Summary

SUMMARY OF ARGUMENT

The Court should grant the petition for certiorari because the decision below creates a Circuit split on a matter of substantial federal interest and importance. In concluding that the Petitioners were not entitled to invoke the doctrine of equitable estoppel in order to compel arbitration under an arbitration clause entered into by foreign insurers and that was, indisputably, covered by the New York Convention, the Fifth Circuit held that Louisiana state law, not federal common law, governs a nonsignatory's right to compel arbitration pursuant to the equitable estoppel doctrine. Specifically, the Fifth Circuit held that the arbitration clause at issue, as invoked by domestic insurers, concerned a subject matter that, under the local law of Louisiana, was not capable of settlement by arbitration and, for this reason, those domestic insurers were unable to use equitable estoppel to compel arbitration under that clause. In reaching that holding, the Fifth Circuit appeared to be of the view that its reliance on state law was mandated by this Court's decision in Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009).

The Fifth Circuit's holding was in error. It held that state law should govern issues of equitable estoppel even where the arbitration agreement at issue is covered by the Convention. That conclusion overlooked this Court's decision in GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 590 U.S. 432, 445 (2020), which expressly left open the question of whether, in cases concerning arbitration agreements subject to the Convention, state or federal common law applies to an equitable estoppel claim. In so doing, the Court below diverged, without explanation or analysis, from the clear consensus of courts considering the issue-- including the Courts of Appeal for the First, Second, Fourth and Ninth Circuits--that federal common law should govern application of the equitable estoppel doctrine in Convention cases, thus contravening and undercutting the strong national and international interests in uniformity in decisions interpreting and applying the Convention. Moreover, that divergence was intentional: the Fifth Circuit "doubled down" on its position by both denying the petition for rehearing en banc3 and continuing, in a subsequent decision, to adhere to it.4

This Court should grant the petition for certiorari and clarify that, in the context of arbitration clauses that are covered by the Convention, (a) issues of equitable estoppel are governed by federal common law and (b) in particular, federal, not state, law governs the question of whether the arbitration agreement on which the claim to equitable estoppel is predicated concerns a subject matter that is not arbitrable.

...

Footnotes omitted