Chapter One of the Federal Arbitration Act enforces arbitration agreements during the pre-award stage by authorizing orders: (a) staying litigation of arbitrable claims; (b) compelling arbitration; (c) appointing one or more arbitrators; and (d) enforcing arbitral hearing subpoenas. We’ve discussed the basics of the first two of these remedies in prior installments of this post. This and one or more other future installments will address he third: an order appointing arbitrators.
This instalment addresses the following FAQs concerning the judicial appointment of arbitrators under 9 U.S.C. § 5:
- Under what Circumstances can a Court Appoint Arbitrators under Section 5 of the Federal Arbitration Act?
- What Papers Comprise an Application to Appoint an Arbitrator under Section 5?
The next installment will address the FAQs:
- “How does Section 5 Work in Practice?”
- “Does Section 5 of the Federal Arbitration Act authorize a Court to Appoint a Replacement Arbitrator if an Arbitrator Dies Prior to the Making of an Award?”
Under what Circumstances can a Court Appoint Arbitrators under Section 5 of the Federal Arbitration Act?
Section 5 of the Federal Arbitration Act provides that “[i]f in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed. . . .” 9 U.S.C. § 5. This provision of Section 5 reflects “the central or primary purpose of the [Federal Arbitration Act (“FAA”)][,]” which is “to ensure that private agreements to arbitrate are enforced according to their terms.” Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 678-80 (2010) (citation and quotations omitted). It also ensures enforcement of what Circuit Court Judge Richard A. Posner once dubbed the “cornerstone of the arbitral process”: “Selection of the decision maker by or with the consent of the parties. . . . Lefkovitz v. Wagner, 395 F.3d 773, 780 (2005) (Posner, J.); see, e.g., Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Art. V(1)(d), June 10, 1958, 21 U.S.T. 2519, T.I.A.S. No. 6997 (a/k/a the “New York Convention”) (implemented by 9 U.S.C. §§ 201, et. seq.) (award subject to challenge where “[t]he composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties”); Stolt-Nielsen, 559 U.S. at 668, 670 (one of the FAA’s “rules of fundamental importance” is parties “may choose who will resolve specific disputes”) (emphasis added; citations omitted); Encyclopaedia Universalis S.A. v. Encyclopaedia Brittanica, Inc., 403 F.3d 85, 91-92 (2d Cir. 2005) (vacating award by panel not convened in accordance with parties’ agreement); Cargill Rice, Inc. v. Empresa Nicaraguense Dealimentos Basicos, 25 F.3d 223, 226 (4th Cir. 1994) (same); Avis Rent A Car Sys., Inc. v. Garage Employees Union, 791 F.2d 22, 25 (2d Cir. 1986) (same).
In addition to directing that arbitrator selection and qualification provisions be enforced according to their terms, Section 5 authorizes court intervention for appointing arbitrators in three situations:
- “if no method be provided therein. . . [;]”
- “if a method be provided and any party thereto shall fail to avail himself of such method[;] or”
- “if for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy. . . .”
9 U.S.C. § 5.
In any of those situations Section 5 authorizes “either party” to make an “application” to the court for an order “designat[ing]” and “appoint[ing] “an arbitrator or arbitrators or umpire,” “who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein. . . .” 9 U.S.C. § 5. Section 5 also states that “unless otherwise provided in the agreement arbitration shall be by a single arbitrator.” 9 U.S.C. § 5.
Appointing Arbitrators: What Papers Comprise an Application to Appoint an Arbitrator under Section 5?
Like applications under Section 4 of the Federal Arbitration Act, and all other applications for relief under the Federal Arbitration Act, an application to appoint arbitrators under Section 5, when brought as an independent legal proceeding in federal district court, is a summary or expedited proceeding, not a regular lawsuit. The application, like all other Federal Arbitration Act applications, is governed by Section 6 of the Act, which provides that “[a]ny application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise . . . expressly provided [in the Federal Arbitration Act].” 9 U.S.C. § 6.
In cases where the application to appoint an arbitrator commences an independent proceeding in a federal district court, the papers in support of the application will ordinarily consist of: (a) a notice of application; (b) a summons; (c) the application itself; (d) a memorandum of law in support; and (e) any supporting affidavits or declarations, principally (but not necessarily exclusively) for putting before the court pertinent documents. Sometimes the application is referred to as a “petition,” rather than an “application,” but the variation in nomenclature does not change the substance or legal effect of the paper.
Documents that should be submitted to the Court ordinarily include copies of: (a) the contract containing the arbitration agreement; (b) the arbitration demand and any related correspondence, including with the arbitrator provider; (c) any documents evidencing efforts to appoint an arbitrator or arbitration panel; (d) any documents evidencing the presence of one or more of the three grounds under which Section 5 authorizes a court to appoint an arbitrator; and (e) a list of arbitrators the court should consider appointing, along with their qualifications.
The application should show that: (a) the court has subject matter jurisdiction, personal jurisdiction, and venue; (b) the parties entered into a written arbitration agreement falling under the Federal Arbitration Act, or that the applicant is entitled to claim against the respondent under a written arbitration agreement; (c) at least one of the three grounds for Section 5 relief is present; (d) appointing an arbitrator from the applicant’s list is warranted in the circumstances, including under the parties’ agreement.
Please note. . .
This guide, including the installments that will follow in later posts, and prior installments, does not purport to be a comprehensive recitation of the rules and principles of arbitration law pertinent or potentially pertinent to the issues discussed. It is designed simply to give clients, prospective clients, and other readers general information that will help educate them about the legal challenges they may face and how engaging a skilled, trustworthy, and experienced arbitration attorney can help them confront those challenges more effectively.
This guide is not intended to be legal advice and it should not be relied upon as such. Nor is it a “do-it-yourself” guide for persons who represent themselves pro se, whether they are forced to do so by financial circumstances or whether they voluntarily elect to do so.
If you want or require arbitration-related legal advice, or representation by an attorney in an arbitration or in litigation about arbitration, then you should request legal advice from an experienced and skilled attorney or law firm with a solid background in arbitration law.
About the Author
Philip J. Loree Jr. is a partner and founding member of Loree & Loree. He has nearly 30 years of experience handling matters arising under the Federal Arbitration Act and in representing a wide variety of clients in arbitration, litigation, and arbitration-related litigation. He is a former partner of the litigation departments of the New York City firms of Cadwalader, Wickersham & Taft LLP and Rosenman & Colin LLP (now known as Katten Munchin Rosenman LLP).
Loree & Loree represents private and government-owned-or-controlled business organizations, and persons acting in their individual or representative capacities, and often serves as co-counsel, local counsel or legal adviser to other domestic and international law firms requiring assistance or support.
Loree & Loree was recently selected by Expertise.com out of a group of 1,763 persons or firms reviewed as one of Expertise.com’s top 18 “Arbitrators & Mediators” in New York City for 2019, and now for 2020. (See here and here.)
If you have any questions about arbitration, arbitration-law, arbitration-related litigation, this article, or any other legal-related matter, you can contact Phil Loree Jr. at (516) 941-6094 or at PJL1@LoreeLawFirm.com.
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Photo Acknowledgment
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Tags: Application to Appoint Arbitrator, Appoint Arbitrator, Avis Rent A Car Sys. Inc. v. Garage Employees, Businesspersons Federal Arbitration Act FAQ, Cargill Rice Inc. v. Empressa Nicaraguense Dealimentos Basicos, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Encyclopaedia Universalis S.A. v. Encyclopaedia Brittanica Inc, Federal Arbitration Act, Lefkovitz v. Wagner, New York Convention, Papers Filed on Application to Appoint Arbitrators, Personal Jurisdiction, Section 5, Section 5 Application, Stolt Nielsen S.A. v. Animalfeeds Int'l Corp., Subject Matter Jurisdiction, Venue
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