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Sourcing Unlimited, Inc. v. Asimco Int'l, Inc.

United States Court of Appeals for the First Circuit

May 22, 2008, Decided

No. 07-2754

Opinion

 [*40] LYNCH, Circuit Judge. This case raises the question of whether a corporate signatory to a written partnership agreement that requires international arbitration of their commercial disputes may escape arbitration of such disputes by naming as defendants two non-signatories, on the basis that there was no written agreement to arbitrate with those defendants. We hold the answer is no, and reverse the contrary decision of the district court. We remand with instructions to enter an order compelling arbitration and to dismiss the case.

Plaintiff Sourcing Unlimited, Inc., d/b/a Jumpsource, is a Massachusetts corporation  [*41]  based in Danvers that provides mechanical parts for  [**2] the U.S. commercial and industrial equipment industry. Jumpsource operates five manufacturing facilities in the United States and China; it also maintains two offices in China and contracts with other Chinese manufacturers to produce parts.

In late 2003, Jumpsource sought a larger manufacturing company to help it cope with filling high-volume contracts. Jumpsource's CEO, Michael Porter, began negotiating a business partnership with John Perkowski, Chairman and CEO of Asimco Technologies, Inc. ("ATL"), a Delaware corporation headquartered in China. Those negotiations resulted in a written partnership agreement (the "Agreement") in October 2004.

In addition to acting as Chairman and CEO of ATL, Perkowski was also Chairman of Asimco International, Inc. ("Asimco"). Asimco is a subsidiary of ATL and is based in Southfield, Michigan. It was not listed as a party to the Agreement. 2 

Under the Agreement, Jumpsource agreed  [**3] to abandon certain of its manufacturing operations in China and turn them over to ATL. This freed Jumpsource to focus its efforts on sales and marketing in the United States. The Agreement listed existing and impending contracts held by Jumpsource and indicated how the companies would split profits on those contracts. The companies agreed that ATL would invoice the partnership's customers in the United States for orders received and remit payment to Jumpsource on a monthly basis. ATL agreed, for its part, "not to circumvent Jumpsource in relationships" with its existing customers. The companies further agreed to be "exclusive partner[s]" in the "U.S. Golf and Turf, Industrial Vehicle and Light Construction Markets."

The Agreement concluded with a broadly-worded arbitration clause and a complementary choice-of-law clause:

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526 F.3d 38 *; 2008 U.S. App. LEXIS 10887 **

SOURCING UNLIMITED, INC., d/b/a JUMPSOURCE, Plaintiff, Appellee, v. ASIMCO INTERNATIONAL, INC. and JOHN F. PERKOWSKI, Defendants, Appellants.

Prior History:  [**1] APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. William G. Young, U.S. District Judge.

CORE TERMS

arbitration, arbitration agreement, district court, signatory, compel arbitration, nonsignatory, disputes, interlocutory appeal, oral contract, customers, orders, terms, agreement to arbitrate, partnership, appellate jurisdiction, partnership agreement, arbitration clause, equitable estoppel, motion to dismiss, deny a motion, intertwined, subsidiary, domestic, estopped, invoice, parties, profits

Business & Corporate Compliance, Arbitration, Federal Arbitration Act, Arbitration Agreements, Alternative Dispute Resolution, Foreign Arbitral Awards, Pretrial Matters, Judicial Review, Civil Procedure, Appeals, Appellate Jurisdiction, Interlocutory Orders, General Overview, Orders to Compel Arbitration, Contracts Law, Estoppel, Equitable Estoppel