be determined at the time the action is initiated, and cannot be altered by the events after the interpleader fund becomes viable.”). As stated by the Ninth Circuit, “As the entire point of an interpleader action is to resolve then competing rights and claims, it makes perfect sense that the action itself cannot be used as a vehicle for further jockeying for claim position.” Ponsoldt, 118 F.3d at 1370. The date a statutory interpleader is “commenced,” however, is the date when the interpleader fund is deposited with the Court. Avant Petroleum, 853 F.2d at 143, 144; Ponsoldt, 118 F.3d at 1369; Murphy v. Travelers Ins. Co., 534 F.2d 1155, 1159 (5th Cir.1976) (“[T]he deposit requirement is a jurisdictional prerequisite to a suit under the interpleader statute. 28 U.S.C. § 1335.”). The language of § 1335(a)(2) reflects this point: “The district court shall have original jurisdiction of any civil action of interpleader or in the nature of inter-pleader ... if ... the plaintiff has deposited such money or property ... into the registry of the court ....” In the instant action, that interpleader action compulsory counterclaim was filed on October 21, 2004. There is no evidence that any of the parties now seeking to compel arbitration did so properly before the Court’s entry of the restraining order to preserve the insurance policy proceeds in response to the Outside Directors’ settlement demand for the remaining proceeds and before the Excess Insurers filed their First Amended Third-Party Counterclaim for Interpleader as a compulsory counterclaim. Nevertheless, in a statutory interpleader it is the deposit of the funds that determines when the interpleader has been commenced. The Court issued the order authorizing deposit of the insurance proceeds (the interpleader fund) on December 22, 2004 (# 2865), and the money was actually deposited in the registry by different insurers between January 4-11, 2005. Meanwhile the motions to compel arbitration were filed before those deposits; thus the Movants had preserved their rights and the priority of their claims, and they were clearly adverse to the Insurers at the time the interpleader was “commenced.” See generally 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure Civ. 3d § 1714 (“In-terpleader is a remedy involving two steps.... During the first the court determines the right of the party invoking the remedy to compel the claimants to litigate their claims to the stake in one proceeding. It is at this point that the court determines whether the prerequisites to rule or statutory interpleader have been met by examining such things as the citizenship of the litigants, the merits of the asserted threat of multiple vexation, and, if interpleader is sought under the statute, the sufficiency of the stakeholder’s deposit or bond.... The second stage of interpleader involves the determination of the respective rights of the claimants to the stake. At this juncture, each claimant occupies an adversary position to the others and must proceed accordingly, [emphasis added by the Court]”). Given the timing of the depositing of the interpleader fund in the Court’s registry, the Court concludes that the Interpleaders here cannot use commencement of their interpleader action to deny or nullify the Movants’ prior demands and assertions of their right to seek arbitration if those demands are within the scope of coverage of the policies and if they are governed by the disputed arbitration provisions. Ponsoldt, 118 F.3d at 1369 (“the general purpose of an interpleader action is to decide the validity and priority of existing claims to a res”; “interpleader actions do not ... remove priority from claims which existed when the interpleader commenced”). See also In re Ambassador Group, Inc. Litigation, 738 F.Supp. 57, 65 (E.D.N.Y. 1990)(“... Congress nowhere indicated that the interpleader statute was intended to alter state contract and insurance law.”). If the arbitration provision in the EIM policy does not govern, and if Texas law applies to the excess layers starting with the Greenwich layer, the settling Defendants have made the first Stowers demand for the policy limits. C. Did the Criminal Defendants Waive Their Rights to Compel Arbitration? As a “independent” reason for denying the motion to compel arbitration, the Outside Directors point to a Disclosure Agreement, dated August 29, 2003 and signed by the insured Defendants with full knowledge of the provisions of all the insurance policies. The Disclosure Agreement (¶ 4 of Ex. A.7 to # 3121) sets out the procedure by which insureds under the D & O Policy give notice to one another by electronic mail or facsimile of potential settlements and discuss any objections to them. If no agreement is reached, the Disclosure Agreement provides that the parties may file a declaratory relief action. Id. at ¶ 6. Most important is that ¶ 8 specifies that the Southern District of Texas will be the exclusive forum for such a declaratory relief action. Paragraph 8 states, Any declaratory relief action arising out of Paragraph 6 of this Agreement shall be supplemental to the claims asserted in In re Enron Corp. Securities, Derivative & (“ERISA”) Litigation, MDL 1446 (S.D.Tex.). As they are directly related to, and intertwined with, the claims at issue in that litigation. The Parties further agree that Southern District of Texas shall be the exclusive forum in which any such declaratory relief actions shall be commenced and fully litigated, and the Parties consent to jurisdiction in that court. The Outside Directors contend that the Disclosure Agreement demonstrates that the insureds have always understood that arbitration was not required for a dispute among themselves and, regardless of whether arbitration was - required, this Court would be the exclusive forum for disputes about the use of insurance proceeds. In other words, insist the Outside Directors, by this Disclosure Agreement Movants expressly waived their right to arbitration; the Outside Directors characterize it as “entirely inconsistent with an intent to assert a right to arbitrate — and it is an intentional relinquishment of that right, in exchange for something that would not have been required!,] namely, notice by settling parties (like the Outside Directors) to nonsettling parties of potential settlements before they were consummated.” # 3121 at 13-14, and citing Frye v. Paine, Webber, Jackson & Curtis, Inc., 877 F.2d 396, 398 (5th Cir.1989) (“Despite the strong federal policy favoring arbitration, the right to arbitration may be waived.”), cert. denied, 494 U.S. 1016, 110 S.Ct. 1318, 108 L.Ed.2d 493 (1990). The Outside Directors argue that they have met all requirements under the Disclosure Agreement (gave notice, waited specified time, and tried to resolve objections before they made a demand on the insurers). They now claim that they would be prejudiced if the Criminal Defendants, who obtained and used the benefits of the Disclosure Agreement, are allowed to circumvent their promise to litigate disputes in the Southern District of Texas. In sum, the Outside Directors maintain that there are no arbitration agreements that cover this dispute and any claimed right to arbitrate has been waived. Fastow objects that the Disclosure Agreement, rather than constituting a waiver of the right to arbitrate under the excess policies, expressly preserves that right and all others. See Disclosure Agreement at ¶ 6 (a signatory “may” file a declaratory judgment action in the Southern District of Texas) and ¶ 19 (“Nothing in this Agreement ... shall amend, modify or change in any way the rights, obligations or defenses by the Enron Insureds or the Enron D & O Insurers or with respect to the Enron D & O Policies.”). This Court agrees with Fastow; the language preserving the parties substantive rights, which would include a right to seek arbitration if there is a valid agreement to do so, is clear and unambiguous. “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). Nevertheless, in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557-58, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964), the United States Supreme Court distinguished questions of arbitrability, which are for the district court to decide, from questions of procedure, which, belong to the arbitrator even if they “grow out of the dispute and bear upon its final disposition.” Moreover in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) (“[W]hether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability,’ is ‘an issue for judicial determination’ [u]n-less the parties clearly and unmistakably provide otherwise.”), the high court emphasized the breadth of the scope of procedural issues compared with the scope of arbitrability issues, noting that unless the parties clearly and unmistakably provide otherwise, the arbitrability applies to “the kind of narrow circumstance where contracting parties would likely have expected a court to have decided the gateway matter, where they are not likely to have thought that they agreed that an arbitrator would do so, and consequently, where reference of the gateway dispute to the courts avoids the risk of forcing parties to arbitrate a matter that they may well not have agreed to arbitrate.” Id. at 591, 592. Thus under the FAA the court, not the arbitrator, is to determine the “gateway matters,” i.e., (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement covers the dispute before the court. Green Tree Financial Corporation v. Bazzle, 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003); Howsam, 537 U.S. at 83, 123 S.Ct. 588; International Association of Bridge, Structural, Ornamental, and Reinforcing Ironworkers, Shopman’s Local 493 v. EFCO Corp. and Construction Products, Inc., 359 F.3d 954, 956 (8th Cir.2004). Waiver may be found “when the party seeking arbitration substantially invokes the judicial process to the detriment or prejudice of the other party.” Tristar Financial Ins. Agency v. Equicredit Corp. of America, No. 03-40425, 2004 WL 838633, *2 (5th Cir. Apr.20, 2004). Nevertheless, when a party asserts its right to arbitration during pretrial proceedings, the party opposing the motion to compel arbitration has a heavy burden to demonstrate waiver and any doubts “‘should be resolved in favor of arbitration, whether the problem at hand is the construction of the language itself or any allegation of waiver, delay or a like defense to arbitrability.’ ” Id., quoting Moses H. Cone Mem’l Hosp., 460 U.S. at 25, 103 S.Ct. 927. Because waiver is typically defined as the knowing and voluntary relinquishment of a known right, “the invocation of the judicial process that effects a waiver requires the waiving party to demonstrate a desire to resolve the arbitrable dispute through litigation rather than arbitration.” Id. The Supreme Court pronounced in How-sam, “The presumption is that the arbitrator should decide ‘allegation^] of waiver, delay, or a like defense to arbitrability.’ ” Howsam, 537 U.S. at 84, 123 S.Ct. 588, quoting Moses H. Cone Mem. Hosp. v. Mercury Construction Corp., 460 U.S. at 25, 103 S.Ct. 927; John Wiley, 376 U.S. at 557, 84 S.Ct. 909. See also International Association of Bridge, Structural, Ornamental, and Reinforcing Ironworkers, 359 F.3d at 955 (It is for the arbitrator to determine “procedural questions which grow out of the dispute,” including charges of waiver, delay or similar defenses and whether a party has satisfied procedural prerequisites). Thus if the Court determines that the issues before it fall within coverage of the policies and are governed by the mandatory arbitration provisions, and therefore that the motions to compel arbitration should be granted, the arbitrator should determine whether the parties waived their right to compel arbitration by signing the Disclosure Agreement. If not, as indicated, this Court concludes that the clear and unambiguous language of the Disclosure Agreement contradicts the waiver assertion. D. Is There Coverage for Criminal Defense Costs Under the Policies? 1. Law Regarding Construction of Contracts Because the rules of contract construction affect many of the following issues, the Court sets them out here. The interpretation of a contract and the determination whether a contract is ambiguous are issues of law for the court. Reliant Energy Services, Inc. v. Enron Canada Corp., 349 F.3d 816, 821 (5th Cir.2003), citing Stinnett v. Colorado Interstate Gas Co., 227 F.3d 247, 254 (5th Cir. 2000). See also Alexander & Alexander Servs., Inc. v. These Certain Underwriters at Lloyd’s, London, 136 F.3d 82, 86 (2d Cir.1998)(same with New York law); Ruttenberg v. Davidge Data Systems Corp., 215 A.D.2d 191, 192, 626 N.Y.S.2d 174, 175 ([1st Dept.] 1995). A court “must enforce the unambiguous language in a contract as written, and the applicable standard is the objective intent evidenced by the language used, rather than the subjective intent of the parties.” Clardy Mfg. Co. v. Marine Midland Bus. Loans, 88 F.3d 347, 352 (5th Cir.1996) (quoting Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981)), cert. denied, 519 U.S. 1078, 117 S.Ct. 740, 136 L.Ed.2d 679 (1997); in accord Francis v. IN A Life Ins. Co. of N.Y., 809 F.2d 183, 185 (2d Cir.1987). The court may not consider the parties’ interpretations unless it finds the contract is ambiguous. H.E. Butt Grocery Co. v. Nat’l Union Fire Ins. Co., 150 F.3d 526, 529 (5th Cir.1998). Under Texas law, insurance policies are contracts and their construction is governed by ordinary state law contract principles. Empire Fire and Marine Insurance Company v. Brantley Trucking, Inc., 220 F.Bd 679, 681 (5th Cir.2000). New York law in accord, Bell v. Cendant Corp., 293 F.3d at 566 (2d Cir.) (Although the FAA “creates ‘a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act,’ ... [bjecause an agreement to arbitrate is a creature of contract, ... the ultimate question of whether the parties agreed to arbitrate is determined by state law.”); PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1198 (2d Cir.1996)(“in interpreting an arbitration agreement we apply the principles of state law that govern the formation of ordinary contracts”). The AEGIS Primary Policy’s provision addresses the question of applicable state law only in regard to Dispute Resolution, specifically Arbitration, and states that the terms of the policy are to be construed in accordance with the laws “of the jurisdiction in which the situation forming the basis for the controversy arose,” which in this instance for Enron’s former directors and officers would be Texas. AEGIS Policy at 11, § IV(Q)(3). The EIM Policy specified that arbitrable claims shall be resolved in New York under New York law, and that the exclusive forum for nonarbitrable claims is New York with New York law governing. At the same time Section I of the EIM Policy states that generally its “coverage shall apply in conformance with the warranties, terms, conditions, definitions and exclusions (except as regards those matters expressly set forth herein) contained in the form of the Underlying Policy ...,” creating a patent ambiguity. In construing a contract and attempting to identify the intent of the parties in the agreement, the court examines the plain language of the contract, its commercial context, and its purposes. Reliant Energy, 349 F.3d at 822. When the contract is expressed in unambiguous language, “its terms will be given their plain meaning and will be enforced as written.” Id. See also Seiden Assocs., Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir.1992). A contract is ambiguous only if, after applying the rules of contract construction, its meaning is reasonably susceptible to multiple interpretations. Id.; Gomez v. Hartford Co. of the Midwest, 803 S.W.2d 438, 441 (Tex. App-El Paso 1991, writ denied). “The mere fact that the parties may disagree on the meaning of a contractual provision is not enough to constitute ambiguity.” Reliant Energy, 349 F.3d at 821-22; Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex.1998). Contract construction principles require the court to examine the entire instrument to discover the true intentions of the parties, in an attempt to harmonize and give effect to all of its provisions. Gomez, 803 S.W.2d at 442; Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). The parties’ intentions are considered only to the extent that they are evident within the document as a whole. Balandra