Recent SCOTUS Reversal a 'Boon for International Commerce' (The National Law Journal)
The U.S. Supreme Court's unanimous decision in GE Energy v. Outokumpu has far-reaching implications for international business.
On June 1, 2020, the U.S. Supreme Court issued a unanimous decision that vindicates international arbitration agreements, ensuring that those agreements will be enforceable in U.S. courts to the same extent as in domestic ones. The Supreme Court has long been supportive of domestic arbitration agreements and adhered to well-settled principles of contract law that allow entities who did not sign arbitration agreements to enforce them under appropriate circumstances. These principles include such fundamental concepts as agency, assignment, and corporate succession.
Jones Day partners Shay Dvoretzky and Caroline Edsall Littleton and associate Amanda Rice (all of whom represented GE Energy in the Supreme Court case) describe for The National Law Journal how, in GE Energy v. Outokumpu, the Court addressed a conflict among U.S. courts about whether those same principles are available for international arbitration agreements. The Court's holding that non-signatory enforcement doctrines apply to international arbitration agreements was a crucial victory for the international business community. Had the Court come out the other way, international arbitration agreements would have been enforceable only by those individuals who personally signed them—a result that would have disrupted international commerce, interfered with subcontracting agreements and distribution chains, and rendered the United States an outlier in the world. Instead, the Court's ruling makes clear that treaty requirements for international arbitration agreements set a floor, not a ceiling, for the enforcement of those agreements.
Reprinted with permission from the June 9, 2020, issue of The National Law Journal. © 2020 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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