Summary

INTRODUCTION

The courts of appeals have split--the count is now 4-2--over whether federal or state law governs when a nonsignatory seeks to compel arbitration under an agreement governed by the New York Convention. After the petition was filed, the Seventh Circuit joined the Fifth Circuit's minority position here that state law applies. See Kim v. Jump Trading, LLC, No. 251964, 2026 WL 2348464, at *5 (7th Cir. Aug. 13, 2026) (published). The court acknowledged that "four circuits"--the First, Second, Fourth, and Ninth--"have held that federal common law provides the rule of equitable estoppel for agreements governed by Chapter 2," but expressly rejected those decisions, agreeing with the Fifth Circuit in this case instead. Id.

Respondents' counterarguments don't withstand scrutiny. Respondents claim there's no split because the First, Second, Fourth, and Ninth Circuit cases involved claims by or against foreign parties (unlike this case) and didn't confront outcome-determinative differences between federal and state law. But none of the decisions turned on, or is limited by, those claimed distinctions. Rather, those circuits held that a uniform federal rule of decision is necessary to effectuate the Convention's goal of promoting uniform enforcement of arbitration. Pet. 16-20. And those holdings apply no matter the parties or dispute in any particular case.

Respondents also claim that this case is a bad vehicle because (1) they dismissed their claims against the two foreign Insurers; (2) this case involves insurance contracts, which are traditionally regulated by the states; and (3) equitable estoppel can't be applied against government entities. Those arguments fail.

First, the Fifth Circuit has already rejected the argument that dismissing foreign insurers in nearly identical circumstances thwarts domestic insurers' ability to invoke equitable estoppel. See Bufkin Enterprises, L.L.C. v. Indian Harbor Insurance Co., 96 F.4th 726, 732 (5th Cir. 2024) (per curiam). Second, it doesn't matter that insurance contracts are traditionally regulated by the states because the New York Convention displaces state insurance regulation, as every court of appeals to have considered the question has held, Pet. 10, and as Respondents elsewhere (Opp. 11) acknowledge. Finally, governmental entities are immune only from estoppel arguments that would prevent them from enforcing the law or changing public policy, see New Hampshire v. Maine, 532 U.S. 742, 755-56 (2001)--not when trying to enforce commercial contracts.

The petition presents a critical, certworthy question and this case is an excellent vehicle for resolving it. The Fifth and Seventh Circuits' erroneous decisions threaten to undermine critical policies embodied in the Convention. The Court should grant review.