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E.I. Dupont de Nemours and Co. v. Rhone Poulenc Fiber and Resin Intermediates

No principles of contract or agency law required that parent corporation submit to contractual arbitration based on terms of joint venture agreement executed by subsidiary.

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Argued: September 5, 2001

OPINION OF THE COURT

In 1996, after years of negotiation, a Joint Venture Agreement (“the Agreement”) was entered into between DuPont China (“DPC”), Rhone Poulenc Fiber and Resin Intermediates (“Rhodia Fiber”), and Liaoyang Petro-Chemical Fiber Company (“LYPFC”), a Chinese entity. DPC and Rhodia Fiber are subsidiaries of E.I. DuPont de Nemours and Company (“DuPont”) and Rhodia, SA (“Rhodia”),*fn1 respectively. The object of the 50-year joint venture was to create Sanlong Nylon Company Limited (“Sanlong”) to research, manufacture, and sell certain fibers. The joint venture ultimately failed and DuPont, the parent of DPC, brought suit against Rhodia Fiber and its parent, Rhodia, to recover, DuPont says, not for breach of the Agreement, to which it was not a party, but rather for breach of an oral agreement and fraudulent misrepresentations which occurred much later in time and as a result of which it was damaged. Rhodia Fiber and Rhodia moved to dismiss the complaint on various grounds and to compel arbitration. The District Court denied that motion in all respects, and an appeal was taken from the denial of the motion to compel arbitration and the denial of the motion to dismiss for lack of personal jurisdiction. We will affirm as to the former and dismiss the appeal as to the latter.

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