Author: Michael F. Hoellering*
Published: March 1990
| Jurisdiction: United States |
Topics: Arbitrators and Arbitral Tribunals Categories of Disputes Commercial Disputes AAA FAA New York Convention UNCITRAL Model Law |
Description: The United States provides a most Hospitable climate for the arbitral resolution of disputes. Modern legislation at both federal and state levels provides an orderly and predictable legal framework for the enforcement of arbitral agreements and awards, and for judicial assistance without undue interference from the courts.
I. THE UNITED STATES ARBITRATION ACT
The United States Arbitration Act (FAA) was enacted to foster the use of arbitration and to end judicial hostility towards this form of private dispute resolution. It applies to international and maritime transactions, as well as to those arising in commerce between states. Section 2 of the FAA provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The Act further provides for a stay of judicial proceedings where the contested issue is arbitrable under the agreement, and directs the courts to order arbitration if a party fails to honor an agreement to arbitrate. Chapter 2 of the FAA serves to implement the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards in the United States. It sets forth the conditions under which international commercial disputes may be subject to the FAA’s reach, establishes which courts have proper jurisdiction, and delineates their role in compelling arbitration and confirming awards. All but two states have their own arbitration laws governing the form and substance of arbitration within their borders. These statutes closely resemble the FAA, although some are more detailed in certain procedural aspects.
*Michael F. Hoellering is General Counsel of the American Arbitration Association. The assistance of Vicki M. Young, AAA Editor of Court Decisions, in the preparation of this article is gratefully acknowledged.