Binding non-signatories to arbitrate—the United States approach

Andrijana Mišović, Binding non-signatories to arbitrate—the United States approach, Arbitration International, Volume 37, Issue 3, September 2021, Pages 749–768, https://doi.org/10.1093/arbint/aiab009

Navbar Search Filter Mobile Enter search term Search Navbar Search Filter Enter search term Search

Abstract

Parties’ consent to the arbitration is the basis for tribunal’s authority to decide the case and, as such, is of fundamental importance in any arbitration proceedings. Commercial reality, however, often requires from the so called ‘non-signatories’ of the contract containing an arbitration clause to participate in performance of such contract. Being sensitive to such commercial concerns, the US courts have developed different domestic theories for binding the non-signatories. Recent ruling of the US Supreme Court holds that such domestic theories are also applicable in cases governed by Chapter 2 of the Federal Arbitration Act (incorporating New York Convention). However, the Supreme Court did not resolve the question which law should be applied to the issue of binding the non-signatories. Although US courts might be more inclined to apply federal principles to this issue, this is not the only possible solution based on the current SCOTUS case-law. The US court could also resort to the choice of law analysis and apply appropriate (foreign) state principles for binding the non-signatories. However, different states clearly have different views of the issue of binding the non-signatories, as this article briefly outlines. Thus, the same factual pattern might lead to completely different results.