Case No. 18-1048 | 11th Cir.
Preview by Boseul (Jenny) Jeong, Online Editor
The parties seek the Court’s interpretation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) regarding the nonsignatories’ right to compel an arbitration agreement based on domestic legal doctrines such as equitable estoppel. Petitioner argues that such domestic legal doctrines apply to arbitration agreements that are subject to the New York Convention, absent other conflicts of law. Respondent argues that the scope of the Convention is limited to the parties of the written agreement.
The Petitioner’s argument focuses on the purpose of the Convention and how its own interpretation is consistent with the Convention’s principles. It emphasizes that the New York Convention was intended to promote arbitration. It points to Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009), in which the Court held that Chapter 1 of the Federal Arbitration Act, which governs domestic arbitration agreements, incorporates common-law doctrines, and urges the Court to extend the principle to the Convention. According to the Petitioner, the structure of the Convention, which leaves gaps in enforcement, contemplates parties’ reliance on domestic legal principles, consistent with the understanding of the parties and international consensus. It points to the Restatement by the United Nations Commission on International Trade Law as a reference. It also adds that the Eleventh Circuit’s interpretation will limit applications of other principles such as agency, assignment, and corporate succession.
On the other hand, Respondent focuses on what is explicitly mentioned in the Convention and how the literal differences are meaningful. It points to the Convention’s drafting history and advocates that the text should be limited to the parties who consented in writing. It emphasizes that the intention behind specifying the written agreement requirement was to ensure the certainty of the parties’ consent. This runs directly against applying non-consent-based enforcement with the equitable estoppel doctrine, according to the Respondent. The Respondent further argues that the arbitration agreement in question is governed by German law which does not recognize the Petitioner’s arguments, and thus the Court can affirm on an alternative ground as well.
It will be interesting to see what the Court will emphasize when interpreting the international treaties, and this case’s implications for other international disputes involving arbitration agreements.