If the underlying case involves interstate commerce the Federal Arbitration Act (FAA) will apply to the enforcement procedures. The FAA provides that any party to the arbitration may apply to the appropriate court for an order confirming the award if the arbitration clause of the contract provides that a judgment of the court shall be entered upon the award. The arbitration clause, however, need not explicitly authorize entry of a judgment for a federal court to have jurisdiction under this provision. Rather, some courts have held that a contract that provides that the decision of the arbitrators “shall be final and binding upon both parties” may satisfy the requirement that the parties have agreed to entry of a judgment. In some circuits, parties' conduct may be sufficient to find an implied agreement to have a judgment entered. Finally, even if the parties have not agreed that a court can enter a judgment, courts have created an exception that allows for confirmation under the Federal Arbitration Act if the parties had previously invoked the jurisdiction of the federal courts. Consequently, under the Federal Arbitration Act, federal courts can gain jurisdiction over an arbitration award in a number of ways.

 

The FAA itself, however, does not provide subject matter jurisdiction for federal courts. Even if the parties agreed to a federal court confirming or modifying an arbitration award, the federal court must have independent subject matter jurisdiction over the arbitration award. Thus, the parties must still show that federal question or diversity subject matter jurisdiction exists. Section 9 of the FAA provides that if no court is specified in the agreement for confirmation of the award, application may be made to the “United States court in and for the district within which the award was made.” The term “United States court” has been ruled to include state courts and federal courts. This provision has also been interpreted as permissive and not mandatory.