Originally from Practitioner's Handbook On International Arbitration And Mediation- 3rd Edition

The law governing International Arbitration in the United States is found in both federal and state law. The Federal Arbitration Act, Chapters 2 and 3, implement the provisions of the New York Convention on the Recognition and Enforcement of International Arbitration Awards and the Inter-American Convention on International Commercial Arbitration. Because the Federal Arbitration Act provides for original, non-exclusive subject matter jurisdiction in United States Federal Court for international arbitrations, state laws concerning international arbitration, though not necessarily preempted by federal law, generally are of secondary importance. As a common law jurisdiction, United States federal courts have developed a federal common law of arbitration, both domestic and international. United States federal common law is continuing to develop regarding the international arbitration concepts of separability and competence-competence, and arbitrator bias-disqualification. This chapter also covers how to distinguish between an international and domestic arbitration under United States law, as well as certain practical issues to consider when engaging in arbitration in the United States.

§ 10.02 The Law Governing International Arbitration in the United States

The most significant treaty in the world of international arbitration is the 1958 Convention On the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). The New York Convention has 145 signatories, including the United States, all of whom have agreed to require their domestic courts to enforce foreign arbitration awards covered by its terms. There also is a significant regional treaty to which the United States is a signatory: The Inter-American Convention on International Commercial Arbitration (1975) (the “Panama Convention”).1

The New York Convention is implemented through Chapter 2 of the Federal Arbitration Act (9 U.S.C. §201, et seq.). The Panama Convention is implemented through Chapter 3 of the Federal Arbitration Act (9 U.S.C. § 301, et seq). The New York and Panama Conventions potentially have overlapping jurisdiction for arbitrations that fall under both their terms. However, FAA Section 305 resolves potential conflicts as follows:

When the requirements for application of both the Inter-American Convention [Panama Convention] and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 [New York Convention], are met, determination as to which Convention applies shall, unless otherwise expressly agreed, be made as follows:

(1) If a majority of the parties to the arbitration agreement are citizens of a State or States that have ratified or acceded to the Inter-American Convention and are member States of the Organization of American States, the Inter-American Convention shall apply.

(2) In all other cases the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, shall apply.