The Federal Arbitration Act (FAA) is the law that governs arbitration in the United States. Enacted in 1925, the FAA provides for the enforcement of arbitration agreements in both state and federal courts.
FAA's main provisions include:
- A strong presumption in favour of enforcing arbitration agreements, meaning that courts will generally uphold and enforce agreements to arbitrate disputes.
- A requirement that courts stay (i.e., put on hold) legal proceedings that are pending in court when there is an arbitration agreement in place.
- A requirement that courts enforce arbitration awards in the same way that they would enforce a judgment from a court.
- A provision allowing for limited judicial review of arbitration awards in certain circumstances, such as when an award is based on fraud or corruption, or when it is in conflict with the law.
- The FAA also provides that arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
While the Federal Arbitration Act (FAA) is the primary law governing arbitration in the United States, some states do have their own arbitration laws that supplement or may even modify the FAA.
For example, some states have adopted the Uniform Arbitration Act (UAA), which is a model law created by the National Conference of Commissioners on Uniform State Laws. The UAA is designed to provide a uniform set of rules for the conduct of arbitration proceedings, and to promote the use of arbitration as an alternative to litigation. It is similar to the Federal Arbitration Act (FAA) in many respects but includes additional provisions that address certain issues that may arise during arbitration proceedings.
The UAA includes provisions that govern the:
- Enforceability of arbitration agreements, similar to the FAA
- Appointment of arbitrators, including provisions for the appointment of a neutral arbitrator in the event that the parties are unable to agree on an arbitrator
- Conduct of arbitration proceedings, including rules for the scheduling of hearings and the exchange of information between the parties
- Appeal of arbitration awards, including provisions for the limited judicial review of awards
- Enforcement of arbitration awards, including provisions for the confirmation, vacation, modification, or correction of awards
The UAA is not federal law, but it is a model law that has been adopted by some states. However, it is important to note that it is not adopted by every state, and some states may have different arbitration laws or may have adopted a variation of the UAA. Other states have adopted variations of the UAA or have their own unique arbitration laws. These state laws may include provisions that are more favourable to consumers or employees, or that provide additional protections for certain types of disputes.
However, it is important to note that when there is a conflict between state and federal laws, federal law will generally prevail. This means that the FAA will govern in situations where it applies, and state arbitration laws will only apply to the extent that they do not conflict with the FAA.
FAA is the primary law governing arbitration in the United States, some states do have their own arbitration laws that supplement or modify the FAA. However, the FAA will generally govern in situations where it applies, and state arbitration laws will only apply to the extent that they do not conflict with the FAA.
