The answer to your arbitration-related question may depend on the law that applies to the arbitration. The State of Georgia has an arbitration code—the Georgia Arbitration Code, or “GAC” (O.C.G.A. § 9-9-1 et seq.)—that applies to certain arbitrations and certain arbitration-related issues. The United States also has an arbitration code—the Federal Arbitration Act, or “FAA” (9 U.S.C. § 1 et seq.)—that may apply alongside, or instead of, the GAC. While these two sets of laws will often provide the same answer to a particular question, there are areas where these laws diverge. And even where the codes look similar, it may be that courts have interpreted the respective provisions in such a way that results in incompatible answers to your question.
The basic rule is that the GAC will usually apply when the underlying contract involves Georgia parties and a local commercial relationship in Georgia. The FAA will usually apply when the underlying contract involves parties from different states and/or subject matter that crosses state lines (i.e., “interstate commerce”). The U.S. Supreme Court has an expansive view of the FAA’s reach, concluding that it applies to contracts that have even a slight relationship to “interstate commerce.”
Now for an example that illustrates why it matters. There is an ongoing arbitration, and you are a non-party. One of the parties in that arbitration sends you a subpoena requesting that you turn over certain relevant documents in your possession. Do you have to produce the documents? If the GAC applies to the arbitration, then you probably do. The GAC provides that “[t]he arbitrators may issue subpoenas for … the production of books, records, documents, and other evidence” and that courts may enforce these subpoenas. O.C.G.A. § 9-9-9(a). To date, courts have not provided much guidance on this provision of the GAC, and the safest assumption is that it will be enforced as written. If, however, the FAA applies to the arbitration, then you likely do not have to produce the documents. See Managed Care Advisory Grp., LLC v. CIGNA Healthcare, Inc., 939 F.3d 1145 (11th Cir. 2019). But be careful. The arbitrator generally has the power under the FAA to compel your appearance as a witness at the arbitration, and can require that you bring the requested documents with you to the hearing. Therefore, if you believe that refusing to produce the documents may lead to a request that you appear at the arbitration, you may decide to voluntarily turn over the documents.
The issue of applicable law in arbitration is complex. For any “rules” discussed above, the exceptions and nuances are abundant. But we hope you now feel better equipped to raise the issue with in-house or outside counsel when drafting an agreement, when a dispute arises, or when a subpoena shows up in your inbox.
About the author:
R. David Gallo specializes in business litigation and arbitration. Prior to moving to Atlanta, David studied under leading arbitration practitioners and scholars at Columbia Law School, practiced litigation and arbitration at two AmLaw 100 firms in New York, and taught arbitration at Fordham Law School.
About the Arbitration Blog
This blog is a user-friendly resource for businesses and individuals who find themselves faced with issues involving arbitration. Perhaps you want to include an arbitration clause in your contract, or you are being asked to sign a contract with an arbitration clause. Maybe a dispute has arisen and you want to begin arbitration proceedings but you are not sure whether your arbitration clause covers the dispute (hint: it usually does). Perhaps you received a subpoena for documents in connection with an arbitration in which you are not otherwise involved. This blog provides you with answers to simple questions and will help you ask the right questions when confronted with more complex issues.
Among other topics, we cover how to draft an arbitration clause and what to expect in arbitration proceedings. We discuss the differences and similarities among arbitrations governed by Georgia law, federal law, and international law. We explore—in layman’s terms, whenever possible—the Georgia Arbitration Code, the Federal Arbitration Act, transnational law, and decisions from Georgia’s state courts, Georgia’s federal district courts, the U.S. Court of Appeals for the Eleventh Circuit, the U.S. Supreme Court, and foreign tribunals. We provide toolkits and checklists you can use to navigate everyday arbitration issues. We discuss the various contexts and industries in which we have handled arbitration issues for our clients, including:
- Breach of Contract
- Closely Held Company Shareholder Disputes
- Earn Out Disputes
- Executive Separation/Severance
- Franchise Disputes
- Mergers and Acquisitions
- Real Estate
- Trusts and Estates
- Vendor/Supplier Disputes
- Trusts and Estates
We are available and eager to discuss your arbitration issues with you.
Attorneys at Krevolin & Horst with extensive arbitration experience: