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GE Energy Power Conversion France SAS v. Outokumpu Stainless USA LLC

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Supreme Court of the United States
GE Energy Power Conversion France SAS v. Outokumpu Stainless USA LLC
Term: 2019
Important Dates
Argument: January 21, 2020
Decided: June 1, 2020
Outcome
Reversed and remanded
Vote
9-0
Majority
Clarence Thomas • Chief Justice John G. Roberts • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh
Concurring
Sonia Sotomayor


GE Energy Power Conversion France SAS v. Outokumpu Stainless USA LLC is a case argued before the Supreme Court of the United States on January 21, 2020, during the court's October 2019-2020 term. The case came on a writ of certiorari to the United States Court of Appeals for the 11th Circuit. It concerned the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The court reversed the decision of the United States Court of Appeals for the 11th Circuit in a unanimous ruling, holding the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not conflict with doctrines in state law that allow the enforcement of arbitration agreements by nonsignatories to those agreements.[1] Click here for more information.

HIGHLIGHTS
  • The case: Outokumpu Stainless USA LLC ("Outokumpu") contracted with Fives St. Corp. ("Fives") to provide equipment for its steel plant in Alabama. Fives subcontracted with GE Energy Power Conversion France SAS ("GE Energy"), a foreign corporation, to supply the equipment. The contracts between Outokumpu and Fives and between Fives and GE Energy contained arbitration clauses. The equipment was installed between 2011 and 2012 but failed by 2015. Outokumpu sued GE Energy in Alabama state court. The case was moved to federal district court, which dismissed the case and compelled Outokumpu to undertake arbitration proceedings. On appeal, the 11th Circuit Court of Appeals reversed the district court's decision to compel arbitration. GE Energy appealed to the U.S. Supreme Court for review, arguing the 11th Circuit's decision underlined a 2-to-2 circuit court split.[2][3]
  • The issue: Whether the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") permits a non-signatory to an arbitration agreement to compel arbitration based on the doctrine of equitable estoppel.[4]
  • The outcome: The court reversed the decision of the United States Court of Appeals for the 11th Circuit in a unanimous ruling, holding the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not conflict with doctrines in state law that allow the enforcement of arbitration agreements by nonsignatories to those agreements.[1]


    • You can review the lower court's opinion here.

    Timeline

    The following timeline details key events in this case:

    • June 1, 2020: The U.S. Supreme Court reversed the 11th Circuit's ruling and remanded the case.
    • January 21, 2020: The U.S. Supreme Court heard oral argument.
    • June 28, 2019: The U.S. Supreme Court agreed to hear the case.
    • February 7, 2019: GE Energy Power Conversion France SAS, Corp., the petitioner, filed a petition with the U.S. Supreme Court.
    • August 30, 2018: The 11th Circuit affirmed in part and reversed in part the Southern District of Alabama's ruling and remanded the case.

    Background

    Outokumpu Stainless USA LLC ("Outokumpu") operates a steel plant in Calvert, Alabama. Outokumpu's predecessor contracted with Fives St. Corp. ("Fives") to provide three cold rolling mills for the plant. Fives subcontracted with GE Energy Power Conversion France SAS ("GE Energy"), a foreign corporation, to supply the motors needed for the cold rolling mills. The contracts between Outokumpu's predecessor and Fives and between Fives and GE Energy contained arbitration clauses.[2][3]

    The motors were manufactured in France and installed in Alabama between 2011 and 2012. However, motors from all three of the mills failed by August 2015. After it was unable to resolve the motor failures with GE Energy, Outokumpu filed suit in Alabama state court in 2016. The case moved to federal district court. GE Energy moved to dismiss the litigation and compel arbitration. The district court granted GE Energy's motion, finding the claims related to an arbitration agreement under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The court dismissed the case and compelled Outokumpu to undertake arbitration proceedings.[2]

    On appeal, the 11th Circuit Court of Appeals affirmed in part and reversed in part the district court's ruling. Specifically, the circuit court reversed the district court's decision to compel arbitration. The case was remanded to the district court.[2]

    GE Energy filed a petition for a writ of certiorari on February 7, 2019. In its petition, GE Energy questioned the 11th Circuit's ruling, writing, "The Eleventh Circuit held that a non-signatory cannot compel arbitration if one of the parties is a foreign entity. That erroneous holding deepens a 2-to-2 circuit split and warrants this Court’s review."[3]

    Questions presented

    The petitioner presented the following questions to the court:

    Questions presented:

    Whether the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") permits a non-signatory to an arbitration agreement to compel arbitration based on the doctrine of equitable estoppel.[4]

    Outcome

    In a unanimous opinion, the court reversed the judgment of the United States Court of Appeals for the 11th Circuit and remanded the case. The court held that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not conflict with doctrines in state law that allow the enforcement of arbitration agreements by nonsignatory parties.[1]

    Justice Clarence Thomas delivered the opinion of the court. Justice Sonia Sotomayor filed a concurring opinion.

    Opinion

    In his opinion, Justice Thomas wrote:

    “ The question in this case is whether the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U. S. T. 2517, T. I. A. S. No. 6997, conflicts with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by nonsignatories. We hold that it does not.[5] ”
    —Justice Thomas[1]

    Concurring opinion

    Justice Sotomayor filed a concurring opinion.

    In her concurring opinion, Justice Sotomayor wrote:

    “ I agree with the Court that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U. S. T. 2517, T. I. A. S. No. 6997 (New York Convention), does not categorically prohibit the application of domestic doctrines, such as equitable estoppel, that may permit nonsignatories to enforce arbitration agreements. I note, however, that the application of such domestic doctrines is subject to an important limitation: Any applicable domestic doctrines must be rooted in the principle of consent to arbitrate. [5] ”
    —Justice Sotomayor[1]

    Text of the opinion

    Read the full opinion here.

    Oral argument

    Audio

    Audio of oral argument:[6]



    Transcript

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 Supreme Court of the United States, GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, decided June 1, 2020
    2. ↑ 2.0 2.1 2.2 2.3 United States Court of Appeals for the 11th Circuit, Outokumpu Stainless USA LLC v. GE Energy Power Conversion France SAS, decided August 30, 2018
    3. ↑ 3.0 3.1 3.2 Supreme Court of the United States, GE Energy Power Conversion France SAS v. Outokumpu Stainless USA LLC: "Petition for a writ of certiorari," accessed July 1, 2019
    4. ↑ 4.0 4.1 Supreme Court of the United States, GE Energy Power Conversion France SAS v. Outokumpu Stainless USA LLC: "Questions presented," accessed July 1, 2019
    5. ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ Supreme Court of the United States, "Oral Argument - Audio," accessed January 27, 2020
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