The Arbitration Process: How Do I Get My Award? Part 3: Jurisdiction of the Court

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Arbitration Attorney

In the last blog, I discussed the court process of approving or vacating an award through our court system.  When it comes to arbitration awards, courts are not always rubber-stamping the arbitrator’s award.  Disputes can arise if one party feels they were treated unfairly because they entered into the agreement to arbitrate fraudulently, or feel that the arbitration was not conducted fairly, the and courts have to evaluate these claims to see if there is any merit before converting the award into a judgment.  Courts also have to evaluate whether a valid contract exists and the dispute arbitrated is within the confines of what can be arbitrated between the parties.  Today, I am going to present you with another issue in the Court’s analysis that needs to be considered: jurisdiction.

One of the most fundamental questions a court must ask is whether it has the power to decide a dispute or take action on a dispute.  If the answer to the question is no, then a court can’t do anything about the case and it will dismiss it.  In our case, the client’s agreement made us have to do some more research because the clause stated that arbitration will be performed “in accordance with the Federal Arbitration Act.”  So what does that mean?  New Jersey has its own laws concerning arbitration and how to enforce it with the courts, but the federal government also has its own laws on arbitration agreements.  There is a lot of overlap between the laws and common philosophy, including how to initiate confirmation proceedings and the grounds from which to vacate an arbitration award, but the clause found in our client’s case presented a possible issue.  The court could possibly say that we should have filed in federal court, since the agreement was based on federal law, and possibly dismiss the case.

The wrinkle here lies with the statutory language.  New Jersey’s laws allow courts to hear arbitration enforcement cases if the arbitration agreement provides for arbitration to occur in New Jersey.  The federal law, in contrast, allows confirmation actions to be filed in the federal court, but does not mandate that they be filed in the Federal Court, leaving open the opportunity for state courts to hear the case if their statutes allow.  New Jersey’s statute is broad enough to confirm arbitration awards performed under the rules of the FAA if the agreement provides that cases can be arbitrated in New Jersey, and so, in our case the matter will be heard in state court rather than having to go to federal court.

To discuss your NJ Arbitration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

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