§ 51.016.Appeal Arising Under Federal Arbitration Act

A section that imports a federal appellate rule wholesale, and it solved a real problem.

In a matter subject to the Federal Arbitration Act, a person may take an appeal or writ of error to the court of appeals from the judgment or interlocutory order of a district court, county court at law, county court, or the business court under the same circumstances that an appeal from a federal district court’s order or decision would be permitted by 9 U.S.C. Section 16.

The difficulty this addresses is a mismatch between two systems. The federal arbitration act governs arbitration agreements in contracts affecting interstate commerce, and it is applied by state courts as well as federal ones — but its appellate provision speaks to federal courts, and Texas appellate rights come from state statute.

Before this section a party in a Texas court on a federal act matter could find that an order was appealable in federal court and not in state court, which made the forum determine the appellate rights on the same federal question.

The federal provision has a distinctive shape worth knowing. It is asymmetric: orders hostile to arbitration are generally appealable — denying a stay, refusing to compel — while orders favourable to arbitration generally are not.

That asymmetry reflects the federal act’s policy, and importing the provision imports the policy with it.

The section covers both a judgment and an interlocutory order, so it is not confined to the finality rule that governs elsewhere in this chapter.

The listed courts include the business court, which was added when that court was created.

Note the condition: the matter must be subject to the federal act. A Texas arbitration governed by the state general arbitration chapter takes its appellate rights from that chapter instead.