1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

Arbitration in the United States is governed by the Federal Arbitration Act, 9 USC § 1 et seq (FAA). The FAA is split into three chapters and sets out the basic legal principles applicable to arbitration in the United States. It applies to all arbitration agreements in maritime transactions and contracts involving interstate or foreign commerce, and is applicable in both federal and state courts.

The scope of the FAA is limited in four respects:

  • It is not applicable to contracts of employment of seamen, railroad employees or any other class of workers engaged in interstate commerce (9 USC § 1; Circuit City Stores, lnc v Adams, 532 US 105 (2001); New Prime Inc v Oliveira, 139 S Ct 532 (2019);
  • It requires the arbitration agreement to be in writing in order to be enforceable (9 USC § 2);
  • The common law principles that apply to contracts generally under state law apply to arbitration agreements under the FAA, meaning that an arbitration agreement will not be enforceable under the FAA if it is unenforceable at law or in equity (9 USC § 2); and
  • The FAA also does not directly apply to arbitrations arising out of a collective bargaining agreement (Coca-Cola Bottling Co of NY v Soft Drink & Brewery Workers Union Local 812 Int'l Bh of Teamsters, 242 F3d 52, 54-55 (2d Cir 2001).

In addition to the FAA, each of the 50 states has enacted separate legislation governing arbitration in its respective jurisdiction. Where a conflict arises between the FAA and state law, the FAA will prevail.

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

The FAA does not provide a definition of ‘domestic' or ‘international' arbitration proceedings.

Chapter 1 (9 USC § 1 et seq) sets out the general provisions applicable to arbitration agreements involving maritime, interstate or foreign commerce.

Chapter 2 (9 USC § 201 et seq) adopts the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Section 208 states that the general provisions in Chapter 1 will apply to foreign arbitral awards and proceedings only "to the extent that chapter is not in conflict" with the New York Convention.

Chapter 3 adopts the 1975 Inter-American Convention on International Arbitration (‘Panama Convention'). Section 307 provides that the general provisions in Chapter 1 will apply only where they are not in conflict with the Panama Convention. Additionally, Section 305 holds that where both the New York and Panama Conventions apply to the enforcement of an arbitral award, if a majority of the parties to the agreement are citizens of a state or states that have ratified the Panama Convention, it will apply. Otherwise, the New York Convention will apply.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

The UNCITRAL Model Law has not been enacted in the United States. However, eight states – California, Connecticut, Florida, Georgia, Illinois, Louisiana, Oregon and Texas – have enacted statutes based on the Model Law that apply in conjunction with the FAA.

The main differences between Chapter 1 of the FAA and the Model Law are summarised in the table below.

FAA Model Law

9 USC § 5

Unless otherwise stated in the arbitration agreement, upon the application of either party a United States court shall designate and appoint an arbitrator, and the arbitration will be conducted by a single arbitrator.

Article 10

(1) The parties are free to determine the number of arbitrators.

(2) Failing such determination, the number of arbitrators shall be three.

Article 11

(3)(a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator.

9 USC § 11

A United States court may make an order modifying or correcting an arbitration award where:

(a) there was an evident material miscalculation of figures or an evident material mistake

(b) the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.

(c) the award is imperfect in matter of form not affecting the merits of the controversy

Article 33

(1) Within thirty days of receipt of the award, unless another period of time has been agreed upon by the parties:

(a) a party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of similar nature;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

9 USC § 10

A United States court can vacate an arbitration award, inter alia, where:

(1) the award was procured by corruption, fraud, or undue means.

(2) there was evident partiality or corruption in the arbitrators, or either of them.

(3) 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.

(4) 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.

Article 34

An arbitral award may be set aside by the court specified in article 6 only if:

(a) the party making the application furnishes proof that:

(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or

(ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;

However, a number of issues which are addressed by the Model Law are not addressed by the FAA. These include:

  • the availability of pre-action measures and relief from a court (but in connection with admiralty disputes, the FAA allows for arrest and similar procedures to be used, 9 U.S.C. § 8);
  • the ways in which an arbitrator's alleged impartiality can be challenged;
  • the tribunal's power to appoint experts; and
  • the form of the arbitral award.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

The FAA contains no mandatory rules governing arbitral proceedings in the United States.

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

There is currently no legislative intention to amend the FAA. However, its provisions are frequently interpreted by the courts.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

The FAA adopts the New York Convention in Chapter 2 (see 9 USC § 201 et seq). However, there are two general reservations to the implementation of the New York Convention in the United States:

  • The United States will only recognise awards made in another jurisdiction that has ratified the New York Convention; and
  • The United States will only apply the New York Convention to matters recognised under domestic law as ‘commercial'.

However, courts have given these reservations a narrow construction (see Karaha Bodas Co v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F3d 274 (5th Cir 2004)).

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

The FAA adopts the Panama Convention in Chapter 3 (see 9 USC § 301 et seq). The United States has also signed and ratified the Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965). Furthermore, the United States has numerous bilateral free trade agreements in force and is a party to 42 bilateral investment treaties. Importantly, these agreements provide a limited right for investors from one contracting state to arbitrate claims lodged against the state in which they invested.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Two elements must be satisfied for it to be determined that a dispute is arbitrable in the United States:

  • The parties must have entered into an arbitration agreement (for purposes of a United States seated arbitration) which states that arbitration is to be conducted in the United States; and
  • The dispute that has arisen must fall within the terms of the arbitration agreement

The FAA requires federal district courts to stay judicial proceedings or compel arbitration if there is an agreement to arbitrate that encompasses their dispute: 9 U.S.C. §§ 3, 4. However, the Act does not address whether, or when, the question of arbitrability should be decided by the arbitration panel rather than the court. A major issue, therefore, is whether the agreement clearly and unmistakeably delegated these threshold questions of arbitrability to the arbitrator or whether they remain with the court (Rent-A-Center, West, Inc v Jackson, 561 US 63, 79 (2010)). The answer to this question will inform the parties as to whether the dispute over arbitrability is to be arbitrated or determined by a court.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

The Federal Arbitration Act does not restrict the choice of seat based on the nature of the dispute. Parties are free to choose any seat of arbitration for the resolution of any dispute, without any legal restrictions, provided that it is specified in the arbitration agreement.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

It must be shown that there is a written agreement in a commercial or maritime contract to settle controversies by arbitration, "save on such grounds as exist at law or in equity for the revocation of any contract" (9 USC §2). Although state law will govern questions of contract formation (see Tillman v Macy's, Inc, 735 F3d 453, 456 (6th Cir 2013)), the issue of whether the parties have agreed to arbitrate is a matter of federal law (Evanston Ins Co v Cogswell Props, LLC, 683 F3d 684, 693 (6th Cir 2012)). Courts have identified and enforced written arbitration agreements whether or not the parties signed the writing; and where it was in electronic form. For example, in Gomes v Karnell, it was held that parties formed a valid arbitration agreement evidenced by an exchange of emails between counsel (2016 WL 7010912 (Del Ch 30, November 2016)).

In the international context, Article II of the New York Convention states that the arbitration agreement must be either "signed by the parties" or "contained in an exchange of letters or telegrams" (see Smith/Enron Cogeneration Ltd P'ship, Inc v Smith Cogeneration Int'l, Inc, 198 F3d 88, 93 (2d Cir 1999)). However, extant literature is of the view that these requirements are not mandatory and an arbitration agreement can be created by an email exchange (see generally SI Strong, "What Constitutes an ‘Agreement in Writing,' in International Commercial Arbitration? Conflicts Between the New York Convention and the Federal Arbitration Act" (2012) 48 Stan J Int'l L 47; Restatement (Third) US Law of Int'l Comm Arb § 2.4, (2019)).

Irrespective of the writing requirement, what is most important is that the arbitration agreement unambiguously states that:

  • for purposes of a US seated tribunal, the arbitration is to be conducted in the United States;
  • the Federal Arbitration Act (FAA) governs the arbitration agreement and the arbitration process; and
  • if applicable, US law applies.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

No separate arbitration agreement is required; an arbitration provision inserted within the contract is sufficient. The arbitration provision can also be incorporated by reference to another document that is enforceable between the parties to the contract. For example, in Crawford Professional Drugs, Inc v CVS Caremark Corp, the court held that pharmacies that signed provider agreements incorporating a provider manual with an arbitration clause were bound to arbitrate their disputes (748 F3d 249, 262 (5th Cir 2014)).

Importantly, however, an arbitration provision is severable from the remainder of the contract and is therefore enforced separately (see Prima Paint Corp v Flood & Conklin Mfg Co, 388 US 395, 403 (1967); S Jersey Sanitation Co, Inc v Applied Underwriters Captive Risk Assurance Co, Inc, 840 F3d 138, 144 (3d Cir 2016)).

Hence, unless a challenge is made to the arbitration clause within the agreement itself, a challenge to the validity of the contract (eg, on the grounds of fraud, duress or illegality) as a whole does not bear on the agreement to arbitrate and must therefore be adjudicated by the arbitrator at first instance (Buckeye Check Cashing v Cardegna, 546 US 440, 449 (2006)).

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

The FAA does not specify the seat and/or language that is to apply if there is no agreement between the parties.

If the parties have adopted in their agreement any institutional rules which provide default rules in this situation, these will apply. The most common institutional rules are the American Arbitration Association (AAA) Commercial Arbitration Rules and Mediation Procedures 2021. If adopted, Rule 11(a) provides that the AAA may initially determine the place of arbitration, subject to the power of the arbitrator after appointment, to make a final determination on the locale.

If the parties have not adopted any institutional rules and do not agree on the seat or the language of the arbitration, these issues will be determined by the arbitrator.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

This is not specified by the Federal Arbitration Act. However, it may be addressed by the arbitration rules that the parties have adopted in the arbitration agreement. For example, Rule 7(c) of the American Arbitration Association Rules 2021 provides that: "A party must object to the jurisdiction of the arbitrator or to the arbitrability of a claim or counterclaim no later than the filing of the answering statement to the claim or counterclaim that gives rise to the objection. The arbitrator may rule on such objections as a preliminary matter, or as part of the final award."

If the rules adopted by the parties do not address this issue or no arbitration rules are specified within the arbitration agreement, the usual common law principles will apply. Therefore, applying the doctrine of estoppel (see, in the context of arbitration, J Griffin & Co v Beach Club II Homeowners Ass'n, 384 F3d 157, 160-61 (4th Cir 2004)), a party would be required to object to jurisdiction before the substantive proceedings begin and in its first correspondence to the opposing parties and written submissions to the tribunal.

4.2 Can a tribunal rule on its own jurisdiction?


Parties to an arbitration agreement may submit the issue of arbitrability to the arbitrator if the agreement contains clear and unmistakable evidence that the parties intended the question of arbitrability to be decided by the arbitrator (Rent-A-Center, West, Inc v Jackson, 561 US 63, 79 (2010)); AT&T Tech, Inc, v Comm Workers, 475 US 643 (1986)). Therefore, arbitrators have jurisdiction to determine whether a particular dispute is arbitrable where the arbitration agreement is "inclusive, categorical, unconditional and unlimited" (Benihana, Inc v Benihana of Tokyo, LLC, 784 F3d 887, 898 (2d Cir 2015)). This will clearly be shown where the parties have adopted a set of institutional rules which provide that the tribunal can rule on its own jurisdiction.

However, in Howsam v Dean Witter Reynolds, Inc, 537 US 79, 123 S Ct 588 (2002), the Supreme Court of the United States considered whether the applicability of a time limit rule for demanding arbitration under a securities contract was to be decided by the court or arbitrators. The court noted that as a general principle, the question of arbitrability – that is, whether the parties have submitted a particular dispute to arbitration – is an issue to be decided by the court.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

There is a presumption that the courts will hear any objections as to whether the parties agreed to be bound by an arbitration clause and, if so, whether a dispute is within the scope of an arbitration clause (First Options of Chicago, Inc v Kaplan, 514 US 938, 943 (1996)). Therefore, parties can apply to the courts as they see fit to challenge jurisdiction, provided that they are not prevented from doing so by way of the doctrine of estoppel or any other relevant common law principles, or the language of the arbitration agreement's delegation clause which may clearly and unambiguously provide that the arbitral panel is to decide all matters concerning arbitrability, including jurisdiction. This area of the law is developing. For example, whether incorporation of an arbitral body's rules qualifies as "clear and unmistakeable" delegations of authority under First Options is a matter of ongoing dispute (Cf. Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 202 L. Ed. 2d 480 (2019)).

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

There are no restrictions on who can be a party to an arbitration agreement. When a proceeding is brought to enforce a judgment against a sovereign state, the proceeding is governed by the Foreign Sovereign Immunities Act (28 USC § 1604).

5.2 Are the parties under any duties in relation to the arbitration?

Most of the domestic commercial arbitration in the United States are governed by the Federal Arbitration Act (FAA). The FAA does not impose a mandatory set of procedural rules that parties are to comply with; rather, the parties are free to specify in their arbitration agreement which rules they want to govern the arbitration. For example, parties may state that the American Arbitration Association Rules, the International Institute for Conflict Prevention and Resolution or the London Maritime Arbitrators Association Rules are to apply. It is these rules that will impose duties on the parties in the arbitration, such as when to file written submissions to the tribunal and so on.

In instances where the arbitration agreement does not specify what procedural rules are to govern the arbitration, then the arbitrators will generally proceed on an ad hoc basis, determining procedure in accordance with experience and party consultation.

5.3 Are there any provisions of law which deal with multi-party disputes?

The FAA does not contain provisions which set out what is to occur in multi-party disputes. Such provisions are generally contained in the relevant procedural rules that govern the arbitration. If they are not contained in those rules, where no agreement can be reached between the parties, the tribunal will decide the rules which govern multi-party disputes.

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The Federal Arbitration Act (FAA) does not contain choice of law rules. Instead, the parties are free to select the substantive law that will apply to the dispute. The parties must do so expressly and unambiguously. For example, in Mastrobuno v Shearson Lehman Hutton, 514 US 52 (1995), the Supreme Court held that parties that wish to apply the arbitration of a particular state cannot rely on a general choice of law provision in the contract within which the arbitration agreement was contained. Indeed, it was held in AT&T Mobility LLC v Concepcion 563 US 333, 334 (2011) that the FAA operates on the presumption that it overrides state laws; therefore, if parties wish to adopt the law of a particular state in the United States, they must explicitly do so in the arbitration agreement.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

Yes. The tribunal will uphold a party agreement specifying the substantive law of the dispute. If the substantive law is unclear, this will be determined by the arbitrators at their discretion. It is usual that tribunals hear submissions on this issue from the parties before determining what substantive law will apply.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

The Federal Arbitration Act (FAA) does not contain provisions on the consolidation of arbitrations. This issue is almost always dealt with by the relevant procedural rules that the parties have stipulated will govern the arbitration. Additionally, a US court may rule on a petition to compel or enjoin arbitration only if there is an underlying basis for subject-matter jurisdiction (Moses H Cone Mem'l Hosp v Mercury Constr Corp, 460 US 1, 25 (1983)). Courts may also examine the underlying dispute between the parties to determine whether a federal court has federal question subject-matter jurisdiction over a petition to compel or enjoin arbitration (Vaden v Discover Bank, 556 US 49, 62 (2009)).

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

This issue is not addressed by the FAA and is almost always dealt with by the relevant procedural rules that govern the arbitration. For example, Article 7 of the International Chamber of Commerce Arbitration Rules provides that "no additional party may be joined after the appointment of any arbitrator, unless all parties, including the additional party, otherwise agree".

7.3 Does an arbitration agreement bind assignees or other third parties?

It is well established that a non-signatory party may be bound to an arbitration agreement if so dictated by ordinary principles of the common law. US courts have held that third-party non-signatories can be bound by arbitration agreements based on principles of:

  • agency (D/S Norden A/S v CHS de Paraguay, SRL, 16-CV-2274, 2017 WL 473913, at *4 (SDNY, 3 February 2017));
  • estoppel (2004 Parker Family LP v BDO USA LLP, No. 657152/2019, 2020 WL 2844578 at *3 (N.Y.Sup., 29 May 2020));
  • third-party beneficiary status under the contract (Geier v m-Qube Inc, 824 F3d 797 (9th Cir 2016)); or
  • piercing the corporate veil (Bridas SAPIC v Government of Turkmenistan, 447 F3d 411 (5th Cir 2006)).

8 The tribunal

8.1 How is the tribunal appointed?

The Federal Arbitration Act (FAA) leaves it to the parties to agree on the method for selecting arbitrators (9 USC § 5). This is encouraged; and it has been held that the intention of the FAA is for the parties, rather than the courts, to appoint arbitrators (see Shell Oil Co v CO2 Comm, Inc, 589 F.3d 1105, 1109 (10th Cir. 2009)). The parties should therefore specify the process by which arbitrators are to be appointed in the arbitration agreement.

At the request of a party, however, the court has the power under Section 5 of the FAA to appoint the arbitrator(s) where:

  • the parties have failed to agree on a selection method;
  • the selection method is agreed, but one of the parties fails to abide by that method; or
  • for any reason, there is a failure to appoint an arbitrator or fill a vacancy.

Where a party refuses to appoint an arbitrator in accordance with the parties' agreement, the other party can file a motion with a court to compel the appointment of an arbitrator in accordance with the provisions of the arbitration agreement (9 USC § 6).

The district court has the authority and the obligation to appoint an arbitrator where there the selection process does not occur or is not followed (Odyssey Reinsurance Co v Certain Underwriters at Lloyd's London Syndicate 53, 615 F App'x 22 (2d Cir 2015)). For example, the court appointed an arbitrator in circumstances where a party-appointed arbitrator largely failed to engage in the process of selecting the chair of the tribunal (see Nat'l Union Fire Ins Co of Pittsburgh, PA v Source One Staffing LLC, 16-CV-6461, 2016 WL 5940920, at *1 (SDNY, 13 October 2016)).

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

The FAA starts from the position that there is to be a sole arbitrator instead of a panel of three (9 USC § 5). However, the parties are free to change this by agreement and often agree on three or more arbitrators in large or complex transactions. The parties may also agree to have their arbitration administered by an arbitral institution such as the American Arbitration Association (AAA). In that case, the institution decides on the number of arbitrators if the agreement is silent and the parties disagree.

Where the Panama Convention governs, a court must appoint three arbitrators unless the parties agree otherwise (9 USC § 303; Article 3 of the Panama Convention).

The FAA otherwise does not restrict the number of arbitrators, their qualifications or their method of selection.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

Section 10 of the FAA provides that an award may be vacated:

(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) 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 misbehaviour by which the rights of any party have been prejudiced; or (4) 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.

However, the FAA does not provide a process for challenging the appointment of an arbitrator before the award has been made. US courts therefore generally do not consider interlocutory challenges to an arbitrator's appointment (AVIC Int'l USA, Inc v Tang Energy Grp, Ltd, 614 F App'x 218 (5th Cir 2015)); In re Sussex, 781 F3d 1065 (9th Cir 2015)). Indeed, US federal courts have found that they lack authority to remove arbitrators during an arbitration (In re Sussex, 781 F3d 1065 (9th Cir 2015)). After the award is made, an arbitrator can be challenged through a proceeding to confirm or vacate the award.

However, the parties are free to include in their arbitration agreement any ways they wish to challenge the appointment of an arbitrator; and provisions on this are usually included in procedural rules which govern arbitration, such as Rule 18 of the AAA Commercial Arbitration Rules and Mediation Procedures.

8.4 If a challenge is successful, how is the arbitrator replaced?

The FAA states that if the arbitration agreement provides the method for replacing an arbitrator, that method must be followed (9 USC § 5). If no method is provided, then "upon application of either party to the controversy the court shall designate and appoint an arbitrator or arbitrators" (9 USC § 5).

Standard form procedural rules governing arbitrations all generally have provisions that address arbitrator replacement. For example, see Rule 15 of the JAMS Comprehensive Arbitration Rules & Procedures.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

The FAA contains no specific requirements regarding arbitrator independence, impartiality or the disclosure of potential conflicts of interest. It does, however, give rise to an implicit standard by providing that an award can be set aside on the ground of evident partiality or corruption (see question 14).

Pursuant to this standard, US courts have held that a mere failure to disclose a potential conflict of interest is not a sufficient basis to set aside an award. The challenging party must prove that the partiality is direct, definite and capable of demonstration rather than remote, uncertain or speculative (Republic of Argentina v AWG Group Ltd, 894 F3d 327, 334-35 (DC Cir 2018); Scandinavian Reinsurance Co v Saint Paul Fire & Marine Ins Co, 668 F3d 60, 74 (2d Cir 2012)).

Additionally, the rules of the major arbitration institutions expressly address the requirements for independence, impartiality and disclosure. For example, the International Chamber of Commerce Arbitration Rules 2021, the International Centre for Dispute Resolution International Dispute Resolution Procedures Rules 2021 and the AAA Rules 2021 require the arbitrators and the parties to disclose any circumstances that may give rise to justifiable doubts regarding an arbitrator's impartiality or independence. Parties can challenge an arbitrator whenever these circumstances become known. However, a party cannot wait to see the results of the final award to challenge the arbitrator's independence or impartiality if the basis for the challenge was known earlier (Lucent Techs, Inc v Tatung Co, 379 F3d 24, 31 (2d Cir 2004); Meyer v Kalanick, 477 F Supp 3d 52, 55 (SDNY 2020)).

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

The FAA only addresses two very limited issues on procedure and evidence.

First, Section 7 of the FAA states that: "The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case." However, there has been some judicial debate over the scope of this provision. The Second and Third Circuit have held respectively that Section 7 does not grant an arbitrator authority to order non-parties to appear at depositions or provide parties with documents prior to a hearing (Life Receivables Tr v Syndicate 102 at Lloyd's of London, 549 F3d 210, 216–17 (2d Cir 2008); Hay Grp, Inc v EBS Acquisition Corp, 360 F3d 404, 410 (3d Cir 2004)). The Eighth Circuit takes the view that although the statute does not "explicitly authorize the arbitration panel to require the production of documents for inspection by a party, ... implicit in an arbitration panel's power to subpoena relevant documents for production at a hearing is the power to order the production of relevant documents for review by a party prior to the hearing" (In re Security Life Ins Co, 228 F3d 865, 870–71 (8th Cir 2000)). A third, middle ground is represented by the Fourth Circuit, which – concerned that "arbitral efficiency would be ‘degraded if the parties are unable to review and digest relevant evidence prior to the arbitration hearing'" – has "read into the FAA an exception under which a party could petition the district court to compel discovery ‘upon a showing of special need or hardship'" (Comsat Corp v National Sci Found, 190 F3d 269, 275 (4th Cir 1999)). The courts are still in disagreement over which approach is to be adopted (see Matter of Roche Molecular Systems, Inc 60 Misc 3d 222 (2018)).

Second, Section 10(a)(3) of the FAA provides that the courts have authority to vacate an award where the tribunal "refuses to hear evidence pertinent and material to the controversy" (9 USC § 10(a)(3)). This provision is quite straightforward and has received little judicial commentary.

Other than on the two issues outlined above, the FAA does not provide rules of procedure or evidence, and arbitrators are typically bound by the arbitration rules and procedures agreed on by the parties in their arbitration agreement. Where the parties fail to designate applicable rules, the arbitrator will decide on questions of procedure and evidence after consultation with the parties, on an ad hoc basis.

(b) Interim relief?

The FAA does not expressly address whether tribunals can order interim remedies. However, courts have accepted that tribunals can order such relief if the arbitration agreement or the applicable arbitration rules grant them the authority to do so.

Interim relief generally takes the form of an interlocutory injunction to preserve the status quo until the tribunal has issued its award. Furthermore, tribunals may have (if applicable arbitration rules so provide) the authority to grant any interim relief necessary to secure assets to satisfy a final award. For example, a tribunal might order a party to deposit funds into escrow.

(c) Parties which do not comply with its orders?

Section 7 of the FAA provides that where a party fails to comply with a tribunal's order to testify or produce documents, the party seeking to enforce the order may petition a court for enforcement. Indeed, an arbitral tribunal lacks the enforcement mechanisms that a judicial court has to compel document disclosure or testimony. Therefore, if a witness fails to appear or does not comply with an order of the tribunal, the innocent party may apply to a court in the jurisdiction of the arbitral tribunal to make an identical order. If the order is again not followed, proceedings for contempt of court can be commenced.

(d) Issuing partial final awards?

Section 16 of the FAA expressly contemplates both final and partial awards. The FAA therefore operates on the presumption that an arbitral tribunal situated in the United States can issue partial final awards. The grant of partial awards is also included in standard form arbitration rules. For example, Article 32(1) of the International Centre for Dispute Resolution Rules provides that: "In addition to making a final award, the arbitral tribunal may make interim, interlocutory, or partial awards."

The courts are of the view that for a partial final award to be valid, it must resolve a discrete issue (Sperry Int'l Trade v Government of Israel, 532 F Supp 901, 909 (SDNY 1982), aff'd, 689 F2d 301 (2d Cir 1982); Southern Seas Navigation Ltd of Monrovia v Petroleos Mexicanos of Mexico City, 606 F Supp 692, 694 (SDNY 1985)). However, this threshold is not a particularly demanding one, as it has been held that a partial award will be enforced by a court "when such confirmation is necessary to ensure the integrity of the arbitration" (Companion Property and Cas. Ins. Co. v Allied Provident Ins., Inc, No 13-cv-7865, 2014 WL 4804466 (SDNY 2014).

(e) The remedies it can grant in a final award?

The FAA does not limit the types of remedies that a tribunal can award. However, the parties can agree to limits, either expressly or by adopting a particular set of arbitration rules.

If no limitations are stipulated (as is generally the case under standard form arbitration rules), the tribunal can award a wide range of remedies. The Supreme Court has held that arbitrators may award punitive damages unless the parties' agreement expressly prohibits such relief (Mastrobuono v Shearson Lehman Hutton, Inc, 514 US 52, 58, 60-61 (1995)). Furthermore, if the substantive law governing the contract allows for equitable remedies such as rectification, rescission, specific performance or an injunction, the tribunal can order those remedies (EGI-VSR, LLC v Coderch Mitjans, 963 F3d 1112, 1124 (11th Cir 2020) (confirming the grant of specific performance); Benihana, Inc v Benihana of Tokyo, LLC, 15-CV-7428, 2016 WL 3913599, at *1 (SDNY, 15 July 2016) (confirming the grant of a permanent injunction)). Finally, it has also been held that arbitrators have the power to fashion relief that a court might not properly grant (see Sperry Int'l Trade, Inc v Gov't of Israel, 689 F2d 301, 306 (2d Cir 1982)).

(f) Interest?

The FAA does not specifically address the calculation of interest. However, courts routinely grant interest when ordering judgments on awards.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

Where a party to an arbitration agreement does not participate in the arbitration, Section 4 of the FAA permits federal courts to compel the party to participate. If, after such action is taken, the party still does not participate in the proceedings, the institutional arbitration rules generally provide arbitrators with the power to enter a default award on the condition that the non-defaulting party can provide evidence in support of its claim. Once a default award is made, it can be enforced in the courts just like an ordinary award.

8.8 Are arbitrators immune from liability?

The FAA is silent on arbitrator immunity. However, the courts are of the view that because arbitrators exercise quasi-judicial functions, they have absolute immunity for acts undertaken within the scope of an arbitration (see Lanza v FINRA, 953 F3d 159, 163 (1st Cir 2020); Landmark Ventures, Inc v Cohen, No 13 Civ 9044 (JGK), 2014 WL 6784397, at *4 (SDNY, 26 Nov. 2014)).The institutional arbitration rules also generally provide arbitrators and arbitral institutions with broad immunity for any acts undertaken in connection with an arbitration.

The only exception to this immunity was recognised in obiter dicta in Int'l Union, United Mine Workers of Am v Consol Energy, Inc, No 20-cv-01476, 2020 WL 7042815, at *6 (DDC, 1 December 2020), where it was stated that an exception to immunity arises "when there is evidence of bias or misconduct in the arbitration".

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Yes. Sections 3 and 4 of the Federal Arbitration Act (FAA) set out the mechanism for enforcing valid arbitration agreements as follows:

  • Section 3 empowers the court, on application of one of the parties, to stay proceedings before it if it is satisfied that the proceedings involve issues that are "referable to arbitration" under a written arbitration agreement.
  • Section 4 requires US district courts, on application by a party aggrieved by the failure, neglect or refusal of another to arbitrate under a written arbitration agreement, to make an order directing the parties to proceed to arbitration in accordance with the terms of the arbitration agreement. The district court will also have the discretion to determine whether to stay the case pending arbitration (Occilien v Related Partners, Inc, No 19 Civ 7634, 2021 WL 184399, at *9 (SDNY, 1 January 2021).

Although the FAA does not expressly authorise federal courts to stay state court proceedings, federal courts have enjoined state proceedings (see Atkins v CGI Techs & Sols, Inc, 339 F Supp 3d 619 (ED Ky 2018)).

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

Other than Section 7 of the FAA, which gives courts the power to enforce a tribunal's order to testify or produce documents, the FAA does not provide specific powers in relation to domestic and foreign arbitrations.

However, federal and state courts have held that under the FAA, a court may grant interim relief such as interlocutory injunctions pending arbitration (Sojitz Corp v Prithvi Info Solutions, Ltd, 921 NYS 2d 14, 17 (App Div 2011); Stemcor USA Inc v CIA Siderurgica Do Para Cosipar, 870 F3d 370, 374-79 (5th Cir 2017)). As was stated in Gen Mills, Inc v Champion Petfoods USA, Inc, No 20-CV-181 (KMK), 2020 WL 915824, at *3 (SDNY, 26 February 2020), "[t]he Second Circuit has repeatedly held that courts retain the power, and the responsibility, to consider applications for preliminary injunctions while a dispute is being arbitrated".

Furthermore, courts have granted anti-suit injunctions in cases concerning a pending or threatened foreign arbitration (Citigroup, Inc v Abu Dhabi Inv Auth, No 13 Civ 6073 (PKC), 2013 WL 6171315 (SDNY, 25 November 2013), aff'd, 776 F 3d 126 (2d Cir 2015)). In order to issue such an injunction, a federal district court must have jurisdiction and the usual requirements for injunctive relief must be established. Furthermore, as stipulated by the decision in China Trade & Dev Corp v MV Choong Yong, 837, F2d 33, 36 (2d Cir 1987):

  • the parties must be the same in both matters; and
  • resolution of the case before the enjoining court must be dispositive of the action to be enjoined.

Finally, pursuant to 28 USC § 1782, US courts can compel the production of evidence located in the United States for use in international proceedings. Section 1782 allows for US courts to assist foreign tribunals in gathering evidence. The provision requires that the documents or testimony sought by the parties be for use "in a proceeding in a foreign or international tribunal".

At the time of this writing, there is a circuit split among the federal circuit courts as to whether private international arbitration meets the requirements of a "foreign or international tribunal." Cf. In Re Guo, 965 F.3d 96 (2d Cir. 2020), as amended (July 9, 2020) (disallowing); Servotronics, Inc. v. Boeing Co., 954 F.3d 209 (4th Cir. 2020) (allowing). The U.S. Supreme Court is expected to consider this question soon.

Some states in the US have state laws which allow for court ordered provisional remedies in aid of arbitration globally. New York is notably one such state. Its procedural rules, at NY CPLR § 7502(c) provides that courts "may entertain an application for an order of attachment or for a preliminary injunction in connection with an arbitration that is pending or that is to be commenced inside or outside this state, whether or not it is subject to the United Nations convention on the recognition and enforcement of foreign arbitral awards, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief."

9.3 Can the parties exclude the court's powers by agreement?

Yes, provided that the power is not one contained in the FAA. Therefore, parties cannot exclude the court's power to:

  • issue a stay of proceedings when litigation is subject to arbitration, as well as an order to compel arbitration (9 USC §§ 3, 4);
  • appoint arbitrators (9 USC § 5);
  • enforce summonses issued by the tribunal (9 USC § 7); or
  • confirm and enforce awards, and vacate awards (9 USC §§ 9, 10).

10 Costs

10.1 How will the tribunal approach the issue of costs?

An arbitrator's power to award legal fees and costs in an arbitration is not entirely settled under US law. The FAA does not address the issue of arbitration costs; but where the arbitration agreement or the agreed institutional rules at least implicitly allow for the allocation and award of costs, most courts are likely to uphold the award (eg, see PaineWebber Inc v Bybyk, 81 F3d 1193, 1201 (2d Cir 1996); Prudential-Bache Securities, Inc v Tanner, 72 F3d 234, 243 (1st Cir 1995); cf Beacon Towers Condo Trust v Alex, 42 NE3d 1144 (Mass, 2016)).

Where the institutional rules are ambiguous or do not contain a provision on costs, the general rule is that each party bears its own costs and attorneys' fees in litigation, regardless of outcome and absent an explicit agreement to the contrary (Arcambel v Wiseman, 3 US 306, 306 (1796)). Choosing a foreign law to govern the contract that provides for prevailing party attorneys' fees may not displace this presumption (Atomi, Inc v RCA Trademark Mgmt, SAS, 2015 WL 1433229, at *5 (SDNY, 30 March 2015)).

In the absence of a statutory or contractual authority to award attorneys' fees to the prevailing party, an arbitrator may have authority to impose a sanction through a costs award if one of the parties has acted in bad faith. For example, in Todd Shipyards Corp v Cunard Line, Ltd 943 F2d 1056, 1064 (9th Cir 1991), the US Court of Appeals for the Ninth Circuit determined that arbitrators have broad powers under the American Arbitration Association Rules to decide on appropriate remedies and upheld the arbitrators' award of attorneys' fees as a consequence of the improper conduct and bad faith of the losing party during the arbitration (see also Salus Capital Partners, LLC v Moser, 289 F Supp 3d 468, 479 (SDNY 2018)). A New York appellate court has, however, vacated an arbitrator's award of $3 million in punitive sanctions as against public policy (see Grynberg v BP Exploration Operating Co, 938 NYS2d 439, 440 (1st Dep't 2012)).

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

There are no restrictions specified in the FAA or in the case law on what parties can agree to in terms of costs.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

Third-party funding is gaining prominence in US arbitration. The issue is not expressly addressed by the Federal Arbitration Act. However, most states allow third-party funding as long as client confidences are preserved and the client is in complete control of the case.

The main concern is whether the funding arrangement must be disclosed. If the law firm is the counterparty to the funding agreement, these arrangements raise concerns with respect to its ethical obligations. This is because a lawyer or law firm must not share legal fees with a non-lawyer (Rule 5.4(a) of the Model Rules of Professional Conduct).

12 Award

12.1 What procedural and substantive requirements must be met by an award?

Section 10(a)(4) of the Federal Arbitration Act (FAA) provides that an arbitral award must be "mutual, final, and definite". Additionally, Section 201 states that foreign awards must be in writing. Other than these two provisions, the FAA does not impose any procedural or substantive requirements.

However, institutional arbitral rules generally require that the award be in writing and be signed by a majority of the arbitrators. For example, Rule 46(a) of the American Arbitration Association Rules provides that: "Any award shall be in writing and signed by a majority of the arbitrators. It shall be executed in the form and manner required by law."

The courts do not require arbitrators to give substantive reasons for their decisions (see United Steelworkers v Enter Wheel & Car Corp, 363 US 493, 598: "Arbitrators have no obligation to the court to give their reasons for an award"). As was stated in Mandell v Reeve, Nos 10 Civ 6530, 10 Civ 7389, 2011 WL 4585248, at *3 (SDNY, 4 October 2011), a court only needs to find "a barely colorable justification for the outcome reached" (aff'd, 510 FApp'x 73 (2d Cir 2013). This sentiment is reflected in the institutional arbitral rules. For example, Rule 46(b) of the American Arbitration Association Rules provides that: "The arbitrator need not render a reasoned award unless the parties request such an award in writing prior to appointment of the arbitrator or unless the arbitrator determines that a reasoned award is appropriate."

Despite the very minimal requirements for an award to be valid, courts have held that "an arbitrator exceeds his or her authority by issuing an improper form of award" (Tully Const Co, 2015 WL 906128 at *18).

12.2 Must the award be produced within a certain timeframe?

The FAA does not require that awards be produced within a certain timeframe. However, the parties are free to incorporate a time limit within their arbitration agreement. Otherwise, the institutional arbitral rules generally specify time limits for the issue of arbitral awards. For example, Rule 15.7 of the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration of Domestic and International Disputes 2014 requires the parties and the arbitrator(s) to use best efforts to ensure that:

  • the dispute is submitted to the tribunal for decision within six months of the initial pre-hearing conference; and
  • the final award is rendered within one month of the close of proceedings.

Additionally, Rule 45 of the American Arbitration Association Rules provides that: "The award shall be made promptly by the arbitrator and, unless otherwise agreed by the parties or specified by law, no later than 30 calendar days from the date of closing the hearing…"

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

Yes. Where the arbitral award is rendered in the United States, the prevailing party in an arbitration must request a US court to ‘confirm' the award against the losing party (9 USC §§9, 13, 207 and 304; CBF Indústria de Gusa S/A v AMCI Holdings, Inc, 850 F3d 58, 75 (2d Cir 2017)). This requires the filing of a petition to confirm along with supporting documents, such as a copy of the arbitration agreement and the arbitral award. A petition to confirm a domestic award "may" be filed "at any time within one year after the award is made"; and notice of the petition must be filed on the opposing party (9 USC § 9). Once a court judgment is entered confirming the award, that judgment has the same force and effect as any other court judgment entered in an action (9 USC § 13).

In connection with Chapter 2 of the FAA (enabling the New York Convention), the term ‘confirm' is also used, but courts have explained as having a somewhat distinct meaning. (CBF Industria de Gusa/S/A v AMCI Holdings, Inc, 850 F 3d 58 (2d Cir), cert denied, 138 S Ct 557 (2017)). ‘Confirmed' as used there "is the equivalent of ‘recognition and enforcement' as used in the New York Convention for the purposes of foreign arbitral awards" (id at 72). Thus, to recognize and enforce foreign arbitral awards under Chapter 2 (9 USC §§ 201–208), one proceeds pursuant to 9 USC § 207 which provides that "[w]ithin three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration [,and the] court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in said Convention." As to ‘non-domestic' awards (i.e., award falling under the New York Convention but "not considered as domestic" in the US because of certain international components), federal appellate authority has held that, as the court of primary jurisdiction, the US court is "free to set aside or modify an award in accordance with its domestic law and its full panoply of express and implied grounds for relief." See CBF Indústria de Gusa S/A, 850 F3d at 73-4 (explaining the distinctions between foreign and non-domestic awards under the New York Convention).

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

For awards rendered in the United States (whether domestic or international), awards can only be vacated pursuant to the grounds stipulated in Section 10 of the Federal Arbitration Act (FAA) (Hall Street Associates LLC v Mattel, Inc, 552 US 576 (2008)). Therefore, the US court in and for the district in which an arbitral award was made may, on the application of a party to the arbitration, vacate the award on one of the following grounds:

  • The award was obtained by corruption, fraud or undue means;
  • The arbitrators were guilty of misconduct in:
    • refusing to postpone the hearing on sufficient cause shown;
    • refusing to hear evidence pertinent and material to the controversy; or
    • behaving in any other way by which the rights of any party have been prejudiced; or
  • The arbitrators exceeded their powers or so imperfectly executed them that they did not make a mutual, final and definite award on the subject matter submitted.

As stated by the Supreme Court in Stolt-Nielsen SA v Animal Feeds Int'l Corp, a party seeking to overturn an award on these grounds "must clear a high hurdle" (559 US 662, 671 (2010)). More recently, the Tenth Circuit remarked that: "Once an arbitration award is entered, the finality of arbitration weighs heavily in its favor and cannot be upset except under exceptional circumstances" (Mid-Atl Cap Corp v Bien 956 F3d 1182 (10th Cir 2020)).

Pursuant to the New York Convention, which is adopted by the FAA at § 201, a court may refuse to recognise or enforce a foreign arbitral award only if it finds one or more of the following:

  • The parties to the agreement were under some incapacity or the agreement is not valid under the law;
  • The party against which the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings;
  • The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration;
  • The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties; or
  • The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

Finally, it should be noted that courts have held that arbitral awards may be vacated based on the arbitrator's manifest disregard of the law. This judicially advanced standard has been outlined as follows: "Manifest disregard can be established only where a governing legal principle is well defined, explicit, and clearly applicable to the case, and where the arbitrator ignored it after it was brought to the arbitrator's attention in a way that assures that the arbitrator knew its controlling nature" (see Goldman v Architectural Iron Co, 306 F3d 1214, 1216 (2d Cir 2002)). For decisions that have considered this doctrine, see Copragri SA v Agribusiness United DMCC, No 20 Civ 5486, 2021 WL 961751 (SDNY, 15 March 2021); Weiss v Sallie Mae, Inc, 939 F3d 105, 109 (2d Cir 2019)).

14.2 Are there are any time limits and/or other requirements to bring a challenge?

Yes. An application to vacate, modify or correct the award must be brought within three months of it being made (9 USC § 2). The application must also be served on the opposing party within three months of the award being filed or delivered; and the action must be brought in the district where the award was made. A federal court will also be required to have jurisdiction over the matter.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

No. The Supreme Court, in Hall St Assocs, LLC v Mattel, Inc, 552 US 576 (2008), held that the grounds for vacatur of an award under Section 10 of the FAA are exclusive and cannot be expanded or removed by contract.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

The Federal Arbitration Act does not impose a duty of confidentiality on parties in respect of arbitral proceedings. While some institutional arbitration rules may contain provisions regarding confidentiality, they are generally limited to imposing obligations on the arbitrators or the institution, rather than the parties themselves. Additionally, there is no case law establishing a general duty of confidentiality in arbitrations. Parties therefore often enter into confidentiality agreements to govern proceedings and courts will enforce these agreements.

15.2 Are there any exceptions to confidentiality?


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.