An arbitration provision in a contract typically applies only to
the contracting parties. Where, however, the contract is
incorporated by reference into a second agreement, if it is broad
enough, the party to the second agreement–although a
non-signatory to the original agreement–may find that the
arbitration provision applies to them as well. This was the result
in a case before the Second Circuit involving a surety on a
performance bond.
In Federal Insurance Co. v.
Metropolitan Transportation Authority, No. 18-3664 (2d
Cir. Aug. 30, 2019) (Summary Order), a surety on a performance bond
brought suit against the public transportation authorities that
contracted with the contractor principal. The public authorities
moved to dismiss the claim based on the arbitration clause in the
underlying contract. The underlying contract had a broad
arbitration clause, which provided that the “parties to this
Contract hereby authorize and agree to the resolution of all
disputes
