Answer ... The Federal Arbitration Act, 9 USC § 1 et seq (FAA), governs arbitration agreements in contracts involving interstate commerce; it applies in both federal and state courts. The only specific requirement for enforceability under the FAA is that the arbitration agreement be in writing (9 USC §§ 2-4). Section 12 of the FAA provides that where the FAA applies, an agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract” (9 USC § 12). The same contract principles that apply to contracts generally under state law apply to arbitration agreements under the FAA.
Answer ... The same arbitration law governs both domestic and international arbitration proceedings, and is set forth in three chapters located in Title 9 of the US Code.
Chapter 1 (9 USC § 1 et seq) codifies the FAA and sets forth general provisions applicable to arbitration agreements involving maritime, interstate or foreign commerce.
Chapter 2 (9 USC § 201 et seq) implements the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘New York Convention’). The provisions of Chapter 1 apply to foreign arbitral awards and proceedings only “to the extent that chapter is not in conflict with” the New York Convention (9 USC § 208).
Chapter 3 (9 USC § 301 et seq) implements the 1975 Inter-American Convention on International Arbitration (‘Panama Convention’). Should a conflict arise between Chapter 1 and Chapter 3, the provisions in Chapter 3 apply (9 USC § 307). Where both the New York and Panama Conventions could apply to the enforcement of an arbitral award, the New York Convention controls, unless the parties indicate that the Panama Convention should apply (9 USC § 305).
Answer ... The United States has not enacted the UNCITRAL Model Law. Eight states, however, have enacted statutes based on the Model Law: California, Connecticut, Florida, Georgia, Illinois, Louisiana, Oregon and Texas. The FAA and the Model Law have several similar provisions, but differ in other significant respects. The main differences relate to:
- the number of arbitrators and the method of their selection in the absence of party agreement;
- the authority of the arbitral tribunal to rule on its own jurisdiction (competence-competence);
- the power of the courts to correct or modify an award; and
- the grounds for setting aside an award.
Several issues addressed by the Model Law are not addressed by the FAA. These include:
- the availability of provisional measures from a court;
- the disclosure obligations of the arbitrators;
- the means of challenging an arbitrator’s alleged impartiality;
- the arbitrator’s authority, in the absence of party agreement, to determine the venue and language of the arbitration and the governing law;
- the tribunal’s right to appoint experts;
- procedures to follow upon default; and
- the form of the arbitral award.
Answer ... The FAA contains no mandatory rules governing arbitral proceedings sited in the United States.
Answer ... There are no current plans to significantly amend the FAA. However, courts continue to interpret its provisions. A divided US Supreme Court, in Epic Sys Corp v Lewis, __US__, 2018 WL 2292444 (21 May 2018), held that class action waiver provisions in employer-imposed arbitration agreements are enforceable and do not violate the National Labor Relations Act. The court observed that: “In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.” The controversial decision resolves a split in the federal courts of appeals on the issue.
Answer ... The United States acceded to the New York Convention in 1970 and implemented its provisions in Chapter 2 of Title 9 of the US Code. There are two reservations. First, the United States recognises only awards made in another state that has ratified the Convention. Second, the United States applies the convention only to matters recognised under domestic law as “commercial”. Courts have construed these reservations narrowly (Karaha Bodas Co v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F3d 274 (5th Cir 2004)).
Answer ... Chapter 3 of the FAA (9 USC § 301 et seq) implements the Panama Convention. In addition, the United States has signed and ratified the Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965). The United States also has 20 bilateral free trade agreements in force and is a party to 42 bilateral investment treaties. These trade and investment agreements provide a limited right for investors from one contracting state to arbitrate claims lodged against the state in which they invested.