Non-Signatory To Arbitration Agreement Cannot Compel Arbitration When New York Convention Applies

The Eleventh Circuit Court of Appeals held recently that it could not compel arbitration demanded by a non-signatory to an arbitration agreement when the New York Convention applied. See Outokumpu Stainless USA, LLC v. Converteam SAS (c/k/a GE Energy Power Conversion France SAS, Corp., No. 17-10944, 2018 WL 4122807 (11th Cir. Aug. 30, 2018).

The Court considered an arbitration agreement between a buyer (Outokumpu) of three cold rolling mills from a seller (FLI), where that arbitration clause was invoked by a sub-contractor (GE Energy) of the seller. FLI had subcontracted with GE Energy to supply motors for the three CRMs. The motors failed. Outokumpu filed suit in Alabama state court; GE Energy removed to federal court; Outokumpu moved to remand; and GE Energy moved to dismiss the suit and compel arbitration. The District Court granted GE's motions to dismiss and compel.