The Utility of State Laws Regulating International Commerical Arbitration and Their Compatibility with the FAA - Vol. 11 No. 1-2 ARIA 2000
Originally from American Review of International Arbitration - ARIA
On June 21st, 1985, the UNCITRAL adopted the "Model Law on International Commercial Arbitration." A few months later, on December 11th, 1985, the United Nations General Assembly approved the Model Law and recommended that "all States give due consideration" to this model. A great number of States adopted the UNCITRAL Model law, without changes or with slight modifications. Other legislatures did not strictly follow the Model Law but were inspired by its content when they revised their national laws on arbitration. It is undisputed that the Model Law is a success and has played a crucial role in the harmonization of national laws on international arbitration.
The United States has not implemented the UNCITRAL Model Law at the federal level. Some states have, nevertheless, adopted the Model Law at the state level with a view to promoting international arbitration within their own boundaries. This study aims at examining to what extent these state laws on international arbitration are valid or, conversely, pre-empted by the federal arbitration law. We will also express an opinion on the utility of these state laws. Do they promote international arbitration or do they create a confused situation due to the existence of different legal regimes?
Even though most of the states have adopted a law closely following the UNCITRAL Model Law, some of them took different approaches to attract international arbitral proceedings and enacted other types of rules to govern international arbitration. We will also discuss this second category of state laws.
After a brief presentation of US federal law in the field of arbitration (Section I), this study will deal with new trends in international arbitration law in the United States (Section II). We will then turn to general principles governing the pre-emption of state laws by the federal arbitration law (Section III) and to potential and actual conflicts between state provisions and the federal law (Section IV). We will conclude (Section VI) after examining two specific cases stemming from 1) choice-of-law clauses, and 2) differences between the scope of application of federal and state laws, respectively (Section V).