U.S. Supreme Court Interprets New York Convention [1]
On June 1, 2020, the U.S. Supreme Court published its opinion in GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC [3], a case involving interpretation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards [4] (New York Convention). The issue was “whether the [New York Convention] conflicts with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by nonsignatories.” GE was a subcontractor for three contracts between ThyssenKrupp Stainless USA, LLC and F. L. Industries, Inc., tasked with “design[ing], manufactur[ing], and supply[ing] motors for the cold rolling mills” under the contract for F.L. Industries, Inc. After the motors failed, suit was brought against GE in Alabama state court. GE removed the case to federal court and then “moved to dismiss and compel arbitration, relying on the arbitration clauses in the contracts between F. L. Industries, Inc., and ThyssenKrupp.” The District Court granted the motion, holding that GE Energy qualified as a party under the arbitration clauses because the contracts defined the terms “Seller” and “Parties” to include subcontractors.” The District Court declined to consider GE’s argument that the [subcontractor] agreement was enforceable under equitable estoppel. The Eleventh Circuit reversed, holding that the New York Convention permits only parties who signed the contract to rely on the arbitration clause. It further held that GE “could not rely on state-law equitable estoppel doctrines to enforce the arbitration agreement as a nonsignatory because . . . equitable estoppel conflicts with the Convention’s signatory requirement. The Supreme Court ruled unanimously that the “New York Convention does not conflict with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by nonsignatories.”