The US Court of Appeal for the 11th Circuit will not enforce an agreement to mediate under the FAA

• Author: José Antonio García Álvaro
• Position: Arbitraje y Mediación, Dispute Settlement Resources

In Advanced Bodycare Solutions, LLC v. Thione International, Inc., No. 07-12309 (11th Cir. April 21, 2008), the Eleventh Circuit ruled that the Federal Arbitration Act could not be used to enforce the partiesí agreement to resolve disputes using mediation or nonbinding arbitration.

In this interlocutory appeal we must decide whether the Federal Arbitration Act permits enforcement of a contract clause requiring an aggrieved party, prior to filing a lawsuit, to institute mediation or non-binding arbitration. We conclude it does not.

At issue, is mediation the same as arbitration under the FAA? Interestingly, the FAA does not define arbitration. However, the FAA makes references to ìawardsî as instruments declaring the rights and obligations of the parties, binding rights and obligations. By its nature, an award id the end product of a binding process, precisely what the FAA regulates. As the Court notes, ìindeed, much of arbitration law is predicated on the existence of an award.î

To further establish the difference between arbitration and mediation under the FAA, the...