Author: Daniel M. Kolkey*
Published: December 1990
Description: “It’s not broken; don’t fix it.” That is often the response to proposals to reform the Federal Arbitration Act (the “FAA” or the “Act”). Enacted in 1925 to reserve the common law’s hostility towards arbitration, the Act has since served as the federal centerpiece for the enforcement of arbitration agreements and awards.
However, while a number of judicial decisions have strengthened the Act from within — i.e., the federal right to enforce arbitration agreements has been applied to state as well as federal
court proceedings and the type of disputes subject to arbitration has been expanded — external developments have weakened the Act from without. Specifically, leading industrial jurisdictions interested in encouraging more international commercial arbitrations within their own borders (e.g. England and France) have instituted reforms of their arbitration laws. And since the FAA addresses only a limited number of issues — primarily the enforcement of arbitral agreements and awards — the enactment of these newer and more comprehensive arbitral regimes (many of which addressed issues specific to international arbitrations) has given many of these jurisdictions a competitive boost vis-a-vis the FAA.
*Partner, Gibson, Dünn & Crutcher, Los Angeles.