Mutual Benefit Life Ins. Co. v. Zimmerman

In Mutual Benefit Life Ins. Co. v. Zimmerman, 783 F.Supp. 853 (D.N.J.), aff'd, 970 F.2d 899 (3d Cir.1992), Judge Lechner addressed the issue in the context of an action arising out of reinsurance agreements. In that case, the movants, who were nonsignatories to the agreement, sought to compel the reinsurers to arbitration, while the reinsurers argued that the movants did not have standing to compel arbitration since they were not parties to the agreement. Id. at 864-865. The court began its analysis by noting that "'the right to compel arbitration derives from a contractual right. . . .'" Id. at 865. Thus, a non-party to an agreement, absent certain special circumstances, lacks standing to compel arbitration of claims. Ibid. While the Mutual Benefit Life court found that the "movants have failed to establish they are either agents or third-party beneficiaries under the Management Agreement andaccordingly, they lacked standing to compel arbitration," id. at 867, "the terms of the agreement and the allegations of the complaint" were deemed controlling, id.at 866.