Texas Arbitration Act
Codified at Tex. Civ. Prac. & Rem. Code Ch. 171, the Texas General Arbitration Act (TGAA) governs written arbitration agreements in Texas, subject to the exclusions in section 171.002. Its procedures are similar to the FAA's. The two statutes can apply to the same agreement. Where the agreement involves interstate commerce, the FAA preempts TGAA provisions that would make the agreement unenforceable.
The Texas Arbitration Act (TGAA), codified at Tex. Civ. Prac. & Rem. Code Ch. 171, is Texas's state-law arbitration statute, covering written agreements to arbitrate subject to the exclusions in section 171.002. The TGAA tracks the Federal Arbitration Act framework procedurally, addressing agreement enforceability, motions to compel, motions to stay, confirmation, and vacatur, but operates as a state-law backstop. Because "involving commerce" is read broadly, the FAA reaches many Texas commercial agreements, and it displaces the TGAA where the two conflict. Section 171.002 excludes some categories from the TGAA altogether, including collective bargaining agreements, workers' compensation claims, and, unless signed by each party and its attorney, certain individual consumer agreements of $50,000 or less and personal injury claims.
Scope, when the TGAA applies
The TGAA matters most where the Federal Arbitration Act does not reach the agreement. Two principal scenarios: (1) intrastate transactions, both parties Texas residents, performance entirely within Texas, no out-of-state connections that would invoke "interstate commerce" under the FAA's broad definition; (2) FAA-excluded categories, FAA § 1 excludes contracts of employment of seamen, railroad employees, and other workers engaged in foreign or interstate commerce, which New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), held includes independent-contractor agreements with transportation workers. Where neither party invokes the FAA and the contract is silent on governing law, courts may apply the TGAA.
Section 171.001, agreement validity
Section 171.001 makes arbitration agreements "valid and enforceable", a state-law equivalent to FAA § 2. The provision applies to written agreements to arbitrate disputes between the contracting parties. The TGAA permits the same general contract defenses to enforcement (fraud, duress, unconscionability) as the FAA, applied without arbitration-specific bias. Enforcement proceedings parallel federal procedures: motion to compel arbitration with stay of court proceedings, with the arbitration agreement's validity determined by the court (gateway issue) before the arbitrator addresses the merits.
Procedural mechanics
TGAA enforcement procedures: (1) Motion to Compel, § 171.021; if a suit involving the arbitrable issue is already pending, the application must be made in that court, and otherwise in a court of proper venue under § 171.096 (§ 171.024); (2) Stay of Litigation, § 171.025 stays trial on issues subject to arbitration; (3) Appointment, § 171.041 governs appointment of arbitrators; (4) Conduct, §§ 171.042-171.055 address arbitration procedure (notice and hearing, witnesses, subpoenas, depositions in limited circumstances); (5) Award, § 171.053 addresses the award form; (6) Confirmation, § 171.087 makes awards judicially enforceable; (7) Vacatur, § 171.088 lists grounds (corruption or fraud, evident partiality, arbitrator misconduct, exceeded powers, procedural refusals that prejudiced a party, no agreement to arbitrate), and the application is generally due within 90 days after delivery of a copy of the award; (8) Appeal, § 171.098 governs appellate review.
FAA-TGAA interaction
Where both the FAA and TGAA potentially apply, the FAA preempts TGAA provisions that conflict with it, such as a section 171.002 exclusion that would leave an agreement involving interstate commerce unenforceable (Olshan). Where the contract is silent on governing law, FAA applicability turns on the interstate-commerce nexus. A choice-of-law clause can also bear on which statute's procedures apply.
Vacatur grounds
Section 171.088 lists TGAA vacatur grounds, paralleling FAA § 10: (1) award procured by corruption, fraud, or other undue means; (2) a party's rights were prejudiced by evident partiality of a neutral arbitrator, corruption in an arbitrator, or arbitrator misconduct or wilful misbehavior; (3) the arbitrators exceeded their powers, refused to postpone the hearing after a showing of sufficient cause, refused to hear material evidence, or conducted the hearing contrary to sections 171.043-171.047 in a way that substantially prejudiced a party; (4) there was no agreement to arbitrate, the issue was not adversely decided in a proceeding to compel or stay, and the party did not participate in the hearing without objecting. The application must be made within 90 days after delivery of a copy of the award, or, for corruption, fraud or other undue means, within 90 days after the grounds are known or should have been known. The Texas Supreme Court has held that these statutory grounds are exclusive, so common-law grounds such as manifest disregard are unavailable under the TGAA. Hoskins v. Hoskins, 497 S.W.3d 490 (Tex. 2016).
Appellate review
Section 171.098 authorizes interlocutory appeal from orders: (1) denying a motion to compel arbitration; (2) granting a motion to stay arbitration; (3) confirming or denying confirmation; (4) modifying or correcting; (5) vacating without directing rehearing. Section 171.098 also permits appeal from a judgment or decree entered under the chapter. Orders not listed, such as an order compelling arbitration, are generally not appealable before final judgment, though mandamus review is sometimes available. Orders denying arbitration can be reviewed promptly rather than after trial.
For Texas commercial parties, the TGAA matters in several settings: (1) contracts that choose the FAA, the TGAA, or both, which affects which statute's procedures and exclusions apply; (2) purely intrastate transactions; (3) FAA-excluded transportation-worker agreements (New Prime), where the TGAA may be the available framework; (4) procedural disputes, since TGAA procedures track the FAA's closely but with state-law specifics; (5) confirmation and vacatur proceedings, since the FAA's substantive rules apply in state as well as federal court, so the governing statute turns on the agreement and the transaction, not the forum.
Full entry: Texas Arbitration Act