STORY FROM: Reinsurance & Arbitration

Payment Bond Did Not Incorporate Arbitration Clause, Ind. Federal Judge Rules

INDIANAPOLIS — An Indiana federal judge has refused to compel arbitration of a payment dispute between a subcontractor and two sureties, ruling that the payment bond to which the sureties were parties did not incorporate the subcontract and its arbitration provision, to which the sureties were not parties.

On Oct. 17, Judge Jane Magnus-Stindon of the U.S. District Court for the Southern District of Indiana said the sureties cited no authority for their proposition that a non-signatory can invoke an arbitration provision that was not expressly incorporated into a contract to which the non-signatory is a party.

On April 8, ...

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