Arbitration is one of the most widely used and effective means of alternative dispute resolution employed in the United States legal system. Under an arbitration clause, parties will agree to have their legal dispute heard by a group of arbitrators, generally known as an arbitral tribunal, who will subsequently issue a final, binding resolution that functions similarly to a judicial order. The grounds on which to attack an arbitral award are historically very limited. Today, the only grounds for an appeal from an arbitral decision are fraud, arbitrator bias, misconduct, or an excess of authority.
Congress affirmed its commitment to the arbitral process in 1925 when it passed the Federal Arbitration Act (“FAA”). The FAA makes provisions for the utilization of binding arbitration, thereby resulting in a relinquishment of the right of a judicial appeal on substantive grounds, for disputes arising out of varying types of contracts. The FAA establishes a liberal presumption towards the enforceability of arbitration agreements on statutory claims. When the parties have agreed to arbitrate disputes arising out of a contract, either expressly in the contract or via the use of boilerplate language in a unilateral mandatory arbitration clause, then the parties must arbitrate that claim rather than going to court. Only a congressional intent to the contrary contained in the statute may override this presumption, and the burden of demonstrating that contrary intent lie with the party opposing the arbitration agreement. A party opposing an arbitration agreement may demonstrate a contrary congressional intent either through the statute’s text, its legislative history, or via an inherent conflict between the statute’s underlying purpose and the enforcement of an arbitration agreement.