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Commercial Arbitration in the United States: The Legal Structure - Commercial Mediation and Arbitration in the NAFTA Countries

Author(s): 
John M. Townsend
Page Count: 
27 pages
Published: 
November, 1999
Jurisdictions: 
United States
Practice Areas: 
Commercial Disputes,
Mediation,
NAFTA
Author Detail: 

John M. Townsend is a partner in the Washington DC Office of Hughes Hubbard & Reed and is Chairman of the firm's Arbitration and ADR Group. is a partner in the Washington DC Office of Hughes Hubbard & Reed and is Chairman of the firm's Arbitration and ADR Group.

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Textbooks have been written on the subject of the arbitration law of the United States, but I have been given twenty minutes in which to cover the subject.  With that time limit in mind, I do not propose to attempt a comprehensive treatment of the subject, or to touch at all on the law bearing on other types of ADR, such as mediation.  Rather, I propose to focus on how our peculiar federal legal structure impacts on two subjects.  The first is the enforcement of agreements to arbitrate:  Such agreements are favored under U.S. law, and are enforced by the courts.  The second is the enforcement of arbitration awards, which are also enforced in all types of arbitration, although not necessarily by the same courts or under the same rules.
 
The legal system of the United States provides for differing treatment of three types of commercial arbitration:  Arbitration involving international commercial transactions, which I will refer to as international arbitration; arbitration involving commercial transactions in interstate (but not international) commerce, which I will refer to as federal arbitration; and arbitration involving commercial transactions entirely within one of the states, which I will refer to as local arbitration.  Our legal system applies five sources of law to some or all of these three types of arbitration: International conventions; federal statutes; state statutes; and federal and state court decisions. The result, as one might expect, is that it can be a difficult task to discern what rules apply to any given arbitration, although there is a broad consensus favoring the enforcement of agreement of agreements to arbitrate and the enforcement of arbitration awards in all three types of arbitration.