Whether it’s an employment agreement, a partnership agreement or a non-disclosure agreement between the President of the United States and an adult film actress, parties frequently turn to arbitration as a cheaper, faster and more confidential way to resolve business disputes.  But in New York, parties seeking to avoid the courthouse steps may be in for a rude awakening when it comes to certain preliminary matters. While courts routinely enforce contractual arbitration provisions, especially when the contract is subject to the Federal Arbitration Act (“FAA”), the authority to decide certain conditions precedent to arbitration may lie with the court rather than the arbitrator.

The Federal Arbitration Act

The FAA embodies Congress’ intent that contractual arbitration provisions be enforced by the courts.  The FAA provides that:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.  (9 U.S.C.A. § 2) (emphasis added)

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