JOINDER OF NONSIGNATORIES IN INTERNATIONAL ARBITRATION
Philip L Bruner*
Arbitrator, Mediator and Director of JAMS Global Engineering and Construction panel of Neutrals
On 1 June 2020, the US Supreme Court, in GE Energy Conversion France SAS Corporation v Outokumpu Stainless USA LLC 140 S Ct 1637 (2020), handed down a landmark international arbitration decision in which the court ruled that a nonsignatory third party could compel and could be joined in an international arbitration under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention” or “Convention”) and its implementing statute the US Federal Arbitration Act (“FAA”), notwithstanding that Article II(2) of the New York Convention provides: “The term ‘agreement in writing’ shall include an arbitral clause in a contract, signed by the parties or contained in an exchange of letters or telegrams”.
The critical facts as presented by the Supreme Court are:
“In 2007, ThyssenKrupp Stainless USA LLC [‘Employer’ or ‘Owner’], entered into three contracts with FL Industries Inc [‘Contractor’], for the construction of cold rolling mills at ThyssenKrupp’s steel manufacturing plant in Alabama. Each of the Contracts contained an identical arbitration clause. The clause provided that ‘[a]ll disputes arising between both parties in connection with or in the performances of the Contract … shall be submitted to arbitration for settlement.’.
After executing these agreements, FL Industries Inc entered into a sub-contractor agreement with petitioner GE Energy Power Conversion France SAS Corporation (GE Energy) [‘sub-contractor’], then known as Converteam SAS. Under that agreement, GE Energy agreed to design, manufacture, and supply motors for the cold rolling mills. Between 2011 and 2012, GE Energy delivered nine motors to the Alabama plant for installation. Soon thereafter, respondent Outokumpu Stainless USA LLC [‘Successor Owner’] acquired ownership of the plant from ThyssenKrupp.
According to Outokumpu, GE Energy’s motors failed by the summer of 2015, resulting in substantial damages. In 2016, Outokumpu and its insurers [‘Subrogee Insurers’] filed suit against GE Energy in Alabama state court. GE Energy removed
Pt 3] Joinder of Nonsignatories in International Arbitration