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The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, as implemented by 9 U.S.C.S. §§ 201-208, does not conflict with the enforcement of arbitration agreements by nonsignatories under domestic-law equitable estoppel doctrines.
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 contract contained a clause requiring arbitration of any contract dispute. F. L. Industries then entered into a subcontractor agreement with petitioner (GE Energy) for the provision of nine motors to power the cold rolling mills. After the motors for the cold rolling mills allegedly failed, Outokumpu Stainless USA, LLC (which acquired ownership of the plant), and its insurers sued GE Energy in Alabama state court. GE Energy removed the case to federal court under 9 U.S.C.S. § 205. It then moved to dismiss and compel arbitration, relying on the arbitration clauses in the F. L. Industries and ThyssenKrupp contracts. The District Court granted the motion, concluding that both Outokumpu and GE Energy were parties to the agreement. The Eleventh Circuit reversed. It concluded that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention or Convention) allowed enforcement of an arbitration agreement only by the parties that actually signed the agreement and that GE Energy was a non-signatory. It also held that allowing GE Energy to rely on state-law equitable estoppel doctrines to enforce the arbitration agreement would conflict with the Convention's signatory requirement.
Did 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, conflict with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by non-signatories?
The Court held that nothing in the text of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, as implemented by 9 U.S.C.S. § 201-208, conflicted with the application of domestic equitable estoppel doctrines permitted under 9 U.S.C.S. § 208 as the Convention was silent as to non-signatory enforcement. The Court further noted that nothing in the drafting history suggested that the Convention sought to prevent contracting states from applying domestic law that permitted non-signatories to enforce arbitration agreements in additional circumstances. Whether GE Energy could enforce the arbitration clauses under principles of equitable estoppel or which body of law governed that determination had to be addressed on remand.