A statute enacted in 1925 that provides the basic legal principles applicable to arbitration in the US (9 USC §§ 1-16; 9 USC §§ 201-208; 9 USC §§ 301-307). The Federal Arbitration Act or FAA, is an act of Congress that provides for non-judicial facilitation of private dispute resolution through arbitration.Arbitration is a mandatory but non-binding informal hearing where a neutral arbitrator, or panel of arbitrators, is selected to hear the evidence in your case. Arbitration is a mandatory but non-binding informal hearing where a neutral arbitrator, or panel of arbitrators, is selected to hear the evidence in your case. In the consolidated appeals, the appellate court held that the Magnuson-Moss Act precluded binding arbitration of the consumer disputes. Federal Arbitration Act, 9 U.S.C. sec.