Arbitration Agreement Non-Signatory

Substantial amendments to the Act were made by the Arbitration and Conciliation Act (Act 2015) (`the Amending Act`), including Section 8 thereof, under which the words `a part of the arbitration agreement or a person asserting by or under it` were added to replace the word `party`8. The arbitration clause is mandatory on the basis of assignment, succession or agency: no surprises there. However, in certain circumstances, the Tribunal may extend the arbitration clause to a party other than a signatory to the arbitration clause, including if that party has a business relationship with the original signatory. The Supreme Court of Cheran Properties Limited v. Kasturi and Sons Limited12 argued that even an arbitral award may be binding on a third party if it is the responsibility of the “parties and persons who assert their right to it” in accordance with section 35 of the Act.13 In the present case, the holder of the award sought enforcement of the award against a third party who argued that that party was a nominee of the debtor, whereas the main contract, which was a share purchase agreement with the arbitration clause, had been concluded only between the arbitration holder and the debtor and the arbitral proceedings had been conducted only between them. The Supreme Court relied heavily on its ruling in chloro Controls (above) and ruled that the UK Supreme Court had previously refused to impose the arbitral award in England on the grounds that the Pakistani government was not an appropriate part of the arbitration. What is remarkable is that Judge Sotomayor relied on U.S. arbitration law – the FAA – and did not seek to calculate her arguments in the text of the New York Convention. Sotomayor J. recognized that it was difficult to determine whether a doctrine that did not sign consent to conciliation, particularly in view of the fact that the content of those doctrines varied from one jurisdiction to another.

Nevertheless, it invited lower courts to analyze on a case-by-case basis whether “the application of a national non-signature doctrine would be contrary to the intrinsic limitation of the FAA`s consent.” In the United States, arbitration is governed by the Federal Arbitration Act (FAA), Chapter 1 of which governs domestic arbitration, while Chapter 2 implements the New York Convention and applies to international arbitration. A central provision of Chapter 2 provides that Chapter 1 also applies to international arbitration agreements, but only to the extent that it is not contrary to the New York Convention. Outokumpu filed a lawsuit against GE in Alabama and GE withdrew the case in Federal Court and forced arbitration. Id. The District Court granted GE`s application to dismiss and force the arbitration; The eleventh circuit, however, turned around. In accordance with the judgment of the Ninth Yang Circle, the Eleventh Circle found that GE, as a non-signatory, did not comply with the requirement of the New York Convention that the parties must actually sign a dispute settlement agreement and therefore cannot impose arbitration proceedings. See id. The Eleventh Circuit also decided that GE, as a non-signatory, could not rely on the state`s Estoppel doctrines to enforce the arbitration agreement, given that a fair Estoppel conflicts with the requirements of the signatories to the New York Convention.

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