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Whether you like it or not, arbitration is becoming more common in the United States as well as right here in South Carolina. What happens when an arbitration dispute arises in court and what law applies?
Start first with the Federal Arbitration Act. In a nutshell, this Act has a goal of favoring arbitration in contract disputes involving interstate commerce (we will blog about IC and the Robert’s court another day). The U.S. Supreme Court recently held that this act is valid in its preemption of state law that interferes with the Act’s goal. Justice Kagan stated:
(Justice Thomas maintains his displeasure with the FAA in a three sentence dissent.) While the FAA is substantive law, the Act still allows for states to set up a procedural process for handling arbitration disputes.
Where does that leave us in S.C.?
First, if the dispute is about whether or not the arbitration agreement is valid, then the parties need to follow the S.C. Uniform Arbitration Act . This section lays out the process for handling a dispute and whether a court should stay or compel arbitration.
What if the parties dispute the results of the arbitration? There is a new case from the S.C. Court of Appeals that does a great job of going through case law on the issues of arbitration.