The Spectre That Haunts Motions To Compel Arbitration: Venue

When a claimant who is party to an arbitration agreement initiates litigation of arbitrable claims, the defendant in that case typically expects to be able to move successfully to compel arbitration under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 4. In cases where the litigation is commenced in a federal district court whose geographical jurisdiction includes the agreed place or "situs" of arbitration, that expectation is likely valid. However, if the litigation is commenced in a district other than one in which the parties agreed to arbitrate their disputes, the federal court may not only be unable to enforce the contractual provision regarding the "place" of arbitration, but it may be unable to compel arbitration altogether. The courts are divided on the issue.