Current Month (February 2026)
Eleventh Circuit Binds Non-Signatory to Tribunal’s Decision Based on Executing Related Document
By Leslie A. Berkoff, Partner and Chair of Dispute Resolution Practice Group, Moritt Hock & Hamroff LLP
A recent decision by the Eleventh Circuit recognizes a scenario where a non-signatory to an agreement can still be responsible for the same. Alfredo Carlos Pott entered into a Stock Option Agreement (the “Agreement”) with World Capital Properties, Ltd. (“WCP”). The Agreement contained an arbitration clause requiring that any disputes be submitted to arbitration before the International Chamber of Commerce (“ICC”). A dispute subsequently arose, prompting Pott to commence an ICC arbitration against not only WCP but also Gonzalo Lopez-Jordan, who was not a signatory to the Agreement.
Lopez-Jordan challenged the ICC’s jurisdiction on the ground that, as a non-signatory, he was not bound by the arbitration clause. During the course of the arbitration, however, Lopez-Jordan’s counsel executed the ICC Terms of Reference, which expressly identified as an issue to be decided by the ICC whether an arbitration agreement existed between Pott and Lopez-Jordan sufficient to confer arbitral jurisdiction. The ICC ultimately concluded that it had jurisdiction over Lopez-Jordan under a veil-piercing theory and issued a final award holding Lopez-Jordan, along with others, jointly and severally liable.
Pott thereafter sought to enforce the final award against Lopez-Jordan in the U.S. District Court for the Southern District of Florida pursuant to the Inter-American Convention and the New York Convention. Lopez-Jordan challenged both the district court’s subject matter jurisdiction and the enforceability of the award against him as a non-signatory. The district court rejected these arguments and confirmed the award. On appeal, the Eleventh Circuit affirmed the decision in Pott v. World Capital Properties, Ltd., No. 24-13071 (11th Cir. Sept. 24, 2025).
In its decision, the Eleventh Circuit observed that the New York Convention is silent as to whether arbitral awards may be enforced against non-signatories. The court further held that domestic legal principles, specifically veil-piercing, could properly be applied to resolve that question. Significantly, the Court noted that Lopez-Jordan, through counsel, had signed the ICC Terms of Reference and thereby “clearly and unmistakably” consented to arbitrate the issue of whether he was bound by the arbitration agreement. Based on these facts, the Court concluded that the district court properly exercised subject matter jurisdiction to enforce the award.
The Court also rejected Lopez-Jordan’s argument that, as a non-signatory, he had not consented to be bound by any arbitral award and therefore could not be subjected to enforcement proceedings. The Court found this contention unpersuasive, reasoning that Lopez-Jordan’s explicit agreement to arbitrate arbitrability, memorialized in the signed Terms of Reference, rendered him bound by the ICC’s determination once arbitrability was established; this satisfied Article IV of the New York Convention, which requires a party seeking enforcement of a foreign arbitral award to provide the court with a copy of the award and the agreement to arbitrate. Here, Pott satisfied that requirement by submitting both the signed Terms of Reference and the ICC’s final award.
Fifth Circuit Applies Effective Vindication Doctrine to ERISA Plan Arbitration Limits on Representative and Planwide Relief
By Milica Krnjaja, Troutman Pepper Locke
The U.S. Court of Appeals for the Fifth Circuit issued a decision on February 10, 2026, holding that an ERISA plan arbitration provision’s limits on representative actions and planwide remedies violate the “effective vindication doctrine.”
The plaintiff, a former employee and plan participant, sued under ERISA §§ 502(a)(2)–(3), alleging fiduciary breaches that caused losses to a bank’s Employees’ Profit Sharing Plan and Trust. The bank defendant moved to compel arbitration based on a unilaterally adopted plan amendment adding a mandatory arbitration provision, retroactive to January 1, 2024. The provision included a jury‑trial waiver; barred class, collective, group, and other representative proceedings; and allowed only claims pursued in an individual capacity. The district court denied the motion to compel, finding no consideration under Texas law for the amended arbitration agreement. The defendant appealed.
On appeal, the Fifth Circuit distinguished between claims brought on behalf of the plan and the plaintiff’s individual claims. As to the planwide claim, the court held that the plan is the relevant contracting party and that the plan consented to arbitration through terms granting the sponsor broad unilateral amendment authority. As to the plaintiff’s individual claims, the court held they could not be compelled to arbitration because “arbitration is a matter of consent” and the plaintiff never personally agreed to arbitrate.
Separately, the court held that the arbitration clause’s requirement that all covered claims proceed solely in an individual capacity; its prohibition on class, collective, group, or other representative proceedings; and its limitation of relief to individual awards conflicted with ERISA’s remedial scheme for fiduciary‑breach claims and thus ran afoul of the effective vindication doctrine. That doctrine requires courts to invalidate arbitration agreements that operate as a prospective waiver of a party’s right to pursue statutory remedies.
The Fifth Circuit reasoned that ERISA §§ 409 and 502(a)(2) authorize participants to seek planwide relief for losses and to restore profits that fiduciaries obtain through misuse of plan assets, and that certain suits, by definition, must proceed in a representative capacity on behalf of the plan. Because the challenged provisions bar a participant from bringing such representative claims and from seeking planwide relief, the court concluded that those provisions are “facially at odds” with ERISA and operate as an impermissible waiver of statutory rights.
With this holding, the Fifth Circuit joined a growing consensus of federal appellate courts applying the effective vindication doctrine to ERISA plan arbitration clauses, including the Second, Third, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuits.
Delaware Supreme Court Upholds Recent Amendments to Section 144 of the Delaware General Corporation Law Against Constitutional Challenges
By K. Tyler O’Connell, Morris James LLP
In Rutledge v. Clearway Energy Grp. LLC, ___ A.3d ___, 2026 WL 548504 (Del. Feb. 27, 2026), the Delaware Supreme Court rejected challenges to the 2025 amendments to Section 144 of the Delaware General Corporation Law (“DGCL”) that, among other things, provided procedural “safe harbors” for controlling stockholder transactions. The amendments also defined who is a “controlling stockholder,” and they codified standards of disinterestedness and independence. By their own terms, the amendments applied retroactively, except with respect to cases already pending.
A stockholder-plaintiff brought suit after the amendments and argued they were unconstitutional under the Delaware Constitution because they diminished the equitable jurisdiction of the Court of Chancery. The plaintiff also argued the amendments impermissibly applied retroactively by eliminating causes of action that accrued before the amendments’ enactment, but for which no case had yet been filed. With the agreement of the parties, the Court of Chancery certified the constitutional questions for review by the Delaware Supreme Court. The Supreme Court agreed to hear them, agreeing there were “important and urgent reasons for an immediate determination of the questions certified.”
After noting the Supreme Court’s “strong judicial tradition” of presuming that statutes are constitutional, the Court addressed the argument that the amendments divested the Delaware Court of Chancery of its traditional equitable jurisdiction by preventing it from granting equitable relief or damages when the “safe harbors” were satisfied. As explained by the Supreme Court, the stockholder-plaintiff argued that “because [the amendment] alters the contours of corporate directors’ and officers’ fiduciary duties and the standards by which the Court of Chancery must review breach of fiduciary duty claims, it encroaches impermissibly on that court’s equity jurisdiction.”
The Supreme Court stated this contention “collapses under scrutiny.” The Supreme Court explained that the amendments do not divest the Court of Chancery of jurisdiction to hear fiduciary duty claims. Rather, they address the “review framework” and relief available for such claims. The Supreme Court reasoned the amendments were “a legitimate exercise of the [legislature]’s authority to enact substantive law that, in its legislative judgment, serves the interests of the citizens of our State.” The Court also reasoned that previous DGCL amendments affected judicial review of fiduciary duty claims. The Court provided examples, such as (i) amendments providing for exculpation from liability for breaches of the fiduciary duty of care (see 8 Del. C. § 102(b)(7)), and (ii) amendments facilitating short-form mergers (see 8 Del. C. § 253) that made “entire fairness” review inapt for such transactions. The Supreme Court reasoned that, even before the 2025 amendments, Section 144 of the DGCL already was understood to abrogate “the common law principle that interested transactions were entirely invalid.”
The Supreme Court then considered the stockholder-plaintiff’s argument that the amendments impermissibly and retroactively deprived him of property rights, in the form of fiduciary duty claims that had already accrued, without due process. The Supreme Court held that the amendments validly could be applied retroactively, as Delaware’s legislature intended, because the amendments did not “extinguish” any causes of action. The Supreme Court explained, the causes of action continued to exist, but due process does not protect an expectation that legal principles pertinent to causes of action will continue unaltered. The Supreme Court further reasoned that the amendments satisfied due process, because they reasonably related to the permissible legislative interest in adopting and modifying the Delaware General Corporation Law.
Accordingly, the Delaware Supreme Court rejected the stockholder-plaintiff’s constitutional challenges to the 2025 DGCL amendments providing “safe harbors” for certain controlling stockholder transactions.
Tyler O’Connell is a Partner at Morris James LLP in Wilmington, Delaware. Any views expressed herein are not necessarily those of the firm or any of its clients.
