Whether a Court can compel enforcement of an arbitral subpoena that commands a witness to appear at a hearing by video conference is a critical one, particularly in view of the ongoing COVID-19 pandemic.
The last instalmentof this Businessperson’s Federal Arbitration Act FAQ Guide addressed a couple of key questions concerning Section 7 of the Federal Arbitration Act, which authorizes judicial enforcement of arbitral subpoenas that require non-party witnesses to attend and produce documents at arbitration hearings. That instalment explained, among other things, how Section 7, construed together with Federal Rule of Civil Procedure 45(c), authorize court enforcement of an arbitral subpoena that “command[s] a person to attend” a “hearing,” but “only if”: (a) “the person resides, is employed, or regularly transacts business in person[]” “within 100 miles” of the hearing. . . ; or (b) the. . . hearing is “within the state where the person resides, is employed, or regularly transacts business in person,” and then only if the person “is a party or a party’s officer[,]” or “is commanded to attend a trial and would not incur substantial expense.” Fed. R. Civ. P. 45(c); see 9 U.S.C. § 7.
That means that courts cannot enforce arbitral subpoenas that purport to compel witnesses outside the territorial boundaries of Fed. R. Civ. P. 45(c) to testify and produce documents at a hearing. And the majority of courts have ruled that Section 7 does not authorize arbitrators to issue judicially-enforceable document or deposition subpoenas, something that federal district courts can do in federal court litigation. (See here.)
But these days—as the COVID-19 pandemic changes the way we interact on a day-to-day basis—whether arbitrators can issue subpoenas requiring persons to appear for a video- or teleconference in lieu of a hearing is an important question, irrespective of whether those witnesses could be compelled to appear in person before the arbitrators under Fed. R. Civ. P. 45(c). To that question we now turn.
The last instalment of this post discussed how arbitrator selection and arbitrator appointment works in practice. This segment addresses the FAQ “Does Section 5 of the Federal Arbitration Act Authorize a Court to Appoint a Replacement Arbitrator if an Arbitrator on a Three-Person Panel Dies Prior to the Panel Making an Award?”
Does Section 5 of the Federal Arbitration Act Authorize a Court to Appoint a Replacement Arbitrator if an Arbitrator on a Three-Person Panel Dies Prior to the Panel Making an Award?
Under Second Circuit authority courts are not permitted to appoint a replacement arbitrator on a three-person panel if an arbitrator dies prior to the panel making a final award. The arbitration must start anew before a new panel.
If an arbitrator dies prior to the panel making a partial final award, then the original award stands, but the parties are required to constitute a new panel to arbitrate the issues that the partial final award did not resolve.
It is unlikely that Courts in the Seventh and Eighth Circuit will adopt this rule, and whether any others will adopt remains to be seen.
The last instalment of this post discussed Section 5, the circumstances under which Courts can appoint arbitrators under Section 5, what papers are filed on a Section 5 application, and what the application should show.
This segment addresses the FAQ “How does Section 5 Work in Practice?” Next we’ll address the FAQ “Does Section 5 of the Federal Arbitration Act Authorize a Court to Appoint a Replacement Arbitrator if an Arbitrator on a Three-Person Panel Dies Prior to the Panel Making an Award?”
The Arbitrator Selection Process
Once arbitration is demanded, the arbitrator selection process begins.
Arbitration agreements address arbitrator selection in different ways. Sometimes parties simply agree that the process set forth in arbitrator provider rules applies. Sometimes parties specify their own method of selection, and sometimes by their agreement they modify an otherwise agreed provider-rule-governed selection procedure.
The qualifications of the arbitrators, the number of arbitrators to serve, and the procedures (if any) to apply if the parties reach an impasse, are key components of the selection process.
For illustration purposes only let’s consider how, for example, arbitrator selection may work under what we sometimes refer to as the traditional, industry tripartite arbitrator selection model. While that model may vary according to the parties’ agreement, typically it requires the party demanding arbitration to appoint a party appointed arbitrator, and for the other party to appoint its own party appointed arbitrator within X days.
The two appointed arbitrators then select an umpire. Sometimes the parties agree that the appointed arbitrators select three umpire candidates each, strike two from the other’s list, and resolve the tie by coin flip, Dow Jones pick (last digit odd or even), or a like tie-breaking procedure.
If the other party fails to appoint timely its arbitrator, then the party demanding arbitration gets to appoint that arbitrator, and the arbitration may proceed even if the other party refuses to participate.
In administered arbitration, single arbitrators are often appointed by the arbitration provider generating a list of an odd number of arbitrator candidates and allowing the parties to strike an even number of candidates, with the remaining candidate being appointed as an umpire. Sometimes provision is made for the arbitration provider to submit an additional list if one or both parties request it.
These are simply examples of how arbitrator selection may proceed. If you’ve agreed to administered arbitration, be sure to check provider rules, for they typically specify the number of arbitrators to serve, their qualifications, how they are to be selected, in situations where the parties do not otherwise agree.
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.
ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.
Photo Acknowledgment
The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law. Loree & Loree added text to this photo.
This segment of the Businessperson’s Federal Arbitration ACT FAQ Guide focuses on the venue and hearing procedure aspects of compelling arbitration under Section 4 of the Federal Arbitration Act.
The last instalment discussed the following FAQ related to Section 4 applications to compel arbitration: “What Papers Comprise an Application to Compel Arbitration and how are they Served?”
This segment addresses two FAQs:
How does a Federal Court “Hear” an Application to Compel Arbitration?
In what Federal Court may an Application to Compel Arbitration be Filed?
Introduction: Section 4 and its Component Parts
As explained in our prior posts, Section 4 consists of 386 words jammed into a single paragraph, but it is easier to digest and follow if we divide it 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).
How does a Federal Court “Hear” an Application to Compel Arbitration?
What we refer to as “Section 4(c)” provides that “[t]he 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.” But, Section 4 continues, “[i]f 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.” 9 U.S.C. § 4.
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.
Thelast 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 Applicationto 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.
Papers Comprising Application to Compel Arbitration
Today’s segment of the Businessperson’s Federal Arbitration ACT FAQ Guide focuses on the nuts and bolts of applying to compel arbitration under Section 4 of the Federal Arbitration Act.
What Gateway Disputes do Sections 2, 3, and 4, Address, and How do they Address them?
How does Section 3 Work in Practice?
After discussing Section 4 generally and dividing the statute into five parts, this segment addresses an FAQ relating to the first of those five parts: “Under Section 4, who May Petition what Court when and for what?” Future segments will address FAQs relating to the other four parts of Section 4.
Application to Compel Arbitration: Section 4 and its Component Parts
Section 4, which sometimes used in tandem with Section 3, but which is available as an independent remedy when a party simply refuses to arbitrate without attempting to litigate the allegedly arbitrable dispute, authorizes courts to compel parties to arbitrate the disputes they’ve promised to submit to arbitration.
Section 4 consists of 386 words jammed into a single paragraph and is thus a little daunting at first blush. It is easier to digest and follow if we divide it into subparagraphs or subsections, which we do below. The subsection letters and captions in bold are not part of the statute, but are added for ease of reference and clarity:
Single arbitrators are required under the Federal Arbitration Act to be neutral unless the parties otherwise agree. See, e.g., Morelite v. N.Y.C. Dist. Council Carpenters, 748 F.2d 79, 81-85 (2d Cir. 1984). In tripartite arbitration, one arbitrator (usually designated the umpire or chair) is ordinarily required to be neutral, while party-appointed arbitrators are presumed to be non-neutral, except to the extent otherwise required by the parties’ arbitration agreement. SeeCertain Underwriting Members London v. Florida Dep’t of Fin. Serv., 892 F.3d 501, 510-11 (2d Cir. 2018); Sphere Drake Ins. v. All American Life Ins., 307 F.3d 617, 622 (7th Cir. 2002); Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), 631 F.3d 869, 872-74 (7th Cir. 2011). Arbitration provider rules, which may govern arbitrator qualifications in appropriate cases, often provide that all three arbitrators of a tripartite panel are required to be neutral.
Section 10(a)(2) of the Federal Arbitration Act—which authorizes federal district courts to vacate arbitration awards “where there was evident partiality…in the arbitrators…”—imposes in part and enforces these neutrality requirements. Section 10(a)(2) establishes that parties who agree to arbitrate can legitimately expect that neutral arbitrators will meet a certain minimal standard of arbitral impartiality, and that arbitrators not appointed as neutrals can, in appropriate circumstances, be held to a substantial, material breach of a stipulated arbitrator qualification requirement related-to, but not necessarily coextensive with, neutrality. See Certain Underwriting Members, 892 F.3d at 510-11; Sphere Drake, 307 F.3d at 622; Trustmark, 631 F.3d at 872-74.
The requirement that an arbitrator be “neutral” can be divided into three, distict components. The arbitrator must be (a) impartial; (b) disinterested; and (c) independent.
Today we’re going to focus on Section 3 of the Federal Arbitration Act, which authorizes a Court to stay litigation.
In the last segment of this series we answered the following FAQs about how gateway disputes are decided by courts and arbitrators:
What is the Presumption of Arbitrability?
Does the Presumption of Arbitrability Apply to all Questions of Arbitrability?
What Law Applies to Determine Gateway Disputes about Arbitrability to which the Presumption of Arbitrability does not Apply?
How is the Presumption of Arbitrability Applied to Resolve Gateway Questions about the Scope of an Arbitration Agreement?
What Defenses, if any, Can Parties Assert against Enforcement of an Arbitration Agreement, and what Law Governs these Defenses?
The answers to these questions, along with those provided in prior segments, were designed to provide you with a solid foundation for understanding how pre-award Federal Arbitration Act litigation works and what to expect if your business is or becomes embroiled in it.
The segment of which this post is Part I answers FAQs about the nuts and bolts of pre-award Federal Arbitration Act practice and procedure under Sections 2, 3, and 4 of the Act, the Sections that address gateway disputes about whether arbitration should proceed.
In this Part I we address the following FAQs, which focus on Section 3 stays of litigation:
What Gateway Disputes do Sections 2, 3, and 4, Address, and How do they Address them?
How does Section 3 Work in Practice?
Future parts of this segment will address questions concerning Section 4 of the Federal Arbitration Act, which authorizes courts to compel arbitration. And we’ll move forward from there.
What Gateway Disputes do Sections 2, 3, and 4, Address, and How do they Address them?
Section 2, as we’ve said, is the enforcement command of the Federal Arbitration Act, which deems all arbitration agreements falling within its scope to be “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. (See here and here.) Section 2 requires, as a matter of federal law, that arbitration agreements falling within its scope are to be enforced to the same extent as contracts generally. (See here.)
But the Federal Arbitration Act does more than require the enforcement of arbitration agreements by putting them on “an equal footing with all other contracts.” Kindred Nursing Centers Ltd. P’ship v. Clark, 137 S. Ct. 1421, 1424 (2017) (quotations and citations omitted). It provides for specific performance of arbitration agreements, both in the form of an order staying litigation of an arbitrable controversy under Section 3 of the FAA, and an order directing a party to proceed with arbitration in accordance with their agreement. 9 U.S.C. §§ 3 & 4.
Gateway disputes, which concern whether parties are required to arbitrate a dispute on the merits, are the principal subject of pre-award Federal Arbitration Act litigation. In the last segment of this series, Gateway Disputes about Whether Arbitration Should Proceed (Part I), we answered a number of FAQs concerning gateway disputes, including who gets to decide those disputes:
What is the Difference between Pre-Award and Post-Award Litigation under the Federal Arbitration Act?
What are Gateway Questions?
Who Decides Gateway Questions?
How do Parties Clearly and Unmistakably Agree to Submit Questions of Arbitrability to Arbitrators?
Are there any Arbitrability Disputes that Courts Decide when the Contract at Issue Clearly and Unmistakably Provides for the Arbitrator to Decide Questions of Arbitrability?
Today we’ll answer some more FAQs about how gateway disputes are decided (or at least are supposed to be decided) by courts and arbitrators:
What is the Presumption of Arbitrability?
Does the Presumption of Arbitrability Apply to all Questions of Arbitrability?
What Law Applies to Determine Gateway Disputes about Arbitrability to which the Presumption of Arbitrability does not Apply?
How is Presumption of Arbitrability Applied to Resolve Gateway Questions about the Scope of an Arbitration Agreement?
What Defenses, if any, Can Parties Assert against Enforcement of an Arbitration Agreement, and what Law Governs these Defenses?
The answers to these questions, along with the answers provided in Part I, will provide you with a solid foundation for understanding how pre-award Federal Arbitration Act litigation works and what to expect if your business is or becomes embroiled in it. The next segment will answer FAQs about the nuts and bolts of pre-award Federal Arbitration Act practice and procedure under Sections 2, 3, and 4 of the Act.
What is the Presumption of Arbitrability?
Back in 1983 the U.S. Supreme Court, in the landmark decision Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983), famously declared that “[t]he [Federal] Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.”
Attorney Advertising Notice: Prior results do not guarantee a similar outcome.
Please see also the information and links set forth on each footer page of the The Loree Law Firm website of which this blog is a part (http://www.loreelawfirm.com), and in the disclaimer that appears in the bottom right corner of each post page of this blog.
Disclaimer:
The content of this blog is not intended to be legal advice and should not be construed as such.
The views expressed in this blog are solely those of the author and do not necessarily reflect
those of The Loree Law Firm or any of its current or former clients.
