Deciding where to arbitrate creates significant jurisdictional issues with respect to the enforcement or attack of an arbitration award.

AuthorCleveland, William C.

Contracts that contain arbitration provisions often, but not always, specify the location at which the arbitration hearing will be conducted. Occasionally, where the contracting parties are from different states or have multi-state presences themselves, they will select a location that has little to do with the performance of the underlying contract. Counsel should be aware that under the Uniform Arbitration Act that has been adopted in 35 states, a contract's provision as to where the arbitration proceeding will be conducted determines where a lawsuit to enforce or attack the arbitration award may be brought, even though the parties, by agreement, decide to conduct the arbitration proceedings somewhere else. Moreover, omitting to specify where the arbitration will be conducted may preclude some courts from entertaining suits to enforce the award.

Courts applying the Uniform Arbitration Act have uniformly held that a court's subject matter jurisdiction to consider motions related to an arbitration is dependent upon, and arises from, the parties' agreement to conduct the arbitration proceedings in that state. (17) Under the Uniform Arbitration Act, where an agreement to arbitrate provides that the arbitration shall be held in a specific state, only the courts of that state have subject matter jurisdiction to hear motions pertaining to the arbitration award.

Ashley River Properties I, LLC v. Ashley River Properties II, LLC arose out of a contract between two Connecticut residents to form a South Carolina limited liability company to develop waterfront property. (18) The Operating Agreement provided that it would be governed by South Carolina law generally and the South Carolina Uniform Arbitration Act specifically, but also provided that the courts of New York shall have sole and exclusive jurisdiction over disputes and that any arbitration proceedings shall be conducted in New York County, New York. During development of the project, one of the members initiated arbitration proceedings against the other alleging breach of the Operating Agreement. After conducting proceedings in New York, the Arbitration Panel issued its award in favor of the Plaintiff. The Defendant then brought an action in South Carolina seeking to vacate the arbitration award. The Trial Court dismissed the lawsuit finding the claims should have been brought in New York.

The South Carolina Court of Appeals affirmed, holding that South Carolina courts did not have jurisdiction to entertain an action attacking the award. The controlling provision of the Uniform Arbitration Act states:

The term 'court' means any court of competent jurisdiction of this State. The making of an agreement described in section 15-48-10 providing for arbitration in this State confers jurisdiction on the court to enforce the agreement under this chapter and to enter judgment on an award thereunder...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT