Subject Matter Jurisdiction under the Federal Arbitration Act: The Mysteries Solved - Dispute Resolution Journal - Vol. 72, No. 2
Originally from Dispute Resolution Journal
The Federal Arbitration Act, which applies to arbitration provisions in maritime transactions and contracts “evidencing a transaction involving commerce,” comprehensively provides for court assistance at all stages of the arbitral process where the coercive power of the court is required to make arbitration effective. The Act authorizes federal courts to order parties to arbitration (Section 4), to stay court proceedings pending arbitration (Section 3), to appoint arbitrators where, for whatever reason, arbitrators had not been appointed pursuant to the agreement (Section 6), to enforce arbitral subpoenas for witnesses and documents (Section 7), to correct clerical errors in awards (Section 11), to confirm awards (Section 9), and to vacate awards in cases of arbitrator bias, substantial denial of the opportunity to submit proof, fraud, or other illegality (Section 10).
Several sections of the Federal Arbitration Act appear on their face to confer subject matter jurisdiction on federal courts, but the Supreme Court has held that they do not. A large body of case law holds that all these sections of the Act require an independent basis of federal jurisdiction, even though only Section 4, which is limited to actions to compel arbitration, contains such an express requirement. Section 4 permits federal courts to compel arbitration only where the dispute – absent the arbitration clause – could have been brought in federal court under, for example, admiralty or diversity jurisdiction.
Much confusion exists as to how to apply the independent basis of jurisdiction requirement to other sections of the Act, especially Section 7 (subpoenas) and Section 10 (applications to confirm awards). In Section 7 cases, two issues arise in determining whether jurisdiction exists based on diversity of citizenship.