In a recent decision, the United States Supreme Court held that Section 3 of the Federal Arbitration Act requires a court to stay a proceeding pending arbitration and provides no discretion for the court to dismiss the action. In Smith v. Spizzirri,1 the Supreme Court settled a significant circuit split on the interpretation of Section 3 of the Federal Arbitration Act (“FAA”). Whereas the Second, Third, Sixth, and Seventh Circuits held that Section 3 of the FAA mandated a stay of court proceedings, the First, Fifth, Eighth, and Ninth Circuits held that a district court had discretion to dismiss, rather than stay, where all the issues were subject to arbitration. This decision unequivocally held that a district court has no discretion to dismiss an action pending arbitration, and further requires the court to stay the matter.
Read the full post on the Gulf Coast Business Law Blog here.
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