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Arbitrating Against Non-Signatories

BY John Dellaportas
July 02, 2014

Arbitration is a creature of contract, made between consenting parties. As such, it is generally thought that those who have not signed an arbitration agreement cannot be compelled to arbitrate. While that is often the case, like most legal rules, it has its exceptions. The U.S. Court of Appeals for the Second Circuit has recognized five of them: 1) incorporation by reference; 2) assumption; 3) agency; 4) veil-piercing/alter ego; and 5) estoppel. See, Thomson-CSF, S.A. v. American Arbitration Assoc., 64 F.3d 773, 776 (2d Cir. 1995).

Courts have cited each of these common law principles as supporting arbitral jurisdiction over a non-signatory to an arbitration clause in a contract signed by other parties. (Thomson-CSF, although decided under non-state specific, “ordinary principles of contract and agency” (id. at 776), is broadly cited by New York state and federal courts, which will typically apply New York law to questions of arbitrability in New York-venued arbitrations. See, Gary Born, Enforcement and Interpretation of International Arbitration Agreements Basic Principles: in International Commercial Arbitration: Commentary and Materials, 2d Edition, at 111 (Kluwer Law International 2001) (“[M]any authorities apply to substantive law of the arbitral situs to arbitration agreements.”).)

Incorporation by Reference

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