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GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC

Supreme Court of the United States

January 21, 2020, Argued; June 1, 2020, Decided

No. 18-1048.

Opinion

Justice Thomas delivered the opinion of the Court.

The question in [*6]  this case is whether the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U. S. T. 2517, T. I. A. S. No. 6997, conflicts with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by nonsignatories. We hold that it does not.

In 2007, ThyssenKrupp Stainless USA, LLC, entered into three contracts with F. L. Industries, Inc., for the construction of cold rolling mills at ThyssenKrupp’s steel manufacturing plant in Alabama. Each of the contracts contained an identical arbitration clause. The clause provided that “[a]ll disputes arising between both parties in connection with or in the performances of the Contract . . . shall be submitted to arbitration for settlement.” App. 171.

After executing these agreements, F. L. Industries, Inc., entered into a subcontractor agreement with petitioner GE Energy Power Conversion France SAS, Corp. (GE Energy), then known as Converteam SAS. Under that agreement, GE Energy agreed to design, manufacture, and supply motors for the cold rolling mills. Between 2011 and 2012, GE Energy delivered nine motors to the Alabama plant for installation. Soon thereafter, respondent Outokumpu Stainless [*7]  USA, LLC, acquired ownership of the plant from ThyssenKrupp.

According to Outokumpu, GE Energy’s motors failed by the summer of 2015, resulting in substantial damages. In 2016, Outokumpu and its insurers filed suit against GE Energy in Alabama state court. ] GE Energy removed the case to federal court under 9 U. S. C. §205, which authorizes the removal of an action from state to federal court if the action “relates to an arbitration agreement . . . falling under the Convention [on the Recognition and Enforcement of Foreign Arbitral Awards].” GE Energy 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 GE Energy’s motion to dismiss and compel arbitration with Outokumpu and Sompo Japan Insurance Company of America. Outokumpu Stainless USA LLC v. Converteam SAS, 2017 U.S. Dist. LEXIS 11995, 2017 WL 401951 (SD Ala., Jan. 30, 2017). 1 The court held that GE Energy qualified as a party under the arbitration clauses because the contracts defined the terms “Seller” and “Parties” to include subcontractors. 2017 U.S. Dist. LEXIS 11995, [WL], at *4. Because the court concluded that both Outokumpu and GE Energy were parties to the agreements, it declined to address GE Energy’s argument that the agreement was enforceable under equitable estoppel. [*8]  2017 U.S. Dist. LEXIS 11995, [WL], at *1, n. 1.

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2020 U.S. LEXIS 3029 *

GE ENERGY POWER CONVERSION FRANCE SAS, CORP., FKA CONVERTEAM SAS, PETITIONER v. OUTOKUMPU STAINLESS USA, LLC, ET AL.

Notice:  The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History:  [*1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

Outokumpu Stainless USA, LLC v. Converteam SAS, 902 F.3d 1316, 2018 U.S. App. LEXIS 24671 (11th Cir. Ala., Aug. 30, 2018)

Disposition: 902 F. 3d 1316, reversed and remanded.

CORE TERMS

arbitration, domestic, nonsignatory, estoppel, equitable, treaty, signatory, recommendation, displaces

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Foreign Arbitral Awards, Civil Procedure, Preliminary Considerations, Removal, Specific Cases Removed, International Law, Dispute Resolution, Arbitration & Mediation, Agreements, International Trade Law, International Commercial Arbitration, Arbitration, Federal Arbitration Act, Arbitration Agreements, Contracts Law, Third Parties, Beneficiaries, Claims & Enforcement, Affirmative Defenses, Estoppel, Equitable Estoppel, Orders to Compel Arbitration, Treaty Interpretation, Intent, Plain Language, History & Practical Construction, Treaty Interpretation, Treaty Review