Ribadeneira v. New Balance Athletics, Inc.

65 F.4th 1

• Court: Court of Appeals for the First Circuit
• Decided: April 6, 2023
• Docket: Case: 21-1831
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 21-1831

RODRIGO RIBADENEIRA; SUPERDEPORTE PLUS PERU S.A.C.,

Petitioners, Appellees,

v.

NEW BALANCE ATHLETICS, INC.,

Respondent, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Allison D. Burroughs, U.S. District Judge]

Before

Kayatta, Lipez, and Howard, Circuit Judges.

Kevin P. Martin, with whom Mark E. Tully, Kate E. MacLeman, Gerard J. Cedrone, and Goodwin Procter LLP were on brief, for appellant.

David M. Cooper, with whom David M. Orta, Julianne F. Jaquith, Gregg Badichek, and Quinn Emanuel Urquhart & Sullivan, LLP were on brief, for appellees.

April 6, 2023 LIPEZ, Circuit Judge. At the beginning of 2013,

appellant New Balance Athletics, Inc. ("New Balance") entered into

a contract (the "Distribution Agreement") with Peruvian Sporting

Goods S.A.C. ("PSG") to distribute its products in Peru. This

Distribution Agreement contained an arbitration clause, which New

Balance invoked in 2018 to initiate arbitration proceedings

against PSG. Also joined as respondents in this arbitration were

appellees Rodrigo Ribadeneira, the controlling owner of PSG, and

Superdeporte Plus Peru S.A.C. ("Superdeporte"), another business

entity owned by Ribadeneira in Peru. The arbitrator issued two

awards, which imposed liability on PSG and Superdeporte for breach

of the Distribution Agreement, and on PSG, Superdeporte, and

Ribadeneira for tortious interference. The arbitrator also

rejected three counterclaims brought against New Balance.

Ribadeneira and Superdeporte subsequently filed a motion

in the district court to vacate the arbitration awards. The awards

had to be vacated, they contended, because they were nonsignatories

of the Distribution Agreement, and hence not subject to its

arbitration clause.1 Agreeing that the arbitrator had improperly

exercised jurisdiction over Ribadeneira and Superdeporte, the

1 PSG did not join Ribadeneira and Superdeporte in filing the motion to vacate, and indeed, appellees expressly recognize that PSG was bound, as a signatory to the Distribution Agreement, to abide by that agreement's arbitration clause. Consequently, PSG is not a party to this appeal.

- 2 - district court vacated the awards. Because we conclude that

theories of assumption and equitable estoppel apply here to support

arbitral jurisdiction over appellees, we reverse the judgment of

the district court.

I.

The resolution of this appeal turns in part on the

parties' actions before and during the arbitration proceedings.

Hence, we recount the tangled history of the parties' business

relationship, the litigation in Peru arising out of the breakdown

of that relationship, and the arbitration proceedings that

resulted in the contested awards.2

A. The Original Distribution Agreement and Negotiations over a New Agreement

On January 1, 2013, New Balance and PSG entered into the

Distribution Agreement, pursuant to which PSG would serve as the

exclusive wholesale distributor of New Balance products in Peru in

exchange for paying distribution fees to New Balance. At the time,

Ribadeneira was PSG's majority shareholder but was not himself a

party to the agreement. The agreement was set to expire after an

initial term of three years but would automatically renew for an

2As an aid to understanding the procedural history of the Peruvian litigation, the arbitration proceedings, and the challenge to the arbitration awards in the district court, we include an Appendix to this opinion in the form of a chart that summarizes the claims and counterclaims brought by the various parties in the various forums, as well as the key rulings of the arbitrator and the district court.

- 3 - additional year absent timely notice by either party objecting to

renewal.

Section 21 of the Distribution Agreement contained an

arbitration clause, providing that:

The parties agree that any and all disputes (whether in contract or any other theories of recovery) related to or arising out of this Agreement or the relationship, its application and/or termination (including post- termination obligations) shall be settled by final and binding arbitration in accordance with the UNCITRAL Arbitration Rules.

The Distribution Agreement also included two choice-of-

law provisions. First, there is a provision in Section 20 setting

out the law governing the agreement:

This Agreement . . . shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, U.S.A. without giving effect to principles of conflicts of laws . . . .

Second, there is a provision in Section 21, which dealt with

arbitration, requiring that:

The arbitrator shall determine the matters in dispute in accordance with the laws of the Commonwealth of Massachusetts, USA.

While the Distribution Agreement was still in effect,

New Balance and PSG began negotiating a new distribution agreement.

By that time, PSG was in arrears with respect to distribution fees

it owed New Balance.3 In September 2015, the parties exchanged a

3 Although the parties disagreed below about the extent of

- 4 - draft of an "Amended and Restated Distribution Agreement" (the

"New Agreement"). While some of the terms in the putative New

Agreement differed from those in the original Distribution

Agreement, its arbitration clause remained identical. In their

negotiations, both parties understood that while the New Agreement

initially would be executed between New Balance and PSG, a new

entity -- Superdeporte -- would be incorporated and would, once

operational, replace PSG as the distributor of New Balance products

in Peru.

Meanwhile, as neither PSG nor New Balance gave notice of

an intention to let the original Distribution Agreement expire on

December 31, 2015, the agreement renewed by its terms until

December 31, 2016.

In May 2016, Superdeporte was ready to begin operations.

Believing that it had reached agreement with New Balance on the

New Agreement -- and that, accordingly, the New Agreement was

binding on both parties -- PSG informed New Balance that

Superdeporte was ready to distribute New Balance products in Peru

and sought New Balance's agreement to modify the New Agreement to

substitute Superdeporte for PSG as its Peruvian distributor.

this arrearage, that dispute is not material to this appeal, which does not turn on the merits of the underlying claims and counterclaims in the arbitration.

- 5 - In response, New Balance denied that it had ever

concluded the New Agreement with either PSG or Superdeporte.

Shortly thereafter, New Balance gave notice that it would not

continue the distribution relationship with either PSG or

Superdeporte beyond the Distribution Agreement's expiration on

December 31, 2016. Instead, it would be using a different Peruvian

distributor, Deportes Sparta.

B. The Assignments to Ribadeneira

In November 2016, shortly before the extended expiration

of the Distribution Agreement, PSG and Superdeporte each executed

assignment agreements with Ribadeneira that transferred to him any

legal claims they had against New Balance arising from the New

Agreement and the negotiations surrounding it. The assignment

agreements contained language stating that PSG and the principals

of Superdeporte had engaged in negotiations with New Balance

regarding a new distribution agreement, but that, "once the

contractual terms were agreed and the contract ready to be

executed," New Balance announced that it would work with another

distributor in Peru, leading to "a dispute" between New Balance,

on the one side, and PSG and Superdeporte, on the other. The

assignment agreement with each company then provided for the

transfer to Ribadeneira of "all [their] rights in attention to the

dispute . . . against [New Balance], before judicial and

administrative authorities," thus allowing Ribadeneira to bring

- 6 - legal actions against New Balance to vindicate these rights "in

Peru and anywhere else in the world."

C. Litigation in Peru

In January 2017, as PSG and Superdeporte's assignee

under the assignment agreements, Ribadeneira sued New Balance in

a Peruvian court, asserting two claims of civil liability (the

"Peru Claims"): (1) that the New Agreement was an enforceable

contract, which New Balance had breached; and (2) that, in the

alternative, even if the New Agreement was never validly executed,

New Balance had violated its precontractual duty to negotiate with

PSG and Superdeporte in good faith.

The following month, Ribadeneira moved ex parte for an

injunction restraining New Balance from using any distributor in

Peru other than Superdeporte. The Peruvian court granted this

relief ("the Peru injunction") in December 2017, thereby

compelling New Balance to suspend its distribution relationship

with Deportes Sparta. The Peru injunction was lifted by the court

in July 2018 after New Balance had an opportunity to contest it.4

D. The Arbitration Proceedings

Later in July 2018, New Balance initiated arbitration

proceedings against PSG and Ribadeneira in Boston, Massachusetts,

4The Peruvian court dissolved the injunction apparently based on its determination that New Balance and PSG no longer had any distribution agreement in effect.

- 7 - seeking compensation for allegedly unpaid fees under the

Distribution Agreement. In support of the tribunal's jurisdiction

over Ribadeneira, New Balance argued that, as PSG's assignee,

Ribadeneira had taken its place under the Distribution Agreement.

Responding to New Balance's notice of arbitration in

September 2018, Ribadeneira objected to the arbitrator's

jurisdiction over him because he was a nonsignatory of the

Distribution Agreement. He also argued that since PSG had only

assigned him its claims in relation to the New Agreement, his

status as assignee could not bind him to arbitrate New Balance's

claim that PSG had breached the original Distribution Agreement.

In an amended response filed the following month, PSG asserted a

counterclaim alleging that New Balance itself had breached the

Distribution Agreement by refusing to accept orders from PSG by

letters of credit.

In January 2019, New Balance moved to compel PSG and

Ribadeneira to arbitrate the Peru Claims, arguing both that the

arbitration clause in the Distribution Agreement encompassed the

Peru Claims, and that the arbitrator had jurisdiction over

Ribadeneira. PSG and Ribadeneira opposed the motion, contesting

the arbitrability of the Peru Claims and arbitral jurisdiction

over Ribadeneira.

The arbitrator granted New Balance's motion to compel

arbitration in March 2019, ruling that both of the Peru Claims

- 8 - were subject to arbitration, and that Ribadeneira could be

compelled to arbitrate them.

Two months later, on May 2, 2019, Ribadeneira executed

new assignment agreements with PSG and Superdeporte that assigned

back to them the rights they had previously transferred to him.

The following day, New Balance filed an amended notice

of arbitration, adding Superdeporte as a respondent in New

Balance's claim for breach of the Distribution Agreement. New

Balance also added a claim against PSG, Ribadeneira, and

Superdeporte (collectively, the "arbitration respondents")

alleging that, by obtaining the Peru injunction based on

misrepresentations, they had tortiously interfered with its

distribution agreement with Deportes Sparta.

In a response filed on May 17, 2019, Ribadeneira and

Superdeporte objected to arbitral jurisdiction over them as to New

Balance's breach of contract claim because neither of them were

signatories of the Distribution Agreement. The arbitration

respondents also denied that New Balance's tortious interference

claim was arbitrable.

On May 31, 2019, the arbitration respondents moved for

summary disposition. Ribadeneira asserted that the tribunal

lacked jurisdiction over him entirely. He argued that he was not

bound to arbitrate New Balance's breach of contract claim because

he was neither a party to the Distribution Agreement nor to the

- 9 - New Agreement. He also reiterated that he was not obligated to

arbitrate the Peru Claims, because he had transferred the rights

underlying the Peru Claims back to PSG and Superdeporte. The

arbitration respondents also challenged the arbitrability of New

Balance's tortious interference claim, insisting that any claim

for damages arising from the Peru injunction could only be

adjudicated by the Peruvian court itself.

In August 2019, the arbitrator denied the arbitration

respondents' motion for summary disposition. With respect to the

tortious interference claim, the arbitrator ruled that the

Distribution Agreement's arbitration clause was broad enough to

embrace that claim, because the Peruvian litigation underlying

that claim implicated the "relationship" between the parties -- or

more specifically the breakdown of that relationship. Moreover,

because it was Ribadeneira who had requested the Peru injunction,

arbitral jurisdiction over the tortious interference claim

entailed jurisdiction over him with respect to that claim,

notwithstanding the new assignment agreements by which he assigned

back to PSG and Superdeporte the rights they had previously

assigned to him. As for the tribunal's jurisdiction over

Ribadeneira with respect to New Balance's breach of contract claim,

the arbitrator recognized that because PSG -- but not Ribadeneira

-- was a party to the original Distribution Agreement, ordinarily

Ribadeneira would not be subject to that contract's arbitration

- 10 - clause. However, the arbitrator deferred ruling on whether summary

disposition was warranted on that issue until the close of

discovery, given that evidence could yet emerge to support piercing

the corporate veil to attribute PSG's potential liability to

Ribadeneira, which would support Ribadeneira's joinder as a

respondent.

After discovery closed on November 15, 2019, the

arbitration respondents filed a renewed motion for summary

disposition to address this deferred issue. They contended that,

because no evidence had emerged to support a veil-piercing theory

of Ribadeneira's liability for PSG's alleged breach of the

Distribution Agreement, he was not obliged to arbitrate that claim.

They further argued that because Superdeporte was not a party to

the Distribution Agreement, it was not required to arbitrate New

Balance's claim for breach of that agreement.

In December 2019, the arbitration respondents filed

another amendment to their response to assert two additional

counterclaims. These counterclaims, brought by PSG and

Superdeporte against New Balance, alleged what were, in essence,

the Peru Claims. Specifically, the first counterclaim alleged

that New Balance had breached the New Agreement -- which they

insisted was a legally binding contract between New Balance, PSG,

and Superdeporte -- by discontinuing its distribution relationship

with PSG and Superdeporte after 2016. The second counterclaim

- 11 - contended, in the alternative, that New Balance had breached its

precontractual obligation under Massachusetts law to negotiate the

New Agreement in good faith. PSG also reiterated its counterclaim

against New Balance alleging breach of the Distribution Agreement.

The arbitration respondents' second amended response

also renewed Ribadeneira's objection to the arbitrator's

jurisdiction over him, pointing to the absence of evidence to

support piercing PSG's corporate veil and the new assignment

agreements by which he had assigned back to PSG and Superdeporte

the right to pursue the Peru Claims.

Arbitration hearings were held in March and May 2020.

The arbitration respondents submitted a post-hearing brief in

which they maintained their objection to the arbitrator's

jurisdiction over Ribadeneira and Superdeporte as to New Balance's

claim for breach of the original Distribution Agreement.

E. The Arbitrator's Partial Final Award & Final Award

On August 20, 2020, the arbitrator issued a Partial Final

Award, finding for New Balance on its claim that PSG had breached

the Distribution Agreement, and -- on the theory that Superdeporte

was PSG's successor-in-interest -- holding PSG and Superdeporte

jointly liable for the $826,102.60 in damages awarded.5

Because the arbitrator declined to pierce the corporate veil 5

to hold Ribadeneira liable for PSG's conduct, he did not impose liability on Ribadeneira for breach of the Distribution Agreement.

- 12 - The arbitrator also agreed with New Balance that

Ribadeneira had tortiously interfered with its agreement with

Deportes Sparta by seeking and obtaining the Peru injunction.

Determining that the assignment of rights from PSG and Superdeporte

to Ribadeneira "created principal-agent relationships rendering

the principals as well as the agent responsible," he imposed

liability for tortious interference not only on Ribadeneira but

also on PSG and Superdeporte, holding all three jointly liable for

$215,736.71 in damages. The arbitrator also rejected PSG's

counterclaim alleging breach by New Balance of the Distribution

Agreement, as well as the two counterclaims brought against New

Balance by PSG and Superdeporte. In rejecting PSG and

Superdeporte's counterclaim alleging that New Balance had breached

the New Agreement, the arbitrator determined that the New Agreement

never became an enforceable contract.6

Pending further proceedings, the arbitrator reserved a

further decision on the calculation of interest on the contractual

damages and the award of reasonable attorney's fees and expenses,

inviting the parties to submit briefing on these issues.

6 The arbitrator rejected PSG's counterclaim because he concluded that New Balance did not breach the Distribution Agreement. He rejected PSG and Superdeporte's counterclaim alleging that New Balance had violated its obligation of good faith in the contract negotiation process because he found no evidence that New Balance had negotiated in bad faith.

- 13 - Following the issuance of the Partial Final Award, the

arbitration respondents filed a request under the UNCITRAL

Arbitration Rules for an explanation of the legal basis for

arbitral jurisdiction over Ribadeneira and Superdeporte, insisting

that the arbitrator lacked jurisdiction over these two respondents

to arbitrate "any claims."

In a memorandum and order issued on November 4, 2020,

the arbitrator declined to modify or expand his discussion or

conclusions in the Partial Final Award. He reiterated that

Superdeporte was subject to his jurisdiction as to New Balance's

breach of contract claim because Superdeporte was PSG's "business

successor." He also explained, restating the reasoning in the

Partial Final Award, that he had exercised jurisdiction over all

three arbitration respondents as to the tortious interference

claim because Ribadeneira had sought and obtained the underlying

injunction in Peru pursuant to assignments of rights from PSG and

Superdeporte.

The Final Award issued on February 11, 2021, awarding

contractual interest on New Balance's breach of contract claim,

and allowing New Balance to recover attorney's fees and expenses.

The arbitrator also increased the principal amount of damages on

the contract claim. A provision in the Final Award stated that

the award was made "in full settlement of all claims and

counterclaims submitted to this Arbitration."

- 14 - F. Litigation in U.S. District Court

On February 1, 2021, shortly before the issuance of the

Final Award, appellees Ribadeneira and Superdeporte filed a motion

in the U.S. District Court for the District of Massachusetts,

asking the court to vacate the Partial Final Award under Section

10(a)(4) of the Federal Arbitration Act ("FAA") because the

arbitral tribunal lacked jurisdiction over them. On February 22,

2021, following the issuance of the Final Award, appellees filed

an amended motion seeking to vacate both the Partial Final Award

and the Final Award. Appellees again contended that vacatur was

appropriate because the arbitrator had exceeded his authority in

exercising jurisdiction over them.

Opposing appellees' amended motion, New Balance filed a

motion to dismiss and a cross-motion to confirm the arbitration

awards. New Balance set forth three arguments in support of its

motions: (1) appellees' amended motion was time-barred regardless

of whether the Massachusetts Uniform Arbitration Act ("MUAA") or

the FAA applied; (2) Superdeporte had waived any argument that the

arbitrator lacked jurisdiction over it by raising its

jurisdictional objection too late; and (3) while appellees were

not parties to the Distribution Agreement, they were nevertheless

subject to the arbitrator's jurisdiction under theories of

assumption and equitable estoppel.

- 15 - The district court denied New Balance's motion to

dismiss, agreeing with the appellees that their amended motion was

not time-barred. The court first determined that the FAA's three-

month deadline for filing a motion to vacate applied, see 9 U.S.C.

§ 12, despite the choice-of-law provision in the Distribution

Agreement stipulating that "[t]he arbitrator shall determine the

matters in dispute" according to Massachusetts law. Reasoning

that this choice-of-law provision only specified the law to be

applied in arbitration proceedings, rather than in court

challenges to the enforcement of arbitration awards, the district

court concluded that there was no explicit agreement to displace

the FAA in favor of state law. Accordingly, the FAA's three-month

deadline governed. The court went on to conclude that this three-

month period only began to run when the arbitrator issued the Final

Award, not the Partial Final Award, because the arbitrator did not

intend for the Partial Final Award to resolve all claims before

him. Hence, given that appellees filed their amended motion to

vacate within ninety days of the issuance of the Final Award, the

district court found that it had been timely filed.

The district court also granted the appellees' amended

motion to vacate the arbitration awards. On the waiver issue, the

court determined that Superdeporte's jurisdictional objection was

preserved because Superdeporte had objected to jurisdiction prior

to the arbitration hearing. On the merits of appellees'

- 16 - jurisdictional challenge, the court concluded that the arbitrator

lacked jurisdiction over both Ribadeneira and Superdeporte as

nonsignatories of the Distribution Agreement, and that neither

principles of assumption nor of equitable estoppel overcame their

nonsignatory status. Accordingly, the court ruled that appellees

were not obligated to arbitrate.

New Balance timely appealed.

II.

Before evaluating the merits of the district court's

decision to vacate the challenged arbitration awards for lack of

arbitral jurisdiction over appellees, we first address these

threshold issues: whether appellees' amended motion to vacate was

timely filed, and, if so, whether Superdeporte waived its

jurisdictional challenge to the arbitration awards.

A. Timeliness of Appellees' Motion to Vacate

New Balance argues that the two choice-of-law provisions

in the Distribution Agreement together demonstrate that the

parties intended for Massachusetts law -- rather than the FAA --

to govern all aspects of the arbitration process, including the

deadline for seeking judicial review of any arbitration award.

Under the MUAA, a party seeking to vacate an arbitration award

must file an application to vacate the award "within thirty days

after delivery of a copy of the award." Mass. Gen. Laws ch. 251,

§ 12(b). This period begins to run upon "the delivery of the

- 17 - arbitration award," not the issuance of the "final decision."

Maltz v. Smith Barney, Inc., 694 N.E.2d 840, 842 n.8 (Mass. 1998).

Since appellees' initial motion to vacate and amended motion were

filed on February 1, 2021, and February 22, 2021, respectively --

significantly more than thirty days after the Partial Final Award

was issued on August 20, 2020 -- New Balance contends that

appellees' amended motion is time-barred to the extent that it

seeks to vacate the liability and damages determinations made in

the Partial Final Award.

While parties to an arbitration contract "may

contemplate enforcement under state statutory or common law"

rather than the FAA, Hall St. Assocs. v. Mattel, Inc., 552 U.S.

576, 590 (2008), we have emphasized that "FAA displacement . . .

can occur 'only if the parties have so agreed explicitly.'"

Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 932 F.3d 1, 7

(1st Cir. 2019) (quoting Ortiz-Espinosa v. BBVA Secs. of P.R.,

Inc., 852 F.3d 36, 42 (1st Cir. 2017), abrogated on other grounds

by Badgerow v. Walters, 142 S. Ct. 1310 (2022)). As such, the

"mere inclusion of a generic choice-of-law clause within the

arbitration agreement is not sufficient . . . to support a finding

that contracting parties intended to opt out of the FAA's default

regime for vacatur of arbitral awards." Id. at 8 (quoting P.R.

Tel. Co. v. U.S. Phone Mfg. Corp., 427 F.3d 21, 29 (1st Cir. 2005),

abrogated on other grounds by Hall St. Assocs., 552 U.S. 576).

- 18 - To support its argument that the MUAA rather than the

FAA applies, New Balance relies on the choice-of-law provisions in

Sections 20 and 21 of the Distribution Agreement. Neither of these

provisions, however, indicates sufficiently explicit agreement to

displace the FAA's enforcement regime in favor of the MUAA.

Section 20, which provides that the Distribution

Agreement "shall be governed by and construed in accordance with"

Massachusetts law, is the kind of generic choice-of-law provision

we have previously held insufficient for FAA displacement. It

closely matches, for example, a choice-of-law provision

instructing that a contract was to "be construed in accordance

with the internal substantive laws of the Commonwealth of Puerto

Rico" that we determined to be insufficient to effectuate FAA

displacement. See Dialysis Access Ctr., 932 F.3d at 7-8.

The provision in Section 21 requiring the arbitrator to

"determine the matters in dispute" according to Massachusetts law

likewise does not demonstrate the parties' specific intention to

displace the FAA enforcement regime. As the district court

correctly observed, this provision "refers only to the law the

arbitrator will apply when deciding matters in dispute."

Ribadeneira v. New Balance Athletics, Inc., No. 21-cv-10173-ADB,

2021 WL 4419943, at *5 (D. Mass. Sept. 27, 2021). It does not

- 19 - contemplate the application of Massachusetts law to actions in a

judicial forum to enforce or vacate arbitration awards.7

We therefore conclude that the district court correctly

applied the FAA's deadline, which requires notice of a motion to

vacate an arbitration award to be filed "within three months after

the award is filed or delivered." 9 U.S.C. § 12.

New Balance contends that, even accounting for the FAA's

three-month deadline, appellees' amended motion was still untimely

because it was filed more than three months after the arbitrator

issued the Partial Final Award. To address this claim, we begin

with the principle that, in actions seeking to set aside an

arbitration award under Section 10(a)(4) of the FAA, "[i]t is

essential for the district court's jurisdiction that the

arbitrator's award was final, not interlocutory." Hart Surgical,

Inc. v. Ultracision, Inc., 244 F.3d 231, 233 (1st Cir. 2001)

(alteration in original) (quoting El Mundo Broad. Corp. v. United

Steelworkers of Am., AFL-CIO CLC, 116 F.3d 7, 9 (1st Cir. 1997)).

7 Where courts have found FAA displacement, the choice-of-law provisions at issue have been much more explicit in requiring the application of state law in the enforcement of arbitration awards or in proceedings beyond the arbitration itself. See, e.g., Foulger-Pratt Residential Contracting, LLC v. Madrigal Condos., LLC, 779 F. Supp. 2d 100, 110 (D.D.C. 2011) (clause making an arbitration agreement "specifically enforceable pursuant to . . . the laws of the District of Columbia"); Ga. Cas. & Sur. Co. v. Excalibur Reinsurance Corp., 4 F. Supp. 3d 1362, 1364, 1369 (N.D. Ga. 2014) (clause providing that "all proceedings pursuant [to the arbitration provision] shall be governed by the law of the state").

- 20 - The "familiar finality standard" is that "[n]ormally, an arbitral

award is deemed 'final' provided it evidences the arbitrators'

intention to resolve all claims submitted in the demand for

arbitration." Univ. of Notre Dame (USA) in Eng. v. TJAC Waterloo,

LLC, 861 F.3d 287, 291 (1st Cir. 2017) (quoting Hart Surgical, 244

F.3d at 233).

As an exception to this general rule, a partial award

may qualify as final "when the arbitrating parties have . . .

agreed to litigate [the issues] in separate, independent stages."

Id. This agreement to bifurcate proceedings may be "informal."

Id. (citing Providence J. Co. v. Providence Newspaper Guild, 271

F.3d 16, 19-20 (1st Cir. 2001)). Whether an agreement -- including

an agreement that was "never formally stated" -- to bifurcate

proceedings may be found depends on whether the parties "had

expressed an intent to bifurcate." Providence J., 271 F.3d at 19-

20.

Here, as the district court also concluded, there is no

evidence that the parties to the arbitration manifested any

intention to divide the proceedings into two parts. See

Ribadeneira, 2021 WL 4419943, at *6. The exception covering

bifurcated arbitration proceedings therefore does not apply.

Accordingly, the Partial Final Award qualifies as "final" for

purposes of starting the FAA's three-month clock only if it reveals

the arbitrator's intention to settle all claims before him.

- 21 - We discern no such intention. In issuing the Partial

Final Award, the arbitrator indicated that he was "retain[ing]

jurisdiction" and "re-open[ed] the hearings for written

submissions" on issues including the calculation of contractual

interest and the award of attorney's fees and expenses. The issue

of contractual interest, as the arbitrator later explained in the

Final Award, was "a subject of New Balance's contractual claim."

While the arbitrator described the awards made in the Partial Final

Award as "preliminary," he stated that the Final Award was "in

full settlement of all claims and counterclaims submitted to this

Arbitration."

We therefore conclude that only the Final Award was a

"final" arbitration award that the district court had jurisdiction

to review. Accordingly, the FAA's three-month deadline is measured

from the date that the Final Award issued, namely February 11,

2021. Since appellee's amended motion to vacate was filed on

February 22, 2021, it was timely.

B. Waiver of Superdeporte's Jurisdictional Challenge

New Balance contends that Superdeporte waived its right

to challenge the arbitrator's jurisdiction, offering two

arguments. First, New Balance maintains that Superdeporte only

raised a sufficient objection to arbitral jurisdiction after the

arbitrator had made a decision on the merits. This objection was

thus waived because it came too late. Second, New Balance urges

- 22 - that even if Superdeporte's earlier jurisdictional objections,

made in May 2019, were sufficient, it abandoned these objections

when it (along with PSG) asserted counterclaims before the

arbitrator in December 2019 without contemporaneously renewing its

jurisdictional challenge. We examine these arguments in turn.

1. Timing of Initial Objection

Because "[f]ederal courts encourage participation in

arbitration,"8 Kaplan v. First Options of Chi., Inc., 19 F.3d 1503,

1510 (3d Cir. 1994), aff'd, 514 U.S. 938 (1995), "[a] party does

not have to try to enjoin or stay an arbitration proceeding in

order to preserve its objection to jurisdiction." China Minmetals

Materials Imp. & Exp. Co. v. Chi Mei Corp., 334 F.3d 274, 290 (3d

Cir. 2003) (quoting Kaplan, 19 F.3d at 1510). Provided "a party

clearly and explicitly reserves the right to object to

arbitrability, his participation in the arbitration does not

preclude him from challenging the arbitrator's authority in

court." Env't Barrier Co. v. Slurry Sys., Inc., 540 F.3d 598, 606

(7th Cir. 2008) (quoting AGCO Corp. v. Anglin, 216 F.3d 589, 593

This encouragement flows from the "liberal federal policy 8

favoring arbitration agreements" established by the FAA itself. See Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). In light of this policy, "as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration," including when the doubt concerns "an allegation of waiver." Moses H. Cone, 460 U.S. at 24-25.

- 23 - (7th Cir. 2000)). Nevertheless, such an objection to the

arbitrator's jurisdiction "must be made on a timely basis, or it

is waived." ConnTech Dev. Co. v. Univ. of Conn. Educ. Props.,

Inc., 102 F.3d 677, 685 (2d Cir. 1996); see also Opals on Ice

Lingerie v. Bodylines Inc., 320 F.3d 362, 368 (2d Cir. 2003).

There is broad agreement among the federal courts of

appeal that a jurisdictional objection comes too late if it is

only raised after the arbitrator has ruled on the merits. See,

e.g., OJSC Ukrnafta v. Carpatsky Petrol. Corp., 957 F.3d 487, 498

(5th Cir. 2020); Env't Barrier, 540 F.3d at 607; Pa. Power Co. v.

Loc. Union No. 272 of the Int'l Bhd. of Elec. Workers, 886 F.2d

46, 50 (3d Cir. 1989); Fortune, Alsweet & Eldridge, Inc. v. Daniel,

724 F.2d 1355, 1357 (9th Cir. 1983). As the Fifth Circuit

explained, "[t]his waiver rule prevents inefficiency and . . .

gamesmanship." Ukrnafta, 957 F.3d at 498. Allowing a party to

challenge arbitral jurisdiction in the courts after the

arbitrator's merits decision would encourage gamesmanship because

"a party could wait to see how the arbitration tribunal ruled

before deciding whether to challenge its jurisdiction." Id.; see

also, e.g., Env't Barrier, 540 F.3d at 606 (noting that such a

"wait-and-see approach" is "not a tactic [the court] can accept,

for sound policy reasons"); Daniel, 724 F.2d at 1357 (similar);

Ficek v. S. Pac. Co., 338 F.2d 655, 657 (9th Cir. 1964) (similar).

It would also be inefficient to allow such a late jurisdictional

- 24 - objection because vacating an arbitrator's decision for lack of

jurisdiction after the pursuit of discovery, the submission of

briefs, and the holding of hearings would be "terribly wasteful of

the arbitrator's time, the parties' time, and the court's time."

Env't Barrier, 540 F.3d at 606. It would likewise be unfair to

the other parties to the arbitration who had shouldered the effort

and expense of the arbitration proceedings until their conclusion,

only to find that they still face the risk of having to relitigate

the same issues in a judicial forum.

These considerations of gamesmanship, inefficiency, and

fairness do not apply exclusively to circumstances where a party

fails to object to arbitrability until after the arbitrator has

decided the merits. Thus, where a party objected to arbitrability

"shortly before the arbitrator announced her decision," after that

party had voluntarily participated in arbitration proceedings

"over a period of several months," the Ninth Circuit deemed the

objection waived. Daniel, 724 F.2d at 1357; accord Upshur Coals

Corp. v. United Mine Workers of Am., Dist. 31, 933 F.2d 225, 228

(4th Cir. 1991) (disapproving rule allowing a "party that suspects

it will lose in arbitration to withdraw consent to arbitrate

shortly before a decision is handed down"). By contrast, courts

have declined to find waiver where the objecting party did not

participate "extensively" in the arbitration proceedings on the

merits of the dispute before challenging the arbitrator's

- 25 - jurisdiction.9 Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1279

(9th Cir. 2006) (discussing Textile Unlimited, Inc. v. A..BMH &

Co., 240 F.3d 781, 788 (9th Cir. 2001)); see also Opals on Ice,

320 F.3d at 366, 368 (declining to find waiver where the party

challenging waiver first raised its objection one month after the

commencement of arbitration proceedings but thereafter raised its

challenge "continuously").

We decline to articulate any bright-line rule as to when

a party's participation in arbitration proceedings becomes so

extensive as to preclude a challenge to arbitral jurisdiction,

engaging instead in a fact-specific inquiry. We observe that after

New Balance added Superdeporte as a respondent in its amended

notice of arbitration, all three arbitration respondents filed a

response a mere two weeks later, May 17, 2019, in which they

asserted that the arbitral tribunal "does not have jurisdiction

over . . . Superdeporte" as to New Balance's claim for breach of

the Distribution Agreement because Superdeporte was "never part of

the Distribution Agreement." The arbitration respondents also

9 Similarly, another court found waiver where the objection to arbitrability was raised "more than 43 months . . . since the parties first exchanged default notices, more than 41 months . . . since service of the arbitration demand, and more than 15 months . . . since the first witness was sworn in the arbitration," and after the arbitrators "had conducted an extensive examination of the relevant evidence, including 45 days of hearings . . ., 409 documentary exhibits, the testimony of 14 witnesses, and a tour of the development site." ConnTech Dev., 102 F.3d at 685.

- 26 - denied that New Balance's tortious interference claim was

arbitrable. In a motion for summary disposition filed on May 31,

2019, the arbitration respondents reiterated their objection to

arbitral jurisdiction over all three of them -- including

Superdeporte -- as to the tortious interference claim.

Hence, contrary to New Balance's claim, Superdeporte

sufficiently challenged its obligation to arbitrate New Balance's

breach of contract claim and the tortious interference claim well

before the arbitrator made any decision on the merits. Indeed,

Superdeporte objected to the arbitrator's jurisdiction soon after

it was added as a respondent, before the close of discovery and

before any hearings on the merits.10 On these facts, we conclude

that Superdeporte did not waive its jurisdictional challenge by

raising its initial objection unreasonably late.

2. Effect of the Counterclaims

Having determined that Superdeporte raised a sufficient

jurisdictional objection in May 2019 to avoid any waiver argument

10The district court stated that Superdeporte first objected to arbitrating claims arising from the Distribution Agreement, in particular New Balance's breach of contract claim, "after the close of discovery but before the hearing." Ribadeneira, 2021 WL 4419943, at *8 n.2. The court presumably was referring to the jurisdictional objections raised in the arbitration respondents' renewed motion for summary disposition. However, the arbitration respondents' May 17, 2019, response expressly challenged arbitral jurisdiction over Superdeporte as to New Balance's claim for breach of the Distribution Agreement. This initial jurisdictional objection was therefore raised before discovery concluded in November 2019.

- 27 - premised on the timing of the objection, we now consider the

significance for the waiver analysis of Superdeporte's December

2019 assertion, with PSG, of two counterclaims alleging that New

Balance breached the New Agreement and, alternatively, that New

Balance acted in bad faith during contract negotiations.

Specifically, we consider whether, by filing these counterclaims

without specifically renewing its jurisdictional objection,

Superdeporte abandoned the earlier objection and thereby waived

its right to challenge the arbitrator's jurisdiction before a

judicial forum.

"A jurisdictional objection, once stated, remains

preserved for judicial review absent a clear and unequivocal

waiver." Kaplan, 19 F.3d at 1510; see also Nat'l Ass'n of Broad.

Emps. & Technicians v. Am. Broad. Co., 140 F.3d 459, 462 (2d Cir.

1998). An objection to the arbitral forum therefore will not be

deemed abandoned unless and until the party making the objection

"clearly indicate[s] [its] willingness to forego judicial review."

Kaplan, 19 F.3d at 1510 (quoting Pa. Power, 886 F.2d at 50).

Accordingly, Superdeporte would only have abandoned its earlier

jurisdictional objection by asserting the counterclaims if

bringing those counterclaims was a clear signal of its willingness

to withdraw its challenge to arbitral jurisdiction.

In considering the clarity of the signal, it is crucial

to understand the background to the decision by PSG and

- 28 - Superdeporte to arbitrate the Peru Claims as counterclaims. Before

Superdeporte was added as a respondent in the arbitration, New

Balance had sought to compel PSG and Ribadeneira to arbitrate the

Peru Claims. The response opposing New Balance's motion urged not

only that the Peruvian court had exclusive jurisdiction over the

Peru Claims but also specifically denied that Superdeporte was

obligated to arbitrate the Peru Claims because it was not a

signatory to the New Agreement and hence was not bound by its

arbitration clause. Over this opposition, the arbitrator allowed

New Balance's motion to compel arbitration.

This background suggests that Superdeporte may have

filed the two counterclaims only reluctantly and protectively, in

light of the arbitrator's ruling that the Peru Claims were

arbitrable. As such, the decision to file the counterclaims does

not clearly signal an intention to submit to the arbitrator's

jurisdiction and abandon its earlier objection.11 Superdeporte did

not, therefore, waive its right to judicial review of its challenge

to arbitral jurisdiction by abandoning the jurisdictional

objection that it first pressed in May 2019.

11 We have similarly recognized, outside the arbitration context, that where a party with a preserved jurisdictional defense puts forward a counterclaim only "as a conditional position" that "will not be independently pressed if the primary action is dismissed for lack of . . . jurisdiction," this alternatively pleaded counterclaim does not undercut the jurisdictional defense. See Gen. Contracting & Trading Co. v. Interpole, Inc., 940 F.2d 20, 25 (1st Cir. 1991).

- 29 - III.

We turn now to the substance of appellees'

jurisdictional challenge to the arbitrator's awards. Appellees

sought vacatur under Section 10(a)(4) of the FAA, which authorizes

a court to vacate an arbitration award "where the arbitrators

exceeded their powers." 9 U.S.C. § 10(a)(4). They contended, and

the district court agreed, that the arbitrator exceeded his

authority by exercising jurisdiction over them.

A. Standard of Review

When considering a district court's decision to confirm

or vacate an arbitration award, "we review questions of law de

novo and questions of fact for clear error." In re Vital Basics

Inc., 472 F.3d 12, 16 (1st Cir. 2006). But to the extent that the

district court "neither conducted an evidentiary hearing nor made

findings of fact, our review is de novo." First State Ins. Co. v.

Nat'l Cas. Co., 781 F.3d 7, 11 (1st Cir. 2015); see also Coady v.

Ashcraft & Gerel, 223 F.3d 1, 10 (1st Cir. 2000). Because here

the district court relied on facts "taken from the parties'

submissions and the documents cited therein," Ribadeneira, 2021 WL

4419943, at *1, we apply de novo review.12

This approach comports with the rationale the Supreme Court 12

cited for its holding that "courts of appeals should apply ordinary, not special, standards when reviewing district court decisions upholding arbitration awards," First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 948 (1995), namely that "the reviewing attitude that a court of appeals takes toward a district

- 30 - Where a party challenges an arbitration award based on

the arbitrator's resolution of the merits of the underlying

dispute, we conduct our de novo review of the district court's

decision "with great circumspection," Hoolahan v. IBC Advanced

Alloys Corp., 947 F.3d 101, 111 (1st Cir. 2020), "mindful that the

district court's review of arbitral awards must be 'extremely

narrow and exceedingly deferential,'" Bull HN Info. Sys. v. Hutson,

229 F.3d 321, 330 (1st Cir. 2000) (quoting Wheelabrator Envirotech

Operating Servs. Inc. v. Mass. Laborers Dist. Council Loc. 1144,

88 F.3d 40, 43 (1st Cir. 1996)). In these circumstances, a federal

court "do[es] not sit as a court of appeal to hear claims of

factual or legal error by an arbitrator or to consider the merits

of the award." Hoolahan, 947 F.3d at 111 (quoting Asociación de

Empleados del E.L.A. v. Unión Internacional de Trabajadores de la

Industria de Automóviles, 559 F.3d 44, 47 (1st Cir. 2009)). By

agreeing to have their disputes settled by an arbitrator, the

parties to a contract with an arbitration clause agree to accept

"the arbitrator's view of the facts and of the meaning of the

contract." Hutson, 229 F.3d at 330 (quoting United Paperworkers

Int'l Union v. Misco, Inc., 484 U.S. 29, 37-38 (1987)).

court decision should depend upon 'the respective institutional advantages of trial and appellate courts,'" id. (quoting Salve Regina Coll. v. Russell, 499 U.S. 225, 233 (1991)). In deriving the factual background to its rulings from the parties' submissions and the arbitration record, the district court had no special institutional advantage with respect to establishing the facts.

- 31 - By contrast, where a party challenges an arbitration

award by attacking the arbitrator's jurisdiction, the "question[s]

of arbitrability" at issue "are presumptively for courts to

decide." Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 n.2

(2013). This presumption is overcome only if the parties agreed

"by 'clear and unmistakable' evidence" to have an arbitrator decide

questions of arbitrability in addition to the merits of their

disputes. Henry Schein, Inc. v. Archer & White Sales, Inc., 139

S. Ct. 524, 530 (2019) (quoting First Options of Chi., Inc. v.

Kaplan, 514 U.S. 938, 944 (1995)). Here, the district court

concluded -- a conclusion New Balance does not challenge on appeal

-- that Ribadeneira and Superdeporte "did not clearly and

unmistakably agree to arbitrate arbitrability." Ribadeneira, 2021

WL 4419943, at *10. The district court accordingly reviewed the

arbitrator's determinations regarding his own jurisdiction de

novo. See Sutter, 569 U.S. at 569 n.2. We likewise determine the

scope of the arbitrator's jurisdiction "independently," First

Options, 514 U.S. at 943, even as our analysis is "informed" by

the arbitrator's determinations in his own analysis of his

jurisdiction, Solvay Pharms., Inc. v. Duramed Pharms., Inc., 442

F.3d 471, 477 (6th Cir. 2006) (citing Mobil Oil Corp. v. Loc. 8-

766, 600 F.2d 322, 325 (1st Cir. 1979)).

- 32 - B. Legal Principles

As the parties agree, Massachusetts law governs the

question whether the arbitrator properly exercised jurisdiction

over appellees.13 In general, Massachusetts law recognizes that

"arbitration is a matter of contract and a party cannot be required

to submit to arbitration any dispute which he has not agreed so to

submit." Loc. Union No. 1710, Int'l Ass'n of Fire Fighters v.

City of Chicopee, 721 N.E.2d 378, 381 (Mass. 1999), abrogated on

other grounds by Mass. Highway Dep't v. Perini Corp., 828 N.E.2d

34 (Mass. 2005) (quoting AT&T Techs., Inc. v. Commc'ns Workers,

475 U.S. 643, 648 (1986)). Nevertheless, arbitral jurisdiction is

"not limited to those who have signed an arbitration agreement."

Walker v. Collyer, 9 N.E.3d 854, 861 (Mass. App. Ct. 2014) (citing

Thomson-CSF, S.A., v. Am. Arb. Ass'n, 64 F.3d 773, 776 (2d Cir.

1995)). Following case law developed in the federal courts,

Massachusetts courts have identified six theories under which

nonsignatories may be bound by the arbitration agreements of

13 We held supra that, despite the choice-of-law provisions in Sections 20 and 21 of the Distribution Agreement specifying the applicability of Massachusetts law, federal law rather than Massachusetts law governs procedural issues in the judicial review of the arbitrator's awards because those provisions were insufficient to displace the default FAA regime for enforcement of arbitration awards. Here, by contrast, the question is what law applies to determine whether the arbitrator properly exercised jurisdiction; that question was a "matter[] in dispute" before the arbitrator that, according to Section 21, must be decided "in accordance with the laws of the Commonwealth of Massachusetts."

- 33 - others: "(1) incorporation by reference; (2) assumption; (3)

agency; (4) veil-piercing/alter ego; (5) equitable estoppel, and

(6) third-party beneficiary." Machado v. System4 LLC, 28 N.E.3d

401, 408 (Mass. 2015) (footnotes and citations omitted); see also

Walker, 9 N.E.3d at 861 (citations omitted).

New Balance argues that the arbitrator's exercise of

jurisdiction over appellees was supportable under theories of

assumption and equitable estoppel. We explain these theories

before turning to examine how they apply in the instant case.

1. Assumption

In Machado, the Massachusetts Supreme Judicial Court

("SJC") recognized that "'a party may be bound by an arbitration

clause if its subsequent conduct indicates that it is assuming the

obligation to arbitrate,' despite being a non-signatory." 28

N.E.3d at 408 n.10 (quoting Thomson-CSF, 64 F.3d at 777). Apart

from acknowledging assumption as one potential source of arbitral

jurisdiction over a nonsignatory of an arbitration agreement,

however, the SJC and Massachusetts courts more generally have not

addressed the theory in great depth. Mindful that Massachusetts

courts have considered it "appropriate to give strong weight to

decisions in other jurisdictions" in examining when a signatory to

an arbitration agreement can compel a nonsignatory to arbitrate,

Walker, 9 N.E.3d at 859 (quoting O'Brien v. Hanover Ins. Co., 692

- 34 - N.E.2d 39, 44 (Mass. 1998)), we look beyond Massachusetts case law

for guidance.

We note that federal courts have applied the assumption

theory in at least two sets of circumstances. First, where a

nonsignatory to a contract with an arbitration clause is the

successor-in-interest to an entity that was a party, the

nonsignatory assumes its predecessor's obligation to arbitrate.

For example, where a nonsignatory to a licensing agreement

containing an arbitration clause merged with, and then dissolved,

a licensee, the nonsignatory was deemed to have "voluntarily

assumed" the obligations of the agreement as the signatory

licensee's "successor," including the obligation to arbitrate.

Fyrnetics (H.K.) Ltd. v. Quantum Grp., Inc., 293 F.3d 1023, 1029

(7th Cir. 2002). The court insisted that the nonsignatory

successor entity could not "escape application of the license

agreement's arbitration agreement by effectively legislating [the

licensee] out of existence." Id. Similarly, where one broker-

dealer acquired from another broker-dealer customer accounts

governed by client agreements containing arbitration clauses, the

court explained that the acquiring broker-dealer "can be held to

have assumed the predecessor's liabilities" -- including the

obligation to arbitrate as a nonsignatory of the client agreements

-- if there was a "'de facto merger' of the two entities" or "a

'mere continuance' of the predecessor by the successor," such that

- 35 - the acquiring broker-dealer was the "successor-in-interest" to the

predecessor broker-dealer. Ryan, Beck & Co. v. Fakih, 268 F. Supp.

2d 210, 229-30 (E.D.N.Y. 2003).14

Second, where a nonsignatory is assigned rights under a

contract containing an arbitration clause, the assignee assumes

the obligation to arbitrate under that clause. See Fisser v. Int'l

Bank, 282 F.2d 231, 233 n.6 (2d. Cir. 1960) ("[A]ssignees of

contracts containing arbitration provisions may become parties to

such provisions." (citations omitted)); cf. GMAC Com. Credit LLC

v. Springs Indus., Inc., 171 F. Supp. 2d 209, 214 (S.D.N.Y. 2001)

14 The court in Ryan, Beck seemed to treat the theory that a successor-in-interest assumes the predecessor entity's obligation to arbitrate as distinct from the traditional assumption theory, describing that theory as a principle that it was recognizing "[i]n addition" to the assumption and estoppel theories. 268 F. Supp. 2d at 229. Here, by contrast, we treat the successor-in-interest theory as a form of assumption, rather than as an additional exception to the rule that nonsignatories are not bound to arbitrate. But even if we were to classify the successor-in- interest theory as distinct from the assumption theory, we think Massachusetts courts would not hesitate to treat successor liability as a basis for binding nonsignatories to an arbitration agreement. While Massachusetts courts have expressly recognized six traditional theories for binding nonsignatories to arbitration agreements, they have not treated this as an exhaustive list. See Machado, 28 N.E.3d at 408; Walker, 9 N.E.3d at 861. Moreover, the federal cases cited by the Machado and Walker courts expressly indicate that the various theories for binding nonsignatories to arbitration reflect traditional principles of contract and agency law. See, e.g., E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 195 (3d Cir. 2001); Thomson-CSF, 64 F.3d at 776; Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 345 F.3d 347, 356 (5th Cir. 2003). The principle that a successor-in-interest is liable for the obligations of its predecessor is such a traditional principle of agency and corporate law. Ryan, Beck, 268 F. Supp. 2d at 229.

- 36 - (holding that, under the Uniform Commercial Code, where an assignee

is assigned rights under a contract, the "assignee suing on an

assigned contract is bound by that contract's arbitration clause

unless it secured a waiver"). This rule follows from "the basic

principle that an assignee . . . whose rights are premised on a

contract is bound by the remedial provisions bargained for between

the original parties to the contract." Banque de Paris et des

Pays-Bas v. Amoco Oil Co., 573 F. Supp. 1464, 1469 (S.D.N.Y. 1983).

Otherwise, an arbitration clause "would be of no value," since "a

party 'could escape the effect of such a clause by assigning a

claim subject to arbitration between the original parties to a

third party.'" Id. at 1470 (quoting Hosiery Mfrs.' Corp. v.

Goldston, 143 N.E. 779, 780 (N.Y. 1924)).

2. Equitable Estoppel

Drawing on the Second Circuit's articulation of the

"direct benefits estoppel" theory, the Massachusetts Appeals Court

recognized that a signatory may estop a nonsignatory from avoiding

arbitration where the nonsignatory has "knowingly exploit[ed] an

agreement with an arbitration clause," such as by "'knowingly

accept[ing] the benefits' of such an agreement," provided the

benefits at issue were "direct." Walker, 9 N.E.3d at 861-62

(quoting MAG Portfolio Consult, GMBH v. Merlin Biomed Grp. LLC,

268 F.3d 58, 61 (2d Cir. 2001)). Benefits are "direct" when they

"flow[] directly from the agreement," while "indirect" benefits

- 37 - arise from "exploit[ing] the contractual relation of parties to an

agreement" but not "the agreement itself." Id. at 862 (quoting

MAG Portfolio, 268 F.3d at 61).

Federal courts in a number of other circuits, applying

federal common law, have endorsed and further expounded on the

direct benefits theory of equitable estoppel. For example, the

Third Circuit held that nonsignatories who, "during the life of [a

contract containing an arbitration clause], have embraced the

contract despite their non-signatory status but then, during

litigation, attempt to repudiate the arbitration clause in the

contract," may be estopped from avoiding the obligation to

arbitrate under that clause. E.I. DuPont de Nemours & Co. v. Rhone

Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 200 (3d

Cir. 2001), quoted with approval in InterGen N.V. v. Grina, 344

F.3d 134, 146 (1st Cir. 2003). See also Noble Drilling Servs.,

Inc. v. Certex USA, Inc., 620 F.3d 469, 473-74 (5th Cir. 2010);

Hellenic Inv. Fund, Inc. v. Det Norske Veritas, 464 F.3d 514, 517-

18 (5th Cir. 2006).

Applying the direct benefits theory of equitable

estoppel, these courts have recognized specifically that a

nonsignatory is estopped from avoiding the obligation to arbitrate

under a contract's arbitration clause when the nonsignatory brings

a claim under the contract. See, e.g., Noble Drilling, 620 F.3d

at 473 (explaining that direct benefit estoppel applies when a

- 38 - nonsignatory to a contract with an arbitration clause "seek[s] to

enforce the terms of that contract or assert[s] claims that must

be determined by reference to that contract"); Int'l Paper Co. v.

Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 418 (4th

Cir. 2000) ("In the arbitration context, . . . a party may be

estopped from asserting that the lack of his signature on a written

contract precludes enforcement of the contract's arbitration

clause when he has consistently maintained that other provisions

of the same contract should be enforced to benefit him.").

C. Application

The district court concluded that the assumption and

equitable estoppel theories provide no basis for arbitral

jurisdiction over Superdeporte and Ribadeneira. On de novo review,

we reach a different conclusion.

1. Jurisdiction over Superdeporte

New Balance relies on both an assumption theory and an

equitable estoppel theory to argue that the arbitrator properly

exercised jurisdiction over Superdeporte as to New Balance's

claims for breach of the Distribution Agreement and for tortious

interference, and as to Superdeporte's own counterclaims. Because

we conclude that the assumption theory, standing alone, provides

sufficient support for the arbitrator's exercise of jurisdiction

over Superdeporte, we do not address the applicability of the

direct benefits estoppel theory.

- 39 - (a) Assumption

New Balance argues that Superdeporte was subject to the

arbitrator's jurisdiction because, as PSG's successor-in-interest,

it assumed an obligation to arbitrate under the arbitration clause

contained in the original Distribution Agreement.

Relying on Thomson-CSF, the district court rejected New

Balance's argument. In Thomson-CSF, 64 F.3d at 777, the Second

Circuit remarked that where a nonsignatory "explicitly disavowed

any obligations arising out of" a contract with an arbitration

clause, it cannot be held to have assumed the obligation to

arbitrate under that clause. Noting Superdeporte's repeated

objections to arbitral jurisdiction, the district court determined

that Superdeporte had not assumed any duty to arbitrate, regardless

of whether it was PSG's successor-in-interest.

We cannot agree with the district court's interpretation

of Thomson-CSF. To be sure, in determining whether a nonsignatory

corporate parent had assumed the obligation to arbitrate with a

supplier under a contract concluded between its subsidiary and the

supplier, the Thomson-CSF court looked to whether the nonsignatory

corporate parent's conduct "manifest[ed] an intention to be bound"

by the contract. Id. However, the court's inquiry was into the

nonsignatory's entire course of conduct relating to the contract

at issue, including its conduct before arbitration proceedings

commenced. The Thomson-CSF court highlighted the fact that, even

- 40 - before the nonsignatory corporate parent acquired the signatory

subsidiary, the corporate parent had "explicitly informed" the

supplier that it was "not adopting the [contract]" and "did not

consider itself bound" by it. Id. at 775. Thomson-CSF therefore

does not support the district court's view that Superdeporte's

post hoc objections to jurisdiction, made during arbitration and

litigation, were sufficient to definitively negate New Balance's

contention that Superdeporte had assumed an obligation to

arbitrate under the Distribution Agreement as PSG's successor-in-

interest.

We therefore consider whether Superdeporte was liable

for PSG's obligations under the Distribution Agreement as its

successor-in-interest and thereby became bound by the agreement's

arbitration clause.

As a general rule, Massachusetts law counsels against

imposing the liabilities of a corporation on its successor. See

Smith v. Kelley, 139 N.E.3d 314, 322 (Mass. 2020). However, where

there is a "reorganization transforming a single company from one

corporate entity into another," Milliken & Co. v. Duro Textiles,

LLC, 887 N.E.2d 244, 255 (Mass. 2008) (quoting McCarthy v. Litton

Indus., Inc., 570 N.E.2d 1008, 1012 (Mass. 1991)), successor

liability may be imposed if "the entity remains essentially the

same, despite a formalistic change of name or of corporate form,"

such that the successor entity is a "mere continuation of its

- 41 - predecessor," Kelley, 139 N.E.3d at 323. To determine whether an

entity is such a "mere continuation," Massachusetts courts examine

"the continuity or discontinuity of the ownership, officers,

directors, stockholders, management, personnel, assets, and

operations of the two entities." Id. They also look to whether,

after the reorganization, only one entity continues to exist. See

Milliken, 887 N.E.2d at 255. In this "mere continuation" analysis,

"no single factor is dispositive." Kelley, 139 N.E.3d at 323

(quoting Milliken, 887 N.E.2d at 255-56).

Here, almost all of these factors support the conclusion

that Superdeporte was a "mere continuation" of PSG. The continuity

of operations between PSG and Superdeporte is perhaps the most

striking factor. It is undisputed that Superdeporte was created

to take over PSG's role as New Balance's distributor in Peru. The

arbitrator found, and the arbitration record confirms, that New

Balance dealt with Superdeporte as its Peruvian distributor from

May 2016, when Superdeporte became ready to begin operations.

This continuity of operations was matched by a

substantial continuity of assets. The arbitration record

discloses that PSG sold its entire inventory of New Balance

products to Superdeporte, and that Superdeporte acquired PSG's

intercompany debt as well as the right to use office premises

- 42 - previously occupied by PSG.15 Moreover, while PSG was not

dissolved, it is undisputed that it ceased distribution operations

after selling its assets to Superdeporte.16

There was, in addition, substantial continuity of

personnel and ownership between PSG and Superdeporte. Ribadeneira

himself testified during arbitration proceedings that he was the

"ultimate owner" behind both entities. As the arbitrator found,

and appellees do not contest, Superdeporte also hired former PSG

employees, and Ribadeneira exercised effective control of

Superdeporte as he had done with PSG.

Of all these factors, it is mainly PSG's continued

existence as a separate entity that weighs against a conclusion

that Superdeporte was a "mere continuation" of PSG. When taken

together, however, the balance of the factors strongly supports

the conclusion that Superdeporte was PSG's successor-in-interest.

Consequently, we deem Superdeporte to have assumed PSG's

15 Contrary to appellees' assertion, this sale of assets satisfied the "prerequisite to successor liability," that there be "a transfer of all, or substantially all, assets from predecessor to successor." Premier Cap., LLC v. KMZ, Inc., 984 N.E.2d 286, 292 (Mass. 2013) (emphasis added) (first quoting Carreiro v. Rhodes Gill & Co., 68 F.3d 1443, 1448 (1st Cir. 1995), then quoting Nat'l Soffit & Escutcheons, Inc. v. Superior Sys., Inc., 98 F.3d 262, 266 (7th Cir. 1996)). 16 Evidence in the arbitration record reveals that, having been stripped of its assets, PSG was then transferred to a new owner outside the retail group owned by Ribadeneira.

- 43 - obligation to arbitrate under the arbitration clause in the

Distribution Agreement.

(b) Scope of the Distribution Agreement's Arbitration Clause Having concluded that, as a "mere continuation" of PSG

and hence its successor-in-interest, Superdeporte assumed the

obligation to arbitrate under the Distribution Agreement's

arbitration clause, we now examine what claims are arbitrable under

that clause, which encompasses "any and all disputes (whether in

contract or any other theories of recovery) related to or arising

out of" the Distribution Agreement, or that are related to or arise

out of "the relationship" between the parties to that contract,

namely New Balance and PSG. We specifically seek to determine, as

an exercise in contract interpretation, whether the arbitration

clause covers those claims and counterclaims resolved by the

arbitrator in which Superdeporte either was found liable or had

itself sought relief: New Balance's breach of contract claim and

tortious interference claim, and the two counterclaims that

Superdeporte, joining with PSG, filed.

We begin by considering the claim brought by New Balance

alleging breach of the Distribution Agreement, for which the

arbitrator held Superdeporte jointly liable. The Distribution

Agreement's arbitration clause binds to arbitration all disputes

"related to or arising out of" the contract. Since a claim for

breach of the Distribution Agreement is undoubtedly a dispute

- 44 - arising out of that agreement, New Balance's claim is clearly

arbitrable under the Distribution Agreement's arbitration clause.

Having assumed PSG's obligation to arbitrate under that clause,

Superdeporte was required to arbitrate the claim.

We consider next whether Superdeporte's two

counterclaims are encompassed by the Distribution Agreement's

arbitration clause. The first counterclaim alleged that New

Balance had breached the New Agreement -- an agreement designed to

continue, albeit in a different form, the business relationship

between PSG and New Balance in Peru. As such, it is a dispute

"related to or arising out of" the "relationship" between New

Balance and PSG. The second counterclaim alleged that New Balance

had acted in bad faith during the negotiations seeking to extend

the relationship between PSG and New Balance. Disputes related to

or arising out of the breakdown of the relationship between New

Balance and PSG are disputes "related to or arising out of" their

"relationship." See Next Step Med. Co. v. Johnson & Johnson Int'l,

619 F.3d 67, 72 (1st Cir. 2010) (holding that an arbitration clause

covering disputes "arising out of or relating in any way to" the

"business relationship" between the parties encompassed a tort

claim relating to the "breakdown" of that relationship). Since

both of Superdeporte's counterclaims related to or arose out of

the relationship -- and its breakdown -- between PSG and New

Balance, they come within the scope of the Distribution Agreement's

- 45 - arbitration clause. Given that Superdeporte assumed the

obligation to arbitrate under that clause as PSG's successor-in-

interest, the arbitrator's exercise of jurisdiction to rule on

Superdeporte's counterclaims was therefore proper.

We turn next to New Balance's tortious interference

claim as against Superdeporte, for which the arbitrator held

Superdeporte (and PSG) jointly liable with Ribadeneira due to the

assignment by Superdeporte (and PSG) of the Peru Claims to

Ribadeneira. But it is not the question of Superdeporte's

liability on the tortious interference claim that is before us.17

Our inquiry is into whether Superdeporte was required to submit to

the arbitrator's resolution of that claim. Specifically, we ask

whether the tortious interference claim is encompassed by the

Distribution Agreement's arbitration clause, to which Superdeporte

is bound as PSG's successor-in-interest.

In answering that question of arbitrability, we note at

the outset that the broad language of the Distribution Agreement's

arbitration clause, covering "any and all" disputes "whether in

contract or any other theories of recovery," embraces not only

17In seeking vacatur of the arbitrator's awards, Superdeporte has not challenged the arbitrator's determination of liability on the merits of the tortious interference claim -- or any other claim -- but only the arbitrator's jurisdiction.

- 46 - contract-based claims but also tort claims such as a tortious

interference claim.

Here, the tortious interference alleged was

Ribadeneira's pursuit of the Peru injunction by improper means.

This injunction was granted by the Peruvian court as relief for

the Peru Claims. As we explained in discussing the arbitrability

of Superdeporte's counterclaims, which asserted what were

essentially the Peru Claims in the arbitration, these claims are

disputes "related to or arising out of" the "relationship" between

the parties to the Distribution Agreement. The first claim,

alleging that New Balance breached the New Agreement, was a claim

"arising out of" a contract that would have formalized the

continuation of New Balance and PSG's distribution "relationship"

in Peru. The second claim, alleging bad faith by New Balance in

contract negotiations, "related to" the breakdown of the

"relationship" between New Balance and PSG.

Since the Peru Claims were disputes "related to or

arising out of" the "relationship" between New Balance and PSG,

the tortious interference claim alleging that Ribadeneira

improperly obtained the Peru injunction as relief for those same

Peru Claims is also fairly describable as a dispute "related to or

arising out of" the "relationship" between New Balance and PSG.

The tortious interference claim is therefore encompassed by the

- 47 - Distribution Agreement's arbitration clause.18 As PSG's successor-

in-interest, Superdeporte assumed the obligation to arbitrate

under that clause and, accordingly, it was bound to arbitrate the

tortious interference claim.

2. Jurisdiction over Ribadeneira

New Balance's arguments that Ribadeneira was bound to

arbitrate its tortious interference claim rely again on the

assumption and equitable estoppel theories. New Balance invoked

an assumption theory in contending that when Ribadeneira was

assigned PSG and Superderporte's claims arising from the New

Agreement and the negotiations surrounding it, he assumed the

obligation to arbitrate under both the New Agreement and the

original Distribution Agreement. New Balance invoked an equitable

estoppel theory in arguing that, because Ribadeneira brought suit

in Peru alleging claims relating to the Distribution Agreement and

New Agreement, he is estopped from escaping the obligation to

arbitrate under the arbitration clauses of both contracts.19

18 Our conclusion is strengthened by the presumption under Massachusetts law in favor of arbitrability where, as here, the arbitration clause is broadly worded. See Carpenter v. Pomerantz, 634 N.E.2d 587, 589 (Mass. App. Ct. 1994) (holding that the broad language of an arbitration clause encompassing "[a]ny dispute arising out of or relating to this Agreement or the breach thereof" created a "strong presumption of arbitrability"); cf. Commonwealth v. Philip Morris Inc., 864 N.E.2d 505, 511 (Mass. 2007) ("[W]hen considering a broadly worded arbitration clause, there is a presumption that a contract dispute is encompassed by the clause unless it is clear that the dispute is excluded."). 19 We understand New Balance to have invoked the equitable

- 48 - The district court concluded that jurisdiction over

Ribadeneira was unsupportable on these theories, for reasons that

appellees echo on appeal. The court determined that the assumption

theory could not justify arbitral jurisdiction over Ribadeneira

because it interpreted the assignment agreements to have

transferred only claims relating to the putative New Agreement,

not the original Distribution Agreement. As such, any obligation

to arbitrate that Ribadeneira assumed by the assignment agreements

could only have been under the New Agreement, not the Distribution

Agreement. But since the arbitrator found that the New Agreement

never became an enforceable contract, Ribadeneira could not have

assumed a binding obligation to arbitrate.

The district court also relied on its interpretation of

the assignment agreements as transferring only rights under the

New Agreement to conclude that the direct benefits estoppel theory

failed to establish arbitral jurisdiction over Ribadeneira.

Because Ribadeneira's lawsuit in the Peruvian courts asserted

claims under the New Agreement only, the court reasoned,

Ribadeneira only received a direct benefit from the New Agreement.

He would therefore only be estopped from avoiding the New

estoppel theory for jurisdiction over Ribadeneira when it observed that "Ribadeneira . . . invoke[d] the Distribution Agreement and the putative [New Agreement] while trying to escape the arbitration clause," and then urged that Ribadeneira's "pick-and-choose strategy is unavailing."

- 49 - Agreement's arbitration clause. But because the New Agreement is

unenforceable, Ribadeneira could not have acquired an effective

obligation to arbitrate by being estopped from avoiding the New

Agreement's arbitration clause.

We disagree with the district court and appellees that

equitable estoppel is powerless to impose an effective obligation

on Ribadeneira to arbitrate under the New Agreement's arbitration

clause. Because we conclude that principles of equitable estoppel

are sufficient to bind Ribadeneira to arbitration under the New

Agreement's arbitration clause, we do not consider the assumption

theory that New Balance also presses.

(a) Equitable Estoppel

It is undisputed that Ribadeneira filed suit in Peru

alleging that New Balance had breached the New Agreement. He

thereby obtained an injunction against New Balance that lasted

from December 2017 to July 2018. In this way, Ribadeneira sought

to legally enforce -- and for well over half a year, succeeded in

enforcing -- a claim under that contract. Because he sought to

enforce the terms of the New Agreement, thereby knowingly receiving

a direct benefit from that contract, we conclude that Ribadeneira

was estopped from avoiding that putative contract's arbitration

clause, despite his nonsignatory status. See Noble Drilling, 620

F.3d at 473; Int'l Paper, 206 F.3d at 418; Walker, 9 N.E.3d at

861-62.

- 50 - To be sure, as emphasized by the district court and

appellees, the arbitrator ruled that the New Agreement never became

an enforceable contract. If so, then the New Agreement and its

arbitration clause do not impose valid contractual obligations.

But the unenforceability of the New Agreement as a matter of

contract law does not preclude compelling Ribadeneira to abide by

that agreement's arbitration clause by the application of

equitable estoppel. After all, "[e]very modern instance of

estoppel . . . is an illustration of equity's refusal to accept a

legal outcome and of its power to change it." Andrew Kull,

Equity's Atrophy, 97 Notre Dame L. Rev. 1801, 1803 (2022). Perhaps

the clearest example of the equitable power of courts to impose an

obligation in the absence of any contractual basis for that

obligation is provided by the doctrine of promissory estoppel,

where detrimental reliance -- without the consideration necessary

for the formation of a valid contract -- can give rise to binding

obligations.20

As Massachusetts courts have recognized, in the absence of 20

an enforceable contract, "promissory estoppel implies a contract . . . where there is proof of an unambiguous promise coupled with detrimental reliance by the promisee." Malden Police Patrolman's Ass'n v. Malden, 82 N.E.3d 1055, 1064 (Mass. App. Ct. 2017) (citing R.I. Hosp. Trust Nat'l Bank v. Varadian, 647 N.E.2d 1174, 1178 (Mass. 1995)). Notably, promissory estoppel does not apply where there is an enforceable contract. See id. at 1064 ("Where an enforceable contract exists, . . . a claim for promissory estoppel will not lie.").

- 51 - In the arbitration context, equitable estoppel applies

to prevent a nonsignatory from opportunistically adopting

inconsistent stances toward a contract according to what would

suit its advantage: a nonsignatory will be estopped from "embracing

a contract, and then turning its back on the portions of the

contract, such as an arbitration clause, that it finds

distasteful." DuPont, 269 F.3d at 200. Here, Ribadeneira obtained

the Peru injunction in his favor predicated on his claim that the

New Agreement was a binding contract. We are persuaded that

equitable estoppel applies here to prevent him, when challenging

the arbitrator's jurisdiction, from maintaining that the contract

was never executed, in direct contradiction to his earlier stance.

See 18B Charles A. Wright and Arthur R. Miller, Federal Practice

and Procedure § 4477 (3d ed. 1998) ("Absent any good explanation,

a party shall not be allowed to gain an advantage by litigating on

one theory, and then seek an inconsistent advantage by pursuing an

incompatible theory."); see generally In re Buscone, 61 F.4th 10

(1st Cir. 2023). Ribadeneira is estopped from denying that the

New Agreement's arbitration clause is enforceable, just as he is

estopped from asserting his nonsignatory status to avoid the

obligation to arbitrate under that clause. Accordingly, he is

obliged to abide by the New Agreement's arbitration clause, even

if that putative contract was never executed.

- 52 - (b) Scope of the New Agreement's Arbitration Clause

Having concluded that Ribadeneira is bound by the New

Agreement's arbitration clause, we now examine whether that clause

embraces the one claim as to which the arbitrator found him liable,

namely New Balance's tortious interference claim. As we explained

supra, the language in the New Agreement's arbitration clause is

identical to that of the Distribution Agreement's arbitration

clause. The New Agreement's arbitration clause therefore binds to

arbitration "any and all disputes (whether in contract or any other

theories of recovery) related to or arising out of" that putative

contract or "the relationship" between the alleged parties to the

agreement.

The misconduct underlying the tortious interference

claim was Ribadeneira's seeking and obtaining of the Peru

injunction based on misrepresentations. The Peruvian court

granted the Peru injunction as relief for the Peru Claims, one of

which alleged that New Balance had failed to perform its

obligations under the New Agreement. The tortious interference

claim is, for that reason, a dispute "related to or arising out

of" the New Agreement. Accordingly, the claim was arbitrable under

the New Agreement's arbitration clause. Being bound by equitable

estoppel to abide by that clause, Ribadeneira was subject to the

arbitrator's resolution of the tortious interference claim.

- 53 - IV.

We have concluded that the arbitrator properly exercised

jurisdiction over both Ribadeneira and Superdeporte as to the

various claims and counterclaims on which he ruled. The order of

the district court vacating the arbitration awards for lack of

arbitral jurisdiction is therefore reversed. We remand the case

to the district court with instructions to grant New Balance's

cross-motion to confirm the arbitrator's awards.

So ordered. Costs to appellant.

- 54 - APPENDIX

PERUVIAN LITIGATION ARBITRATION DISTRICT COURT

CLAIM / Brought by Against Brought by Against RULINGS RULINGS COUNTERCLAIM

PSG, Breach of PSG and No arbitral Superdeporte, Distribution New Balance Superdeporte jurisdiction over and Agreement liable Superdeporte Ribadeneira

PSG, PSG, No arbitral Superdeporte, Tortious Superdeporte, jurisdiction over New Balance and interference and Superdeporte and Ribadeneira Ribadeneira Ribadeneira liable

Ribadeneira, PSG and Breach of No arbitral as assignee New Superdeporte New Balance New New Balance jurisdiction over of PSG and Balance (counter- not liable Agreement Superdeporte Superdeporte claimants)

Ribadeneira, PSG and Bad faith in No arbitral as assignee New Superdeporte New Balance contract New Balance jurisdiction over of PSG and Balance (counter- not liable negotiations Superdeporte Superdeporte claimants)

- 55 -