by Steven R. Paradise and Michael S. Davi

While it is axiomatic that public policy strongly favors enforcing agreements to arbitrate, the extent to which a court will compel a signatory to an arbitration agreement to arbitrate against a nonsignatory seeking to enforce that agreement has been less certain.

Recently, however, the U.S. Court of Appeals for the Second Circuit provided some clarity on this issue. In Sokol Holdings Inc. v. BMB Munai Inc.,1 the court concluded that a nonsignatory can compel arbitration under a theory of equitable estoppel only when the signatory's agreement to arbitrate can be reasonably extended to include the nonsignatory based on the relationship between the parties.

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