Setty v.. Shrinivas Sugandhallayah, LLP, No. 18-35573 (9th Cir. 2021)Annotate this Case
In a prior opinion, the Ninth CIrcuit held that SS Mumbai could not equitably estop SS Bangalore from avoiding arbitration. Mumbai, a non-signatory to a partnership deed that contained an arbitration provision, argued that, based on the arbitration provision, Indian law applied to the question of whether it could compel Bangalore to arbitrate.
The Supreme Court vacated and remanded based on its holding that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not conflict with the enforcement of arbitration agreements by non-signatories under domestic law equitable estoppel doctrines.
On remand, the Ninth Circuit affirmed the district court’s order denying Mumbai’s motion to compel arbitration. While a nonsignatory can compel arbitration in a Convention case, the allegations, in this case, do not implicate the arbitration clause—a prerequisite for compelling arbitration under the equitable estoppel framework. The court declined to apply Indian law because whether Mumbai could enforce the partnership deed as a non-signatory was a threshold issue for which it did not look to the agreement itself. The deed’s arbitration provision applied to disputes “arising between the partners” and not also to third parties such as Mumbai.
This opinion or order relates to an opinion or order originally issued on June 6, 2019.