Opinion ID: 2829241
Heading Depth: 2
Heading Rank: 2

Heading: This Court’s Treatment of Choice-of-Law Provisions Relating to Arbitration Agreements

Text: This Court analyzed contractual language in the context of the relationship between an arbitration clause and a general choice-of-law provision in In re L & L Kempwood Associates, L.P. , 9 S.W.3d 125, 127–28 (Tex. 1999) (per curiam ). We held that an agreement containing a general choice-of-law provision stating that the entire contract will be governed by “the law of the place where the Project is located,” does not preclude application of the FAA. Id. The Court observed that the Project was located in Houston, thus the FAA was part of “the law of the place where the Project is located.” Id. ; see also Capital Income Props. v. Blackmon , 843 S.W.2d 22, 23 (Tex. 1992) (per curiam ) (stating that “[t]he Federal [Arbitration] Act is part of the substantive law of Texas”). When the language of the provision included federal law, further language specifically excluding application of the FAA is necessary for a court to apply the TAA to the FAA’s exclusion. “The choice-of-law provision did not specifically exclude the application of federal law, and absent such an exclusion we decline to read the choice-of-law clause as having such an effect.” L & L Kempwood , 9 S.W.3d at 127–28 . Rather, a general choice-of-law provision “may reasonably be read as merely a substitute for the conflict-of-laws analysis that otherwise would determine what law to apply to disputes.” Id . at 127 n.16 (citing Mastrobuono , 514 U.S. at 59–60) . Courts apply the FAA unless language in the arbitration agreement indicates its exclusion.