This article examines the potential responsibilities of nonsignatories regarding a final award by considering court treatment of nonsignatories in arbitration agreements. In particular, this article argues that the duty to arbitrate can and should be extended to provide courts with the authority to require those nonsignatories to satisfy awards. Doing so provides parties with clarity regarding award confirmation proceedings and discourages parties from potentially structuring their assets to avoid paying an award.
Part I presents the unique relationship of veil piercing and arbitration, highlighting how a nonsignatory may be involved in the legal proceedings during the enforcement of an award. Part II presents the complex jurisdictional, procedural, and arbitral issues that arise when an arbitral party refuses to comply with court-enforced awards. Part III recommends solutions to the issues raised in Part II, arguing that courts should be empowered to pierce the corporate veil when necessary or by an amendment to the Federal Arbitration Act by Congress.
The article concludes that courts should pierce through the “double veil,” out of the confines of the original signatories to the arbitration agreement, to reach the alter-ego of a signatory. The article further highlights the need for a uniform test to determine when to pierce the double veil of the arbitration agreement and the alter-ego.