Although the goal of arbitration is speedy and efficient resolution of disputes, these goals may be frustrated by judicial interpretation of choice of law provisions in commercial agreements. There is uncertainty as to the law that a court will apply in deciding a motion to stay or otherwise interfere with an arbitration. There is further uncertainty surrounding whether the law governing arbitration is the Federal Arbitration Act (FAA), the arbitration law of the state where the arbitration is taking place, or that of the state mentioned in a choice of law clause. The federal courts have adopted conflicting standards so that similarly situated litigants are treated differently, solely based on where the initial suit was filed. The United States Supreme Court has addressed the issue in two seminal cases, Volt Information Sciences v. Board of Trustees of Leland Stanford Junior University, and Mastrobuono v. Shearson Lehman Hutton. The federal circuits have construed the mandates of Volt and Mastrobuono differently. 8 This Note explores the impact that choice of law clauses in commercial agreements have on the strong federal policy favoring arbitration as construed by the federal courts.
Horizontal Uniformity and Vertical Chaos: State Choice of Law Clauses and Preemption under the Federal Arbitration Act,
2005 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol2005/iss1/11