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Report No. 76

1.8. U.S.A.-

In the United States, arbitration began in 1887 when the Chamber of Commerce of the State of New York set up the first privately administered tribunal of businessmen and became the first administrator of arbitrations 1 Arbitration in the U.S.A. generally followed the pattern of the English common law until 1920, when New York adopted the first modern arbitration statute. Previously, agreements to refer to arbitration disputes that might arise in the future could be revoked at any time prior to an actual settlement.2 Such agreements were held unenforceable, although not illegal, on the theory that they would deprive the courts of jurisdiction.3

Following the adoption of the New York statute, the federal government (in 1925) and 15 states enacted similar statutes relating to arbitration. The federal Act does not prescribe the rule of decision for all cases in the federal courts, but is confined to subjects within federal legislative control, namely, maritime transactions and those involving interstate commerce. In other cases that may be litigated in the federal courts-e.g., in suits between citizens of different states-the law of the state in which the federal court sits either provides the controlling law on arbitration or points to the law of the appropriate state.4

A Uniform Arbitration Law was adopted by the National Conference5 of the Commissioners on Uniform State Laws in 1955, and amended in 1956. In the early 1960s, all states in the U.S.A. (with the exception of Oklahoma and South Dakota) had some statutory provisions for arbitration.6 Not all, however, provided for enforcing an agreement to arbitrate future disputes; many followed the rule that none but existing controversies could be made the subject of an agreement for arbitration. In contrast, the Uniform Arbitration Act recognises agreements regarding both existing and future disputes.

1. Wehringer Arbitration: Precepts and Principles, (1969), p. 5.

2. Encyclopaedia Britannica, Vol. 2, p. 214.

3. Encyclopaedia Britannica, Vol. 2, p. 214.

4. Encyclopaedia Britannica, Vol. 2, p. 214.

5. Wehringer Arbitration: Precepts and Principles, (1969), p. 5.

6. Encyclopaedia Britannica, Vol. 2, p. 214.

Arbitration Act, 1940 Back

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