Arbitration is a creature of contract, made between consenting parties. As such, it is generally thought that those who have not signed an arbitration agreement cannot be compelled to arbitrate. While that is often the case, like most legal rules, it has its exceptions. The U.S. Court of Appeals for the Second Circuit, in Thomson-CSF, S.A. v. American Arbitration Association, recognized five: (1) incorporation by reference; (2) assumption; (3) agency; (4) veil-piercing/alter ego; and (5) estoppel.1 Courts have cited each of these common law principles as supporting arbitral jurisdiction over a non-signatory to an arbitration clause in a contract signed by other parties.2
Incorporation By Reference
A non-signatory may be compelled to arbitrate against a signatory to an arbitration agreement when that non-signatory has executed a contract that incorporates by reference the existing arbitration agreement. The converse is also true—a non-signatory in such circumstances can also compel arbitration against a signatory. In Import Export Steel v. Mississippi Valley Barge Line,3 for example, a charter party (i.e., an admiralty contract between a vessel owner and a shipper) contained the following arbitration clause:
Should any dispute arise between the Disponent Owners and the Charterers, the matter in dispute shall be referred to three persons in New York, one to be appointed by each of the parties hereto, and the third by the two so chosen, and their decision, or that of any two of them, shall be final, and, for purpose, of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be commercial men.4
