GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA

140 S. Ct. 1637, 207 L. Ed. 2d 1 (2020)

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GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA

United States Supreme Court
140 S. Ct. 1637, 207 L. Ed. 2d 1 (2020)

Facts

In 2007, ThyssenKrupp Stainless USA, LLC (ThyssenKrupp) entered into three contracts with F. L. Industries, Inc. (FL) to construct mills at ThyssenKrupp’s steel-manufacturing plant in Alabama. The contracts contained an arbitration clause providing that all disputes between the parties arising from the agreement were subject to arbitration. FL subsequently subcontracted with GE Energy Power Conversion France SAS, Corp. (GE Energy) (plaintiff) to design, manufacture, and supply the motors for the mills. After GE Energy had delivered nine motors to the plant for installation, Outokumpu Stainless USA (Outokumpu) (defendant) acquired ownership of the plant from ThyssenKrupp. GE Energy’s motors subsequently failed, causing substantial damage at the plant. Outokumpu and Outokumpu’s insurers sued GE Energy to recover, but GE Energy moved to dismiss and compel arbitration based on the arbitration clauses in the contracts between FL and Thyssenkrupp. The trial court granted GE Energy’s motion after finding that the FL-Thyssenkrupp contracts included subcontractors in the definition of the parties to the agreement. The appellate court reversed, holding that under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the convention), arbitration could be compelled only if the parties had actually signed an agreement to arbitrate their disputes. According to the appellate court, because GE Energy had not signed the contracts, GE Energy could not compel arbitration. The appellate court further held that GE Energy could not enforce the arbitration agreements under the doctrine of equitable estoppel, which generally allows a nonsignatory to an agreement containing an arbitration provision to compel arbitration if a signatory to the agreement must rely on the agreement’s terms in asserting a claim against the nonsignatory. The appellate court reasoned that the equitable-estoppel doctrine conflicted with the convention’s requirement that parties actually sign the agreement to arbitrate. The United States Supreme Court granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Thomas, J.)

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