Amicus Curiae Brief — GE Energy Power Conversion France SAS, Corp., fka Converteam SAS, Petitioner v. Outokumpu Stainless USA, LLC, et al.
Supreme Court briefSep 24, 2019
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No. 18-1048
In the Supreme Court of the United States
__________________
GE ENERGY POWER CONVERSION FRANCE SAS, CORP.,
FKA CONVERTEAM SAS,
Petitioner,
v.
OUTOKUMPU STAINLESS USA, LLC, ET AL.,
Respondents.
__________________
On Writ of Certiorari to the United States Court
of Appeals for the Eleventh Circuit
__________________
Brief of Amici Curiae Professor George A.
Bermann, R. Doak Bishop, Professor Andrea K.
Bjorklund, Douglas Earl McLaren, Professor
Alan S. Rau, Professor W. Michael Reisman and
John M. Townsend in Support of Petitioner
__________________
DAVID WEISS
KING & SPALDING LLP
1100 Louisiana Street
Suite 4000
Houston, TX 77002
(713) 751-3200
dweiss@kslaw.com
DOUGLASS CASSEL
Counsel of Record
KING & SPALDING LLP
1185 Avenue of the Americas
35th Floor
New York, NY 10036
(212) 556-2100
dcassel@kslaw.com
Counsel for Amici Curiae
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . iii
INTEREST OF AMICI CURIAE . . . . . . . . . . . . . . . . 1
SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 4
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
I.
The Interpretation of the New York
Convention by the Court of Appeals Is
Contrary to the Post-ratification
Understanding of the Convention by States
Parties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
A. The Interpretation of the Convention by
the Court of Appeals Is Contrary to the
Collective Understanding of States. . . . . 19
B. The Interpretation of the Convention by
the Court of Appeals Is Contrary to the
Individual Understandings of States . . . 21
II.
The Judgment Below Is Contrary to the
Interpretations of the New York Convention
by Leading Scholars. . . . . . . . . . . . . . . . . . . . 31
III.
The Court of Appeals’ Consequent
Misreading of Chapter 2 of the Federal
Arbitration Act Is Contrary to the
Restatement of U.S. Law of
International Commercial and Investor-State
Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ii
APPENDIX
Appendix A Brief Biographies of
Amici Curiae . . . . . . . . . . . . . . . . . App. 1
Appendix B Recommendation Regarding the
Interpretation of Article II, Paragraph
2, and Article VII, Paragraph 1, of the
Convention on the Recognition and
Enforcement of Foreign Arbitral
Awards (UNCITRAL 2006) . . . . . App. 8
iii
TABLE OF AUTHORITIES
U.S. Cases
Abbott v. Abbott,
560 U.S. 1 (2010). . . . . . . . . . . . . . 5, 11, 21, 23, 31
Aggarao v. MOL Ship Mgmt. Co.,
675 F.3d 355 (4th Cir. 2012). . . . . . . . . . . . . . . . 14
Air France v. Saks,
470 U.S. 392 (1985). . . . . . . . . . . . . . . . . . . . . . . 23
American Bureau of Shipping v. Tencara S.P.A.,
170 F.2d 349 (2d Cir. 1999) . . . . . . . . . . . . . . . . 14
Arthur Andersen LLP et al. v. Carlisle et al.,
556 U.S. 624 (2009). . . . . . . . . . . . . . . . . . 9, 16, 20
A/S Custodia v. Lessin Int’l Inc.,
503 F.2d 318 (2d Cir. 1974) . . . . . . . . . . . . . . . . 14
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006). . . . . . . . . . . . . . . . . . . . . . . 38
CBF Indústria Gusa S/A v. AMCI Holdings, Inc.,
846 F.3d 35 (2d Cir. 2017), reheard, 850 F.3d 58,
cert. denied, 138 S. Ct. 557 (2017). . . . . . . . . . . . 21
Century Indem. Co. v. Certain Underwriters at
Lloyd’s, London,
584 F.3d 513 (3d Cir. 2009) . . . . . . . . . . . . . . . . 14
Deloitte Noraudit A/S v. Deloitte Haskins & Sells,
9 F.3d 1060 (2d Cir. 1993) . . . . . . . . . . . . . . 14, 22
DuPont v. Rhone Poulonc Fiber,
269 F.3d 187 (3d Cir. 2001) . . . . . . . . . . . . . . . . 14
iv
El Al Israel Airlines Ltd. v. Tsui Yuan Tseng,
525 U.S. 155 (1999). . . . . . . . . . . . . . . . . . . . . . . 23
InterGen N.V. v. Grina,
344 F.3d 134 (1st Cir. 2003) . . . . . . . . . . . . . . 7, 14
Int’l Paper Co. v. Schwabedissen Maschinen &
Anlagen GMBH,
206 F.3d 411 (4th Cir. 2000). . . . . . . . . . . . . . . . 14
Medellin v. Texas,
552 U.S. 491 (2008). . . . . . . . . . . . . . . . . . 5, 11, 18
Outokumpu Stainless USA, LLC, v. et al. v.
CONVERTEAM SAS, now known as GE Energy
Power Conversion France SAS, Corp.,
902 F.3d 1316 (11 th Cir. 2018) . . . . 4, 9, 10, 11, 17
Sapic v. Government of Turkmenistan,
345 F.3d 347 (5 th Cir. 2003) . . . . . . . 14, 15, 16, 32
Scherk v. Alberto-Culver,
417 U.S. 506 (1974). . . . . . . . . . . . . . . . . . . . . . . 13
Sourcing Unlimited v. Asimco Int’l,
526 F.3d 38 (1 st Cir. 2008) . . . . . . . . . . . . . . 14, 22
Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc.,
10 F.3d 753 (11 th Cir. 1993) . . . . . . . . . . . . . . . . 37
Zicherman v. Korean Airlines Co.,
516 U.S. 217 (1996). . . . . . . . . . . . . . . . . . 5, 11, 18
v
Foreign Cases
Bundesgerichtshof, III ZR 371/12, 8 May 2014,
English translation published in Albert Jan van
den Berg (ed), Yearbook Commercial Arbitration
2014 - Volume XXXIX, Yearbook Commercial
Arbitration, Volume 39 (© Kluwer Law
International; Kluwer Law International 2014)
(Germany) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Chloro Controls (I) P. Ltd. v. Severn Trent Water
Purification Inc. (US) et al.,
Supreme Court of India, Civil Appeal No. 7134
of 2012 with Civil Appeal Nos. 7135-7136 of
2012, 28 September 2012, published in Albert
Jan Van den Berg (ed), Yearbook Commercial
Arbitration 2013 - Volume XXXVIII . . . . . . 25, 29
CE International Resources Holdings LLC v. Yeap
Soon Sit,
2013 BCSC 1804 (2013) . . . . . . . . . . . . . . . . . . . 30
Dickson Valora Group (Holdings) Co Ltd v. Fan Ji
Qian,
[2019] HKCFI 482, High Court of Hong Kong,
Court of First Instance, Miscellaneous
Proceedings No. 1954 of 2018, 20 February 2019
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Dima Distribución Integral, S.A., y Gelesa Gestión
Logística, S.L. v. Logintegral 2000, S.A.U.,
Superior Court of Justice of Madrid, 68/2014,
16 December 2014. . . . . . . . . . . . . . . . . . . . . . . . 24
vi
Javor v. Francoeur,
2003 BCSC 350 (2003), aff’d, 2004 BCCA 134
(2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29, 30
Lichtenshtein v. A.I.G. Hajzakot Bemashkantaot
Ltd.,
Supreme Court decision no. 9542/06, cited in
“Israel No. 10, Darie Engineering Ltd v. Alstom
International SAS et al., District Court, Tel Aviv,
17 February 2013 and Supreme Court, 13
February 2014”, in Albert Jan van den Berg (ed),
Yearbook Commercial Arbitration 2014 - Volume
XXXIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Parties not indicated,
Court of Appeal of Brussels, Case No.
2013/AR/1830, 25 October 2018, in Annet van
Hooft and Jean-François Tossens (eds), bArbitra | Belgian Review of Arbitration,
(Wolters Kluwer 2019, Volume 2019 Issue 1) . . 24
Parties not indicated,
Swiss Federal Tribunal, No. 4A_128/2008, 19
Aug. 2008; Swiss Federal Tribunal, X. v. Y
Engineering S.p.A., No. ATF 4A_450, Apr. 7,
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
vii
Parties not indicated,
Swiss Federal Tribunal, No. 4A_646/2018, 17
Apr. 2019 (in German). See English Summary by
N. Voser and L. Groselj, Extension of arbitration
agreement to non-signatory upheld under New
York Convention (Swiss Supreme Court),
Practical Law, May 22, 2019; V. Hirsiger-Meier
and L. Innerebener, Federal Supreme Court
upholds extension of arbitration agreement to
non-signatories under the New York Convention,
Global Arbitration News, June 18, 2019 . . . . . . 28
The ‘Titan Unity’
[2014] SGHCR4, Admiralty in Rem No 276 of
2012 (Summons No 3952 of 2013), 4 February
2014 (Singapore) . . . . . . . . . . . . . . . . . . . . . . . . . 29
Werner Schneider as liquidator of Walter Bau A.G.
v. The Kingdom of Thailand,
No. 147 / E27, Higher Regional Court of Berlin,
Case No. 20 Sch 10/11, 4 June 2012 and Federal
Court of Justice of Germany, Case No. III ZB
40/12, 30 January 2013 . . . . . . . . . . . . . . . . . . . 25
X. S.A.L., Y. S.A.L. et A. v. Z. Sàrl,
Swiss Federal Tribunal, 4P.115/2003, 16 October
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Statutes
Federal Arbitration Act, 9 U.S. Code Title 9 . passim
Ley 60/2003, de 23 de diciembre, de Arbitraje
(Spain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
viii
Peruvian Arbitration Act, Decreto Legislativo No.
1071 of June 27, 2008 . . . . . . . . . . . . . . . . . . . . . 24
Treaties
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, 10 June 1958, entered
into force, 7 June 1959, 330 UNTS 38 . . . . passim
Statute of the International Court of Justice, 26
June 1945, entered into force, 24 October 1945,
59 Stat. 1055, USTS No. 993 . . . . . . . . . . . . . . . 31
Vienna Convention on the Law of Treaties, May 23,
1969, entered into force, Jan. 27, 1980, 1155
UNTS 331 . . . . . . . . . . . . . . . . . . . . . . . . . 5, 12, 18
Other Authorities
Gary Born, International Commercial Arbitration
(Kluwer International Law 2d ed. 2014) . . . 23, 24
William W. Park, Non-signatories and international
contracts: an arbitrator’s dilemma in Multiple
Parties in International Arbitration (Oxford
2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Jan Paulsson, The Idea of Arbitration (2014). . . . . 32
Alan S. Rau, Arbitral Jurisdiction and the Limits of
Party ‘Consent’, in Multiple Party Actions in
International Arbitration (Oxford 2009) . . . . . . 32
ix
Recommendation Regarding the Interpretation of
Article II, Paragraph 2, and Article VII,
Paragraph 1, of the Convention on the
Recognition and Enforcement of Foreign Arbitral
Awards, Done in New York, 10 June 1958,
Adopted by the United Nations Commission on
International Trade Law on 7 July 2006, at its
Thirty-ninth Session. . . . . . . . . . . . . . . . . . . . . . 19
Restatement of the U.S. Law of International
Commercial and Investor-State Arbitration
(2019). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Adam Samuel, The Effect of the Place of Arbitration
on the Enforcement of the Agreement to
Arbitrate, 8 Arb. Int’l 257 (1992) . . . . . . . . . . . . 17
Eduardo Silva Romero and Luis Miguel Velarde
Saffer, The Extension of the Arbitral Agreement
to Non-Signatories in Europe: A Uniform
Approach?, 5 Am. Univ. Bus. L. Rev. 371 (2015)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
UN General Assembly Resolution 2205 (1966). . . . 19
J. Douglas Uloth & J. Hamilton Rial, III, Equitable
Estoppel as a Basis for Compelling
Nonsignatories to Arbitrate - A Bridge Too
Far?, 21 Rev. Litig. 593 (2002) . . . . . . . . . . . . . . 32
UNCITRAL, Report of the Working Group on
Arbitration and Conciliation on the work of its
forty-fourth session (New York, 23-27
January 2006), UN Doc. A/CN.9/592, 27
February 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
x
UNCITRAL, Report of the UNCITRAL on the work
of its thirty-ninth session (19 June-7 July 2006),
UN General Assembly, Official Records, sixtyfirst session, Supplement No. 17 (A/61/17), ¶¶ 4,
12, 177-80 and Annex II . . . . . . . . . . . . . . . . . . . 19
U.S. State Dept., 2009-2017, Frequently Asked
Questions, Vienna Convention on the Law of
Treaties. https://2009-2017.state.gov/s/l/treaty/
faqs/70139.htm . . . . . . . . . . . . . . . . . . . . . . . . . . 12
United States, Memorandum Brief as Amicus
Curiae in DA Terra Siderurgica LTDA
v. American Metals International, Docket
No. 15-1133 (L), 15-1146 (con), September 12,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22
1
INTEREST OF AMICI CURIAE*
Amici curiae are prominent scholars and
practitioners of international arbitration law. They also
served as the Reporter and Advisers to the
Restatement of the U.S. Law of International
Commercial and Investor-State Arbitration, adopted by
the American Law Institute in 2019 (“the
Restatement”).
In the view of amici, the judgment of the Court of
Appeals in this case rests on an erroneous
interpretation of the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (the
“Convention” or the “New York Convention”). The
Court of Appeals’ interpretation is contrary to
widespread international consensus and practice under
the Convention. Its consequent misreading of
Chapter 2 of the Federal Arbitration Act (the “FAA”) is
also contrary to the synthesis of U.S. law in the
Restatement. Amici are concerned that the Court of
Appeals’ rigid and untenable reading of the
Convention, and hence of the FAA, would disrupt the
global system of fair resolution of international
commercial disputes built up over the last half century.
Amici recognize that arbitration agreements are
based primarily on express consent. However, there
are limited but important and well-established
*
Counsel for all parties have consented to the filing of this brief.
Pursuant to Supreme Court Rule 37.6, amici state that no counsel
for a party authored this brief in whole or in part and that no
person or entity other than amici and their counsel contributed
monetarily to the preparation or submission of this brief.
2
exceptions for implied consent, and in some instances
imputed consent, by which nonsignatories may be
bound by or enforce international arbitration
agreements, based on ordinary principles of contract,
agency, equity and related principles. If the judgment
below were to be affirmed, the resulting American
doctrine would categorically bar, not only nonsignatory
enforcement of international arbitration agreements on
the basis of equitable estoppel – the question presented
in this case – but much more.
It would invalidate nearly all of the many bases
recognized and regularly used by States parties to the
Convention – including by courts in diverse
jurisdictions in the U.S. – on which nonsignatories may
exceptionally be bound by or enforce international
arbitration agreements. U.S. cases recognize a range
of grounds to permit international arbitration by or
against nonsignatories, based on ordinary principles of
contract law, judicial estoppel, equitable estoppel, the
direct benefits theory of estoppel, agency, alter ego,
veil-piercing, incorporation by reference, assumption,
and third-party beneficiary.
To the knowledge of amici, no appellate tribunal of
any other nation has explicitly adopted so rigidly
restrictive a reading of the signature provisions of the
Convention. On the contrary, the principal
international monitoring body – the United Nations
Commission on International Trade Law, or
UNCITRAL – officially interprets the signature
provisions on which the Court of Appeals relied as “not
exhaustive.” Consistent with this interpretation, many
States permit nonsignatories in exceptional
3
circumstances to be bound by or
international arbitration agreements.
to
enforce
Amici are listed below. Affiliations are for
identification only. Brief biographical information is
included in Appendix A.
Reporter of the Restatement:
George A. Bermann is the Jean Monnet Professor
of EU Law, Walter Gellhorn Professor of Law, and the
Director of the Center for International Commercial
and Investment Arbitration at Columbia Law School.
Advisers to the Restatement:
R. Doak Bishop is a Partner in the International
Arbitration practice of King & Spalding, specializing in
the oil and gas, energy, construction, environmental
and foreign investment sectors.
Andrea K. Bjorklund is Full Professor and
Associate Dean (Graduate Studies) of the Faculty of
Law of McGill University, where she holds the L. Yves
Fortier Chair in International Arbitration and
International Commercial Law.
Douglas Earl McLaren is an attorney who has
served on many commercial and securities arbitrations
for the American Arbitration Association, International
Centre for Dispute Resolution, ICC International Court
of Arbitration and the Financial Industry Regulatory
Authority.
Alan S. Rau is the Mark G. and Judy G. Yudof
Chair Emeritus in Law at the University of Texas at
Austin. He frequently serves as an arbitrator and is a
4
member of the panel of the AAA and the panel of
mediators of the Court of Arbitration for Sport.
W. Michael Reisman is Myres S. McDougal
Professor of International Law at the Yale Law School
and Honorary President of the American Society of
International Law. He has served as an arbitrator or
counsel in many international arbitrations and has
authored numerous scholarly publications on
international commercial arbitration.
John M. Townsend is a litigation partner in the
Washington, D.C. office of Hughes Hubbard & Reed
LLP and co-chairs the firm's Arbitration practice
group.1 His arbitration practice includes representing
parties in international and domestic commercial
arbitration, investment treaty disputes, and acting as
an arbitrator.
SUMMARY OF ARGUMENT
The Court of Appeals erred in holding that, “to
compel arbitration, the Convention requires that the
arbitration agreement be signed by the parties before
the Court or their privities.” Outokumpu Stainless
USA, LLC, v. et al. v. CONVERTEAM SAS, now
known as GE Energy Power Conversion France SAS,
Corp., 902 F.3d 1316, 1326 (11th Cir. 2018) (footnote
omitted). Its broad holding – that arbitration cannot be
compelled unless the “parties before the Court” or their
1
Former partners of Hughes Hubbard & Reed LLP advised clients
in connection with the District Court stage of this litigation, but
Mr. Townsend was not involved. Neither his firm nor its clients
have made a monetary contribution to the filing of this brief.
5
privities signed the arbitration agreement – would
categorically bar enforcement of international
arbitration agreements by or against nonsignatories in
all circumstances.
In thus misconstruing the New York Convention,
the Court of Appeals completely disregarded all but one
of the principal criteria utilized by this Court to
interpret a treaty. It relied solely on the literal text of
a single article in the Convention (which it misread).
In contrast, this Court interprets treaties in light of
multiple criteria: the text and structure of the treaty;
the views of the Executive; the views of other States
parties, including their case law; scholarly opinion; the
history of the treaty; and the object and purpose of the
treaty. Abbott v. Abbott, 560 U.S. 1, 10, 15, 16, 18, 19
and 20 (2010). The Court of Appeals also entirely
overlooked a further criterion this Court takes into
account, namely the post-ratification understanding of
the Convention by other States. Medellin v. Texas, 552
U.S. 491, 516 (2008); Zicherman v. Korean Airlines Co.,
516 U.S. 217, 226 (1996).
International law on treaty interpretation is broadly
consistent with this Court’s criteria. Vienna
Convention on the Law of Treaties, May 23, 1969,
entered into force, Jan. 27, 1980, 1155 U.N.T.S. 331,
art. 31.
The Court of Appeals considered only the literal text
of a single article of the Convention – Article II – and
got it wrong. It misread Article II, first, by treating
signatures as the only means by which international
arbitration agreements may be covered by the
Convention and, second, by confusing the question of
6
the formalities for an agreement under the Convention
with the separate question of who may enforce or be
bound by such an agreement. As aptly explained by the
Swiss Federal Tribunal, the inclusion of agreements
“signed by the parties” in Article II (2) of the
Convention refers to agreements signed by the parties
to the original contract, and not necessarily by thirdparties to which the scope of the arbitration agreement
is extended. (See Part I.B below.)
Amici recognize that the primary basis of
international arbitration is express consent. However,
there are limited but important and well-established
exceptions for implied and in some instances imputed
consent. Petitioner argues persuasively that the text,
as well as the object and purpose of the Convention,
allow space for these exceptions. In particular, the
Convention permits nonsignatories exceptionally to be
bound by or enforce international arbitration
agreements based on equitable estoppel.
Amici need not repeat Petitioner’s arguments.
Instead we focus on further criteria leading to the same
interpretive result, each of which is within our
particular expertise, and none of which was addressed
by the Court of Appeals below. That the Convention
permits nonsignatories exceptionally to be bound by or
to enforce international arbitration agreements is
shown by the consensus of States, joined in by the U.S.
(Part I.A below); by the individual post-ratification
understandings of States, embodied mainly in their
case law and, in the case of the U.S., in an amicus brief
submitted by the Executive (Part I.B below); and by
7
scholarly interpretations of the Convention. (Part II
below).
In addition, with respect to implementation of the
Convention in the U.S. through Chapter 2 of the FAA,
we invoke the synthesis of U.S. law in the
Restatement, which supports the position taken herein.
(Part III below).
Courts in the U.S. and other States parties to the
Convention allow nonsignatories exceptionally to be
bound by or to enforce international arbitration
agreements based on a wide range of ordinary contract,
agency, equitable and related doctrines.
Although the question presented in this case
involves one such doctrine (equitable estoppel), the
rationale of the Court of Appeals – that only signatories
or their privities may be bound by or enforce
international arbitration agreements – sweeps much
more broadly. It conflicts, not only with the judgments
in the First and Fourth Circuits concerning estoppel
cited in the petition for certiorari, but also with a legion
of judgments from diverse U.S. jurisdictions
recognizing that arbitration by or against
nonsignatories may exceptionally be permitted by
ordinary principles of contract, agency, equitable and
related principles. They include appellate decisions
from at least the First, Second, Third and Fifth
Circuits. E.g., InterGen N.V. v. Grina, 344 F.3d 134,
144-50 (1st Cir. 2003) and other cases cited in Part I
below.
8
These cases recognize a range of exceptional
grounds to permit international arbitration by or
against nonsignatories, based on ordinary principles of
contract law, judicial estoppel, equitable estoppel, the
direct benefits theory of estoppel, agency, alter ego,
veil-piercing, incorporation by reference, assumption,
and third-party beneficiary. (Part I below.)
As illustrated by these cases (and others cited in the
Restatement), the rigid reading of the Convention by
the Court of Appeals in this case is a distinctly
minority view in U.S. case law.
Even more broadly, the erroneous interpretation of
the Convention by the Court of Appeals would
invalidate virtually all of the many legal and equitable
bases recognized by States around the world to allow
nonsignatories exceptionally to be bound by or to
enforce international arbitration agreements. Although
civil law States do not generally recognize the common
law doctrine of equitable estoppel as such, they
recognize comparable obligations under a range of legal
and equitable doctrines as bases to enforce arbitration
agreements by or against nonsignatories. Depending
on the civil or common law jurisdiction, legal bases of
nonsignatory arbitration may include agency, apparent
or ostensible authority, implied consent, alter ego, veilpiercing, the “group of companies” doctrine, third party
beneficiaries, guarantors, succession, assignment and
other transfers of contractual rights, subrogation,
estoppel, good faith, ratification, corporate officers and
directors, shareholder derivative rights, and joint
venture relations. (Part I.B below.)
9
The untenably strict reading of the Convention by
the Court of Appeals would thus significantly disrupt
the successful system of fair arbitral resolution of
international commercial disputes painstakingly
constructed over the last half century.
This Court has rightly rejected a ban on
nonsignatory arbitration in the domestic context. It has
held that nonsignatories may enforce or be bound by
domestic arbitration agreements under Chapter 1 of
the FAA in circumstances where “’traditional
principles’ of state law allow a contract to be enforced
by or against nonparties to the contract through
‘assumption, piercing the corporate veil, alter ego,
incorporation by reference, third-party beneficiary
theories, waiver and estoppel’.” Arthur Andersen LLP
et al. v. Carlisle et al., 556 U.S. 624, 631 (2009), quoting
21 R. Lord, Williston on Contracts §57:19, p. 183 (4th
ed. 2001).
No sound reason exists why nonsignatories may not
also exceptionally be bound by or enforce international
arbitration agreements based on the same “traditional
principles” under Chapter 2 of the FAA. Section 208 of
Chapter 2 provides, “Chapter 1 applies to actions and
proceedings brought under this chapter to the extent
that chapter is not in conflict with this chapter or the
Convention as ratified by the United States.”
There is no such conflict. The Court of Appeals
thought it found one in Convention Article II (2), which
provides that arbitration agreements under the
Convention shall “include” arbitral clauses or
agreements “signed by the parties or contained in an
exchange of letters or telegrams.’’ 902 F.3d at 1325,
10
1327. However, the Court of Appeals both misread and
misapplied Article II (2).
First, by including international arbitration
agreements signed by the parties among those covered
by the Convention, Article II (2) is “not exhaustive.”
Such is the authoritative interpretation of the
international monitoring body – the United Nations
Commission on International Trade Law
(“UNCITRAL”) – adopted by a consensus including the
U.S. (Part I.A. below.)
Second, the issue of who may be bound by or enforce
an agreement is in any event distinct from the question
of whether the agreement is covered under the
Convention. As Petitioner aptly argues, the Court of
Appeals misconstrued the word “parties” in Article II
(2). In context, it refers to the parties, not to the
arbitral proceeding, but to the arbitration agreement.
Amici are aware of no appellate decision by the
courts of any other nation which explicitly adopts the
Court of Appeals’ rigidly restrictive interpretation and
misapplication of the signature provisions of Article
II (2) of the Convention.
Because the Court of Appeals erroneously held that
the Convention, and thus Chapter 2 of the FAA,
categorically bar enforcing international arbitration
agreements by or against nonsignatories, it did not
reach the question of whether Respondents are
equitably estopped from refusing arbitration in this
case. Amici express no view on that separate question.
This Court should reverse and remand for further
11
proceedings on whether equitable estoppel applies
here.
ARGUMENT
The Court of Appeals erred in holding that, “to
compel arbitration, the Convention requires that the
arbitration agreement be signed by the parties before
the Court or their privities.” 902 F.3d at1326. Its broad
holding – that arbitration cannot be compelled unless
the “parties before the Court” or their privities signed
the arbitration agreement – would categorically bar
enforcement of international arbitration agreements
either by or against nonsignatories in all
circumstances.
The Court’s misconstruction of the Convention
caused it also to misconstrue Chapter 2 of the FAA,
which implements the Convention in U.S. Law. In so
interpreting the Convention, the Court entirely
disregarded all but one of the principal criteria utilized
by this Court to interpret a treaty. Moreover, it erred
on the one criterion – the text of a single article of the
Convention – which it did consider. In contrast, this
Court interprets treaties by considering the text and
structure of the treaty; the views of the Executive; the
views of other States parties, including their case law;
scholarly opinion; the history of the treaty; and the
object and purpose of the treaty. Abbott v. Abbott, 560
U.S. 1, 10, 15, 16, 18, 19 and 20 (2010). Nor did the
Court of Appeals consider the post-ratification
understanding of the Convention by other States,
which this Court also takes into account. Medellin v.
Texas, 552 U.S. 491, 516 (2008); Zicherman v. Korean
Airlines Co., 516 U.S. 217, 226 (1996).
12
Although expressed in different formulations, this
Court’s criteria for treaty interpretation are broadly
consistent with those of international law as set forth
in the article 31 of the Vienna Convention on the Law
of Treaties. The U.S. “considers many of the provisions
of the Vienna Convention on the Law of Treaties to
constitute customary international law on the law of
treaties.”2
The Court of Appeals interpreted the Convention on
the sole basis of the literal text of Article II of the
Convention. However, it misread the text in two ways.
First, it treated the Article II (2) provision that the
Convention shall “include” agreements “signed by the
parties” as if it were exclusive of other agreements,
which it is not. Second, the Court confused the
question of what agreements are covered by the
Convention with the separate issue of who may enforce
or be bound by them. As well explained by the Swiss
Federal Tribunal, the inclusion in Article II (2) of
arbitration agreements “signed by the parties” refers to
the parties to the original agreement, and not to thirdparties to whom the scope of the arbitration agreement
may exceptionally be extended. (See Part I.B below.)
The Court of Appeals also failed to take into account
the object and purpose of the Convention:
The goal of the Convention, and the principal
purpose underlying American adoption and
implementation of it, was to encourage the
2
U.S. State Dept., 2009-2017, Frequently Asked Questions, Vienna
Convention on the Law of Treaties. https://20092017.state.gov/s/l/treaty/faqs/70139.htm.
13
recognition and enforcement of commercial
arbitration agreements in international
contracts and to unify the standards by which
agreements to arbitrate are observed and
arbitral awards are enforced in the signatory
countries.
Scherk v. Alberto Culver, 417 U.S. 506, 520 n. 15
(1974).
These purposes would be significantly frustrated by
the Court of Appeals’ misreading of the Convention to
categorically exclude enforcement of arbitration
agreements by or against nonsignatories in the
exceptional circumstances traditionally recognized by
U.S. courts for domestic arbitrations, and by courts of
other nations in both domestic and international
arbitrations.
The primary basis of international arbitration is
indeed express consent. However, ordinary principles
of contract law, as well as the consensus of States
parties on the interpretation of the Convention,
recognize exceptional circumstances in which consent
may be implied, or even imputed in the interest of
equity. Comment a to Restatement section 2.3. Courts
in the U.S. (and in other States parties; see Part I.B
below) allow nonsignatories exceptionally to be bound
by or to enforce international arbitration agreements
based on a wide range of ordinary contract, agency,
equitable and related doctrines.
In the U.S., those cases are not limited to the
decisions by the First and Fourth Circuits, on which
the petition for certiorari was predicated, allowing
14
nonsignatory arbitration based on equitable estoppel.
Sourcing Unlimited v. Asimco Int’l, 526 F.3d 38, 46-48
(1st Cir. 2008); Int’l Paper Co. v. Schwabedissen
Maschinen & Anlagen GMBH, 206 F.3d 411, 416-18
(4th Cir. 2000); Aggarao v. MOL Ship Mgmt. Co., 675
F.3d 355, 373-75 (4th Cir. 2012).
The precedents also include many other judgments
from diverse U.S. jurisdictions, all recognizing that
international arbitration by or against nonsignatories
may be compelled in exceptional circumstances under
ordinary principles of contract and agency law, equity
and related doctrines. The following federal appellate
decisions from the First, Second, Third and Fifth
Circuits are among many cases cited by the Reporter’s
Notes to section 2.3 of the Restatement (Part III below):
InterGen N.V. v. Grina, 344 F.3d 134, 144-50 (1st Cir.
2003) (general principles of contract and agency law,
judicial estoppel, equitable estoppel, third-party
beneficiary, agency, alter ego); A/S Custodia v. Lessin
Int’l Inc., 503 F.2d 318, 320 (2d Cir. 1974) (ordinary
contract principles, agency); Deloitte Noraudit A/S v.
Deloitte Haskins & Sells, 9 F.3d 1060, 1064 (2d Cir.
1993) (ordinary principles of contract and agency,
estoppel); American Bureau of Shipping v. Tencara
S.P.A., 170 F.3d 349, 352 (2d Cir. 1999) (incorporation
by reference, assumption, agency, veil piercing/alter
ego, and estoppel); DuPont v. Rhone Poulonc Fiber, 269
F.3d 187, 194-95 (3d Cir. 2001) (traditional principles
of contract and agency law, third-party beneficiary,
agency, equitable estoppel); Century Indem. Co. v.
Certain Underwriters at Lloyd’s, London, 584 F.3d 513,
532, 534 (3d Cir. 2009) (ordinary state-law principles of
contract law, incorporation by reference); and Sapic v.
15
Government of Turkmenistan, 345 F.3d 347 (5th Cir.
2003) (ordinary principles of contract and agency law,
incorporation by reference, assumption, agency, veilpiercing/alter ego, estoppel, “direct benefits” theory of
estoppel, and third-party beneficiary).
The misreading of the Convention by the Court of
Appeals below is thus clearly a minority view in U.S.
case law.
Petitioner has persuasively analyzed the text of the
Convention. Amici focus instead on additional criteria
which lead to the same conclusion. Each is within our
particular expertise; none was addressed by the Court
of Appeals below. Amici address:
• The collective post-ratification understanding of
States. This was authoritatively expressed in
2006 by the consensus – in which the U.S. joined
--of the United Nations Commission on
International Trade Law (“UNCITRAL”) (Part
I.A below);
• The individual understandings of States parties.
In the U.S., these are embodied in an amicus
brief filed by the Executive in 2016. The
understandings of other States are found mainly
in their case law (Part I.B below); and
• Scholarly interpretations of the Convention
(Part II below).
Finally, with regard to interpretation of the
Convention in the U.S. under Chapter 2 of the FAA,
Part III below summarizes U.S. law as synthesized in
the Restatement.
16
All these sources of interpretation of the
Convention, and hence of Chapter 2 of the FAA,
recognize that nonsignatories may be bound by or
enforce international arbitration agreements in
exceptional circumstances.
Indeed, the case for permitting nonsignatories
exceptionally to enforce arbitration agreements – as
here -- is arguably stronger than the case for enforcing
the agreements against nonsignatories. Sapic v.
Government of Turkmenistan, 345 F.3d 347, 361 (5th
Cir. 2003). When nonsignatories enforce arbitration
agreements, they do so against respondents who have
at least agreed to arbitrate with respect to the dispute,
even if not with respect to the particular disputant.
In the U.S. under Chapter 1 of the FAA, domestic
arbitration agreements may be enforced by or against
nonsignatories in circumstances – such as equitable
estoppel -- where “background principles of state
contract law” allow contracts to be enforced by or
against non-parties. Arthur Andersen LLP et al. v.
Carlisle et al., 556 U.S. 624, 630 (2009).
This Chapter 1 principle properly extends as well to
international arbitrations under Chapter 2 of the FAA.
Section 208 of Chapter 2 provides, “Chapter 1 applies
to actions and proceedings brought under this chapter
to the extent that chapter is not in conflict with this
chapter or the Convention as ratified by the United
States.”
There is no such conflict. The Court of Appeals
found a conflict only by misinterpreting Convention
Article II (2), which provides that international
17
arbitration agreements covered by the Convention shall
“include” agreements signed by the “parties.” 902 F.3d
at 1325, 1327.
However, this provision is not exhaustive. (Part A
below.) Article II (2) does not limit the agreements
States may cover under the Convention. It merely
“lays down the minimum [that States must do], not the
maximum [that they may do] to enforce arbitral
agreements.”3
Moreover, as Petitioner argues, the word “parties”
in Article II (2) refers to the parties to the original
arbitration agreement, not to the parties to the arbitral
proceeding. In exceptional circumstances, arbitral
proceedings may be initiated by or against parties who
did not sign the arbitration agreement.
Because the Court of Appeals held that the FAA
categorically bars non-signatories from enforcing
international arbitration agreements under Chapter 2,
it did not reach the question of whether estoppel
applies here. Amici express no view on whether
Respondents are estopped from denying arbitral
jurisdiction in this case. This Court should reverse the
erroneous holding below and remand for further
proceedings to address whether equitable estoppel
applies in this case.
3
Adam Samuel, The Effect of the Place of Arbitration on the
Enforcement of the Agreement to Arbitrate, 8 Arb. Int’l 257, 269
(1992).
18
I.
The Interpretation of the New York
Convention by the Court of Appeals Is
Contrary to the Post-ratification
Understanding of the Convention by States
Parties.
As noted above, this Court’s approach to treaty
interpretation takes into account the post-ratification
understanding of the treaty by other States parties.
Medellin, 552 U.S. at 516; Zicherman v. Korean
Airlines Co., 516 U.S. 217, 226 (1996).
Likewise, the Vienna Convention provides that
treaty interpretation shall take into account:
(a) Any subsequent agreement between the
parties regarding the interpretation of the treaty
or the application of its provisions;
(b) Any subsequent practice in the application of
the treaty which establishes the agreement of
the parties regarding its interpretation;
Vienna Convention on the Law of Treaties, art. 31.3 (a)
and (b).
The interpretation of the Convention by the Court
of Appeals is contrary to the post-ratification
understandings of the Convention by States, as
embodied in both their “subsequent agreements” (Part
A below) and their “subsequent practice” (Part B
below).
19
A. The Interpretation of the Convention by
the Court of Appeals Is Contrary to the
Collective Understanding of States.
The interpretation of the Convention by the Court
of Appeals is contrary to the collective understanding
of States. That understanding is embodied in a 2006
Recommendation on the interpretation of Articles II (2)
and VII (1) of the Convention (Appendix B to this
brief).4
The Recommendation was adopted by
consensus of the sixty member States – including the
U.S. – of the United Nations Commission on
International Trade Law (“UNCITRAL”).5
The Convention is a treaty of the United Nations.
UNCITRAL is mandated by the United Nations
General Assembly to promote “ways and means of
ensuring a uniform interpretation and application of
international conventions and uniform laws in the field
of international trade.” (UN General Assembly Res.
2205 (XXI), 1966.) UNCITRAL’s authoritative 2006
Recommendation was developed after lengthy
deliberation by UNCITRAL’s Working Group on
4
Recommendation Regarding the Interpretation of Article II,
Paragraph 2, and Article VII, Paragraph 1, of the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, Done in
New York, 10 June 1958, Adopted by the United Nations Commission
on International Trade Law on 7 July 2006, at its Thirty-ninth
Session. Issued in Official Records of the General Assembly, Sixty-first
Session, Supplement No. 17 (Annex A/61/17), annex II.
5
Report of the UNCITRAL on the work of its thirty-ninth session
(19 June-7 July 2006), UN General Assembly, Official Records,
sixty-first session, Supplement No. 17 (A/61/17), ¶¶ 4, 12, 177-80
and Annex II.
20
International Arbitration.6 It was finally adopted by a
consensus -- which included the official U.S. Delegation
-- after full consideration, debate and revision by the
entire Commission.7
The Court of Appeals’ misreading of the Convention
is contrary to the UNCITRAL Recommendation in two
respects.
First, the Recommendation clarifies that
Convention Article II (2) – which the Court of Appeals
erroneously held to be the exclusive basis of
international arbitration agreements covered by the
Convention -- is “not exhaustive.”
Second, the Recommendation provides that Article
VII (1) of the Convention should be applied to allow
“any interested party” to assert its rights “under the
laws … of the country” to enforce an arbitration
agreement. This is sometimes referred to as the “morefavorable right principle.” (See judgment of the German
Federal Supreme Court in Part B below.)
Because U.S. law confers rights on nonsignatories
exceptionally to enforce arbitral agreements in
domestic arbitrations under Chapter 1 of the FAA,
Arthur Andersen LLP et al. v. Carlisle et al., 556 U.S.
624, 630 (2009), the import of the UNCITRAL “more
favorable right” principle under Article VII (1) is to
6
UNCITRAL, Report of the Working Group on Arbitration and
Conciliation on the work of its forty-fourth session (New York, 2327 January 2006), UN Doc. A/CN.9/592, 27 February 2006, ¶¶ 8288 and Annex III.
7
Note 5 above.
21
grant nonsignatories the same rights exceptionally to
enforce international arbitration agreements under
Chapter 2 of the FAA.
In short, the Court of Appeals misread Article II (2)
of the Convention and ignored Article VII (1). For both
reasons, there is no conflict between Chapter 1 of the
FAA and the Convention, as implemented in Chapter
2 of the FAA.
B. The Interpretation of the Convention by
the Court of Appeals Is Contrary to the
Individual Understandings of States
The interpretation of the Convention by the Court
of Appeals is also contrary to the post-ratification
understandings of many individual States parties.
In interpreting a treaty, this Court treats the views
of the Executive with great respect. Abbott v. Abbott,
560 U.S. at 15 (citation omitted). We therefore begin
with the U.S. In addition to joining in the consensus
UNCITRAL Recommendation of 2006, the Executive
more recently made its views known in an amicus brief
filed in the Second Circuit. On September 12, 2016, the
U.S. Attorney for the Southern District of New York
and the Departments of Justice and State filed an
amicus brief on behalf of the U.S. in the case of DA
Terra Siderurgica LTDA v. American Metals
International, Docket No. 15-1133 (L), 15-1146 (con).8
8
The eventual Second Circuit ruling was reported as CBF
Indústria Gusa S/A v. AMCI Holdings, Inc., 850 F.3d 58 (2d Cir.
2017), cert. denied, 138 S. Ct. 557 (2017). It cited the U.S. amicus
brief with approval, but on another point. 850 F.3d at 72.
22
One issue addressed by the U.S. amicus was
whether a foreign arbitral award governed by the New
York Convention and Chapter 2 of the FAA must be
confirmed prior to enforcement against an awarddebtors’ alleged “alter egos or successors-in-interest.”
Amicus Brief at 2. The Government answered that an
award-creditor “may seek, in the appropriate
circumstances, to confirm a foreign arbitral award
directly against alleged alter egos or successors.” Id.
The Government relied in part on cases where
federal courts exercised jurisdiction under Chapter 2 of
the FAA “to compel arbitration by non-signatories to
the agreement.” In particular, the Government cited
the First Circuit decision in Sourcing Unlimited and
the Second Circuit decision in Deloitte Noraudit. As
noted supra, both cases recognize estoppel as an
exceptional basis to enforce international arbitration
agreements by or against nonsignatories. The U.S.
Brief continued (p. 14):
Courts interpret the scope of “the agreement”
under [FAA Chapter 2] … in accordance with
the common law principles (such as assumption,
alter ego, and estoppel) … Courts therefore
compel participation in arbitration by entities
that have not signed an arbitration agreement
when they are nonetheless bound to the
agreement for a valid legal reason.
The Executive thus relied on the case law that
nonsignatories may exceptionally be bound by
international arbitration agreements under Chapter 2
of the FAA. This position is directly contrary to the
23
restrictive view of Chapter 2 erroneously adopted by
the Court of Appeals in the present case.
Not only the views of the U.S. Executive, but also
the views of other States parties, are entitled to
“considerable weight” in interpreting a treaty. Abbott
v. Abbott, 560 U.S. 1 at 16, quoting El Al Israel Airlines
Ltd. v. Tsui Yuan Tseng, 525 U.S. 155, 176 (1999) and
Air France v. Saks, 470 U.S. 392, 404 (1985). In the
present case, the views of other States have been
expressed in their post-ratification understandings of
the Convention articulated in their case law.
To the knowledge of amici, no appellate tribunal of
any other State explicitly adopts the restrictive view
taken by the Court of Appeals in this case. On the
contrary, foreign jurisdictions which exceptionally
recognize one or more doctrines of nonsignatory
arbitration include at least Austria, Belgium, Canada,
China, Denmark, France, Germany, Hong Kong, India,
Israel, Italy, Malaysia, The Netherlands, Peru,
Romania, Russia, Singapore, Spain, Sweden,
Switzerland and the United Kingdom. Gary Born,
International Commercial Arbitration (Kluwer Law
International 2d ed. 2014) 1418-501 and accompanying
footnotes; notes 9 and 10 below.
Civil law countries do not generally recognize the
common law doctrine of estoppel as such. However,
civil law courts permit nonsignatories exceptionally to
be bound by or enforce international arbitration
agreements in a “wide range of circumstances in which
entities that do not themselves execute a contract
(‘non-signatories’) may nonetheless be parties to, and
bound by or permitted to invoke, the associated
24
arbitration agreement.” Id. at 1423. Depending on the
jurisdiction, legal bases of nonsignatory arbitration
may include agency, apparent or ostensible authority,
implied consent, alter ego, veil-piercing, the “group of
companies” doctrine, third party beneficiaries,
guarantors, succession, assignment and other transfers
of contractual rights, subrogation, estoppel and related
doctrines in civil law countries (e.g., good faith),
ratification, corporate officers and directors,
shareholder derivative rights, and joint venture
relations. Id. at 1418-1501. Both civil law9 and
common law as well as mixed courts,10 take into
9
E.g., Belgium: Court of Appeal of Brussels, Case No.
2013/AR/1830, 25 October 2018, in Annet van Hooft and JeanFrançois Tossens (eds), b-Arbitra | Belgian Review of Arbitration,
(Wolters Kluwer 2019, Volume 2019 Issue 1) pp. 201 – 206
(Belgian law does not distinguish between domestic and
international arbitrations); Peru: Article 14 of Peruvian
Arbitration Act, Decreto Legislativo No. 1071 of June 27, 2008
(article 1.1 of the Act makes it applicable to both domestic and
international arbitrations, without prejudice to Peru’s treaty
obligations); Spain: Dima Distribución Integral, S.A., y Gelesa
Gestión Logística, S.L. v. Logintegral 2000, S.A.U., Superior Court
of Justice of Madrid, 68/2014, 16 December 2014 (the Spanish
arbitration law applies to both domestic and international
arbitrations, without prejudice to Spain’s treaty obligations, Ley
60/2003, de 23 de diciembre, de Arbitraje, art.1.1.); Switzerland:
Swiss Federal Tribunal, Parties not indicated, No. 4A_128/2008, 19
Aug. 2008; Swiss Federal Tribunal, X. v. Y Engineering S.p.A.,
No. ATF 4A_450, Apr. 7, 2014.
10
Hong Kong: Dickson Valora Group (Holdings) Co Ltd v. Fan Ji
Qian [2019] HKCFI 482, High Court of Hong Kong, Court of First
Instance, Miscellaneous Proceedings No. 1954 of 2018, 20
February 2019. The Hong Kong 2011 Arbitration Ordinance does
not distinguish between domestic and international arbitrations
25
account good faith and equity exceptionally to justify
nonsignatory arbitration. Applying a doctrine palpably
equivalent to estoppel, a German court barred a party
which participated in an arbitration from later denying
that it was subject to arbitration, based on the
principle of the “prohibition of contradictory
behavior.”11
In explaining the widely accepted practice of
permitting nonsignatories in limited circumstances to
be bound by or enforce international arbitration
agreements, foreign courts sometimes expound on the
interpretation of Articles II and VII of the Convention.
(except for certain optional provisions which do not address
nonsignatory arbitration); India: Chloro Controls (I) P. Ltd. v.
Severn Trent Water Purification Inc. (US) et al., Supreme Court of
India, Civil Appeal No. 7134 of 2012 with Civil Appeal Nos. 71357136 of 2012, 28 September 2012, published in Albert Jan Van den
Berg (ed), Yearbook Commercial Arbitration 2013 - Volume
XXXVIII, pp. 392 – 396, ¶¶ 68, 109; Israel: Supreme Court
decision no. 9542/06, Lichtenshtein v. A.I.G. Hajzakot
Bemashkantaot Ltd., ¶ 13 of the decision, cited in “Israel No. 10,
Darie Engineering Ltd v. Alstom International SAS et al., District
Court, Tel Aviv, 17 February 2013 and Supreme Court, 13
February 2014”, in Albert Jan van den Berg (ed), Yearbook
Commercial Arbitration 2014 - Volume XXXIX, pp. 413 – 420;
“Israel No. 10, Darie Engineering Ltd v. Alstom International SAS
et al., District Court, Tel Aviv, 17 February 2013 and Supreme
Court, 13 February 2014”, ¶¶ 37 and 39, in Albert Jan van den
Berg (ed), Yearbook Commercial Arbitration 2014 - Volume
XXXIX, p. 413.
11
Germany No. 147 / E27, Werner Schneider as liquidator of Walter
Bau A.G. v. The Kingdom of Thailand, Higher Regional Court of
Berlin, Case No. 20 Sch 10/11, 4 June 2012 and Federal Court of
Justice of Germany, Case No. III ZB 40/12, 30 January 2013.
26
For example, the German Federal Supreme Court
recently articulated the historical context and trends
underlying the contemporary understanding of Articles
II and VII.12 A lower court had refused to refer a
dispute to arbitration on the ground that the claimant
had not signed the contract containing the arbitration
agreement on which the respondent relied.
In
remanding the case, the Court instructed that the
formal signature provisions of Article II (1) and (2)
would not bar nonsignatory arbitration, since the
Convention must be interpreted in favor of arbitration
and allows, in any event, for the application of less
strict formal requirements pursuant to Article VII(1).
With regard to Article II, the Court explained that:
Art. II (1) … would not be an obstacle to [the
nonsignatory being bound by the arbitration
agreement]. The New York Convention aims at
making the international enforcement of
arbitration agreements easier, not at
establishing stricter requirements than in
national law. Art. II (1)-(2) … contains formal
requirements that were comparatively liberal at
the time of the conclusion of the Convention in
1958 and clearly less strict than those of many
national laws. Since then many legal systems, in
the context of a more arbitration-friendly
attitude, have so relaxed their formal
12
Bundesgerichtshof, III ZR 371/12, 8 May 2014, English
translation published in Albert Jan van den Berg (ed), Yearbook
Commercial Arbitration 2014 - Volume XXXIX, Yearbook
Commercial Arbitration, Volume 39 (© Kluwer Law International;
Kluwer Law International 2014) pp. 401 – 405.
27
requirements that they now set more limited
requirements than Art. II (1)-(2) … An
interpretation under which Art. II (1)-(2) …,
against its original intention, becomes an
obstacle to recognition contradicts this
background (…).
The Court further explained the difference –
confused by the Court of Appeals in the instant case –
between the formal requirements of an arbitration
agreement under Article II and the separate question
of who may be bound by or enforce the agreement:
… [I]t does not follow automatically from the
circumstance that there are formal requirements
for an arbitration agreement that there are also
form requirements for the extension to a third
party, respectively that the third party is only
bound when he himself signs the arbitration
agreement or adheres to it in writing (…).
The Court also emphasized the “more-favorable
right principle” of Article VII (1) of the Convention:
Apart from [Article II], Art. VII (1) … expressly
allows for the application of an arbitrationfriendly national law pursuant to the so-called
more-favorable-right principle. …
The Swiss Federal Tribunal similarly articulates
the distinction between whether an agreement is
covered by Article II of the Convention and the
separate question of who may enforce or be bound by it.
Most recently the Tribunal explicitly held that Article
II (2) of the Convention does not bar nonsignatory
28
arbitration.13
The Tribunal explained that the
reference to “signed by the parties” in Article II (2)
means that the arbitration agreement must be signed
by the parties to the original contract, but not
necessarily by third-parties to which the scope of the
arbitration agreement is extended.
The Tribunal’s interpretation of the Convention
thus parallels its earlier decision similarly interpreting
the Swiss arbitration statute (which also contains a
formal requirement that the arbitration agreement be
in writing). Swiss Federal Tribunal, X. S.A.L., Y. S.A.L.
et A. v. Z. Sàrl, 4P.115/2003, 16 October 2003.
The Supreme Court of India adopts a similar
interpretation of Article II of the Convention. It has
held that
[t]he question of formal validity of the
arbitration agreement is independent of the
nature of parties to the agreement, which is a
matter that belongs to the merits and is not
subject to substantive assessment. Once it is
determined that a valid arbitration agreement
exists, it is a different step to establish which
parties are bound by it. Third parties, who are
not explicitly mentioned in an arbitration
13
Swiss Federal Tribunal, Parties not indicated, No. 4A_646/2018,
17 Apr. 2019 (in German). See English Summary by N. Voser and
L. Groselj, Extension of arbitration agreement to non-signatory
upheld under New York Convention (Swiss Supreme Court),
Practical Law, May 22, 2019; V. Hirsiger-Meier and L.
Innerebener, Federal Supreme Court upholds extension of
arbitration agreement to non-signatories under the New York
Convention, Global Arbitration News, June 18, 2019.
29
agreement made in writing, may enter into its
ratione personae scope.14
Likewise, the Singapore High Court has held that
the formalities of Article II of the Convention do not
bar the extension of an arbitration agreement to a third
party.15 Citing decisions from Belgium, Switzerland
and the U.S., the High Court held that “where the
objective circumstances and parties’ conduct reveal
that the parties to the arbitration agreement have
consented to extend the agreement to a third person
who is not a party to the agreement, and that third
person has shown by its conduct to accept to be bound
by the agreement, parties can be found to have
impliedly consented to form an agreement to arbitrate
where this has been clearly and unequivocally shown
be the parties’ objective intention.”16
In contrast, to the knowledge of amici, no foreign
appellate court adopts the restrictive interpretation of
the Convention adopted by the Court of Appeals in this
case. In 2003 a trial court in British Columbia refused
nonsignatory enforcement. Javor v. Francoeur, 2003
BCSC 350 (2003). The decision was affirmed on appeal
14
Chloro Controls (I) P. Ltd. v. Severn Trent Water Purification
Inc. (US) et al., Supreme Court of India, Civil Appeal No. 7134 of
2012 with Civil Appeal Nos. 7135-7136 of 2012, 28 September
2012, published in Albert Jan Van den Berg (ed), Yearbook
Commercial Arbitration 2013 - Volume XXXVIII, pp. 392 – 396,
¶ 109.
15
The ‘Titan Unity’ [2014] SGHCR4, Admiralty in Rem No 276 of
2012 (Summons No 3952 of 2013), 4 February 2014, ¶ 35.
16
Id. ¶¶ 30-35.
30
in a one-page opinion with no explicit discussion of the
issue, 2004 BCCA 134 (2004). However, even in British
Columbia, its precedential weight appears to be nil. In
2013 another British Columbia trial court rejected an
argument based on Javor. An arbitral tribunal had
found arbitral jurisdiction over a nonsignatory, based
on grounds of both alter ego and estoppel. The Court
affirmed that those rulings were “consistent with
international arbitration law in this jurisdiction and
elsewhere.” The Court pointed out that the Canadian
statute does not limit enforcement to signatories of an
arbitration agreement, but defines a party to an
arbitration agreement to include a person claiming
“through or under a party.” Moreover, citing several
leading commentaries, the Court observed that
“nonsignatories have been held to be bound by
arbitration agreements in various ways that include
piercing the corporate veil (alter ego) and estoppel …”
CE International Resources Holdings LLC v. Yeap Soon
Sit, 2013 BCSC 1804, pars. 24-35 (2013).
The post-ratification understandings of individual
States are thus in accord with their collective
understanding as expressed in the UNCITRAL
Recommendation: Convention Article II (2) does not bar
nonsignatory arbitration. Moreover, Article VII (1)
ensures that where nonsignatory arbitration is
exceptionally allowed by domestic law – as in Chapter
1 of the FAA – nonsignatory arbitration extends as well
to international arbitrations under the Convention.
31
II.
The Judgment Below Is Contrary to the
Interpretations of the New York
Convention by Leading Scholars.
As noted above, in treaty interpretation, this Court
takes scholarly views into account. Abbott v. Abbott,
560 U.S. at 18. Similarly, among the sources of
international law are “the teachings of the most highly
qualified publicists of the various nations, as
subsidiary means for the determination of rules of law.”
Statute of the International Court of Justice, art. 38.1
(d).
Leading scholars agree with the post-ratification
understandings of the Convention by States. As noted
by Reporter’s Note a to Restatement section 2.3, “the
general proposition that nonsignatories can be bound
by or invoke an arbitration agreement is also well
established in the scholarly literature as practically
and legally necessary to give effect to parties’
agreements to arbitrate.” Among other leading
commentaries, the Note cites scholarly publications by
Gary B. Born, William W. Park, Daniel Busse, James
M. Hosking, Carolyn B. Lamm & Jocelyn A. Aqua, and
amicus John M. Townsend. Other amici have published
to like effect.
Some scholars argue that there are even stronger
grounds to allow nonsignatories to invoke arbitration
agreements – as here -- than to bind them by such
agreements. For example, amicus Professor Alan S.
Rau has written that the argument is
that “it is more foreseeable, and thus more
reasonable, that a party who has actually agreed
32
in writing to arbitrate claims with someone
might be compelled to broaden the scope of his
agreement to include others.”17 … [S]uch a
presumption brings all the advantages of
efficiency with limited impingement on
contractual autonomy.
That an arbitration
clause may in fact sweep most broadly when
asserted against a signatory to the agreement is
not a novel proposition, …18
As explained by another eminent authority in the
field, Jan Paulsson:
The question is whether the respondent has
consented to arbitration of the claim being
brought, irrespective of who brings it … It may
be that parties do not so much agree to arbitrate
with a person as with respect to a transaction or
a venture.19
And in the words of Professor Park:
When a non-signatory asks to arbitrate against
a signatory, the threshold for extending the
arbitration clause thus may be set at a lower
17
Quoting Sapic v. Turkmenistan, 345 F.3d 347, 361 (5th Cir.
2003), in turn quoting J. Douglas Uloth & J. Hamilton Rial, III,
Equitable Estoppel as a Basis for Compelling Nonsignatories to
Arbitrate - A Bridge Too Far?, 21 Rev. Litig. 593, 633 (2002).
18
Alan S. Rau, Arbitral Jurisdiction and the Limits of Party
‘Consent’, in Multiple Party Actions in International Arbitration
(Oxford 2009), at ¶3.83.
19
Jan Paulsson, The Idea of Arbitration (2014), p. 53.
33
level … The signatory resisting joinder of the
third party might argue that it never agreed to
arbitrate with the particular affiliate seeking to
enter the proceedings. The argument has some
force, albeit limited in nature. The resisting
party did agree that disputes related to the
subject in question would be settled by
arbitration.20
At the very least, there can be no justification in
international cases for disallowing enforcement by
nonsignatories if enforcement against them is allowed.
In all events, the interpretation of the Convention
by the Court of Appeals is contrary to the
overwhelming consensus of leading scholars that
nonsignatories may exceptionally be bound by or
enforce international arbitration agreements. As
succinctly summarized by experienced international
arbitration practitioners, “[n]owadays, there is no
doubt that – under certain circumstances – an arbitral
agreement can be extended to non-signatories.”21
20
William W. Park, Non-signatories and international contracts:
an arbitrator’s dilemma in MULTIPLE PARTIES IN
INTERNATIONAL ARBITRATION, (Oxford 2009) at ¶1.75.
21
Eduardo Silva Romero and Luis Miguel Velarde Saffer, The
Extension of the Arbitral Agreement to Non-Signatories in Europe:
A Uniform Approach?, 5 Am. Univ. Bus. L. Rev. 371, 371 (2015).
34
III.
The Court of Appeals’ Consequent
Misreading of Chapter 2 of the Federal
Arbitration Act Is Contrary to the
Restatement of U.S. Law of International
Commercial and Investor-State
Arbitration.
The Restatement was adopted by the 2019 Annual
Meeting of the American Law Institute, following over
a decade of extensive research, consultations, published
drafts, and deliberations.
The Restatement recognizes the general rule that
parties must expressly consent to arbitration:
“Ordinarily, only persons who have formally executed
an international arbitration agreement or otherwise
expressly assented to it are bound by or may invoke
such an agreement.” Comment a to Restatement
section 2.3.
However, contrary to the mistaken view of the
Court of Appeals, there are exceptions based on implied
and in some instances imputed consent. Comment a to
section 2.3. The Restatement affirms that under U.S.
law non-signatories can both invoke and be subject to
international arbitration agreements in exceptional
circumstances. Section 2.3 (b) provides that a court,
upon request, “enforces an international arbitration
agreement against or in favor of a nonsignatory to the
agreement to the extent that the nonsignatory: (1) is
deemed to have consented to such agreement, or (2) is
otherwise bound by or entitled to invoke the agreement
under applicable law.”
35
Comment a explains that “ordinarily” only
signatories are bound by or may enforce an
international arbitration agreement.
However,
nonsignatories may invoke or be bound by an
arbitration agreement, not only when they are deemed
to assent to it “under ordinary principles of contract
law,” but also under “other doctrines that operate
legally to bind the parties.”
Among the bases of arbitration by or against
nonsignatories recognized in the Comments are actual
or apparent agency; implied consent; estoppel; waiver;
incorporation by reference; alter ego; veil piercing and
corporate relationships; succession, subrogation,
assignment, and other transfers; and third-party
beneficiaries. Comments (b) – (f) to section 2.3.
These multiple theories have in common that
the primary purpose of each inquiry is to discern
the intent of the parties. In some instances, an
intent might be imputed to them to accomplish
the purpose of the arbitration agreement or to
avoid irrational or unfair application of the
arbitration clause.
Comment a to section 2.3.
The Reporter’s Notes to section 2.3 cite numerous
precedents under Chapter 2 of the FAA recognizing
that nonsignatories may exceptionally be bound by or
enforce international arbitration agreements. Even
considering only citations to federal appellate cases
(district court precedents are also cited), the Notes cite
Chapter 2 cases from at least the First, Second, Third,
Fourth and Fifth Circuits (listed in Part I above).
36
One among the bases of nonsignatory arbitration
recognized by the Restatement is estoppel. Comment
c to section 2.3 explains that “a party may impliedly
consent to an arbitration agreement in various ways.
It may, for instance, perform obligations established by
the underlying contract” – as here -- [or] “affirmatively
invoke the arbitration agreement to commence an
arbitration …” – also as here. “The same circumstances
may give rise to estoppel …”
The Reporter’s Note a to section 2.3 adds that while
“ordinarily” only signatories are bound by or may
enforce arbitration agreements, “[c]ourts have long
held … that a party may be bound even in the absence
of formal assent” to an arbitration agreement. There is
a “general proposition that nonsignatories can be
bound by or invoke an arbitration agreement.”
Exceptional nonsignatory arbitration can rest, not
only on consent, but also on equity. As the Note
explains,
While most theories focus on determining the
intent of the parties, some doctrines, like
estoppel and veil piercing, are based on more
equitable considerations that, rather than posit
consent, seek to avoid irrational or unfair
application of the arbitration clause.
Equity can run both ways. Most cases involving
equitable doctrines and nonsignatories deploy those
doctrines in order to bind nonsignatories. However, as
the Note observes, “In addition to finding that
nonsignatories may under some circumstances be
bound by an arbitration agreement, courts at times
37
permit nonsignatories to seek to compel signatories to
arbitrate.”
The Note continues, “Use of the doctrine of
equitable estoppel for these purposes occurs mainly in
two circumstances[:]”
• First, “when a nonsignatory must rely on the
terms of the written agreement containing an
arbitration clause in asserting its claims against
the signatory.”
• Second,
“when a
signatory
alleges
interdependent and concerted misconduct by
both the nonsignatory and one or more of the
signatories to the agreement containing an
arbitration clause.”
Estoppel can thus be used both by and against
nonsignatories. For example, the Note cites a case
holding that, because claims against a nonsignatory
were “intimately founded in and intertwined with” a
contract containing an arbitration clause, the signatory
was estopped from refusing to arbitrate those claims.
Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10
F.3d 753, 757 (11 th Cir. 1993).22
This Court should reverse and remand for
consideration of whether equitable estoppel applies on
the facts of this case.
22
Although Sunkist was an FAA Chapter 1 case, the same
rationale should apply to FAA Chapter 2 cases under the “more
favorable right” principle of Convention art. VII (1).
38
In contrast to the Restatement, the Court of
Appeals would strictly limit international arbitration
to signatories and their privities. The Court of Appeals
thereby interprets the Convention to prohibit all bases
of nonsignatory arbitration. Arbitration by or against
nonsignatories would be categorically prohibited, no
matter how irrational or unfair the result, and no
matter how contrary to the purpose of the arbitration
agreement.
This would mean that international arbitration
agreements -- unlike other contracts under ordinary
principles of contract law -- could not in any
circumstances be subject to enforcement by or against
nonparties to the agreement.
This anomaly is
unsupported by any consideration other than the Court
of Appeals’ untenable interpretation of Article II (2)
and that Court’s complete disregard of Article VII (1) of
the Convention.
Moreover, it would severely
undermine the purpose of the FAA to place arbitration
agreements “on equal footing with all other contracts.’’
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440,
443 (2006).
Comment b to Restatement section 2.4 notes that it
is “unlikely that the Convention drafters intended for
the writing requirement to perform a rigorous gatekeeping role.” It points out that the FAA “touches upon
writings only in a limited and somewhat ambiguous
fashion.”
Comment b concludes on both policy and structural
grounds:
39
Ultimately, no compelling policy supports
maintaining more rigorous writing standards for
international arbitration agreements than for
agreements falling under [FAA] Chapter 1. … In
addition to leading to anomalous results under
the [FAA], a restrictive interpretation of Article
II (2) as implemented by Congress would tend to
reduce the utility of the Convention over time as
new usages and modes of communicating
become established in international trade.
In addition, Comment b observes that the
Restatement’s “pragmatic treatment” of the writing
requirement is consistent with the treatment given by
UNCITRAL, the Convention’s “sponsoring
organization,” which recommends that Convention
Article II (2) should not be read to “state exhaustively
the arbitration agreements to which the Convention
applies.”
In sum, U.S. law on who can enforce or be bound by
international arbitration agreements, as synthesized in
the Restatement, is consistent with the international
consensus: nonsignatories can, in exceptional but
important and well-recognized circumstances, be bound
by or enforce international arbitration agreements
under the Convention where fairness and justice so
require.
CONCLUSION
The Judgment below is contrary to the collective
and individual post-ratification understandings of the
New York Convention by States including the U.S., to
the interpretation of the Convention by leading
40
scholars, and to the synthesis of U.S. law in the
Restatement. The Court should reverse and remand for
further proceedings on whether the doctrine of
equitable estoppel applies to require arbitration on the
facts of this case.
Respectfully submitted,
DOUGLASS CASSEL
Counsel of Record
KING & SPALDING LLP
1185 Avenue of the Americas
35th Floor
New York, NY 10036
(212) 556-2100
dcassel@kslaw.com
DAVID WEISS
KING & SPALDING LLP
1100 Louisiana Street
Suite 4000
Houston, TX 77002
(713) 751-3200
dweiss@kslaw.com
Counsel for Amici Curiae
September 24, 2019
APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A Brief Biographies of
Amici Curiae . . . . . . . . . . . . . . . . . App. 1
Appendix B Recommendation Regarding the
Interpretation of Article II, Paragraph
2, and Article VII, Paragraph 1, of the
Convention on the Recognition and
Enforcement of Foreign Arbitral
Awards (UNCITRAL 2006) . . . . . App. 8
App. 1
APPENDIX A
Brief Biographies of Amici Curiae
George A. Bermann is the Jean Monnet Professor
of EU Law, Walter Gellhorn Professor of Law, and the
Director of the Center for International Commercial
and Investment Arbitration (CICIA) at Columbia Law
School. He was chief Reporter of the Restatement.
A Columbia Law School faculty member since 1975,
Professor Bermann teaches courses in, and has written
extensively on, transnational dispute resolution
(international arbitration and litigation), European
law, administrative law, and WTO law. He is an
affiliated member of the School of Law of Sciences Po
in Paris and the MIDS Masters Program in
International Dispute Resolution in Geneva. He is also
a visiting professor at the Georgetown Law Center.
Professor Bermann is an active international
arbitrator in commercial and investment disputes; coauthor of the UNCITRAL Guide to the New York
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards; chair of the Global Advisory
Board of the New York International Arbitration
Center (NYIAC); co-editor-in-chief of the American
Review of International Arbitration; and founding
member of the governing body of the ICC Court of
Arbitration and a member of its standing committee.
R. Doak Bishop is a Partner in and past Chair of
the International Arbitration practice of King &
App. 2
Spalding, specializing in the oil and gas, energy,
construction, environmental and foreign investment
sectors, with a focus on Latin America. He was an
Adviser to the Restatement.
Mr. Bishop has served as Chairman of the Institute
of Transnational Arbitration and as a Director of the
American Arbitration Association (AAA). He is also a
member of the U.S. delegation to the North American
Free Trade Act (NAFTA) Advisory Committee on
Private Commercial Disputes. He previously served on
the Executive Council of the American Society of
International Law. Among other publications, he is coeditor of Foreign Investment Disputes – Cases,
Materials and Commentary (Wolters Kluwer, 2nd ed.
2014) and The Art of Advocacy in International
Arbitration (JURIS Arbitration Law, 2nd ed. 2010).
Mr. Bishop has served as both an arbitrator and
counsel. As an arbitrator, he has led or participated in
more than 70 arbitrations under the auspices of the
International Centre for Settlement of Investment
Disputes (ICSID), International Chamber of Commerce
(ICC), London Court of International Arbitration
(LCIA), UN Commission on International Trade Law
(UNCITRAL), International Centre for Dispute
Resolution (ICDR), AAA, the Inter-American
Commercial Arbitration Commission (IACAC) and the
Center for Public Resources (CPR), as well as in ad hoc
arbitrations.
Andrea K. Bjorklund is Full Professor and
Associate Dean (Graduate Studies) of the Faculty of
Law of McGill University, where she holds the L. Yves
Fortier Chair in International Arbitration and
App. 3
International Commercial Law. She was an Adviser to
the Restatement.
In 2017, she was named one of McGill’s Norton Rose
Fulbright Scholars in International Arbitration and
International Commercial Law. In 2018, she was a
Plumer Fellow at St. Anne’s College and a Visiting
Fellow in the Law Faculty, University of Oxford, as
well as a Visiting Fellow at the Lauterpacht Centre for
International Law at the University of Cambridge. In
2019, she was elected a vice-president of the Executive
Council of the American Society of International Law.
She is also a member of the Advisory Board of the
Investment Treaty Forum of the British Institute for
International and Comparative Law. Professor
Bjorklund was the inaugural ICSID Scholar-inResidence for 2014-2015 and was Editor-in-Chief of the
Yearbook on International Investment Law and Policy
(OUP) from 2012 to 2015. She sits on the panel of
arbitrators of the AAA’s International Centre for
Dispute Resolution and on the roster of NAFTA
Chapter 19 arbitrators. Professor Bjorklund is widely
published in investment law and dispute resolution
and transnational contracts.
Douglas Earl McLaren is an attorney with over
30 years of legal, business and engineering experience,
both domestically and internationally in infrastructure,
energy, environmental, and commercial projects. He
was an Adviser to the Restatement.
Mr. McLaren has served on many commercial and
securities arbitrations for the American Arbitration
Association, International Centre for Dispute
App. 4
Resolution, ICC International Court of Arbitration and
the Financial Industry Regulatory Authority. He is a
member of the American Law Institute.
Prior to opening his Law Office in Washington,
D.C., Mr. McLaren was Senior Government Affairs
Representative with Bechtel SAIC Company, LLC; and
worked for TRW, and ICF Kaiser Engineers. He has
resolved legal, financial, regulatory and engineering
disputes related to commercial contracts and leases,
joint venture and partnership agreements, and sales of
business enterprises. He was formerly a
Financial/Planning Analyst with ExxonMobil, a
Management Consultant with KPMG, a Project Officer
with Jamaica National Investment Company, and a
Civil Engineer with Hue Lyew Chin Associates.
Alan S. Rau is the Mark G. and Judy G. Yudof
Chair Emeritus in Law at the University of Texas at
Austin. Professor Rau frequently serves as an
arbitrator and is a member of the panel of the AAA and
the panel of mediators of the Court of Arbitration for
Sport. He was an Adviser to the Restatement.
Professor Rau is the author of many scholarly
publications, including his book, Processes of Dispute
Resolution: The Role of Lawyers (4th ed. 2006). Two of
his book chapters most relevant to the issue in this
case are “Arbitral Jurisdiction and the Limits of Party
‘Consent’,” in Multiple Party Actions in International
Arbitration (Oxford 2009), and his lectures at the
Hague Academy of International Law, published as
“The Allocation of Power Between Arbitral Tribunals
and State Courts,” particularly chapter 3 (Hague
Academy Pocketbooks, 2018). Among his numerous
App. 5
other articles are “The Limits of Arbitral Power: Yet
Another Trilogy” (American Review of Int’l Arbitration,
2012); “Arbitrating ‘Arbitrability’” (World Arbitration
and Mediation Review, 2013); “Arbitrators Without
Powers? Disqualifying Counsel in Arbitral Proceedings”
(Arbitration International, 2014), and ““Crossing the
Threshold: Arbitral Jurisdiction after BG
Group,” Mélanges en l’honneur de Pierre Mayer (2014).
He has been Visiting Professor at the University of
Toronto Faculty of Law; at the China University of
Political Science and Law in Beijing; at the University
of Geneva Faculty of Law; and at the University of
Paris-I and the University of Paris-II. In 2014 he was
a Distinguished Professor in Residence at Queen Mary
University, London.
W. Michael Reisman is Myres S. McDougal
Professor of International Law at the Yale Law School.
He has served as an arbitrator or counsel in many
international arbitrations and has authored numerous
scholarly publications on international commercial
arbitration. He was an Adviser to the Restatement.
He has been a visiting professor in Tokyo, Hong
Kong, Berlin, Basel, Paris and Geneva. He is a Fellow
of the World Academy of Art and Science and a former
member of its Executive Council, a former member of
the Advisory Committee on International Law of the
Department of State, President of the Arbitration
Tribunal of the Bank for International Settlements,
and a member of the Board of The Foreign Policy
Association. He has been elected to the Institut de
Droit International. He is Honorary President of the
American Society of International Law, of which he
App. 6
was previously Vice-President and Honorary VicePresident. He was President of the Inter-American
Commission on Human Rights of the Organization of
American States, Editor-in-Chief of the American
Journal of International Law, and Vice-Chairman of
the Policy Sciences Center, Inc. He has served as
arbitrator and counsel in many international cases and
was presiding arbitrator in the OSPAR arbitration
(Ireland v. UK) and arbitrator in the Eritrea/Ethiopia
Boundary Dispute and in the Abyei (Sudan) Boundary
Dispute.
His most recent books are: International
Commercial Arbitration: Cases, Materials, and Notes
on the Resolution of International Business Disputes
(with W. Laurence Craig, William Park and Jan
Paulsson) (Foundation Press) (2nd Edition) (2015);
Foreign Investment Disputes: Cases, Materials and
Commentary (with R. Doak Bishop and James R.
Crawford) (Kluwer Law International) (2nd Edition)
(2014); Fraudulent Evidence Before Public
International Tribunals: The Dirty Stories of
International Law (Hersch Lauterpacht Memorial
Lectures) (with Christina Parajon Skinner) (Cambridge
University Press) (2014); and The Quest for World
Order and Human Dignity in the Twenty-first Century:
Constitutive Process and Individual Commitment:
General Course on Public International Law (Hague
Academy of International Law, 2012).
John M. Townsend is a litigation partner in the
Washington, D.C. office of Hughes Hubbard & Reed
LLP and co-chairs the firm’s Arbitration practice
group. His practice focuses on complex disputes,
App. 7
particularly international disputes, both in court and
before arbitral tribunals. His arbitration practice
includes representing parties in international and
domestic commercial arbitration, investment treaty
disputes, and acting as an arbitrator. He was an
Adviser to the Restatement.
Mr. Townsend served as Chair of the Board of
Directors of the American Arbitration Association
(AAA) from 2007 to 2010 and as chair of the Executive
Committee of the AAA from 2004 to 2007 and currently
chairs the AAA’s Law Committee. He was a member
and a vice president of the Court of Arbitration of the
LCIA from 2014 to 2019. He was the first chair of the
Mediation Committee of the International Bar
Association (IBA). In February 2008, he was appointed
by President George W. Bush as one of the American
members of the Panel of Arbitrators of the
International Centre for the Settlement of Investment
Disputes (ICSID), on which he served until 2016.
Mr. Townsend has served as an arbitrator in more
than 75 arbitrations, including commercial and
investment treaty cases under all major sets of
arbitration rules. He is the author of Non-signatories in
International Arbitration: An American Perspective, in
ICCA International Arbitration Congress,
International Arbitration 2006: Back to Basics?
(Kluwer Law International 2006, ed. Albert Jan van
den Berg, 2006), pp. 359-365.
App. 8
APPENDIX B
Recommendation Regarding the Interpretation
of Article II, Paragraph 2, and Article VII,
Paragraph 1, of the Convention on the
Recognition and Enforcement of Foreign Arbitral
Awards (UNCITRAL 2006)
The United Nations Commission on International
Trade Law,
Recalling General Assembly resolution 2205 (XXI) of
17 December 1966, which established the United
Nations Commission on International Trade Law with
the object of promoting the progressive harmonization
and unification of the law of international trade by,
inter alia, promoting ways and means of ensuring a
uniform interpretation and application of international
conventions and uniform laws in the field of the law of
international trade,
Conscious of the fact that the different legal, social and
economic systems of the world, together with different
levels of development, are represented in the
Commission,
Recalling successive resolutions of the General
Assembly reaffirming the mandate of the Commission
as the core legal body within the United Nations
system in the field of international trade law to
coordinate legal activities in this field,
Convinced that the wide adoption of the Convention on
the Recognition and Enforcement of Foreign Arbitral
App. 9
Awards, done in New York on 10 June 1958,1 has been
a significant achievement in the promotion of the rule
of law, particularly in the field of international trade,
Recalling that the Conference of Plenipotentiaries
which prepared and opened the Convention for
signature adopted a resolution, which states, inter alia,
that the Conference “considers that greater uniformity
of national laws on arbitration would further the
effectiveness of arbitration in the settlement of private
law disputes”,
Bearing in mind differing interpretations of the form
requirements under the Convention that result in part
from differences of expression as between the five
equally authentic texts of the Convention,
Taking into account article VII, paragraph 1, of the
Convention, a purpose of which is to enable the
enforcement of foreign arbitral awards to the greatest
extent, in particular by recognizing the right of any
interested party to avail itself of law or treaties of the
country where the award is sought to be relied upon,
including where such law or treaties offer a regime
more favourable than the Convention,
Considering the wide use of electronic commerce,
Taking into account international legal instruments,
such as the 1985 UNCITRAL Model Law on
1
United Nations, Treaty Series, vol. 330, No. 4739.
App. 10
International Commercial Arbitration, 2 as
subsequently revised, particularly with respect to
article 7,3 the UNCITRAL Model Law on Electronic
Commerce,4 the UNCITRAL Model Law on Electronic
Signatures5 and the United Nations Convention on the
Use of Electronic Communications in International
Contracts,6
Taking into account also enactments of domestic
legislation, as well as case law, more favourable than
the Convention in respect of form requirement
governing arbitration agreements, arbitration
proceedings and the enforcement of arbitral awards,
Considering that, in interpreting the Convention,
regard is to be had to the need to promote recognition
and enforcement of arbitral awards,
2
Official Records of the General Assembly, Fortieth Session,
Supplement No. 17 (A/40/17), annex I, and United Nations
publication, Sales No. E.95.V.18.
3
Ibid., Sixty-first Session, Supplement No. 17 (A/61/17), annex I.
4
Ibid., Fifty-first Session, Supplement No. 17 (A/51/17), annex I,
and United Nations publication, Sales No. E.99.V.4, which
contains also an additional article 5 bis, adopted in 1998, and the
accompanying Guide to Enactment.
5
Ibid., Fifty-sixth Session, Supplement No. 17 and corrigendum
(A/56/17 and Corr.3), annex II, and United Nations publication,
Sales No. E.02.V.8, which contains also the accompanying Guide
to Enactment.
6
General Assembly resolution 60/21, annex.
App. 11
1. Recommends that article II, paragraph 2, of the
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done in New York, 10 June
1958, be applied recognizing that the circumstances
described therein are not exhaustive;
2. Recommends also that article VII, paragraph 1, of
the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done in New York, 10 June
1958, should be applied to allow any interested party to
avail itself of rights it may have, under the law or
treaties of the country where an arbitration agreement
is sought to be relied upon, to seek recognition of the
validity of such an arbitration agreement.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.