What is the Federal Arbitration Act?

The Federal Arbitration Act (FAA) provides the process and procedure for carrying out the arbitration.

The FAA applies when the dispute is subject to mandatory federal arbitration or when there is a voluntary arbitration agreement and the dispute involves federal law.

What rules govern the arbitration process?

The rules governing an arbitration vary depending upon whether the arbitration is voluntary or mandatory.

In a voluntary arbitration, the parties may agree upon the rules to govern the proceeding.

It is rare that the parties will specifically state all of the governing provisions; rather, the agreement to arbitrate will agree that statutory provisions or a set of model rules will govern the arbitration proceeding.

• Note: The Revised Uniform Arbitration Act of 2000 is a model law commonly employed in voluntary arbitrations.

In mandatory arbitration, state law or court order dictates the rules governing the arbitration.

Notably, in 1925, Congress passed the Federal Arbitration Act (FAA) to encourage the use of arbitration to resolve conflicts.

The FAA provides the process and procedure for carrying out the arbitration.

The FAA applies when the dispute is subject to mandatory federal arbitration or when there is a voluntary arbitration agreement and the dispute involves federal law.

Of course, the parties to voluntary arbitration may agree to a different set of laws, but applying FAA standards may affect a party’s ability to enforce the arbitrator’s award through the court system.

Importantly, the FAA requires that where the parties have agreed to arbitrate, they must do so in lieu of going to court.