Application of TAA Necessarily Excludes FAA
The Dallas Court of Appeals recently held that a provision calling for application of the Texas General Arbitration Act necessarily excludes application of the Federal Arbitration Act. First, the Court held that because the motion to abate was made under the FAA, the Court had jurisdiction to review the trial court's order by mandamus. Next, the Court acknowledged the Texas Supreme Court's test that a general choice of law clause will not be read to exclude federal law unless the clause "specifically excludes the application of federal law." Third, the Court acknowledged that the FAA generally controls transactions involving interstate commerce. Lastly, the Court held that the parties excluded application of federal law by agreeing that the Texas General Arbitration Act applied. The Court noted that a general choice of law provision does not specifically exclude federal law because "the FAA was part of the substantive law of Texas." Nevertheless, by naming the Texas Act, the parties excluded the FAA. The Court's opinion in In re Olshan Foundation Repair Co., L.L.C. can be found at this link.
