United States Arbitration Act

Summary of United States Arbitration Act

An act of Congress that prescribes the basis for arbitration of commercial disputes arising from maritime contracts and contracts involving foreign entities. The act is divided into two chapters.

Chapter I, dealing with maritime transactions, was enacted in 1947 and based upon an earlier statute. For purposes of the act, a maritime dispute is any complaint under bills of lading for carriage by water, charter parties, collisions, or any other matter involving interstate or foreign commerce that would be otherwise subject to admiralty jurisdiction. In a maritime contract a written provision for arbitration of subsequent disputes is “valid, irrevocable, and enforceable”under the act. In those cases where a participant in a dispute refuses to adhere to the arbitration provisions of the contract, the Federal courts shall compel arbitration. In addition, awards in arbitration are enforceable through the Federal courts.

Chapter II was enacted in 1970 to embrace the provisions of the New York Convention On The Recognition And Enforcement Of Foreign Arbi

Tral Awards (read this and related legal terms for further details). Under this chapter, which took effect in February 1971, the act does not apply to disputes between citizens of the United States, unless the relationship involves property outside the United States or has a “reasonable relation to one or more foreign states.”The Federal courts, which would have jurisdiction over the dispute if arbitration were not involved, may complete arbitration if interrupted and may remove actions from State courts if a participant to a dispute has commenced an action in a state court. Finally, the court may appoint arbitrators and enforce an award granted.

The act applies, in both maritime cases and inter-national disputes, only where an arbitration clause has been included in the contract prior to the advent of the dispute. Arbitration may not be compelled in the absence of such agreement.

(Main Author: William J. Miller)