One of the more frustrating issues concerning arbitration is the extent to which parties that did not sign an arbitration agreement can be compelled to arbitrate anyway. It sometimes seems that courts will bend over backwards to find ways to force parties to arbitrate even when they don’t want to. Thankfully, there are limits to a court’s power to compel non-signatories to arbitrate, as illustrated by the Eastern District of New York’s recent decision in Butto v. Collecto, Inc. Applying the two-part test from the U.S. Supreme Court’s decision in Stolt Nielsen, the Court found that the relationship between the parties was not sufficiently close enough to warrant estoppel. So, despite the fact that some courts are willing to sidestep it altogether (see our earlier post here), Stolt-Nielsen lives!
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