UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

BALKRISHNA SETTY, individually No. 18-35573 and as general partner in Shrinivas Sugandhalaya Partnership with D.C. No. Nagraj Setty; SHRINIVAS 2:17-cv-01146- SUGANDHALAYA (BNG) LLP, RAJ Plaintiffs-Appellees,

v. OPINION SHRINIVAS SUGANDHALAYA LLP, Defendant-Appellant.

On Remand from the United States Supreme Court

Filed July 7, 2021 Before: Dorothy W. Nelson, Johnnie B. Rawlinson, and Carlos T. Bea, Circuit Judges.

Opinion by Judge D. W. Nelson; Dissent by Judge Bea 2 SETTY V. SHRINIVAS SUGANDHALAYA

SUMMARY **

Arbitration

On remand from the Supreme Court, the panel affirmed the district court’s order denying defendant’s motion to compel arbitration against plaintiffs pursuant to the New York Convention and to grant a stay pending arbitration.

In a prior opinion, the panel held that defendant Shrinivas Sugandhalaya LLP (“SS Mumbai”) could not equitably estop plaintiffs Balkrishna Setty and Shrinivas Sugandhalaya (BNG) LLP (collectively, “SS Bangalore”) from avoiding arbitration. SS Mumbai was a non-signatory to a partnership deed that contained an arbitration provision. The Supreme Court granted certiorari, vacated the Court of Appeals’ judgment, and remanded for further consideration in light of GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020).

SS Mumbai argued that, based on the arbitration provision, Indian law applied to the question whether SS Mumbai could compel Bangalore to arbitrate. The panel declined to apply Indian law because whether SS Mumbai could enforce the partnership deed as a non-signatory was a threshold issue for which the panel did not look to the agreement itself. Moreover, the deed’s arbitration provision applied to disputes “arising between the partners” and not also to third parties such as SS Mumbai.

** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. SETTY V. SHRINIVAS SUGANDHALAYA 3

In this case involving the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, or New York Convention, the panel applied federal substantive law in determining the arbitrability of federal claims by or against non-signatories to the arbitration agreement. On remand following GE Energy (holding that the New York Convention does not conflict with the enforcement of arbitration agreements by non-signatories under domestic- law equitable estoppel doctrines), the panel accepted that a non-signatory could compel arbitration in a New York Convention case. The panel concluded, however, that as a factual matter, the allegations here did not implicate the agreement that contained the arbitration clause—a prerequisite for compelling arbitration under the equitable estoppel framework. Accordingly, the district court did not abuse its discretion in rejecting SS Mumbai’s argument that SS Bangalore should be equitably estopped from avoiding arbitration.

Dissenting, Judge Bea would hold that whichever background body of state contract law that governs the arbitration agreement governs equitable estoppel claims to compel arbitration under the Federal Arbitration Act, regardless whether the arbitration agreement is primarily governed by the FAA or the New York Convention, and would remand to the district court for the district court to perform the choice of law analysis in the first instance. 4 SETTY V. SHRINIVAS SUGANDHALAYA

COUNSEL Brian W. Esler and Vanessa L. Wheeler, Miller Nash Graham & Dunn LLP, Seattle, Washington, for Defendant- Appellant. Scott S. Brown, M