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Service and Notice of Application to Compel Arbitration | Businessperson’s Federal Arbitration Act FAQ Guide | Nuts and Bolts of Pre-Award Federal Arbitration Act Practice under Sections 2, 3, and 4 (Part III)

April 24th, 2020 Application to Compel Arbitration, Arbitrability, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Enforcing Arbitration Agreements, FAA Chapter 1, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 2, Federal Arbitration Act Section 4, Federal Rules of Civil Procedure, Gateway Disputes, Gateway Questions, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Questions of Arbitrability, Small Business B-2-B Arbitration 2 Comments » By Philip J. Loree Jr.
notice of application to compel
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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. 

Papers Comprising Application to Compel Arbitration 

In cases where the application to compel arbitration 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; and (d) any documents evidencing the other parties’ “failure, refusal, or neglect to arbitrate[.]”

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) the applicant has demanded arbitration; and (d) the other party has failed, refused, or neglected to arbitrate.

Service of the Application to Compel Arbitration

If the application commences an independent federal court proceeding to compel arbitration, then Rule 4(c)-(l), governing service of a summons and complaint in a regular lawsuit, will dictate the manner of service of the papers constituting the application. See Fed. R. Civ. P 4(c)-(l). This typically means hand delivery directly on a party by hand, or indirectly via a statutory agent in the manner prescribed by applicable law. It can, in appropriate cases, mean a manner of service agreed by the parties in their agreement.

If, however, the other side has filed a lawsuit, and the applicant is seeking to stay the lawsuit under Section 3, and compel arbitration under Section 4, then service can be made under Fed. R. Civ. P. 5, which governs service of papers in a law suit. Such service may include service by hand, efiling, or mail on the opposing party’s counsel in the litigation. See Fed. R. Civ. P. 5(a)-(b).

Parties should consult applicable local court rules on service. 

Timing of Application

There are two components pertinent to the timing of the application. First, the requirement of “five-days’ notice” refers to the minimum period of time that must be provided from the date on which the notice is served and what is called the “return” or “hearing date” set for the application.

But a discussion of the many rules and differing rules that apply to motion practice in various jurisdictions or federal districts is beyond the scope of this post. Careful attention must be paid to the applicable rules to determine how to notice the application in such a way to best serve the applicant’s objectives. For example, if a party wants to have a reasonable time within which to file reply papers, then that consideration must be worked into the notice period to ensure that the person filing the notice has a reasonable amount of time by which to file reply papers.

In many jurisdictions return or hearing dates are relevant only to the extent that applicable motion practice rules use them as anchors to determine the dates by which responses and replies may be served and filed. In other jurisdictions those dates are, in any event, measured from the date on which the motion papers are served, not from a return or hearing date.

In cases where the application to compel is the initiatory paper to commence an independent proceeding to compel arbitration, it may be best to notice the application in a way that ensures that the respondent has at least the amount of time by which to file responding papers as it would have to serve an answer to a complaint in an ordinary lawsuit, which is ordinarily 21 days. Fed. R. Civ. P. 12(a)(1)(A)(i).

The second timing consideration is statute of limitations. The Federal Arbitration Act is silent on the limitation period for making an application to compel arbitration. But since such an application, made in an independent proceeding, effectively seeks the remedy of specific performance of a contract (the arbitration agreement), the state-law statute of limitations governing a claim to specifically enforce a contract would likely apply.

As respects a motion to compel brought in an existing law suit, the main timing consideration is the need to avoid waiving the right to seek arbitration, which we discussed here. Prudence dictates that parties who have been sued on an arbitrable claim promptly and unequivocally assert their right to arbitrate and move without delay to stay the litigation and compel arbitration.

FAQs concerning the other three parts of Section 4 will follow in future segments of this post.

Please note. . .

This guide, including the instalments that will follow in later posts, and prior instalments, 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.



         

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2 Responses to “Service and Notice of Application to Compel Arbitration | Businessperson’s Federal Arbitration Act FAQ Guide | Nuts and Bolts of Pre-Award Federal Arbitration Act Practice under Sections 2, 3, and 4 (Part III)”

  1. […] last instalment discussed the following FAQ related to Section 4 applications to compel arbitration: “What Papers […]

  2. […] will have been resolved, for example, by a motion to compel arbitration. (See, e.g., here, here, here, and here.) But if the arbitration agreement is self-executing, and the other party does not […]