United States Court of Appeals
For the First Circuit
No. 07-2754
SOURCING UNLIMITED, INC., d/b/a JUMPSOURCE,
Plaintiff, Appellee,
v.
ASIMCO INTERNATIONAL, INC. and JOHN F. PERKOWSKI,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Lynch, Circuit Judge,
Merritt,* Senior Circuit Judge,
and Howard, Circuit Judge.
Victor Genecin with whom Colter L. Paulson, Squire, Sanders &
Dempsey L.L.P., Craig R. Smith, Thomas A. Brown, and Fish &
Richardson PC were on brief for appellants.
Keith L. Sachs with whom Florian Bruno and Metaxas, Norman &
Pidgeon, LLP were on brief for appellee.
May 22, 2008
* Of the Sixth Circuit, sitting by designation.
LYNCH, Circuit Judge. This case raises the question of
whether a corporate signatory to a written partnership agreement
that requires international arbitration of their commercial
disputes may escape arbitration of such disputes by naming as
defendants two non-signatories, on the basis that there was no
written agreement to arbitrate with those defendants. We hold the
answer is no, and reverse the contrary decision of the district
court. We remand with instructions to enter an order compelling
arbitration and to dismiss the case.
I.
Plaintiff Sourcing Unlimited, Inc., d/b/a Jumpsource, is
a Massachusetts corporation based in Danvers that provides
mechanical parts for the U.S. commercial and industrial equipment
industry. Jumpsource operates five manufacturing facilities in the
United States and China; it also maintains two offices in China and
contracts with other Chinese manufacturers to produce parts.
In late 2003, Jumpsource sought a larger manufacturing
company to help it cope with filling high-volume contracts.
Jumpsource's CEO, Michael Porter, began negotiating a business
partnership with John Perkowski, Chairman and CEO of Asimco
Technologies, Inc. ("ATL"), a Delaware corporation headquartered in
China. Those negotiations resulted in a written partnership
agreement (the "Agreement") in October 2004.
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In addition to acting as Chairman and CEO of ATL,
Perkowski was also Chairman of Asimco International, Inc.
("Asimco"). Asimco is a subsidiary of ATL and is based in
Southfield, Michigan. It was not listed as a party to the
Agreement.1
Under the Agreement, Jumpsource agreed to abandon certain
of its manufacturing operations in China and turn them over to ATL.
This freed Jumpsource to focus its efforts on sales and marketing
in the United States. The Agreement listed existing and impending
contracts held by Jumpsource and indicated how the companies would
split profits on those contracts. The companies agreed that ATL
would invoice the partnership's customers in the United States for
orders received and remit payment to Jumpsource on a monthly basis.
ATL agreed, for its part, "not to circumvent Jumpsource in
relationships" with its existing customers. The companies further
agreed to be "exclusive partner[s]" in the "U.S. Golf and Turf,
Industrial Vehicle and Light Construction Markets."
The Agreement concluded with a broadly-worded arbitration
clause and a complementary choice-of-law clause:
This agreement shall be governed by, and
construed in accordance with, the laws of the
P.R. China, without regard to conflicts of
1
"Asimco International, Inc." does not appear within the
text of the Agreement. However, above the text, on the first page
of the Agreement, appear the corporate logos of Jumpsource and ATL.
Underneath the ATL logo is printed a Beijing address for "ASIMCO
International Inc."
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laws principles thereof. Any action to
enforce, arising out of, or relating in any
way to, any of the provisions of this
agreement shall be brought in front of a P.R.
China arbitration body.
The Agreement was signed by Porter and by Wilson Ni, President of
ATL. The Agreement is not signed by any corporate subsidiary of
ATL, nor is there the usual boilerplate language binding all
corporate subsidiaries, affiliates, assigns, etc. One clause of
the Agreement, however, requires Jumpsource to keep confidential
"any information provided to Jumpsource by ASIMCO about ASIMCO or
any ASIMCO Company and its business methods."
The business relationship soured. Jumpsource filed suit
in Massachusetts Superior Court in June 2007, asserting a number of
tort, contract, and statutory claims.2 Notably, the complaint
named only Asimco and Perkowski -- not ATL -- as defendants.
The complaint alleged that in addition to the written
partnership Agreement between Jumpsource and ATL, Jumpsource had
entered into an oral contract with Perkowski. The complaint
alleged that Jumpsource and Perkowski agreed that Asimco would
deliver parts produced by the Jumpsource-ATL partnership to their
customers in the United States. Asimco would invoice the
2
The complaint contains claims for (1) intentional
interference with the Jumpsource-ATL contractual relationship; (2)
intentional interference with the Jumpsource-ATL fiduciary
relationship; (3) misrepresentation; (4) breach of contract; (5)
unjust enrichment; (6) breach of the implied covenant of good faith
and fair dealing; and (7) a violation of the Massachusetts unfair
trade practices law, Mass. Gen. Laws ch. 93A, §§ 2, 11.
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customers, retain partnership profits in the United States, and
split those profits with Jumpsource according to the terms of the
written Jumpsource-ATL Agreement. Jumpsource alleged that the
agreement with Asimco adopted the written Agreement's terms
forbidding Asimco to compete with Jumpsource in certain markets.
The complaint does not mention any oral agreement between
Jumpsource and Asimco to arbitrate their disputes, and Jumpsource
says a court must then infer that there was no such arbitration
agreement.3
The complaint described Asimco's alleged breach of the
oral contract: that Asimco inflated expenses, concealed invoices,
and attempted to generate additional business from existing
Jumpsource customers without informing Jumpsource. Asimco
allegedly rebuffed repeated requests by Jumpsource for an
accounting. When Asimco finally did provide sales figures to
Jumpsource, Asimco allegedly under-reported those numbers by $1
million and blocked Jumpsource's efforts to audit ATL's operations
in China. Asimco, allegedly, had paid Jumpsource a mere $125,000
in spite of invoicing the Jumpsource-ATL partnership's customers
close to $4 million.
3
It is not clear from the complaint in what capacity
Perkowski entered this contract, whether as Chairman and CEO of ATL
or as Chairman of Asimco. Earlier, the complaint alleged that
Perkowski proposed the Jumpsource-ATL partnership, although the
complaint does not mention Perkowski's position at ATL. Further,
the complaint alleges that ATL is Asimco's subsidiary, but in fact
the opposite is true.
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Defendants Asimco and Perkowski removed the case to the
U.S. District Court in Massachusetts on diversity grounds.
Defendants then filed motions to dismiss. Asimco's motion, in
addition to arguing that the complaint failed to state valid
claims, cited Chapter 2 of the Federal Arbitration Act ("FAA"), 9
U.S.C. §§ 201-208, as a basis for dismissal "in favor of
arbitration." Asimco Int'l, Inc.'s Mot. to Dismiss at 18, Sourcing
Unlimited, Inc. v. Asimco Int'l, Inc., No. 07-cv-11321 (D. Mass.
Aug. 31, 2007).
That citation was significant. Chapter 2 of the FAA
implements the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, Sept. 30, 1970, 21 U.S.T. 2517, T.I.A.S.
No. 6997, reprinted at 9 U.S.C.A. § 201, at 511 (West 1999)
[hereinafter New York Convention]. Chapter 2 governs how U.S.
courts treat agreements to arbitrate international commercial
disputes. Asimco's motion argued that the arbitration clause in
the Jumpsource-ATL contract was subject to Chapter 2 and the New
York Convention because (1) there was a written arbitration
agreement; (2) the agreement provided for arbitration in the
territory of a signatory to the Convention; (3) the agreement arose
in a commercial relationship; and (4) the commercial relationship
is related with a foreign state. Cf. DiMercurio v. Sphere Drake
Ins., PLC, 202 F.3d 71, 74 n.2 (1st Cir. 2000) (outlining
appropriate inquiry for applicability of Chapter 2). Jumpsource
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has not disputed that the arbitration clause in the Jumpsource-ATL
Agreement is subject to the New York Convention and Chapter 2 of
the FAA.
Asimco's motion to dismiss characterized the oral
agreement between Jumpsource and Perkowski as a modification of the
Jumpsource-ATL Agreement, not a stand-alone contract.4
Asimco argued that Jumpsource should not be permitted to
evade its obligation to arbitrate under the Jumpsource-ATL contract
by suing a non-signatory subsidiary and a corporate officer of ATL
for matters that all clearly arise from the Agreement. Asimco
framed its argument in terms of equitable estoppel, noting that the
issues Jumpsource sought to litigate "are intertwined with the
agreement that [Jumpsource] has signed." As such, Asimco requested
that Jumpsource's complaint "be dismissed in favor of arbitration"
in China.
Jumpsource responded that its claims derive not from the
Jumpsource-ATL Agreement, but from the separate oral contract
between Jumpsource and Asimco. That oral contract, unlike the
Jumpsource-ATL contract, did not contain any agreement to
arbitrate. Jumpsource denied that estoppel provided grounds for
Asimco, as a non-signatory, to invoke a right to arbitrate under
the Jumpsource-ATL partnership Agreement.
4
Asimco also contended that the oral agreement was
unenforceable under the Massachusetts Statute of Frauds. That is
not of concern in this appeal.
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On November 6, 2007, the district court issued a summary
order that, in relevant part, stated the following:
The Motion to Dismiss . . . on the ground that
arbitration must take place in China is
DENIED. [Jumpsource] is not a party to any
such contract with ASIMCO.
Order, Sourcing Unlimited, No. 07-cv-11321 (D. Mass. Nov. 6, 2007).
The district court gave no reasons to support its ruling other than
that Jumpsource had not signed an arbitration agreement with
Asimco. The net effect of the district court order is to deny
arbitration and allow the merits of the dispute to proceed in the
district court.
II.
A. Appellate Jurisdiction
Jumpsource has moved to dismiss this interlocutory appeal
for lack of appellate jurisdiction. Jumpsource's primary
contention is that appellate jurisdiction is lacking because Asimco
is not a signatory to a written arbitration agreement. We reject
the argument and hold that we have jurisdiction.
The FAA, through 9 U.S.C. § 16(a)(1), creates three
explicit statutory exceptions to the ordinary rule against
interlocutory appeals. Campbell v. Gen. Dynamics Gov't Sys. Corp.,
407 F.3d 546, 550 (1st Cir. 2005).5 The FAA authorizes
5
Otherwise, "[i]n the absence of special circumstances,
interlocutory orders are not immediately appealable." Campbell,
407 F.3d at 550.
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interlocutory appeals from district court orders disfavoring
arbitration:
An appeal may be taken from –
(1) an order --
(A) refusing a stay of any action under
[9 U.S.C. § 3],
(B) denying a petition under [9 U.S.C.
§ 4] to order arbitration to proceed,
(C) denying an application under [9
U.S.C. § 206] to compel arbitration . . . .
9 U.S.C. § 16(a). Congress enacted the FAA to implement "the
national policy favoring arbitration" and "[t]o overcome judicial
resistance to arbitration." Buckeye Check Cashing, Inc. v.
Cardegna, 546 U.S. 440, 443 (2006). Section 16 effectuates those
purposes.
Section 16(a)(1), by authorizing interlocutory appeals of
district court orders that frustrate attempts to resolve disputes
through arbitration, ensures that parties to enforceable
arbitration agreements do not have to endure unnecessary federal
court litigation before their rights under their agreements are
vindicated. See generally D. Siegel, Practice Commentary: Appeals
from Arbitrability Determinations, 9 U.S.C.A. § 16, at 494 (West
1999). By contrast, the FAA expressly precludes interlocutory
appeals from orders favoring arbitration. 9 U.S.C. § 16(b).
It is the third category of appealable interlocutory
orders, defined in § 16(a)(1)(C), that is relevant here. The FAA,
in 9 U.S.C. § 206, authorizes federal courts to compel
international arbitration according to agreements subject to the
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New York Convention. See id. § 206. Section 16(a)(1)(C), in turn,
allows interlocutory appeals of orders refusing to compel
arbitration under § 206.
Our precedent disfavors Jumpsource's argument that we
lack jurisdiction under § 16(a)(1)(C) where the party requesting
arbitration is not a signatory to the arbitration agreement at
issue. In InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003),
this court reviewed a district court order denying a motion to
compel arbitration proceedings in London. Id. at 140. Neither the
party seeking to compel arbitration nor the party resisting
arbitration were signatories to a written arbitration agreement.
Id. at 143. This court, citing 9 U.S.C. § 16(a)(1)(C), held that
"[a] party has the right to appeal immediately from an order
denying a motion to compel arbitration." Id. at 140. Only after
asserting jurisdiction did the InterGen court proceed to evaluate
the merits of the arbitrability issue. It is also true, though,
that there was no dispute between the parties in InterGen that
there was appellate jurisdiction under § 16(a)(1)(C), nor was there
extensive discussion of the issue.
On that basis, Jumpsource urges this court to adopt the
rule of two sister circuits that reject interlocutory appeals,
taken under different provisions of § 16(a)(1), from orders denying
motions to compel domestic arbitration when the parties are not
signatories to a written arbitration agreement. Jumpsource relies
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on In re Universal Service Fund Telephone Billing Practice
Litigation, 428 F.3d 940 (10th Cir. 2005) [hereinafter USF], and on
DSMC Inc. v. Convera Corp., 349 F.3d 679 (D.C. Cir. 2003). Those
decisions also hold that a theory that a non-signatory to a
domestic arbitration agreement may bind a party to arbitrate by
equitable estoppel is insufficient to create jurisdiction under
§ 16(a)(1)(A) or (B). See DSMC, 349 F.3d at 683-85. In appeals
from denials of motions to stay litigation or compel domestic
arbitration under § 16(a)(1)(A) or (B), there is a circuit split on
this question of appellate jurisdiction.6 Because we find the
reasoning of DSMC and USF inapposite to appeals under
§ 16(a)(1)(C), we do not otherwise speak to this apparent
disagreement.
Significantly, this appeal concerns an agreement to
arbitrate an international commercial dispute, which is subject to
6
The Sixth Circuit has recently joined the Tenth and D.C.
Circuits in holding that a non-signatory to a written agreement to
arbitrate domestic disputes may not appeal under § 16(a)(1). See
Carlisle v. Curtis, Mallet-Prevost, Colt & Mosle, LLP, 521 F.3d
597, 599-602 (6th Cir. 2008) (adopting DSMC in context of appeal
under § 16(a)(1)(A)). The Second Circuit has expressly repudiated
the rule in a case under § 16(a)(1)(B). See Ross v. Am. Express
Co., 478 F.3d 96, 99-100 & n.2 (2d Cir. 2007) (rejecting rule of
USF and DSMC). Several other circuits, including our own, have
also exercised jurisdiction over interlocutory appeals under
§ 16(a)(1)(A) or (B) where one or more party to the dispute was
arguably not a signatory to a written arbitration agreement. See,
e.g., Becker v. Davis, 491 F.3d 1292, 1296-97 (11th Cir. 2007);
McCarthy v. Azure, 22 F.3d 351, 354 (1st Cir. 1994). See also May
v. Higbee Co., 372 F.3d 757, 762 & n.8 (5th Cir. 2004) (noting
varying decisions within circuit).
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the New York Convention and Chapter 2 of the FAA. It thus falls
into a different category than the USF and DSMC cases, which
involved domestic arbitration agreements governed by Chapter 1 of
the FAA, 9 U.S.C. §§ 1-16. The D.C. Circuit in DSMC relied heavily
on the language of 9 U.S.C. § 4, which authorizes district courts
to compel domestic arbitration upon the motion of a "party
aggrieved by the alleged failure . . . of another to arbitrate
under a written agreement for arbitration." The D.C. Circuit
reasoned that this language applied only to a signatory's failure
to arbitrate "under a written agreement for arbitration," and "not
an alleged failure to arbitrate when principles of equitable
estoppel indicate that you should." DSMC, 349 F.3d at 683.
In contrast, Chapter 2 of the FAA employs broader
statutory language than does Chapter 1. The Chapter 2 provision
authorizing district courts to compel international arbitration
reads, "A court . . . may direct that arbitration be held in
accordance with the agreement at any place therein provided for,
whether that place is within or without the United States." 9
U.S.C. § 206. Another section in Chapter 2, which specifies the
requirements for an arbitration agreement to fall under the
Convention, states:
An arbitration agreement . . . arising out of
a legal relationship, whether contractual or
not, which is considered as commercial,
including a transaction, contract, or
agreement described in [9 U.S.C. § 2], falls
under the Convention. An agreement . . .
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arising out of such a relationship which is
entirely between citizens of the United States
shall be deemed not to fall under the
Convention unless that relationship . . . has
some . . . reasonable relation with one or
more foreign states.
9 U.S.C. § 202. We do not read anything in the language of Chapter
2 to suggest that a party seeking an appeal from an order denying
international arbitration must have signed a written arbitration
agreement firsthand.7 The statutory text does not preclude an
appeal under § 16(a)(1)(C) based on an estoppel theory, such as the
one presented here.
Furthermore, the national policy favoring arbitration has
extra force when international arbitration is at issue. See
Menorah Ins. Co. v. INX Reinsurance Corp., 72 F.3d 218, 220-21 (1st
Cir. 1995); see also David L. Threlkeld & Co. v. Metallgesellschaft
Ltd., 923 F.2d 245, 248 (2d Cir. 1991) ("The policy in favor of
arbitration is even stronger in the context of international
business transactions."). As the Supreme Court has stated,
"concerns of international comity, respect for the capacities of
foreign and transnational tribunals, and sensitivity to the need of
the international commercial system for predictability in the
7
The Convention does require some writing to render an
arbitration agreement enforceable. Article II of the Convention
contemplates "an agreement in writing" as a prerequisite to
recognizing an arbitration agreement under the treaty. Here, it is
undisputed that there is a writing. That is a separate issue,
however, from whether 9 U.S.C. § 16(a)(1)(C) allows interlocutory
appeals by non-signatories to such a written agreement.
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resolution of disputes" weigh in favor of enforcing arbitration
agreements subject to the New York Convention. Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 629 (1985);
see also Scherk v. Alberto-Culver Co., 417 U.S. 506, 516 (1974) ("A
contractual provision specifying in advance the forum in which
disputes shall be litigated and the law to be applied is . . . an
almost indispensable precondition to achievement of the orderliness
and predictability essential to any international business
transaction.").
To erect a bright-line rule that this court lacks
jurisdiction to review appeals taken under § 16(a)(1)(C) from
denials of international arbitration unless all parties to the
dispute are signatories to a written arbitration agreement would
insulate a whole class of denials of motions to compel arbitration
from review until after the litigation has run its course.8 Such
a rule would contravene the courts' obligation to enforce
arbitration agreements under the New York Convention and Chapter 2
of the FAA. InterGen, 344 F.3d at 142.
8
Courts routinely recognize that arbitration agreements
may require arbitration even where all parties to the dispute did
not sign the arbitration agreement. See, e.g., Zurich Am. Ins. Co.
v. Watts Indus., Inc., 417 F.3d 682, 687 (7th Cir. 2005)
(recognizing that non-signatories may be bound to arbitrate through
doctrines of assumption, agency, estoppel, veil piercing, and
incorporation by reference). Even the Tenth and D.C. Circuits have
left open the possibility that a court could properly compel
signatories to arbitration agreements to arbitrate with non-
signatories. USF, 428 F.3d at 945; DSMC, 349 F.3d at 683.
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A final jurisdictional argument by Jumpsource warrants
brief comment. Jumpsource argues that jurisdiction is not proper
under § 16(a)(1)(C) because defendants sought dismissal of the case
rather than labeling their motion as one "under section 206 . . .
to compel arbitration." 9 U.S.C. § 16(a)(1)(C). This elevates a
label over substance. The record shows that everyone, including
the district court, viewed this motion as one seeking to compel
arbitration, and defendants argued that if arbitration was
compelled, the case should be dismissed. A movant's choice to
request dismissal rather than a stay of proceedings during referral
to arbitration is within the ambit of § 16(a). Fit Tech, Inc. v.
Bally Total Fitness Holding Corp., 374 F.3d 1, 5-6 (1st Cir. 2004).
Asimco's motion clearly cited to Chapter 2 of the FAA and requested
dismissal "in favor of arbitration." The district court's comments
during the hearing on the motion show that the court interpreted
the motion as requesting an order compelling arbitration. The
district court's order framed the motion to dismiss as based "on
the ground that arbitration must take place in China." Jumpsource
was not misled by Asimco's invocation of the arbitration agreement
within a motion to dismiss. Cf. id. at 6.
This court has jurisdiction to review defendants' appeal
under 9 U.S.C. § 16(a)(1)(C). We next turn to the question of
whether the district court erred in denying the motion to compel
arbitration.
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B. Should the Matter Have Been Sent to Arbitration?
Because the district court's order denying the motion to
compel arbitration did not rely on any factual findings meriting
deference, we treat its decision as one of law and review the order
de novo. Campbell, 407 F.3d at 551; InterGen, 344 F.3d at 141. In
the absence of any contention from the parties to the contrary, we
apply federal common law to resolve the issues. InterGen, 344 F.3d
at 143.
The context of the case is significant. The party who is
a signatory to the written agreement requiring arbitration is the
party seeking to avoid arbitration. "A party who attempts to
compel arbitration must show that a valid agreement to arbitrate
exists, that the movant is entitled to invoke the arbitration
clause, that the other party is bound by that clause, and that the
claim asserted comes within the clause's scope." Id. at 142.
Defendants argue that although Asimco did not sign an arbitration
agreement, Jumpsource bound itself to arbitrate claims of this
nature by virtue of the arbitration clause in the Jumpsource-ATL
Agreement and is estopped from litigating claims against Asimco
that essentially arise from the terms of the Jumpsource-ATL
contract.
Equitable estoppel "precludes a party from enjoying
rights and benefits under a contract while at the same time
avoiding its burdens and obligations." Id. at 145. Federal courts
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"have been willing to estop a signatory from avoiding arbitration
with a nonsignatory when the issues the nonsignatory is seeking to
resolve in arbitration are intertwined with the agreement that the
estopped party has signed." Id. (quoting Thomson-CSF, S.A. v. Am.
Arbitration Ass'n, 64 F.3d 773, 779 (2d Cir. 1995)) (internal
quotation marks omitted); see also Sunkist Soft Drinks, Inc. v.
Sunkist Growers, Inc., 10 F.3d 753, 757-58 (11th Cir. 1993)
(estopping signatory from avoiding arbitration with nonsignatory);
Deloitte Noraudit A/S v. Deloitte Haskins & Sells, U.S., 9 F.3d
1060, 1063-64 (2d Cir. 1993) (applying estoppel to bind
nonsignatory to arbitrate international dispute); J.J. Ryan & Sons,
Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315, 320-21 (4th Cir.
1988) (referring nonsignatory parent, along with signatory
subsidiary, to international arbitration).
There is no real issue in this case about whether the
subject matter of the suit is intertwined with the subject matter
within the scope of the arbitration clause. The analysis turns on
the defendants allegedly not having executed a written agreement to
arbitrate.
The present dispute is sufficiently intertwined with the
Jumpsource-ATL Agreement for application of estoppel to be
appropriate. On these facts, there is no need to explore further
what is required to show intertwining. Most of Jumpsource's claims
either directly or indirectly invoke the terms of the Jumpsource-
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ATL Agreement. Counts one and two of Jumpsource's complaint charge
Asimco with intentional interference with contractual and fiduciary
relationships between Jumpsource and ATL. Count three recites
statements that Perkowski allegedly made to Jumpsource in the
course of negotiating the Agreement between ATL and Jumpsource as
the basis for a claim of misrepresentation.
Even if there were an enforceable oral contract between
Jumpsource and Asimco -- an issue for the arbitrator -- that
contract would still require reference to and be in part based on
the underlying Jumpsource-ATL Agreement. Cf. In re Humana Inc.
Managed Care Litig., 285 F.3d 971, 976 (11th Cir. 2002); rev'd on
other grounds sub nom PacifiCare Health Sys., Inc. v. Book, 538
U.S. 401 (2003) ("The [signatory] plaintiff's actual dependence on
the underlying contract in making out the claim against the
nonsignatory defendant is therefore always the sine qua non of an
appropriate situation for applying equitable estoppel [against the
plaintiff]."). As alleged by Jumpsource, the side oral contract
with Asimco explicitly contemplated remitting profits to Jumpsource
in accordance with the terms of the Jumpsource-ATL Agreement. The
side oral contract also allegedly reiterated the Agreement's non-
compete and exclusivity clauses. The only term in the side
contract that added anything to the existing arrangement between
Jumpsource and ATL was Asimco's assumption of ATL's duties to
invoice the partnership's customers and remit profits to
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Jumpsource. If the Jumpsource-ATL Agreement were to become void,
Asimco's contractual obligations under the side contract would be
meaningless.
The fact that the defendants are not signatories is not
a basis on which arbitration may be denied. Jumpsource is
equitably estopped. Jumpsource is bound by a written agreement to
arbitrate in China "[a]ny action to enforce, arising out of, or
relating in any way to, any of the provisions" of the Jumpsource-
ATL Agreement. All of Jumpsource's claims against Asimco
ultimately derive from benefits it alleges are due it under the
partnership Agreement. Jumpsource must seek redress through
arbitration in accordance with the terms of the arbitral clause in
the Agreement. Given the history of this case and the delay
occasioned, dismissal of the underlying complaint is appropriate.
There is no basis for the district court to supervise an
arbitration which will occur in China.
The order of the district court is reversed and remanded
with instructions to grant the motion to compel arbitration and
dismiss the action.
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