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Under the Federal Arbitration Act (FAA), disputes over where arbitration will occur or which law is applicable are matters for the arbitrator to resolve, according to a Virginia federal court.
In Burress, Inc. v. John Deere Construction & Forestry Co., No. 7:07-CV-00310, 2007 WL 3023975 (W.D. Va. Oct. 15, 2007), Burress and John Deere entered into a dealership agreement that contained an arbitration clause. A contract dispute between Burress and John Deere arose out of the dealership agreement.
Both parties agreed that the dispute was subject to arbitration. However, because the parties could not agree on venue and choice of law, Burress brought the issue to court to resolve the dispute.
Burress argued that arbitration should take place in Virginia and that Virginia law should govern the dispute. John Deere argued that the FAA is applicable and that the arbitrator, not the court, should determine where arbitration should take place and which state’s law to apply to the dispute.
The Court noted that the FAA limits a district court’s role in compelling arbitration to whether the arbitration agreement is valid and whether the dispute involved is within the scope of the arbitration agreement.
The arbitration clause in the dealership agreement stipulates that “any dispute” shall be resolved by binding arbitration. The Court concluded that this broad language included disputes over where the arbitration will occur and which law is applicable.
Therefore, the Court ordered the parties to resolve their venue and choice of law disputes before an arbitrator.
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