Us Supreme Court Arbitration Agreements

Indeed, the Court found that the Convention takes absolutely no account of the potential role of a non-signatory in the attempt to impose an arbitration agreement. It interpreted this « silence » to support the application of the doctrine in international arbitration proceedings, since nothing in the text of the Convention precludes such a doctrine or precludes the application of national doctrines. The factual context begins with contracts concluded between the defendant`s predecessor Outokumpu Stainless USA (the American subsidiary of a major Finnish stainless steel producer) and F. L. Industries (a subsidiary of a French mechanical engineering group) for the construction of steel mills in a factory in Alabama. When the engines at the Alabama plant failed, the F. L refused. The industries rejected their responsibilities and argued that any error was due to its subcontractor, petitioner GE Energy Power Conversion France (a French subsidiary of General Electric that had built and installed the engines). Outokumpu and its insurers responded by suing GE France in Alabama.

Since Outokumpu agreed to settle all disputes with F. L. Industries, GE France argued that the common law doctrine of the just Estoppels Outokumpu and its insurers should require them to submit their claims in arbitration proceedings, whereas GE France had not signed the contracts containing the arbitration agreement.