A delegation clause that gave the arbitrators “exclusive jurisdiction over the entire matter in dispute, including any question as to its arbitrability,” was found insufficient to require submission to the arbitrators of whether a non-signatory to the arbitration agreement was subject to it. The court so held because the arbitration agreement did not “clearly and unmistakably” evidence an agreement by the non-signatory to have an arbitrator determine whether the agreement was arbitrable. Rather, nothing in the agreement “mention[ed]” or “reference[d]” the non-signatory.
The court distinguished cases wherein the non-signatory was successful in compelling a signatory to arbitrate. The court reasoned that, while the signatory in those cases could not disown its agreed-to obligation to arbitrate all disputes, the non-signatory in this case had never made such an agreement. Furthermore, one of the cases involved a party that was undeniably a successor-in-interest to a signatory, a fact that was contested in this case.
The court found these distinctions significant, and, in the absence of a “clear and unmistakable” reference in the arbitration agreement indicating the non-signatory was subject to the agreement, determined that it would decide this question of arbitrability, rather than submit it to the arbitrators pursuant to the delegation clause. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Stucco Sys., LLC, 17 Civ. 7936 (USDC S.D.N.Y. Jan. 26, 2018).
This post written by Benjamin E. Stearns.
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