## Facts

- Builders Federal (H.K.) Ltd., a Hong Kong corporation, served as a subcontractor on a construction project in Singapore.
- Turner East Asia, Ltd. (TEA), a Singapore corporation formed and controlled by U.S.-based Turner entities, was the project’s main contractor.
- Builders Federal and TEA executed a written subcontract that:
  - required arbitration in Singapore, and
  - directed that certain disputes “of the same character” as disputes under the main contract be arbitrated pursuant to the main contract’s arbitration terms.
- Disputes arose during performance; TEA ceased work, and Builders Federal pursued proceedings in Singapore to compel arbitration against TEA.
- TEA resisted arbitration on the basis that the subcontract directed the parties into the main contract’s arbitration framework and that the relevant procedures were not properly triggered or applicable.
- Builders Federal then petitioned in the Southern District of New York under the Federal Arbitration Act to compel arbitration in Singapore against TEA and also against Turner Construction Company and Turner International Industries, Inc., despite their non-signatory status.
- Builders Federal sought expedited discovery in the U.S. action to support an alter-ego/veil-piercing theory against the U.S. Turner entities.
- Defendants moved to dismiss or, alternatively, to stay the U.S. proceeding in favor of the contractual dispute-resolution process in Singapore.

## Issues

1. Whether non-signatory parent/affiliate corporations could be compelled to arbitrate under a subsidiary’s subcontract arbitration clause based on an alter-ego or veil-piercing theory.
2. Whether the court should compel arbitration or allow expedited discovery in the United States while related arbitrability and contract-interpretation questions were being pursued, or could be pursued, in the contractually selected foreign forum (Singapore).

## Decision

- The court declined, on the record presented, to compel the non-signatory Turner entities to arbitrate based solely on ownership and control of TEA.
- The court applied ordinary corporate-law veil-piercing standards and found the plaintiff had not made a sufficiently strong showing to disregard corporate separateness at that stage.
- The court was unwilling to bypass or displace the parties’ agreed Singapore arbitral framework through aggressive U.S. intervention.
- The court declined to authorize expansive, expedited discovery aimed at establishing alter-ego status without a stronger preliminary factual basis.

## Legal Principles

- Arbitration is contractual; a party generally may not be required to arbitrate disputes it did not agree to submit to arbitration.
- A non-signatory may be bound to an arbitration clause only under limited doctrines; where the theory is alter ego or veil piercing, courts apply standard corporate-law requirements rather than a relaxed arbitration-specific test.
- There is a strong presumption of corporate separateness; common ownership, shared control, or overlapping management ordinarily does not justify piercing the corporate veil.
- Where an international contract specifies a foreign arbitral forum, courts should give substantial weight to that choice and avoid unnecessary judicial interference, particularly when the designated forum can address arbitrability and contract-interpretation questions.
- Pre-arbitration discovery directed at binding non-signatories may be limited when it is not supported by concrete preliminary evidence of misuse of the corporate form.

## Conclusion

The court refused to compel non-signatory Turner parent entities to arbitrate in Singapore absent a substantial alter-ego/veil-piercing showing, and it declined to broaden U.S. judicial involvement through wide-ranging discovery or orders that would circumvent the parties’ agreed Singapore arbitration framework.


Builders Fed. (H.K.) Ltd. v. Turner Constr. Co., 655 F. Supp. 1400 (S.D.N.Y. 1987)