Originally from American Review of International Arbitration - ARIA 

INTRODUCTION

The role that state contract law plays in the interpretation of arbitration agreements is often overlooked. Its surreptitious presence in the case law is seldom mentioned, treated instead as the inconvenient stepchild of the fact that there is no federal common law of contracts.  It is accepted that the U.S. Federal Arbitration Act (“FAA”) pre-empts “anti-arbitration” state law measures taken against arbitration agreements.  However, until recently, courts benefitted from a safe harbor provided by the accepted principle that arbitration agreements are usually interpreted pursuant to state contract law.  Courts sometimes seize upon this principle to take idiosyncratic, yet outcome-determinative, interpretations of an arbitration agreement’s enforceability.