The Maryland International Commercial Arbitration Act: The Proper State Response Until Congress Enacts a Comprehensive Federal Statute

Abstract

Maryland has taken a unique approach to address international commercial arbitrations conducted within the state. In 1990, the Maryland General Assembly passed the Maryland International Commercial Arbitration Act (MICAA), which precludes the application of state law to international arbitrations. Instead, the MICAA makes the uniform federal law the sole body of law to govern the process and enforcement of international commercial arbitrations occurring in Maryland. Consequently, the MICAA will add certainty and uniformity to the business and legal climate for international arbitrations in this state.

This article asserts that pending the enactment of a more comprehensive federal statute, the Maryland approach is the appropriate state response to the need in the United States for a better and uniform law governing the process and enforcement of international commercial arbitration. In making this argument, the article first highlights the lack of legal uniformity by surveying the different and overlapping schemes applicable to international arbitration in the United States, including the United States Arbitration Act (FAA) and the various state statutes that address international commercial arbitration. Second, by comparing the FAA with the United Nations Commission on International Trade Law (UNCITRAL) Model Law, this article will develop the rationale behind the Maryland approach. This article suggests that Congress should amend the FAA by expressly requiring it to preempt state international arbitration laws. In conclusion, this article argues that other states contemplating the enactment of international commercial arbitration statutes should follow Maryland's lead. A bifurcated multi-statute system leads to a host of complex litigation-generating problems; the Maryland approach, in contrast, will decrease the confusion engendered by multiple statutes and add certainty to international commercial arbitrations.

Keywords: Maryland, commercial arbitration, MICAA, uniform federal law, legal uniformity, FAA, United States Arbitration Act, UNCITRAL, United Nations Commission on International Trade Law, model laws

JEL Classification: K19, K29, K33, K39