Arbitration clauses are not always challenged directly. Often, the challenge is more subtle: a claimant brings court proceedings against both the contractual counterparty and an additional defendant who never signed the arbitration agreement, i.e., a non-signatory or third party. The question then becomes whether that party structure is enough to keep the dispute in court.
In most cases, it is not.
That said, the position is not identical in every jurisdiction. Courts in some jurisdictions are prepared to let non-signatories rely on, or even be bound by, arbitration agreements in some cases. Others will preserve arbitration between the signatories but remain cautious about drawing true outsiders into the arbitral process.
This article considers the position in the United States, England, France and the United Arab Emirates.
United States
U.S. courts are generally reluctant to let claimants avoid arbitration by adding non-signatory defendants. Although arbitration is based on consent, U.S. courts recognise several doctrines under which a non-signatory may enforce, or be bound by, an arbitration agreement. These include equitable estoppel, agency, alter ego, veil-piercing, assignment and related contract-law principles.
In Flota Petrolera Ecuatoriana EP v. Sudhaus et al. (E.D. Pa. May 27, 2026), the defendants asked the court to compel FLOPEC to arbitrate and to stay the court proceedings. FLOPEC resisted, arguing that only one defendant had signed the relevant contracts containing the arbitration agreements, while other defendants were “complete strangers” to them (p. 10) (see also our note on the case here). The United States District Court for the Eastern District of Pennsylvania rejected that argument. Applying New York estoppel principles, it held that a signatory may be prevented from avoiding arbitration with non-signatories where the issues are intertwined with the signed agreement. FLOPEC’s own pleadings alleged that the defendants acted together in the same tanker-pool arrangements and participated in the same scheme. The court therefore allowed the non-signatory defendants to compel arbitration and stayed the court proceedings.
In Bufkin Enterprises, L.L.C. v. Indian Harbor Insurance Company, No. 23-30171 (5th Cir. 2024), the claimant sued domestic insurers, later added foreign insurers, and then dismissed the foreign insurers. The domestic insurers sought to compel arbitration under an arbitration clause in the insurance policy. The Fifth Circuit reversed the district court’s refusal to compel arbitration, holding that equitable estoppel applied because Bufkin’s own pleadings alleged substantially interdependent and concerted misconduct by both the domestic and foreign insurers. Bufkin had treated the insurers collectively and had not meaningfully separated their alleged conduct.
In Dodds v. Pulte Home Corp., 909 A.2d 348 (Pa. Super. Ct. 2006), homebuyers tried to avoid arbitration by suing the builder’s alleged parent company, Pulte Home Corporation, which was not a signatory to the purchase agreements containing the arbitration clauses. The Pennsylvania Superior Court rejected that approach. It held that adding the non-signatory parent company did not defeat arbitration. The parent company’s interests were aligned with those of the signatory subsidiary, and the court reasoned that an arbitration agreement “would be of little value if a party could obviate the effect of the agreement merely by finding a way to join another party” (para. 12).
Together, these cases show that U.S. courts focus on the substance of the dispute rather than the claimant’s chosen party structure. Where the claims against signatories and non-signatories are intertwined, closely connected to the contract, or pleaded as part of the same alleged misconduct, adding a non-signatory defendant will generally not prevent arbitration.
England
Under Section 9(4) of the English Arbitration Act 1996, English courts must stay court proceedings where the dispute falls within a valid arbitration agreement, unless the agreement is null and void, inoperative, or incapable of being performed. Adding a non-signatory defendant therefore does not usually defeat arbitration for the parties and claims covered by the clause.
The harder question is whether the non-signatory itself can be brought into the arbitration. English courts are relatively strict on this point. A third party will not usually be bound simply because it is connected to the dispute or belongs to the same corporate group. A recognised legal basis is needed, such as agency, assignment, novation, succession, third-party rights, consent, or, in exceptional cases, veil-piercing (see also our related note here).
The UK Supreme Court’s decision in Dallah v Pakistan [2010] UKSC 46 illustrates this consent-based approach. In this case, an arbitral award had been rendered against the Government of Pakistan, although the relevant arbitration clause was contained in an agreement signed by Dallah and a separate trust. The Supreme Court refused enforcement of the award because, on the evidence, Pakistan had not agreed to be bound by the arbitration agreement. The Court emphasised that an arbitral tribunal may rule on its own jurisdiction, but it cannot finally determine its own jurisdiction against a party that never agreed to arbitrate. The enforcing court must decide for itself whether a valid arbitration agreement existed.
Similarly, in Peterson Farms Inc. v C&M Farming Ltd. [2004] EWHC 121 (Comm), the English Commercial Court rejected an attempt to recover losses suffered by non-signatory companies in the same corporate group. The arbitral tribunal had relied partly on the “group of companies” doctrine, but the court held that this doctrine forms no part of English law. The court set aside the relevant part of the award for lack of jurisdiction, stressing that the identification of the parties to an arbitration agreement is a matter of substantive law, not a matter of general commercial convenience.
To sum up, in England, a claimant generally cannot avoid arbitration merely by adding a non-signatory defendant, but English law remains strict about compelling that non-signatory to arbitrate. This differs from the U.S. approach, where courts appear more willing to use doctrines such as equitable estoppel to prevent party-structure pleading from defeating arbitration.
France
France takes one of the most arbitration-friendly approaches to non-signatories.
Under Article 1448 of the French Code of Civil Procedure, when a dispute subject to an arbitration agreement is brought before a French court, the court must decline jurisdiction unless the arbitration agreement is manifestly void or manifestly inapplicable.
French law is comparatively liberal in extending arbitration agreements to non-signatories (see further our note about Arbitration in France). Unlike English law, which remains closely tied to consent, privity and recognised contractual routes, French courts look at the parties’ common intention and the economic reality of the transaction. A non-signatory may be bound where it was directly involved in the negotiation, performance, or termination of the contract containing the arbitration clause, and knew of the clause.
The contrast with England is particularly clear in Dallah. As mentioned above, in Dallah v Pakistan [2010] UKSC 46, the UK Supreme Court refused to bind Pakistan to the arbitration agreement because there was insufficient objective evidence that Pakistan had agreed to arbitrate. By contrast, in the French proceedings arising from the same dispute, the Paris Court of Appeal, in 2011, upheld the award against Pakistan, finding that Pakistan had behaved as the true party to the contract and could therefore be bound by the arbitration clause.
The same liberal approach is reflected in the Dow Chemical France v Isover case, where an ICC tribunal held that an arbitration clause signed by one company could extend to other companies in the same corporate group where they had played a decisive role in the negotiation, performance, or termination of the contract. This is the well-known “group of companies” approach, which English law does not accept.
Thus, adding a non-signatory defendant is unlikely to defeat arbitration in France. French courts are more willing than English courts to bind non-signatories where they were involved in the contractual operation, and the circumstances show a common intention to arbitrate.
United Arab Emirates
Onshore UAE law starts from a formal consent-based model. Under Article 8(1) of the UAE Arbitration Law (Federal Law No. 6 of 2018), if a valid arbitration agreement exists, the court must declare the claim before it inadmissible if the defendant invokes the arbitration clause at their first opportunity, unless the arbitration agreement is null and void or incapable of being performed.
While recent onshore UAE court decisions show a more arbitration-supportive trend in some matters, onshore UAE law remains strict where consent to arbitration is concerned and extension of an arbitration clause to a non-signatory appears difficult. The writing requirement is strictly applied, and the authority of the person signing the arbitration agreement remains critical. UAE courts have annulled arbitration agreements or awards where the signatory lacked proper authority (see, e.g., Dubai Court of Cassation Case No. 445/2025/24; Abu Dhabi Court of Cassation Case No. 902/2024).
In a 2025 decision, the Dubai Court of Cassation blocked an attempt to avoid arbitration by adding a company that had not signed the shareholders’ agreement containing the arbitration clause (Dubai Court of Cassation No. 956/2025 Commercial). The dispute arose from a shareholders’ agreement containing an arbitration clause. Although the claimant sued both the shareholder-manager and the company, seeking unpaid profits and registration of his 40% shareholding on the company’s licence, the Court held that the company’s inclusion did not, by itself, make it a genuine party to the dispute.
The Court confirmed that where some defendants are not parties to an arbitration agreement, the dispute may proceed before the courts only if the non-signatory defendant is a real and necessary party. Mere joinder is insufficient. A non-signatory will be treated as a genuine party only where it is a party to the contract underlying the claim, has a direct interest in the dispute, or is connected to the right being litigated.
On the facts, the Court found that the real dispute was between the claimant and the shareholder-manager under the shareholders’ agreement. The company was not a party to that agreement and had no genuine role in the dispute. The requested relief could be pursued against the shareholder-manager, who was the registered shareholder and manager of the company. Accordingly, the Court held that the dispute fell within the scope of the arbitration clause and that the Dubai courts lacked jurisdiction.
The Court therefore overturned the Court of Appeal’s judgment and reinstated the Court of First Instance’s ruling dismissing the claim as inadmissible due to the arbitration agreement. The decision reinforces the UAE courts’ pro-arbitration approach and confirms that adding a nominal non-signatory defendant will not, without more, defeat an otherwise applicable arbitration clause.
For more about the jurisdiction, you may refer to our note on Arbitration in the UAE.
Bottom Line
Across the jurisdictions reviewed, adding a non-signatory defendant will rarely be enough, by itself, to avoid arbitration. Courts generally preserve arbitration for the parties and claims covered by the arbitration clause, although they differ on how readily they will allow the non-signatory itself to rely on, or be bound by, that clause. The U.S. and France are comparatively more flexible, England is more cautious, and the UAE remains formalistic on consent and authority, but the overall conclusion is the same: party-structure tactics alone will usually not defeat arbitration.
