By Lisa Michelle Kömives

The V.I. Supreme Court has found that certain “procedural” terms of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., related to appealing arbitration awards do not preempt the law of the U.S. Virgin Islands, even if the arbitration agreement has an interstate nexus. See Gov’t of the V.I. v. United Indus., 64 V.I. 312, 321-322 (V.I. 2016) (discussing the inapplicability of 9 U.S.C. § 12, holding that “[t]o the extent the FAA even applies to this matter, this Court previously distinguished between the substantive and procedural aspects of the FAA, and concluded that the provisions of the FAA that merely establish procedures in the federal system—such as those pertaining to jurisdiction, or that establish filing deadlines—do not preempt local law.”); see also Gov’t of the V.I. v. St. Thomas/St. John Educ. Admin. Assoc. Local 101, 67 V.I. 623, 632 (V.I. 2017) (“Since section 10 does not preempt local law . . . it does not matter whether the CBA [containing the arbitration agreement] has a sufficient interstate nexus to trigger application of the FAA because we must apply local law to determine the circumstances under which the Superior Court may vacate or modify an arbitration award”).

Accordingly, 9 U.S.C. § 12 of the FAA, which provides a limited three-month time-period in which to appeal an arbitration award is independently inapplicable to an arbitration agreement, even if it has an interstate nexus, leaving the U.S. Virgin Islands statute of limitations to set the deadline to appeal an arbitration award. A review of the statute of limitations, 5 V.I.C. § 31, reveals two potential time periods to bring an action to modify or vacate an arbitration award. The first is a six-year statute of limitations for an “action upon a contract or liability, express or implied.” 5 V.I.C. § 31(3)(A). The second, and most likely applicable, is the ten-year statute of limitations for an “action for any cause not otherwise provided for in this section.” 5 V.I.C. § 31(2)(A).

Clearly, there is a significant difference between a three-month and a ten-year window to appeal an arbitration award.

Please feel free to contact us to discuss how to draft your arbitration agreements to gain the benefit of the FAA’s more limited time to appeal an arbitration award.

Lisa Michelle Kömives is a Partner in Dudley Newman Feuerzeig LLP’s litigation department. She grew up in St. Thomas, Virgin Islands, and has been practicing law in the Virgin Islands for fourteen years. Her main areas of practice include complex commercial litigation, wrongful termination, creditors’ rights, and personal injury defense and her full biography can be found here.