In Republic of Iraq v BNP Paribas USA, (2d Cir. Mar. 28, 2012), Iraq tried to arbitrate claims as a third-party beneficiary of the United Nations and BNP Paribas contract entered into under the UN Oil-for-Food Program. The agreement contained an arbitration clause requiring arbitration of "any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof."

The Second Circuit addressed two issues:

The Second Circuit agreed with the district court, finding that the language in the arbitration clause did not provide "clear and unmistakable evidence" that the particular question of arbitrability at issue here (that is, whether Iraq may invoke the arbitration clause as a third-party beneficiary of the contract) should be decided by arbitrators. Thus, the court must decide. The court then turned to the question of whether Iraq could invoke the arbitration clause.

Assuming that Iraq was a third-party beneficiary and could enforce the contract, the court explained that Iraq must show by a preponderance of evidence that the parties intended to allow Iraq to invoke arbitration. The court concluded that given the plain language of the agreement there was a lack of evidence that BNP agreed to arbitrate claims arising out of its contracts with the UN with a purported third-party beneficiary of the contract. Therefore, the court affirmed the district court's denial of Iraq's motion to compel arbitration.

This case outlines the standards for a third-party beneficiary trying to invoke an arbitration agreement and demonstrates the court's emphasis on the parties' intentions when deciding the rights of non-signatories.