Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas

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I. INTRODUCTION 

John Fellas, as practitioner and teacher, has never lost sight of the need to protect the legitimacy of international arbitration in the United States, which in turn requires our continued appreciation of the bases of arbitration in U.S. law. While the federal policy favoring arbitration is codified in the 1925 Federal Arbitration Act (FAA), the strength of that policy depends on the treatment that arbitration receives in federal courts and in the United States Supreme Court in particular.  

Courts in all jurisdictions play an important role in fashioning the treatment of arbitration agreements, arbitral proceedings and arbitral awards. However, the judicial role in this regard is especially pronounced in the United States, in view of the problematic state of legislation on the subject. The federal legislation on arbitration—the —is 100 years old and has never been meaningfully amended.  The FAA basically reads as it did upon its enactment, except to implement the New York and Panama Conventions on the recognition and enforcement of international arbitral awards. In addition, the federal government does not have exclusive legislative authority, even over international arbitration. Arbitration is also subject to State law provided it is not inconsistent with federal law and policy.  

Upon enactment, the FAA broke new ground by stating that “in any maritime transaction or a contract evidencing a transaction involving commerce… shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”2 On this basis, the Supreme Court declared that the FAA “is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary” and that it “create[s] a body of federal substantive law of arbitrability, application to any arbitration agreement within [its] coverage.”3