Yes. The United States acceded to the New York Convention (the Convention) on 30 September 1970. The US made both reciprocity and commercial reservations pursuant to article I(3) of the Convention. The reciprocity reservation limits the application of the Convention to awards made within the territory of states that are also parties to the Convention. The commercial reservation restricts the scope of application of the Convention to “differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the United States”. The Convention and its implementing legislation were codified at Chapter 2 of Title 9 of the United States Code. See 9 U.S.C. § 201 et seq.
Answer contributed byYes, the US is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) (1966; codified at 22 U.S.C. §§1650 and 1650a); the New York Convention (1970; codified at 9 U.S.C. §201 et seq); and the Inter-American Convention on International Commercial Arbitration often referred to as the Panama Convention (1975; codified at 9 U.S.C. § 301 et seq). The U.S. is also a party to several multilateral treaties with arbitration provisions including, but not limited to, the Central America-Dominican Republic Free Trade Agreement (2006; codified at 19 U.S.C. § 4001, et seq); and the United States-Mexico-Canada Agreement (USMCA) (2020; codified at 19 U.S.C. Chapter 29 et seq). The US is also a party to numerous bilateral investment treaties and free trade agreements that include arbitration clauses. A list of these may be found at the United Nations Conference on Trade and Development (UNCTAD) Investment Policy Hub and the US Department of State and the United States Trade Representatives’ websites.
Answer contributed byThe US has a dual sovereign system with arbitration acts both at the federal and the state level. At the federal level, there is the Federal Arbitration Act (the FAA). See 9 U.S.C. § 201 et seq. The FAA applies to arbitration agreements involving interstate commerce, which has been interpreted very broadly by US courts. In addition, each state may have its own arbitration laws. Most state arbitration acts are based on the Uniform Arbitration Act, which is based on the FAA, or the more modern Revised Uniform Arbitration Act, which incorporates provisions that are broadly similar to the provisions of the UNCITRAL Model Law. State law may be deemed pre-empted to the extent it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of the FAA.
The FAA is an early arbitration law, enacted in 1926 many years before the UNCITRAL Model Law was promulgated. As such, the FAA is not based on the UNCITRAL Model Law. In general, the UNCITRAL Model Law is more comprehensive than the FAA. Both the FAA and the UNCITRAL Model Law require courts to enforce arbitration agreements, allow parties to structure their arbitration proceeding largely how they see fit, and provide limited means of recourse against improper awards. 9 U.S.C. § 2, 10-11; UNCITRAL Model Law articles 8, 34, 36. Both laws also allow for the enforcement of arbitration awards by courts upon request of a party. 9 U.S.C. § 9; UNCITRAL Model Law article 35.
There are also differences. For one, the UNCITRAL Model Law applies only to international commercial arbitrations, while the FAA applies more broadly to domestic and international civil and commercial disputes. 9 U.S.C. § 2; UNCITRAL Model Law article 1. As noted above, the UNCITRAL Model Law is more comprehensive than the FAA and contains different or more detailed provisions addressing topics such as arbitrator appointment, interim measures, competence-competence and the standards for the vacatur or modification of an award. See UNCITRAL Model Law Ch. III-IV.
Answer contributed byThere are numerous institutions that administer international arbitrations in the United States. Among them are the International Centre for Dispute Resolution (ICDR), the international arm of the American Arbitration Association; the International Chamber of Commerce International Court of Arbitration (ICC), which has a New York branch; the International Centre for Settlement of Investment Disputes and the International Institute for Conflict Prevention and Resolution.
Answer contributed byYes. Some prominent institutions have branches in the US. For example, the ICC has a US branch located in New York City. Other foreign providers are free to operate or hold proceedings in the United States and often do.
Answer contributed byNo, there is no specialist arbitration court that exclusively focuses on arbitration. Both federal and state courts may oversee arbitration matters. US federal courts are typically familiar with and supportive of international arbitration. The Supreme Court has repeatedly emphasised that there is a strong public policy in favour of international arbitration based on section 2 of the FAA. State courts in major commercial centres are also increasingly familiar with and supportive of international arbitration based on state arbitration acts and the overarching federal public policy in favour of arbitration. As noted above, state laws that create obstacles to arbitration may be deemed pre-empted by the FAA.
Answer contributed byUnder the FAA, an arbitration agreement must be in writing. 9 U.S.C. § 2. The only requirements that can be imposed on an arbitration agreement are those that apply to all contracts under applicable substantive law. GE Energy Power Conversion Fr. SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S.Ct. 1637, 1643 (2020). Arbitration agreements may cover existing or future disputes. New Prime Inc. v Oliveira, 139 S. Ct. 532, 537 (2019).
Answer contributed byGenerally, the US permits arbitration of all types of civil and commercial disputes including antitrust, construction, consumer, insurance, intellectual property, labour and employment, product and securities disputes, among others. Criminal law disputes are, of course, not arbitrable. That said, there are some exceptions. The FAA explicitly excludes “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce”, 9 U.S.C. § 1. The Supreme Court has held that class actions are not arbitrable unless the parties unambiguously agree to class arbitration. See Stolt-Nielsen S.A. v Animal Feeds Int’l Corp., 559 U.S. 662 (2010). In the bankruptcy context, claims that involve “core” bankruptcy matters are generally deemed non-arbitrable but non-core claims subject to an arbitration agreement may be sent to arbitration. See, eg, Celsius Mining LLC v Mawson Infrastructure Grp. Inc. (In re Celsius Network LLC), Nos. 22-10964 (MG), 23-01202 (MG), 2024 Bankr. LEXIS 459, at *37 (Bankr. S.D.N.Y. Feb. 27, 2024).
Answer contributed byA third party who is non-signatory to an arbitration agreement may in certain circumstances be joined to an arbitration. Although fact specific, courts have enforced arbitration agreements against non-signatories based on theories of incorporation by reference; assumption; agency; veil-piercing/alter ego; and third-party estoppel or beneficiary. See, eg, Arthur Anderson v Carlisle, 556 U.S. 624 (2009). ABM Indus. Grps., LLC v Int’l Union, Local 30, 30A, 30B, 968 F.3d 158, 162 (2d Cir. 2020); Newman v Plains All Am. Pipeline, L.P., 23 F.4th 393, 401 (5th Cir. 2022). Notably, in a recent case, the US Supreme Court held that the New York Convention does not conflict with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements against non-signatories. GE Energy Power Conversion France SAS, Corp v Outokumpu Stainless USA LLC, 140 S.Ct. 1637, 1645 (2020).
Answer contributed byThe FAA contains no provisions governing the consolidation of arbitrations. US courts have held that consolidation is a procedural question for the arbitrators. Blue Cross Blue Shield of Massachusetts Inc. v BCS Ins Co, 671 F.3d 635, 640 (7th Cir. 2011); Shaw’s Supermarkets Inc v United Food and Commercial Workers Union, Local 791, 321 F.3d 251, 252 (1st Cir. 2003).
The American Arbitration Association’s Commercial Arbitration Rules, effective 1 September 2022, added specific rules on consolidation and joinder. Other arbitral bodies, including the ICC, ICDR and JAMS, have adopted rules for joining additional parties or consolidating arbitrations. Note that under Supreme Court precedent, class arbitration is not permissible unless the parties have unambiguously agreed to participate. See Stolt-Nielsen S.A. v Animal Feeds Int’l Corp., 559 U.S. 662 (2010).
Answer contributed byUS courts rarely recognise the group of companies doctrine as a basis to join non-signatory affiliated companies to an arbitration. At least one federal court of appeals has held that the group of companies doctrine cannot be used to compel a non-signatory to arbitrate a dispute. See Sarhank Group v Oracle Corp., 404 F.3d 657, 662 (2d Cir. 2005). Instead, US courts have typically analysed the joinder of non-signatories citing theories of incorporation by reference, assumption, agency, veil-piercing or alter ego and estoppel. See Arthur Anderson v Carlisle, 556 U.S. 624 (2009).
Answer contributed byYes, under federal law, arbitration clauses are severable from the main contract. Buckeye Check Cashing, Inc v Cardegna, 546 U.S. 440, 445 (2006); Gingras v Think Fin., Inc., 922 F.3d 112, 128 (2d Cir. 2019). That law applies in state court as well under the doctrine of federal pre-emption. Id.
Answer contributed byIn the US, the general rule is that courts and not the arbitrators determine the question of arbitrability, but the United States Supreme Court has held that the parties can agree to delegate the question of arbitrability to an arbitrator if they do so “clearly and unmistakably”. First Options of Chicago, Inc. v Kaplan, 514 U.S. 938, 944 (1995); Lamps Plus, Inc v Varela, 139 S.Ct. 1407, 1415 (2019). Incorporating arbitration rules that empower an arbitrator to decide questions of arbitrability is generally sufficient to delegate the question of arbitrability to the arbitrator, provided that there are no other factors that would tend to create an ambiguity such as limiting or conflicting language that makes it unclear whether the parties intended to delegate a given issue to the arbitrator.
Answer contributed byParticular issues to note when drafting an arbitration clause include the place of arbitration, language of arbitration, number of arbitrators, method of appointment of arbitrators, applicable rules and institution to administer the arbitration. Some courts have held that there was “no meeting of the minds” with respect to arbitration and therefore no valid agreement to arbitrate where a dispute resolution provision included conflicting dispute resolution provisions – for example, to submit to the local courts in a state and/or arbitration at the same time. See O’Shaughnessy v Young Living Essential Oils L.C., 810 Fed. Appx. 308, 314 (5th Cir. 2020). In addition, parties may wish to consider whether to explicitly address pre-arbitration relief in court, enforcement of interim orders of the arbitrators and enforcement of the award (such as designating a specific court for enforcement actions). It should be noted that some courts (as well as the New York Convention under article IV) require the award to be translated to English.
Answer contributed byThere is no reliable publicly available data that tracks ad hoc international arbitration versus institutional arbitration in the US. However, the authors consider that institutional arbitration is much more common than ad hoc, unadministered arbitration in the United States. Having said that, both ad hoc and institutional international arbitrations are used in the United States and are valid forms of arbitration. Practitioners often cite to the added weight awards from respected administrating instructions maintained at the time of confirmation and enforcement.
Answer contributed byThere is a split among the courts as to whether district courts have the power to compel consolidation of arbitration proceedings brought under the FAA where the agreements to arbitrate are contained in separate contracts and neither of the separate contracts provides for consolidated arbitration. Thus, it may be helpful if the arbitration clauses are the same, or as similar as possible, and reference each other. In the absence of such guidance in the arbitration agreement, the rules of the arbitral institution referenced in the arbitration agreement may fill the gaps on these issues.
Answer contributed byThe FAA does not contain rules expressly addressing the commencement of arbitrations nor is it common to find rules governing the commencement of arbitrations at the state level. Parties may specify the means for commencing an arbitration in their agreement, escalation clauses, or by incorporating rules governing how proceedings are commenced. For example, the AAA, ICDR, ICC, CPR and JAMS rules all contain provisions governing the commencement of arbitral proceedings. While the FAA does not contain a statute of limitations, some state arbitration laws contain provisions that allow a party to challenge the commencement of an arbitration based on the expiration of the statute of limitations applicable to the cause of action.
Answer contributed byParties may specify the substantive law of the dispute in their contract. When no substantive law is specified, arbitrators have discretion to determine the applicable law. Arbitrators have often applied the law that is most closely connected to the contract while taking into account a variety of factors.
Parties may also specify the law applicable to the arbitration agreement, which is not necessarily the same as the substantive law of the dispute. A general choice of law provision will not necessarily be read as applying to the agreement to arbitrate, which is separable from the main contract. For example, a choice of law provision that states that the contract is governed by the law of Texas will generally not be construed to displace the FAA as governing the arbitration agreement.
Answer contributed byThe FAA does not place any limits on a party’s choice of arbitrator. Some states, for example, California have adopted laws that require arbitrators to comply with ethical standards adopted by the judicial branch. See Cal. Code Civ. Proc. §1281.85. Most state arbitration acts have procedures for challenging an arbitrator as do the most-widely used institutional rules. Following an arbitration, a party may challenge an arbitration award under the FAA on the basis that an arbitrator was biased or had a conflict of interest. See, eg, Monster Energy Co v City Bevs., LLC, 940 F.3d 1130 (9th Cir. 2019); Certain Underwriting Members of Lloyds of London. Florida, 892 F.3d 501 (2d Cir. 2018); UBS Fin. Servs. v Asociación de Empleados del Estado Libre Asociado de P.R., 997 F.3d 15 (1st Cir. 2021); Group Unidos por el Canal, S.A. v Autoridad Del Canal de Panama, 78 F.4th 1252 (11th Cir. 2023); Equicare Health Inc. v Varian Med. Sys., Inc, 2023 U.S. Dist. LEXIS 74818 (N.D. Cal. 2023).
Answer contributed byYes, there are no nationality restrictions in US laws for serving as an arbitrator. Non-US nationals may be required to comply with any applicable visa requirements for working within the US.
Answer contributed byIf parties have agreed to adopt a particular set of arbitral institutional rules like the ICDR, there are default rules parties can follow to appoint an arbitrator. When parties cannot agree upon a method and the arbitration agreement is silent with respect to an appointment process, the FAA and state laws authorise the courts of the state where the arbitration is seated to appoint an arbitrator upon the request of one of the parties.
Answer contributed byIf parties have agreed to adopt a particular set of arbitral institutional rules, the institutional rules typically have procedures regarding the appointment of arbitrators. Where parties cannot agree upon a method of arbitrator appointment and the arbitration agreement is silent in such a respect, the FAA and state laws authorize the federal or state courts located in the state where the arbitration is seated to appoint an arbitrator upon the request of one of the parties. See, eg, 9 U.S.C. § 5.
Answer contributed byThe FAA does not contain any provisions regarding securing arbitration fees. Most institutional rules have provisions regarding deposits and payment of fees to arbitrators.
Answer contributed byUnder the FAA, a party may challenge an arbitration award on the ground that there was “evident partiality or corruption in the arbitrators”. 9 U.S.C. §10(a)(2). US circuit courts are split on how to interpret such an “evident partiality” standard. The Fifth, Eighth, Tenth and Eleventh circuits have adopted standards akin to that of the Ninth Circuit – that there exists a “reasonable impression” of bias. The First, Third, Fourth, Sixth and Seventh circuits have adopted standards akin to that of the Second Circuit – that a “reasonable person would have to conclude” there was bias. In assessing the partiality of arbitrators, some US courts have looked to the IBA Guidelines on Conflicts of Interest to assess ethics of international arbitrators. See, eg, Tafnet v Ukraine, 21 F.4th 829, 839 (D.C. Cir. 2021); New Regency Prods., In. v Nippon Herald Films, Inc., 501 F.3d 1001, 1110 (9th Cir. 2007).
Answer contributed byFederal and state courts may issue interim relief while an arbitration is pending. Such relief may come in a variety of forms including a preliminary injunction, anti-suit injunction, attachments of property and temporary restraining orders. Most arbitration institutions also have rules permitting arbitrators to order interim relief, including injunctions, preservation of evidence or assets, security for costs and temporary restraining orders.
Answer contributed byThere are no specific laws in the US on this precise issue, but parties are able to seek injunctive relief from courts, which could take the form of a request for security for costs that a party expects to incur in an arbitration. See, eg, Cosmotrade Exps. v Conchart Overseas (Offshore) Sal, 2009 U.S. Dist. LEXIS 87790, at *15 (S.D.N.Y. Sep. 8, 2009). Arbitral tribunals may also order a party to provide security for costs under the applicable rules or the tribunal’s inherent powers.
Answer contributed byNo. In ad hoc arbitrations (with no institutional rules agreed on), the parties can agree on a specific arbitration process or delegate that issue to the arbitrator. With respect to specific conduct of the parties, professional conduct rules governing lawyers in each jurisdiction will impose certain requirements on counsel representing parties in an arbitration.
There are some state law safeguards to promote fairness in entering into arbitration agreements. For example, certain states have an unconscionability doctrine that will void an agreement that is unreasonably favourable to one side under limited circumstances. See, eg, In re Olshan Found. Repair Co, LLC, 328 S.W.3d 883, 892 (Tex. 2010). As an example, an arbitration agreement that required patently unfair procedural rules for the benefit of one party could be deemed unconscionable.
It should be noted that although a tribunal may issue certain discovery measures, some federal circuits have limited tribunal authority to seek “pre-hearing” discovery with respect to third parties under the Federal Arbitration Act. See COMSAT Corp. v Nat’l Sci. Found., 190 F.3d 269, 271, 275-76 (4th Cir. 1999); Lloyd’s of London, 549 F.3d 210 (2d Cir. 2008); Hay Group, Inc. v E.B.S. Acquisition Corp., 360 F.3d 404, 407 (3d Cir. 2004); Managed Care Advisory Grp., LLC v Cigna Healthcare, Inc., 939 F.3d 1145 (11th Cir. 2019); but see Day v Orrick, Herrington & Sutcliffe, LLP, 42 F.4th 1131, 1136 (9th Cir. 2022); Am. Fed'n or Television & Radio Artists, AFL-CIO v WJBK-TV (New World Commc'ns of Detroit, Inc.), 164 F.3d 1004, 1007 (6th Cir. 1999); In re Arbitration Between Sec. Life Ins. Co. of Am., 228 F.3d 865, 870-71 (8th Cir. 2000).
Answer contributed bySection 4 of the FAA allows a party aggrieved by another party’s refusal to participate in the arbitral proceedings to petition a federal district court for an order compelling arbitration. See 9 U.S.C. § 4. The court must first determine whether an arbitration agreement exists. See Berkeley Cty. Sch. Dist. v Hub Int'l. Ltd., 944 F.3d 225, 227 (4th Cir. 2019).
When a party fails to appear after receiving proper notice, some institutional arbitration rules grant arbitrators the authority to issue a default award. However, these rules typically require the presentation of evidence supporting the claims. See, eg, AAA Commercial Arbitration Rules and Mediation Procedures Rules R-31; JAMS Comprehensive Arbitration Rules & Procedures Rule 22(j); ICDR International Dispute Resolution Procedures Article 26.
In the United States, such default awards are recognised and enforceable. See Bartlit Beck LLP v Okada, 25 F.4th 519, 524 (7th Cir. 2022); Laws v Morgan Stanley Dean Witter, 452 F.3d 398, 400 (5th Cir. 2006) (“Laws was not denied a fair hearing because the record supports several bases on which the panel reasonably could have denied him a continuance”).
Answer contributed byArbitral tribunals have discretion regarding information exchange, admissibility of evidence and applicable privileges. Courts have typically been deferential of arbitrators' evidentiary decisions, acknowledging that they do not need to follow “all the niceties observed by the federal courts”. See Kolel Beth Yechiel Mechil of Tartikov, Inc v YLL Irrevocable Tr., 729 F.3d 99 (2d Cir. 2013). Arbitrators generally comply with any guidance or limitations on the scope of disclosure set forth in the parties' arbitration agreement. That said, significant departures from due process such as refusing to hear evidence or other serious anomalies may provide grounds for vacatur.
Parties often choose to adopt or refer to established rules in international proceedings, such as the IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules), which cover widely accepted principles in international arbitration practice – for instance, requiring that each party disclose to the tribunal and the other party all documents on which it intends to rely (article 3). Institutional arbitration rules may address evidentiary matters, subject to any contrary provisions in the parties’ agreement.
Answer contributed byYes. Under section 7 of the FAA, arbitrators may summon any person to attend a hearing before them. If the summoned person refuses to appear, the federal court for the district in which the arbitrators are sitting may, upon petition, compel the person’s attendance or punish them for contempt. See 9 U.S.C. § 7. Some state statutes also provide for judicial enforcement of arbitrator subpoenas. However, there is a split among federal circuit courts and between federal and state courts regarding whether section 7 of the FAA authorises arbitrators to issue subpoenas for pre-hearing document production and testimony from non-parties. See COMSAT Corp. v Nat’l Sci. Found., 190 F.3d 269, 271, 275-76 (4th Cir. 1999); Lloyd’s of London, 549 F.3d 210 (2d Cir. 2008); Hay Group, Inc. v E.B.S. Acquisition Corp., 360 F.3d 404, 407 (3d Cir. 2004); Managed Care Advisory Grp., LLC v. Cigna Healthcare, Inc., 939 F.3d 1145 (11th Cir. 2019); but see Day v Orrick, Herrington & Sutcliffe, LLP, 42 F.4th 1131, 1136 (9th Cir. 2022); Am. Fed'n of Television & Radio Artists, AFL-CIO v.WJBK-TV (New World Commc'ns of Detroit, Inc.), 164 F.3d 1004, 1007 (6th Cir. 1999); In re Arbitration Between Sec. Life Ins. Co. of Am., 228 F.3d 865, 870-71 (8th Cir. 2000).
In addition, section 1782 of Title 28 of the United States Code empowers federal district courts to compel discovery of documents, testimony, or other evidence for use in proceedings before “a foreign or international tribunal”. This provision had formerly been applied by some courts to support discovery in international commercial arbitration. However, in ZF Automotive US, In. v Luxshare, Ltd. the US Supreme Court rejected the application of Section 1782 to international commercial arbitrations, holding that only governmental or intergovernmental adjudicative bodies constitute a “foreign or international tribunal” within the meaning of the statute. ZF Automotive US, Inc v Luxshare, Ltd., 142 S.Ct. 2078, 2089 (2022) (finding “foreign or international tribunal” did not include an ad hoc arbitral tribunal established in accordance with the UNCITRAL Rules).
Additionally, an award creditor may request a US court to authorise discovery to identify and attach assets to satisfy an award. Rule 69 of the Federal Rules of Civil Procedure allows for post-judgment discovery from an award debtor. See Fed. R. Civ. P. 69; Morgan Stanley Smith Barney LLC v Johnson, 952 F.3d 978, 2020 U.S. App. LEXIS 8037 (8th Cir. 2020).
Answer contributed byThere is no federal or state law related to document production in international arbitration. Parties are free to agree to institutional rules governing discovery or include their own provisions on document production in their arbitration agreement. In practice, parties in international commercial arbitrations often rely upon the IBA Rules on the Taking of Evidence, which seek to harmonise competing legal systems and provide for standards familiar to arbitrators and counsel.
Answer contributed byThe FAA does not specifically mandate a final hearing on the merits. Absent party agreement to the contrary, there are competing views as to whether arbitrators have discretion to decide whether to hold evidentiary hearings and the format the hearing should take. That said, arbitrators who issue an award without a hearing must ensure that the parties have had sufficient opportunity to present their case to avoid possible grounds for vacatur under the FAA or non-enforcement under article V of the Convention. Some institutions have adopted rules explicitly permitting awards on the papers in smaller and less complex cases. For example, the ICDR has adopted such rules and incorporated the standard that the parties have sufficient opportunity to present their case. See ICDR, Rule 23.
Answer contributed byNeither the FAA nor state law provide specific provisions as to the location of arbitral hearings.
Answer contributed byThe FAA does not impose any requirements as to the number of arbitrators nor does it include any requirement that decisions be unanimous in cases with more than one arbitrator. Most institutional rules applicable to arbitration proceedings provide for majority rule decisions.
Answer contributed byArbitrators generally have wide discretion in granting appropriate remedies. Parties may limit the available remedies by capping damages or excluding specific categories of relief.
The FAA is silent with respect to whether an arbitrator has the power to award punitive damages. Where the parties agree to include punitive damages, the FAA ensures that their agreement will be enforced according to its terms even if a rule of state law would otherwise exclude such claims from arbitration. See Mastrobuono v Shearson Lehman Hutton, Inc., 514 U.S. 52, 58 (1995); Seagate Tech., LLC v W. Digit. Corp., 854 N.W.2d 750, 761 (Minn. 2014). Some New York courts, by way of example, have emphasised the need for explicit language in choice-of-law provisions to invoke New York arbitration law and exclude punitive damages. See Flintlock Construction Services, LLC v Weiss, 122 A.D.3d 51, 991 N.Y.S.2d 408 (1st Dept. 2014).
Answer contributed byYes. There are no restrictions to dissenting opinions absent an agreement to the contrary. Although statistics on dissenting opinions is limited given the private nature of arbitration, some institutional arbitration rules address the topic.
Answer contributed byGenerally speaking, an arbitral award must comply with the requirements of any applicable arbitration rules, the laws of the seat of arbitration and the laws of the jurisdictions where the award is likely to be enforced or challenged.
In the US, the FAA does not explicitly prescribe the form an arbitral award must take. However, article IV(1)(a) of the New York Convention requires the presentation of a “duly authenticated original award or a duly certified copy thereof” as a condition for recognition. Additionally, arbitral institutions may impose specific requirements. For example, the ICC arbitration rules mandate that an award state the reasons upon which it is based. See ICC, article 32(2).
Answer contributed byThe FAA establishes specific time limits for the confirmation and vacatur of arbitral awards. Parties have one year from the date of the award to apply for confirmation. See 9 U.S.C. § 9. Parties have three months from the date of the award to file a motion to vacate, modify, or correct the award, 9 U.S.C. § 12.
Answer contributed byParties often bear their own costs unless there is a statutory or contractual basis for fee-shifting. The parties may include fee-splitting provisions or “loser pays” provisions in their contract. In certain jurisdictions, in the context of enforcing the award, an award for fees may be issued when a party refuses to abide by the arbitration decision without justification. See Bruce Hardwood Floors, Div. of Triangle Pac. Corp. v UBC, S. Council of Indus. Workers, Local Union No. 2713, 103 F.3d 449, 453 (5th Cir. 1997) (“An award of attorneys’ fees is permitted when a party has refused to abide by an arbitration decision ‘without justification.”).
Answer contributed byInterest can be included on the principal claim and costs if interest is provided for under the parties’ contract or substantive law. Pre and post-judgment statutory interest rates vary by state.
Answer contributed byAbsent an agreement between the parties, there are no grounds to appeal the merits of an award. However, there are grounds to vacate, modify or correct an award.
Under the FAA, an arbitral award may be vacated for the following reasons:
where the award was procured by corruption, fraud or undue means;
where there was evident partiality or corruption in the arbitrators, or either of them;
where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.
Section 11 of the FAA also provides grounds for modification or correction of an award, including:
The order may modify and correct the award, so as to affect the intent thereof and promote justice between the parties.
Additionally, the New York Convention, as implemented by U.S.C. §§ 201-208, specifies the grounds on which a court can refuse to recognise and enforce an arbitral award. However, for arbitrations seated in the United States, the 11th Circuit has held that the FAA is the exclusive grounds for vacatur of an arbitral award. See Corporación AIC, SA v Hidroelèctrica Santa Rita S.A., 66 F.4th 876 (11th Cir. 2023).
Answer contributed byThe United States Supreme Court has held that sections 10 and 11 of the FAA provide the exclusive grounds for challenging an arbitration award. See Hall St. Assocs., L.L.C. v Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008). There are contrary views as to whether the Supreme Court in Hall Street left open the possibility for parties to challenge the award based on the “manifest disregard” doctrine or if this doctrine is simply a gloss on the FAA grounds for vacatur.
Answer contributed byEach state’s laws must be consulted to determine the specific provisions related to the right of appeal in arbitral proceedings. In general, there is no statutory right of appeal, although some states allow parties to agree on a form of substantive judicial review.
As previously noted, there is no right of appeal as to the merits of a dispute under the FAA.
Answer contributed byThe FAA incorporates the New York Convention in Chapter 2. See 9 U.S.C. § 201. Pursuant to the New York Convention, if the court in the seat of arbitration that set aside the award belongs to a sovereign country that has signed the Convention, then a court in the United States will generally defer to that foreign court’s ruling and will not enforce the arbitration award. See TermoRio S.A. E.S.P. v Electranta S.P., 487 F.3d 928, 938, 376 U.S. App. D.C. 242 (D.C. Cir. 2007).
Although rare, certain circuit courts have enforced awards that were annulled either fully or partially at the seat where the “nullification of the award offends basic standards of justice” or other public policy in the US. See Corporación Mexicana de Mantenimiento Integral v Pemex–Exploración y Producción, 832 F.3d 92, 105 (2d Cir. 2016); see also Baker Marine (Nig.) Ltd v Chevron (Nig.) Ltd., 191 F.3d 194, 197 n.3 (2d Cir. 1999) (“Recognition of the Nigerian [annulment of the arbitral award] in this case does not conflict with United States public policy.”); TermoRio
Answer contributed byThe most recent US Supreme Court rulings demonstrate that the United States continues to be a reliable jurisdiction for the enforcement of commercial arbitration awards. US courts consistently recognise and enforce these awards as final judgments, subject only to a limited set of well-defined exceptions as previously mentioned.
In Yegiazaryan v Smagin and CMB Monaco v Smagin, the Supreme Court clarified that civil liability under the Racketeer Influenced and Corrupt Organizations Act may be available against fraudulent domestic efforts to avoid the enforcement of an international arbitration award. Yegiazaryan v Smagin, 599 U.S. 533 (2023). This decision provides clarity on the “domestic injury” requirement and offers litigants a new tool to pursue the recognition and enforcement of international arbitration awards within the US.
Further, some courts have required strict compliance with technical formalities for service of process, particularly in cases involving sovereigns or default judgments. See Saint-Gobain Performance Plastics Eur. v Bolivarian Republic, 455 U.S. App. D.C. 332, 23 F.4th 1036 (2022); Republic of Guatemala v IC Power Asia Dev. Ltd (S.D.N.Y. May 5, 2023).
Other important decisions include Smarter Tools, Inc v Chongqing SENCI Import & Export Trade Co., Ltd., 57 F.4th 372 (2d Cir. 2023) in which the Second Circuit court held that remanding an arbitration award to provide additional reasoning was a “permissible choice” rather than vacating the entire award. The court also established that failure to state reasons for an award falls under section 11 of the FAA, which governs modifications and corrections of awards, rather than section 10, which deals with vacatur.
Finally, the Supreme Court's decision in Coinbase Inc. v Bielski, (U.S. 2023), established that when a motion to compel arbitration is denied by a district court and subsequently appealed, the ongoing court proceedings are automatically stayed until the appeal is resolved. Coinbase, Inc. v Bielski, 599 U.S. 736 (2023).
Answer contributed byThe Foreign Sovereign Immunities Act (FSIA) is the sole basis for obtaining jurisdiction over a foreign state in US courts. See Process & Indus. Devs. Ltd. v Fed. Republic of Nig., 456 U.S. App. D.C. 154, 27 F.4th 771 (2022). If a foreign state enters into an arbitration agreement or takes actions implying waiver, such as filing a responsive pleading, a court may find that the foreign state has waived immunity and could enforce arbitration. The FSIA includes an arbitration exception to sovereign immunity under section 1605(a)(6), which allows US courts to exercise jurisdiction over actions to enforce arbitration agreements between private parties and foreign states or to confirm resulting arbitration awards, even where a foreign court has set aside the award. Id.
Answer contributed byThe FAA does not contain any provisions that specifically address the confidentiality of arbitral proceedings. In general, confidentiality will be governed by the applicable arbitration agreement, arbitration rules, or agreements of the parties. The ABA/AAA Code of Ethics for Arbitrators in Commercial Disputes acknowledges that arbitrators have a duty to maintain the confidentiality of all matters related to arbitration proceedings.
It should be noted that courts may require the publication of the final award and the arbitration agreement when a party seeks to enforce the award or when a party seeks to set it aside. However, in certain limited circumstances, parties have sought an order sealing the award.
Answer contributed byAs noted above, there are no generally applicable confidentiality rules. If the parties prefer to maintain confidentiality over evidence in the arbitral proceeding, they must agree on a confidentiality agreement or incorporate arbitration rules with confidentiality protections.
Answer contributed byCounsel in arbitration proceedings are bound by the ethical codes of the states in which they practice. Most codes are based on the American Bar Association's Model Rules of Professional Conduct (ABA Model Rules). These rules cover various aspects of professional conduct, including conflicts of interest, financial arrangements, conduct before a tribunal and confidentiality.
Model Rule 5.5(c)(3) permits a lawyer who is licensed to practise in one US jurisdiction to represent a client in an arbitration proceeding in another jurisdiction subject to certain conditions. In addition to the ABA Model Rules, some states have established specific ethical guidelines that govern the conduct of attorneys participating in international arbitration proceedings.
Answer contributed byThe procedural framework is entirely dependent on the arbitration agreement and any rules that are incorporated therein with few exceptions. International commercial arbitration has developed as a specialised practice area in the US. Procedural expectations are therefore in line with the general practice internationally in respect of written submissions, information exchange, conduct of hearings and motion practice. Procedural expectations in domestic arbitrations may be more in line with domestic litigation practice depending on the background of the arbitrators. This may be seen most clearly in procedural matters such as discovery (which may be more extensive or involve litigation procedures such as depositions) and the procedures at the hearing.
Answer contributed byThird-party funding in international arbitration is a relatively new and evolving area. The approach to third-party funding in international arbitration within the United States remains largely permissive. US courts and arbitral tribunals have recognised the validity of third-party funding arrangements, subject to certain limitations and disclosure requirements. However, the specific rules governing the use of third-party funding may depend on the applicable state laws, as well as the rules of the arbitral institution and/or the terms of the arbitration agreement.
In the context of international arbitration, the disclosure requirements regarding third-party funding vary depending on the applicable rules. The IBA Rules, if chosen to be applicable to the dispute by the parties, require the funded party to disclose the identity of the funder to the arbitrator, who must then disclose any conflicts of interest.