Delaware Business Litigation Report

Court Of Chancery Explains When A Non Party May Be Made To Arbitrate

Kuroda v. SPJS Holdings, L.L.C. , C.A. 4030-CC (November 30, 2010)

Of course the parties to an agreement may be compelled to arbitrate any dispute if that is what their agreement provides.  But when may a non-party to an agreement with an arbitration clause also be made to arbitrate a dispute with one of the parties?   The short answer is not too often.

This decision carefully explains the exceptions to the rule that only the parties to the arbitration agreement may be made to go to arbitration. The exceptions are: (1) incorporation by reference, (2) assumption, (3) agency, (4) veil piercing/alter ego, (5) third-party beneficiary and (6) equitable estoppel.

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