No Agreement: A Businessperson’s Guide to a Narrow but Important Defense to Award Confirmation
What if your adversary obtains a default award against your business but your business never agreed to arbitrate the dispute?
Suppose your business receives an arbitration demand, but it never signed the alleged arbitration agreement, never otherwise agreed to arbitrate, and is not bound to an arbitration agreement under generally applicable state-law contract principles. Your business promptly objects and refuses to appear in response to the arbitration demand and does not participate in the demanded arbitration.
Undaunted, the claimant proceeds, obtains a default award, waits until the Federal Arbitration Act (the “FAA”)’s three-month period for moving to vacate has expired, and then asks a court to confirm the award. Assume that if there were a binding arbitration agreement, then it would be governed exclusively by the FAA, not state arbitration law.
Must the Court confirm the award simply because your business failed to serve and file a Section 10(a) motion to vacate within FAA Section 12’s three-month limitation period for service of a motion to vacate under Section 10, or modify or correct the award under Section 11? Continue Reading »
