Non-Signatories Not Bound By Arbitration Agreement, 5th Circuit Rules

NEW ORLEANS - The agents of a company that entered into a contract that included an arbitration provision are not bound by that provision because they did not personally agree to arbitrate, a federal appeals court has ruled. Covington v. Aban Offshore Limited, No. 10-40449 (5th Cir.).

In an Aug. 10 opinion, the 5th Circuit U.S. Court of Appeals explained that, pursuant to the Restatement (Third) of Agency, the agents are not a party to the contract (and the arbitration provision) unless the agent and third party agree otherwise.

In September 2005, Beacon Maritime Inc. entered into a contract …