§ 16.073.Applicability of Limitations Periods to Arbitration

A short provision closing a real gap between the two forums.

A claim sought to be arbitrated is subject to the same limitations period that would apply if it had been brought in court. And commencing an action by filing suit in a court of competent jurisdiction tolls the applicable limitations period for arbitration of the same claim.

The first sentence answers a question the limitations statutes left open. Limitations statutes speak of bringing suit and of actions, and an arbitration is neither. Without this provision a party could argue that no limitations period applied to arbitration at all — or, from the other side, that a claim had to be arbitrated within some shorter period.

The second sentence solves the practical trap. A claimant who files suit, and is then met with a motion to compel arbitration, may reach arbitration long after the limitations period would have expired. Tolling from the filing means the time spent litigating the forum question does not destroy the claim.

That situation is common. Whether an arbitration clause covers a dispute is frequently contested, sometimes through an interlocutory appeal, and the process can take years.

Note that tolling attaches to filing suit, not to demanding arbitration. The section does not say that a demand for arbitration tolls the period for a later court action.

The suit must be filed "in a court of competent jurisdiction", so a filing in a court lacking jurisdiction does not toll under this section — though the savings provision earlier in the chapter may rescue that case separately.

Read it with the contractual limitations provision: an arbitration agreement is a contract, so a clause purporting to shorten the time to demand arbitration below two years faces the same voidness rule as any other.