Ge Energy Power Conversion Fr. Sas, Corp. v. Outokumpu Stainless USA, LLC

Decision Date01 June 2020
Docket NumberNo. 18-1048,18-1048
Citation207 L.Ed.2d 1,140 S.Ct. 1637
CourtU.S. Supreme Court

Amanda K. Rice, Jones Day, Detroit, MI, Sara Anne Ford, Wesley B. Gilchrist, Amie A. Vague, Lightfoot, Franklin & White, L.L.C., Birmingham, AL, Shay Dvoretzky, Jeffrey R. Johnson, Caroline Edsall Littleton, Benjamin J. Cassady, Jones Day, Washington, DC, for Petitioner.

Cheri Turnage Gatlin, Burr & Forman LLP, Jackson, MS, Melinda S. Kollross, Joseph J. Ferrini, James R. Swinehart, Clausen Miller, P.C., Chicago, IL, Jonathan D. Hacker, Samantha M. Goldstein, O'Melveny & Myers LLP, Washington, DC, Anton Metlitsky, O'Melveny & Myers LLP, New York, NY, E. Travis Ramey, Devin C. Dolive, Burr & Forman LLP, Birmingham, AL, W. Gregory Aimonette, Kenneth R. Wysocki, Kelly A. Jorgensen, Clausen Miller, P.C., Chicago, IL, for Respondents.

Justice THOMAS delivered the opinion of the Court.

The question in this case is whether the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, T.I.A.S. No. 6997, conflicts with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by nonsignatories. We hold that it does not.


In 2007, ThyssenKrupp Stainless USA, LLC, entered into three contracts with F.L. Industries, Inc., 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." App. 171.

After executing these agreements, F.L. Industries, Inc., entered into a subcontractor agreement with petitioner GE Energy Power Conversion France SAS, Corp. (GE Energy), 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, 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 filed suit against GE Energy in Alabama state court. GE Energy removed the case to federal court under 9 U.S.C. § 205, which authorizes the removal of an action from state to federal court if the action "relates to an arbitration agreement ... falling under the Convention [on the Recognition and Enforcement of Foreign Arbitral Awards]." GE Energy then moved to dismiss and compel arbitration, relying on the arbitration clauses in the contracts between F.L. Industries, Inc., and ThyssenKrupp.

The District Court granted GE Energy's motion to dismiss and compel arbitration with Outokumpu and Sompo Japan Insurance Company of America. Outokumpu Stainless USA LLC v. Converteam SAS , 2017 WL 401951 (SD Ala., Jan. 30, 2017).1 The court held that GE Energy qualified as a party under the arbitration clauses because the contracts defined the terms "Seller" and "Parties" to include subcontractors. Id. , at *4. Because the court concluded that both Outokumpu and GE Energy were parties to the agreements, it declined to address GE Energy's argument that the agreement was enforceable under equitable estoppel. Id. , at *1, n. 1.

The Eleventh Circuit reversed the District Court's order compelling arbitration. Outokumpu Stainless USA, LLC v. Converteam SAS , 902 F.3d 1316 (2018). The court interpreted the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention or Convention) to include a "requirement that the parties actually sign an agreement to arbitrate their disputes in order to compel arbitration." Id. , at 1326 (emphasis in original). The court concluded that this requirement was not satisfied because "GE Energy is undeniably not a signatory to the Contracts." Ibid. It then held that GE Energy could not rely on state-law equitable estoppel doctrines to enforce the arbitration agreement as a nonsignatory because, in the court's view, equitable estoppel conflicts with the Convention's signatory requirement. Id. , at 1326–1327.

Given a conflict between the Courts of Appeals on this question,2 we granted certiorari. 588 U.S. ––––, 139 S.Ct. 2776, 204 L.Ed.2d 1156 (2019).


Chapter 1 of the Federal Arbitration Act (FAA) permits courts to apply state-law doctrines related to the enforcement of arbitration agreements. Section 2 of that chapter provides that an arbitration agreement in writing "shall be ... enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. As we have explained, this provision requires federal courts to "place [arbitration] agreements "upon the same footing as other contracts." " Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ. , 489 U.S. 468, 474, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (quoting Scherk v. Alberto-Culver Co. , 417 U.S. 506, 511, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974) ). But it does not "alter background principles of state contract law regarding the scope of agreements (including the question of who is bound by them)." Arthur Andersen LLP v. Carlisle , 556 U.S. 624, 630, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009).

The "traditional principles of state law" that apply under Chapter 1 include doctrines that authorize the enforcement of a contract by a nonsignatory. Id. , at 631, 129 S.Ct. 1896 (internal quotation marks omitted). For example, we have recognized that arbitration agreements may be enforced by nonsignatories through " ‘assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver and estoppel.’ " Ibid. (quoting 21 R. Lord, Williston on Contracts § 57:19, p. 183 (4th ed. 2001) ).

This case implicates domestic equitable estoppel doctrines. Generally, in the arbitration context, "equitable estoppel allows a nonsignatory to a written agreement containing an arbitration clause to compel arbitration where a signatory to the written agreement must rely on the terms of that agreement in asserting its claims against the nonsignatory." Id. , at 200 (2017). In Arthur Andersen , we recognized that Chapter 1 of the FAA permits a nonsignatory to rely on state-law equitable estoppel doctrines to enforce an arbitration agreement. 556 U.S. at 631–632, 129 S.Ct. 1896.


The New York Convention is a multilateral treaty that addresses international arbitration. 21 U.S.T. 2517, T.I.A.S. No. 6997. It focuses almost entirely on arbitral awards. Article I(1) describes the Convention as applying only to "the recognition and enforcement of arbitral awards." Id., at 2519. Articles III, IV, and V contain recognition and enforcement obligations related to arbitral awards for contracting states and for parties seeking the enforcement of arbitral awards. Id., at 2519–2520. Article VI addresses when an award can be set aside or suspended. Id., at 2520. And Article VII(1) states that the "Convention shall not ... deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon." Id., at 2520–2521.

Only one article of the Convention addresses arbitration agreements—Article II. That article contains only three provisions, each one sentence long. Article II(1) requires "[e]ach Contracting State [to] recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration." Id., at 2519. Article II(2) provides that "[t]he term ‘agreement in writing’ shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams." Ibid. Finally, Article II(3) states that "[t]he court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed." Ibid.


In 1970, the United States acceded to the New York Convention, and Congress enacted implementing legislation in Chapter 2 of the FAA. See 84 Stat. 692, 9 U.S.C. §§ 201 – 208. Chapter 2 grants federal courts jurisdiction over actions governed by the Convention, § 203; establishes venue for such actions, § 204; authorizes removal from state court, § 205 ; and empowers courts to compel arbitration, § 206. Chapter 2 also states that "Chapter 1 applies to actions and proceedings brought under this chapter to the extent that [Chapter 1] is not in conflict with this chapter or the Convention." § 208.


We must determine whether the equitable estoppel doctrines permitted under Chapter 1 of the FAA, see supra, at 1643 – 1644, "conflict with ... the Convention." § 208. Applying familiar tools of treaty interpretation, we conclude that they do not conflict.


"The interpretation of a treaty, like the interpretation of a statute, begins with its text." Medellín v. Texas , 552 U.S. 491, 506, 128 S.Ct. 1346, 170 L.Ed.2d 190 (2008). The text of the New York Convention does not address whether nonsignatories may enforce arbitration agreements under domestic doctrines such as equitable estoppel. The Convention is simply silent on the issue of nonsignatory enforcement, and in general,...

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