PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

INTERNATIONAL PAPER COMPANY,
Plaintiff-Appellant,

v.
                                                                  No. 98-2482
SCHWABEDISSEN MASCHINEN &
ANLAGEN GMBH,
Defendant-Appellee.

Appeal from the United States District Court
for the District of South Carolina, at Greenwood.
Solomon Blatt, Jr., Senior District Judge.
(CA-93-2727-9-8)

Argued: January 25, 2000

Decided: March 14, 2000

Before MOTZ and KING, Circuit Judges, and
John T. COPENHAVER, Jr., United States District Judge
for the Southern District of West Virginia,
sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge King and Judge Copenhaver joined.

_________________________________________________________________

COUNSEL

ARGUED: William Jefferson Leath, Jr., LEATH, BOUCH &
CRAWFORD, Charleston, South Carolina, for Appellant. Keating
Lewis Simons, III, LAW OFFICES OF SIMONS & KEAVENY,
Charleston, South Carolina, for Appellee.
OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

A buyer became dissatisfied with an industrial saw and brought suit
against the manufacturer of the saw on the basis of a contract between
the distributor and the manufacturer. The question presented to us is
whether an arbitration clause in the distributor-manufacturer contract
requires the buyer, a nonsignatory to that contract, to arbitrate its
claims against the manufacturer. The district court held that it did.
Concluding that the buyer cannot sue to enforce the guarantees and
warranties of the distributor-manufacturer contract without complying
with its arbitration provision, we affirm.

I.

Westinghouse Electric Corporation (a predecessor-in-interest of the
International Paper Company) sought to purchase an industrial saw
manufactured by Schwabedissen Maschinen & Anlagen GMBH, a
German corporation. On April 1, 1991, Westinghouse sent to Wood
Systems Incorporated, a United States distributor of Schwabedissen
saws, a non-binding letter of intent to purchase a new Schwabedissen
double trim saw. Westinghouse personnel then visited Schwa-
bedissen's facility in Germany to observe its production process.
Upon their return, in a purchase order from Westinghouse to Wood
dated May 17, 1991, Westinghouse agreed to buy and Wood agreed
to sell the Schwabedissen saw, in accordance with a performance
guarantee and certain specifications.

On June 6, 1991, Schwabedissen sent Wood an "Order Confirma-
tion/Contract" for the saw Westinghouse sought to purchase, which
included extensive specifications. Schwabedissen contends, and the
district court found, that this contract also included the terms of two
additional documents--the "General Conditions for the Supply and
Erection of Plant and Machinery for Import and Export No. 188A,
prepared under the auspices of the United Nations Economic Com-
mission for Europe" (the "General Conditions"), and the "Annex
attached to the General Conditions for the Supply and Erection of
Plant and Machinery for Import and Export by the German Mechani-
cal Engineering Industry" (the "Annex"). The "General Conditions"

                    2
contain an arbitration clause providing that "[a]ny dispute arising out
of the Contract shall be finally settled, in accordance with the Rules
of Conciliation and Arbitration of the International Chamber of Com-
merce, by one or more arbitrators designated by those Rules," and
establish the governing law as that of the country of the contractor.
The "Annex" permits the contractor to bring an action before a court
rather than an arbitrator "unless and until the dispute has been referred
to arbitration by one of the parties."

On June 12, 1991, Wood sent a purchase order for the saw to Sch-
wabedissen, together with the specifications from Westinghouse's
purchase order. In response, Schwabedissen arranged for delivery of
the saw, which was installed at Westinghouse's plant in late Decem-
ber 1991. According to Westinghouse, the saw "completely failed to
properly operate once installed or at anytime thereafter." No written
contract ever existed between Westinghouse and Schwabedissen, but
Westinghouse maintains that when difficulty arose as to the saw's
operation, Schwabedissen orally agreed to repair the saw, but failed
to do so.

On July 9, 1993, after Wood declared bankruptcy, Westinghouse
filed a complaint against Schwabedissen in South Carolina state court,
alleging breach of contract, rejection, and breach of warranties based
on the May 17, 1991, purchase order between Westinghouse and
Wood. Westinghouse alleged that Wood acted as an agent for Schwa-
bedissen and therefore Schwabedissen was liable under that purchase
order. Schwabedissen removed the case to federal court.

On September 21, 1994, Westinghouse filed an amended com-
plaint, in which it added allegations based on the Wood-
Schwabedissen contract and asserted that it was a third-party benefi-
ciary of that contract. Schwabedissen then moved to stay the federal
court proceedings pending arbitration, relying on the arbitration
clause contained in its contract with Wood.

At argument on the motion to stay, Westinghouse maintained that
as a third-party beneficiary of the Wood-Schwabedissen contract, it
could compel arbitration in any disputes with a party to the contract,
but that a party could not compel a third-party beneficiary to arbitrate.
Responding to the district court's skepticism about this contention,

                     3
Westinghouse withdrew its third-party beneficiary claim. The district
court then continued the hearing to allow the parties to brief the issues
without that claim.

When the district court again heard argument, Westinghouse con-
tended that it had no knowledge of, and so could not be bound by, the
"General Conditions" (containing the arbitration clause) assertedly
made part of the Wood-Schwabedissen contract. The district court
rejected this argument, reasoning that because Westinghouse sought
"to take advantage of certain commitments that were made by Schwa-
bedissen to" Wood in the Wood-Schwabedissen contract, it was
bound by all commitments in that contract, including the arbitration
provision.

Westinghouse then argued that, notwithstanding an affidavit of a
Schwabedissen employee that the Wood-Schwabedissen contract
included the "General Conditions," nothing in the June 6 contract nor
June 12 purchase order indicated that Wood had in fact accepted the
"General Conditions" as part of its contract with Schwabedissen. The
district court again continued the hearing on the motion to stay to
allow further discovery. At the subsequent hearing, Schwabedissen
produced an agreement between itself and Wood dated February 24,
1993, indicating that the "General Conditions" were part of the June
6 Wood-Schwabedissen contract. Westinghouse offered no contrary
evidence. The district court found that the "General Conditions" were
part of the Wood-Schwabedissen contract and that Westinghouse was
subject to the arbitration provision; therefore, the court granted Sch-
wabedissen's motion to stay proceedings pending arbitration. The dis-
trict court also substituted the International Paper Company, which
had purchased certain Westinghouse assets, for Westinghouse in the
litigation.

International Paper filed a request for arbitration before the Interna-
tional Court of Arbitration in Geneva. At the conclusion of the arbitral
proceedings, the arbitrators ruled in Schwabedissen's favor. The arbi-
trators concluded that International Paper had asserted no basis for
recovery against Schwabedissen because no contract existed between
Schwabedissen and Westinghouse (International Paper's predecessor-
in-interest), Wood was not an agent for Schwabedissen, and Westing-
house was not a third-party beneficiary of the Wood-Schwabedissen

                    4
contract. The arbitrators also assessed costs against International
Paper.

When International Paper refused to comply with the arbitration
award, Schwabedissen sought its enforcement in the district court.
International Paper moved for leave to file a second amended com-
plaint, seeking to allege a breach of both an implied warranty of
workmanlike service and an oral contract to repair. The district court
granted Schwabedissen's motion to enforce the arbitral award and
denied International Paper's motion for leave to amend. International
Paper now appeals.1

II.

International Paper claims that the district court erred in finding
that the Schwabedissen-Wood contract contains an arbitration clause.
It further contends that even if the contract contains such a clause, it
was not bound to adhere to it.

A.

Initially, International Paper contends that the Wood-
Schwabedissen contract contains no arbitration clause. International
Paper argues that the June 12 purchase order Wood sent to Schwa-
bedissen was "the actual contract" between Wood and Schwa-
bedissen, and that the parties never incorporated the "General
Conditions," which contain the arbitration clause, into that contract.2
_________________________________________________________________
1 Schwabedissen maintains International Paper has failed to invoke our
jurisdiction over all of the issues in the case because International Paper
noted an appeal from the district court's order enforcing the arbitral
award, not its final order assessing post-judgment interest. The conten-
tion is meritless. See Firstier Mortgage Co. v. Investors Mortgage Ins.
Co., 498 U.S. 269, 276 (1991) ("[W]hen a district court announces a
decision that would be appealable if immediately followed by the entry
of judgment," then "a notice of appeal from a nonfinal decision . . . oper-
ate[s] as a notice of appeal from the final judgment.").
2 It is unclear whether International Paper argues on appeal that the
June 12 purchase order constituted the sole Wood-Schwabedissen con-
tract, i.e., that the Wood-Schwabedissen contract does not include the

                    5
Schwabedissen submitted an affidavit from one of its employees
stating that the Wood-Schwabedissen contract included the "General
Conditions." In addition, Schwabedissen offered a separate agreement
signed by Schwabedissen and Wood, dated February 24, 1993, that
referenced the contract for the saw sold to Westinghouse and stated
that the "General Conditions" were attached to that contract. Although
International Paper failed to contradict this evidence in any way, it
nonetheless claims that the district court erred in finding that "the
only reasonable inference that [it could] get from [the evidence] was
that the arbitration agreement was a part of the[Wood-
Schwabedissen] contract."

We review factual findings that form the basis of a decision as to
whether the parties have agreed to submit a dispute to arbitration for
clear error. See First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 947-48 (1995). We find no error in the district court's factual
finding that the Wood-Schwabedissen contract included the "General
Conditions" containing the arbitration clause. Indeed, International
Paper offered nothing to counter Schwabedissen's evidence in support
of this finding.

B.

International Paper's principal contention is that even if the Wood-
Schwabedissen contract contains an arbitration clause, that clause
cannot be enforced against International Paper, a non-signatory to the
Wood-Schwabedissen contract.3
_________________________________________________________________
June 6 "Order/Confirmation Contract." International Paper does not
expressly so contend and the argument appears to be frivolous. Interna-
tional Paper itself concedes that the June 12 purchase order between
Wood and Schwabedissen was preceded by the far more detailed June 6
"Order/Confirmation Contract." In any event, because International
Paper never contended in the district court that the June 12 purchase
order between Wood and Schwabedissen constituted the sole Wood-
Schwabedissen contract, we refuse to consider that argument on appeal.
See United States v. Banisadr Bldg. Joint Venture , 65 F.3d 374, 379 (4th
Cir. 1995).
3 The arbitration clause is a broad one, requiring arbitration of "[a]ny
dispute arising out of the Contract." International Paper makes no argu-
ment that the clause, if binding on it, does not cover the claims asserted
in its complaint.

                    6
Generally, "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." United Steelworkers v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 582 (1960); see also AT & T Techs., Inc. v. Communi-
cations Workers, 475 U.S. 643, 648 (1986). While a contract cannot
bind parties to arbitrate disputes they have not agreed to arbitrate, "[i]t
does not follow . . . that under the [Federal Arbitration] Act an obliga-
tion to arbitrate attaches only to one who has personally signed the
written arbitration provision." Fisser v. International Bank, 282 F.2d
231, 233 (2d Cir. 1960). Rather, a party can agree to submit to arbitra-
tion by means other than personally signing a contract containing an
arbitration clause.

Well-established common law principles dictate that in an appro-
priate case a nonsignatory can enforce, or be bound by, an arbitration
provision within a contract executed by other parties.4 For example,
in J.J. Ryan & Sons v. Rhone Poulenc Textile, S.A., 863 F.2d 315,
320-21 (4th Cir. 1988), we explained that when allegations against "a
parent company and its subsidiary are based on the same facts and are
_________________________________________________________________
4 The Supreme Court has directed that we "apply ordinary state-law
principles that govern the formation of contracts," First Options, 514
U.S. at 944, and the "federal substantive law of arbitrability." Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
Thus state law determines questions "concerning the validity, revoca-
bility, or enforceability of contracts generally," Perry v. Thomas, 482
U.S. 483, 493 n.9 (1987), but the Federal Arbitration Act, 9 U.S.C. § 2
(1994), and the Convention on the Recognition and Enforcement of For-
eign Arbitral Awards, enforced by 9 U.S.C. §§ 201-08 (1994), "create a
body of federal substantive law of arbitrability, applicable to any arbitra-
tion agreement within the coverage of the Act." Moses H. Cone Mem'l
Hosp., 460 U.S. at 24. These statutes constitute"a congressional declara-
tion of liberal federal policy favoring arbitration agreements, notwith-
standing any state substantive or procedural policies to the contrary." Id.
The policy applies "with special force in the field of international com-
merce." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
U.S. 614, 631 (1985). Because the determination of whether Interna-
tional Paper, a nonsignatory, is bound by the Wood-Schwabedissen con-
tract presents no state law question of contract formation or validity, we
look to the "federal substantive law of arbitrability" to resolve this ques-
tion.

                     7
inherently inseparable, a court may refer claims against the parent to
arbitration even though the parent is not formally a party to the arbi-
tration agreement." We further explained that"[t]he same result has
been reached under a theory of equitable estoppel." Id.; see also
Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc. , 10 F.3d 753, 757-
78 (11th Cir. 1993) (holding that because claims against nonsignatory
parent were "intimately founded in and intertwined with" a contract
containing an arbitration clause, signatory was estopped from refusing
to arbitrate those claims); Hughes Masonry Co. v. Greater Clark
County Sch. Bldg. Corp., 659 F.2d 836, 840-41 (7th Cir. 1981) (find-
ing signatory equitably estopped from repudiating arbitration clause
in agreement on which suit against nonsignatory was based). More-
over, the Second Circuit recently noted that it had recognized that five
theories "aris[ing] out of common law principles of contract and
agency law" could provide a basis "for binding nonsignatories to arbi-
tration agreements: 1) incorporation by references; 2) assumption; 3)
agency; 4) veil piercing/alter ego; and 5) estoppel." Thomson-CSF,
S.A. v. American Arbitration Ass'n, 64 F.3d 773, 776 (2d Cir. 1995)
(citing cases); see also Bel-Ray Co. v. Chemrite (PTY) Ltd., 181 F.3d
435, 440-43 (3d Cir. 1999); Amoco Transport Co. v. Bugsier Recderei
& Bergungs, A.G. (In re Oil Spill By the"Amoco Cadiz"), 659 F.2d
789, 795-96 (7th Cir. 1981).5
_________________________________________________________________
5 Such cases have spawned a burgeoning array of secondary authorities.
See, e.g., H. Warren Knight et al., Arbitration By and Against
Nonsignatories, in California Practice Guide: Alternative Dispute
Resolution, at §§ 5:261 to :288 (1998); Hope T. Stewart, The Equitable
Estoppel Argument for and Against Commercial Arbitration: From
Hughes Masonry Co., Inc. v. Clark County School Building Corp. to
Northern, Ltd. v. R.E. James, 103 Com. L.J. 336 (1998); David F.
Sawrie, Special Project, Equitable Estoppel and the Outer Boundaries of
Federal Arbitration Law: The Alabama Supreme Court's Retrenchment
of an Expansive Federal Policy Favoring Arbitration , 51 Vand. L. Rev.
721 (1998); Jeff DeArman, Comment, Resolving Arbitration's Nonsigna-
tory Issue: A Critical Analysis of the Application of Equitable Estoppel
in Alabama Courts, 29 Cumb. L. Rev. 645 (1998-1999); Scott M. Mckin-
nis, Note, Enforcing Arbitration with a Nonsignatory: Equitable Estop-
pel and Defensive Piercing of the Corporate Veil, 1995 J. Disp. Resol.
197; Shea Welch, Comment, Arbitration Agreements: Standard of
Review, Interpretation and Who is Bound, 1997 J. Disp. Resol. 271.

                 8
We believe that the doctrine of equitable estoppel applies here.
Equitable estoppel precludes a party from asserting rights "he other-
wise would have had against another" when his own conduct renders
assertion of those rights contrary to equity. First Union Commercial
Corp. v. Nelson, Mullins, Riley & Scarborough (In re Varat Enters.,
Inc.) 81 F.3d 1310, 1317 (4th Cir. 1996); see also Lowery v. Stovall,
92 F.3d 219, 223 (4th Cir. 1996). In the arbitration context, the doc-
trine recognizes that 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 bene-
fit him. "To allow [a plaintiff] to claim the benefit of the contract and
simultaneously avoid its burdens would both disregard equity and
contravene the purposes underlying enactment of the Arbitration
Act." Avila Group, Inc. v. Norma J. of California, 426 F. Supp. 537,
542 (S.D.N.Y. 1977).

A nonsignatory is estopped from refusing to comply with an arbi-
tration clause "when it receives a `direct benefit' from a contract con-
taining an arbitration clause." American Bureau of Shipping v.
Tencara Shipyard S.P.A., 170 F.3d 349, 353 (2d Cir. 1999) (citing
Thomson-CSF, 64 F.3d at 778-79); Deloitte Noraudit A/s v. Deloitte
Haskins & Sells, 9 F.3d 1060, 1064 (2d Cir. 1993) (holding nonsigna-
tory bound to arbitrate when it knew of the arbitration agreement and
"knowingly accepted the benefits of" that agreement); cf. Hughes
Masonry Co., 659 F.2d at 838-39 ("[I]t would be manifestly inequita-
ble to permit Hughes to both claim that J.A. [a nonsignatory] is liable
to Hughes for its failure to perform the contractual duties described
in the [arbitration agreement] and at the same time deny that J.A. is
a party to that agreement in order to avoid arbitration of claims clearly
within the ambit of the arbitration clause."). 6
_________________________________________________________________
6 Some courts have, at a nonsignatory's instance, required a signatory
of an arbitration agreement to arbitrate with the nonsignatory because of
"the close relationship between the entities involved, as well as the rela-
tionship of the alleged wrongs to the nonsignatory's obligations and
duties in the contract . . . and [the fact that] the claims were `intimately
founded in and intertwined with the underlying contract obligations.'"
Sunkist, 10 F.3d at 757 (quoting McBro Planning & Dev. Co. v. Triangle
Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984)). The Second Cir-

                     9
Applying these principles here we can only conclude that Interna-
tional Paper is estopped from refusing to arbitrate its dispute with
Schwabedissen. The Wood-Schwabedissen contract provides part of
the factual foundation for every claim asserted by International Paper
against Schwabedissen. In its amended complaint, International Paper
alleges that Schwabedissen failed to honor the warranties in the
Wood-Schwabedissen contract, and it seeks damages, revocation, and
rejection "in accordance with" that contract. International Paper's
entire case hinges on its asserted rights under the Wood-
Schwabedissen contract; it cannot seek to enforce those contractual
rights and avoid the contract's requirement that"any dispute arising
out of" the contract be arbitrated. The district court did not err in so
holding.7

III.

Alternatively, International Paper urges us to refuse to enforce the
arbitration clause in the Wood-Schwabedissen contract because that
clause is assertedly flawed and fundamentally unfair. For this conten-
tion International Paper relies on our recent decision in Hooters of
_________________________________________________________________
cuit has held, however, that a "close relationship" and "intimate[ ]" fac-
tual connection provide no independent basis to require a nonsignatory
of an arbitration agreement to arbitrate with a signatory, and therefore
that a nonsignatory cannot be bound without receiving a "direct benefit"
from or pursuing a "claim . . . integrally related to the contract containing
the arbitration clause." Thomson-CSF, 64 F.3d at 778-80. We need not
reach this question here because International Paper clearly does seek a
"direct benefit" from the Wood-Schwabedissen agreement and makes a
"claim . . . integrally related to" that contract.
7 For the same reason, we reject International Paper's claim that the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, see 9 U.S.C.A. § 201 (West 1999), precludes enforcement of the
arbitral award because it requires United States courts to enforce interna-
tional arbitration agreements only against parties to "an agreement in
writing." Art. II, ¶ 1. As we have previously recognized, the estoppel
doctrine also applies to non-signatories to arbitration agreements gov-
erned by the Convention. See J.J. Ryan & Sons , 863 F.2d at 320-21; see
also Smith/Enron Cogeneration Ltd. Partnership v. Smith Cogeneration
Int'l, Inc., 198 F.3d 88, 97-98 (2d Cir. 1999).

                    10
America, Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999), in which we
found that an employer "materially breached the arbitration agree-
ment by promulgating rules so egregiously unfair as to constitute a
complete default of its contractual obligation to draft arbitration rules
and to do so in good faith." Id. at 938. In Hooters, we concluded that
the plaintiff employee was not required to submit to"rules . . . so one-
sided that their only possible purpose is to undermine the neutrality
of the proceeding." Id.

The contractual arbitration provision in Hooters allowed the
employer, but not its employees, "to bring suit in court to vacate or
modify an arbitral award when it [the employer] can show, by a pre-
ponderance of the evidence, that the panel exceeded its authority." Id.
at 939. The Hooters arbitration clause required employees to provide
the company notice of any claim, including "`the nature of the
Claim'" and "`the specific act(s) or omission(s) which are the basis
of the Claim,'" as well as "a list of all fact witnesses with a brief sum-
mary of the facts known to each," but the company was not required
to file any responsive pleadings, notice of its defenses, or lists of wit-
nesses. Id. at 938. The contract provided that arbitrators were to be
chosen from a list of arbitrators "created exclusively by Hooters"; the
employer was free to place on that list arbitrators with "existing rela-
tionships, financial or familial" with the company. Id. at 939. Further-
more, once proceedings began, employees were not permitted to raise
any matters not raised in the initial notice, nor were the employees
allowed to audio or videotape the arbitration hearing--though the
company was permitted to do this. Id.

By contrast, in this case, the sole arbitration provision with which
International Paper finds fault permits Schwabedissen "to bring an
action, instead of before an arbitrator, before the ordinary court of his
residence or of his principal place of business, or before the ordinary
court having jurisdiction over the Purchaser, unless and until the dis-
pute has been referred to arbitration by one of the parties." (Empha-
sis added.) This provision does nothing more than give
Schwabedissen a limited right to bring a judicial action in the event
that the other party expresses no interest in arbitration. The arbitration
clause at issue here contains none of the features so objectionable in
the arbitration clause at issue in Hooters. Rather than requiring the
adverse party to choose their arbitrators from a pool selected strictly

                     11
by Schwabedissen, the clause requires (by mandating compliance
with International Chamber of Commerce Rules) that every arbitrator
"remain independent of the parties involved in the arbitration." Inter-
national Chamber of Commerce, ICC Rules of Conciliation and Arbi-
tration 14 (1990). Unlike the Hooters provision, the Wood-
Schwabedissen arbitration clause contains unexceptional filing and
notice requirements. Indeed, the arbitration process required under the
Wood-Schwabedissen agreement differs in virtually every respect
from the egregiously unbalanced, unfair process in Hooters.

Accordingly, we reject International Paper's assertion that the arbi-
tration provision at issue here is flawed and unfair.8

IV.

Finally, International Paper contends that the district court erred in
denying its motion for leave to amend its complaint for a second time
to allege two additional causes of action: breach of an implied war-
ranty of workmanlike service and breach of an oral contract to repair.

"We review a district court's decision to grant or deny a party leave
to amend for an abuse of discretion." Edwards v. City of Goldsboro,
178 F.3d 231, 242 (4th Cir. 1999). "Delay alone is an insufficient rea-
son to deny leave to amend." Id. But when a district court finds that
a party's delay in moving to amend is accompanied by"prejudice,
bad faith or futility," it does not abuse its discretion in refusing to per-
mit the amendment. Id.

International Paper filed its original complaint in July 1993; the
district court granted it leave to amend that complaint in September
1994. The company did not seek to amend its complaint a second
time until June 12, 1998--five years after it initiated this action and
four years after it had been granted leave to file its first amended
complaint. Moreover, International Paper did not request a second
opportunity to amend its complaint until after it had unsuccessfully
_________________________________________________________________
8 We have also carefully considered International Paper's other argu-
ments as to why the district court should not have enforced the arbitra-
tion clause and find them all meritless.

                     12
participated in lengthy international arbitration proceedings and
numerous hearings before the district court.

The district court denied the motion, finding that the amendment
would prejudice Schwabedissen; the court explained,"it is five years
after you brought the suit, six years after you knew about [the new
causes of action], when it could have been handled--already handled
and now you want to start over." International Paper demurred that
the two theories it wished to add were not new but had been alleged
in its earlier complaints; it also contended that the further amendment
to the complaint simply sought "to clean up that pleading and to
amplify the allegations already made." The district court rejected this
argument, explaining that if International Paper had indeed asserted
the allegations in its earlier complaints, then the allegations should
have been addressed in the arbitration proceedings; thus, the proposed
amendment would be futile. The district court's reasoning was sound;
it certainly did not abuse its discretion in refusing to permit the
amendment.

V.

For all of these reasons, the judgment of the district court is

AFFIRMED.

                     13
