US Supreme Court decides on application of the New York Convention
The U.S. Supreme Court held in GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC that, in some circumstances, even nonsignatories to an agreement may invoke international arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the ‘New York Convention’).
The Court ruled that the New York Convention did not prohibit the application of the U.S. doctrine of equitable estoppel (where a court will not grant a judgment or other legal relief to a party who has not acted fairly) to permit the enforcement of arbitration agreements by nonsignatories.
The ruling expands the reach of international arbitration agreements and gives parties who engage in multi-tiered international agreements greater clarity into the possibility to use international arbitration to resolve complex disputes.
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