Of International Commercial Arbitration, Non-Signatories, and American Federalism: The Case for a Federal Equitable Estoppel Rule

41 Pages Posted: 30 Apr 2020 Last revised: 8 Dec 2020

See all articles by Tamar Meshel

Tamar Meshel

University of Alberta - Faculty of Law

Date Written: February 1, 2020

Abstract

In this article I set out to promote clarity and consistency in cases involving non-signatories to international commercial arbitration agreements and the commonly used, albeit contentious, doctrine of equitable estoppel. Part I briefly introduces the origins of the doctrine and examines
its development internationally and in the United States in the context of non-signatories
to arbitration agreements. In Part II, I explore two areas of disagreement emerging from decisions of the circuit courts regarding equitable estoppel: (1) whether the doctrine is available at all in cases involving non-signatories to international commercial arbitration agreements, and, if so, (2) whether state or federal law should govern its application. I also assess this jurisprudence against the
internationally accepted interpretation of the New York Convention and general practice in international commercial arbitration. In Part III, I argue that the application of the equitable estoppel doctrine by or against non-signatories to international commercial arbitration agreements should be considered a matter of federal statutory interpretation informed by the pro-enforcement policy of the FAA. Accordingly, I propose a federal equitable estoppel rule of statutory interpretation to be applied across the federal courts in order to ensure both certainty and compliance with international commercial arbitration norms. This federal equitable estoppel rule has three interrelated elements. First, it makes equitable estoppel uniformly available under the FAA in cases involving non-signatories to international commercial arbitration agreements. Second, it provides that federal, rather than state law, governs the application of equitable estoppel in these cases. Third, it guides such application and sets out its limits. Finally, Part IV concludes that the split among the
circuit courts on some of these questions runs afoul of the goals and spirit of both the
New York Convention and the FAA and undermines the United States' position as a pro-arbitration jurisdiction. In order to prevent contradictory decisions in the future, equitable estoppel should be uniformly applied as a matter of federal law in international commercial arbitration cases involving non-signatories.

Keywords: international commercial arbitration, non-signatories, equitable estoppel, federalism, United States Supreme Court, Federal Arbitration Act

JEL Classification: K19, K29

Suggested Citation

Meshel, Tamar, Of International Commercial Arbitration, Non-Signatories, and American Federalism: The Case for a Federal Equitable Estoppel Rule (February 1, 2020). 56(2) Stanford Journal of International Law 123 (2020), Available at SSRN: https://ssrn.com/abstract=3569099

Tamar Meshel (Contact Author)

University of Alberta - Faculty of Law ( email )

Law Centre (111 - 89 Ave)
University of Alberta
Edmonton, Alberta T6G 2H5
Canada

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