USA – FLORIDA Trends and Developments Contributed by: Harry Burnett, Barry Kamar, Renzo Seminario Córdova and Marcio Vasconcellos, King & Spalding LLP
and Inversiones are wrong, and clearly so”) ( Hidroeléc- trica at 889). With this important precedent, the Elev - enth Circuit joins the Second, Third, Fifth and Seventh Circuits in applying Section 10 of the FAA to review arbitral awards issued in the United States, and not the New York Convention (“This is how the Second, Third, Fifth, and Seventh Circuits have interpreted the Convention”) ( Hidroeléctrica at 886). While some may criticise Hidroeléctrica Santa Rita for possibly eliminating an advantage to international arbitrations seated in Florida – namely, that arbitral awards were harder to vacate under Industrial Risk – the new precedent aligns the Eleventh Circuit with other important circuits in the United States, which brings greater predictability to international arbitral awards issued in Florida. In the authors’ view, this is a positive development, although one that should not be overstated since the factual scenarios that would lead to annulments under the New York Convention should not be fundamentally distinct from those under Section 10 of the FAA. Evidence of this is that the award in Hidroeléctrica Santa Rita was still upheld under the supposedly broader grounds under Sec - tion 10 of the FAA. See Hidroeléctrica Santa Rita S.A. v Corporación AIC, SA , 684 F. Supp. 3d 1277, 1284 (S.D. Fla. 2023), aff’d sub nom. Hidroeléctrica Santa Rita S.A. v Corporación AIC, SA , 119 F.4th 920 (11th Cir. 2024) (“because the Court has found no grounds upon which to refuse to recognize or enforce the arbi - tration award, and no grounds on which to vacate the award, the Court must confirm the award”). Arbitration agreements may be enforced against non-signatory third parties In Various Insurers v Gen. Elec. Int’l, Inc. , 131 F.4th 1273 (11th Cir. 2025), the Eleventh Circuit held that various insurers were bound to arbitrate disputes as subrogees of the signatory party. As the US Supreme Court noted in Arthur Andersen LLP v Carlisle , 556 U.S. 624, 631 (2009), arbitration agreements may be enforced “by or against” non-signatories through various common law theories. In Various Insurers , the Eleventh Circuit demonstrated the application of such a theory in the case of third-party beneficiary insurers. The case arose out of a catastrophic turbine failure at an Algerian power plant. The parent company (SNC)
of the owner of the plant (SKH) had entered into a services contract with GE International providing for arbitration. After compensating SKH for certain loss - es, various insurers “stood in SKH’s shoes” and sued various GE entities in the United States. GE moved to compel arbitration, arguing that even though SKH was not a signatory, it was a third-party beneficiary of the services contract, and thus its insurers were bound by the arbitration clause via subrogation. ( Various Insur- ers at 1275–6.) The district court compelled arbitration and the Elev - enth Circuit affirmed. The Court stated (at 1277) that parties to a contract may create rights in favour of a third party “by manifesting an intention to do so”. When that manifestation is apparent, the third-par - ty beneficiary can be compelled to arbitrate on the demand of a signatory to the contract if that con - tract contains an arbitration clause. In Various Insur- ers , the applicable test for ascertaining “third-party beneficiary status is whether the contract reflects the express or implied intention of the parties to benefit the third party”. Ultimately, the Court held (at 1279) that SKH was a third-party beneficiary of the services contract entered into by its parent SNC because of the “repeated ref - erences and rights afforded to SKH”, which “demon - strate the parties’ intent that the Services Contract’s performance would benefit SKH” and that in some instances “SKH would enjoy the right to unilaterally direct those benefits or exercise contractual rights”. Therefore, because the insurers stepped into SKH’s shoes through subrogation, they were bound by the same arbitration obligation as SKH itself. Parties may waive their right to arbitrate by failing to comply with arbitration obligations In Merritt Island Woodwerx, LLC v Space Coast Credit Union , 137 F.4th 1268 (11th Cir. 2025), the Eleventh Circuit clarified that a party’s failure to comply with institutional rules may amount to a waiver of the right to arbitrate. The case stems from a master services agreement (MSA) that included an arbitration clause selecting the American Arbitration Association (AAA) as the administering institution and providing a fall - back provision allowing the parties to choose a forum if the AAA was unavailable and no substitute insti -
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