Today’s segment of the Businessperson’s Federal Arbitration ACT FAQ Guide continues to focus on the nuts and bolts of applications to compel arbitration under Section 4 of the Federal Arbitration Act.
The last instalment discussed Section 4 generally, divided the statute into five parts, and addressed an FAQ related to the first of those five parts: “Under Section 4, who May Petition what Court when and for what?”
This segment addresses the following FAQ related to the second of those five parts: “What Papers Comprise an Application to Compel Arbitration and how are they Served?”
Future segments will address FAQs relating to the other three parts of Section 4.
Applications to Compel Arbitration: Section 4 and its Component Parts
As explained in our prior post, Section 4 consists of 386 words jammed into a single paragraph, but it is easier to digest and follow if we divide it up into subparagraphs or subsections, which we do below, using bold and bracketed text:
[(a) Who may Petition what Court When and for What.] A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.
[(b) Notice and Service of Petition.] Five days’ notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure.
[(c) Hearing Procedure and Venue.] The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.
[(d) Jury Trial, where Applicable] If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or issues to a jury in the manner provided by the Federal Rules of Civil Procedure, or may specially call a jury for that purpose.
[(e) Disposition upon Trial.] If the jury find that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury find that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.
9 U.S.C. § 4 (bold and bracketed text added).
What Papers Comprise an Application to Compel Arbitration and how are they Served?
The question of what papers comprise an application to compel arbitration and how are they served arises out of what we refer to as “Section 4(b),” which states:
Five days’ notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure.
. . . .
9 U.S.C. § 4.
These two sentences should be interpreted in conjunction with Section 6 of the Federal Arbitration Act and the Federal Rules of Civil Procedure. Also relevant is whether the application to compel is an independent proceeding, or is simply a motion made in an existing action.
Section 6: Application treated as a Motion
Like all other applications for relief under the Federal Arbitration Act, an application to compel arbitration, when brought as an independent legal proceeding in federal district court, is a summary or expedited proceeding, not a regular lawsuit. Rule 81(a)(6)(B) of the Federal Rules of Civil Procedure provides that the Federal Rules “to the extent applicable, govern proceedings under the following laws, except as these laws provide for other procedures. . . (B) 9 U.S.C., relating to arbitration. . . .”
Section 6 of the FAA “provide[s] for. . . procedures” other than those applicable to ordinary civil actions because it requires applications for relief under the FAA to be made and heard as motions:
Any 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.
While Section 6 of the Federal Arbitration Act and Fed. R. Civ. P. 81(a)(6)(B) establish that Federal Rules of Civil Procedure pleading rules applicable to full-blown lawsuits do not apply to applications to compel arbitration, those Rules, and also local court rules, govern motion practice, and are thus made applicable by Section 6 to applications to compel arbitration, unless otherwise provided in the Federal Arbitration Act.
Requirement of Five Days’ Notice
What we refer to as “Section 4(b)” states, in part: “Five days’ notice in writing of such application shall be served upon the party in default.”
That means: (a) notice of the application to compel arbitration must be in writing; (b) it must be dispatched or delivered in a prescribed manner to the opposing party (i.e. “served”); and (c) it must be so dispatched or delivered at least five days before the hearing date on the motion.
