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Supreme Court building. February 7, 2007. Credit: Diego M. Radzinschi/LEGAL TIMES.

Congress enacted the Federal Arbitration Act (FAA) in 1925 to ensure the validity and enforcement of arbitration agreements, thereby encouraging resolution of disputes outside of the court system. Under the FAA, “arbitration is a matter of contract, and courts must enforce arbitration contracts according to their terms.” Rent-A-Center, West v. Jackson, 561 U.S. 63, 67 (2010). The Supreme Court has recognized that the FAA reflects a Congressional intent to enact “a national policy favoring arbitration.” Southland Corp. v. Keating, 465 U.S. 1, 10 (1984). New York law is in accord. As the New York Court of Appeals has stated: “the announced policy of [New York] favors and encourages arbitration as a means of conserving the time and resources of the courts and the contracting parties.” Nationwide Gen. Ins. Co. v. Inv’rs Ins. Co. of Am., 37 N.Y.2d 91, 95 (1975).

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