GE Energy Power Conversion France SAS Corp. v. Outokumpu Stainless USA
This case concerns whether a U.S. can compel an international arbitration under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and the provisions of the Federal Arbitration Act (FAA) that enforce the Convention, when one of the parties to the proposed arbitration is not a party to the arbitration agreement, and enforcement by or against the non-party is based on the doctrine of equitable estoppel. The U.S. Court of Appeals for the Eleventh Circuit held that the terms of the Convention do not allow for arbitration involving non-parties to an arbitration agreement, and the Supreme Court granted review. Public Citizen filed an amicus curiae brief supporting the Eleventh Circuit’s view. The brief argues that the plain terms of the New York Convention allow courts to compel arbitration only between parties to an arbitration agreement. The Convention specifies that it applies to agreements in which parties agree to arbitrate against each other, and it authorizes courts to require arbitration only when the parties to a dispute before them are also parties to such an arbitration agreement.
On June 1, 2020, the Supreme Court issued its opinion reversing the Eleventh Circuit. The Court held that the Convention does not bar courts from enforcing international arbitration agreements based on estoppel theories that are available under the FAA’s provisions that apply to domestic arbitration agreements. Judge Sotomayor, concurring, emphasized that enforcement of an arbitration agreement based on estoppel must be consistent with the principle that arbitration is based on consent of the parties.