Are AI arbitration Awards enforceable?

It starts with a written agreement

Section 2 of the Federal Arbitration Act makes a written arbitration provision in a contract involving commerce, or a written agreement to arbitrate an existing dispute, “valid, irrevocable, and enforceable,” subject to the defenses that apply to any contract, such as lack of assent, fraud, or unconscionability (9 U.S.C. § 2). The parties can make that agreement in a contract before a dispute arises, using the sample clause, or when the case opens.

The Rules and the sample clause let the Tribunal decide its own jurisdiction, including the formation, validity, scope, and arbitrability of the agreement (Rule 2.2). The Supreme Court enforces a clear delegation of those questions to the arbitrator (Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010)).

Choosing an AI tribunal

The Act directs courts to enforce arbitration agreements according to their terms and to follow the parties’ agreed method of appointing the arbitrator (9 U.S.C. § 4, § 5). People’s Court puts the AI role in plain view: the clause names the tier, and every party accepts the exact case-opening terms, including who decides, before the case proceeds (Rule 2.1). The tribunal the parties selected is the tribunal that decides.

Our analysis of why the Act requires courts to enforce an expressly selected AI tribunal is in The FAA is not a human-arbitrator protection act.

Seat, governing law, and court

• The case file identifies the seat. If the parties have not agreed on one, it is Wilmington, Delaware, even when the case is conducted remotely (Rule 12.1).
• Unless the parties validly agree otherwise, the Federal Arbitration Act governs the arbitration agreement and any proceeding to confirm, modify, correct, or vacate an Award, to the extent applicable. For the default Delaware seat, the parties do not adopt the Delaware Uniform Arbitration Act (Rule 12.3).
• Unless the parties validly agree otherwise, court proceedings are brought in the Delaware Court of Chancery or, if it lacks subject-matter jurisdiction, another state or federal court in Delaware (Rule 12.3). A federal court needs its own basis for jurisdiction over an application to confirm or vacate (Badgerow v. Walters, 596 U.S. 1 (2022)).
• The Tribunal applies the substantive law the parties validly selected, or otherwise the law with the most significant relationship to the dispute (Rule 12.2).

Confirming an Award in court

The Rules provide that judgment may be entered on the Award in any court having jurisdiction (Rule 9.5). That brings the Act’s confirmation procedure into play.

The narrow grounds for vacatur

A court may vacate an award only where (9 U.S.C. § 10(a)):

• The Award was procured by corruption, fraud, or undue means.
• There was evident partiality or corruption in the arbitrators.
• The arbitrators refused to hear evidence pertinent and material to the controversy, or other misbehavior prejudiced a party’s rights.
• The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award was not made.

A court may also modify or correct an award for an evident material miscalculation, a decision on a matter not submitted, or an imperfection of form (§ 11). These grounds are exclusive for review under the Act, and parties cannot expand them by contract (Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008)). Errors of fact or law are addressed inside the case, through correction (Rule 8.3) and the human appeal (Rule 9.1).

What the Rules require before an Award issues

• The case proceeds only after the required consent to arbitrate is established, and only within its scope (Rule 3.3).
• Every party accepts the exact case-opening terms, including the procedure and the decider, before the case proceeds (Rule 2.1).
• The parties receive reasonable notice, equal treatment, and a fair opportunity to present their cases (Rule 2.7).
• No party may communicate privately with the Tribunal about the merits (Rule 7.3).
• The Tribunal decides from the closed Record and does not investigate on its own (Rule 5.6).
• The Award is written, resolves each claim, states the seat and the Rules version, and is signed by the Tribunal (Rule 6.5).
• Every track keeps one human appeal on the existing Record unless every party expressly waives it (Rule 9.1).

Either party can download the case record and check its file hashes in the case-record verifier.

Execution without a court

People’s Court executes an Award only through funds or mechanisms within its lawful and technical control, including authorized escrow. Otherwise the Award states the parties’ obligations and is not executed automatically (Rule 8.2). Unless every party waived the appeal, execution waits seven calendar days after service and while any timely correction or appeal is pending (Rule 8.1). Case fees are separate from the disputed funds (Rule 11.1).

Parties in other countries

An award arising from a commercial relationship falls under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, unless the relationship is entirely between U.S. citizens and has no reasonable relation to a foreign state (9 U.S.C. § 202). Recognition in another country is decided by that country’s courts under the Convention and their own law.