Ables v. United States

In Ables v. United States (1983), 2 Cl. Ct. 494, aff'd. (1984), 732 F.2d 166, the United States Court of Claims concluded that a provision requiring payment to a third party did not create third party beneficiary rights in that third party. The contract at issue in Ables was an arbitration agreement between the Air Force and a labor union, and the Claimant was an arbitrator who performed services for the parties. The Claimant sought recovery based upon a provision in the arbitration agreement that stated, "Each party shall pay the costs and expenses of the arbitrator they select. The parties shall share equally the costs and expenses of the neutral member." (2 Ct. Cl. at 500.) The Court ruled that the payment provision did not create a third party beneficiary relationship, reasoning that the agreement contemplated that payment would emanate from separate agreements between the parties and the arbitrator.