Petitioner-cross-respondent (hereafter petitioner), a Japanese
corporation that manufactures automobiles, is the product of a
joint venture between Chrysler International, S.A. (CISA), a Swiss
corporation, and another Japanese corporation, aimed at
distributing through Chrysler dealers outside the continental
United States automobiles manufactured by petitioner.
Respondent-cross-petitioner (hereafter respondent), a Puerto Rico
corporation, entered into distribution and sales agreements with
CISA. The sales agreement (to which petitioner was also a party)
contained a clause providing for arbitration by the Japan
Commercial Arbitration Association of all disputes arising out of
certain articles of the agreement or for the breach thereof.
Thereafter, when attempts to work out disputes arising from a
slackening of the sale of new automobiles failed, petitioner
withheld shipment of automobiles to respondent, which disclaimed
responsibility for them. Petitioner then brought an action in
Federal District Court under the Federal Arbitration Act and the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, seeking an order to compel arbitration of the disputes in
accordance with the arbitration clause. Respondent filed an answer
and counterclaims, asserting,
inter alia, causes of action
under the Sherman Act and other statutes. The District Court
ordered arbitration of most of the issues raised in the complaint
and counterclaims, including the federal antitrust issues. Despite
the doctrine of
American Safety Equipment Corp. v. J. P. &
Co., 391 F.2d 821 (CA2), uniformly followed by the Courts of
Appeals, that rights conferred by the antitrust laws are
inappropriate for enforcement by arbitration, the District Court,
relying on
Scherk v. Alberto-Culver Co., 417 U.
S. 506, held that the international character of the
undertaking in question required enforcement of the arbitration
clause even as to the antitrust claims. The Court of Appeals
reversed insofar as the District Court ordered submission of the
antitrust claims to arbitration.
Held:
1. There is no merit to respondent's contention that, because it
falls within the class for whose benefit the statutes specified in
the counter-claims
Page 473 U. S. 615
were passed, but the arbitration clause at issue does not
mention these statutes or statutes in general, the clause cannot be
properly read to contemplate arbitration of these statutory claims.
There is no warrant in the Arbitration Act for implying in every
contract within its ken a presumption against arbitration of
statutory claims. Nor is there any reason to depart from the
federal policy favoring arbitration where a party bound by an
arbitration agreement raises claims founded on statutory rights.
Pp.
473 U. S.
624-628.
2. Respondent's antitrust claims are arbitrable pursuant to the
Arbitration Act. Concerns of international comity, respect for the
capacities of foreign and transnational tribunals, and sensitivity
to the need of the international commercial system for
predictability in the resolution of disputes, all require
enforcement of the arbitration clause in question even assuming
that a contrary result would be forthcoming in a domestic context.
See Scherk v. Alberto-Culver Co., supra. The strong
presumption in favor of freely negotiated contractual
choice-of-forum provisions is reinforced here by the federal policy
in favor of arbitral dispute resolution, a policy that applies with
special force in the field of international commerce. The mere
appearance of an antitrust dispute does not alone warrant
invalidation of the selected forum on the undemonstrated assumption
that the arbitration clause is tainted. So too, the potential
complexity of antitrust matters does not suffice to ward off
arbitration; nor does an arbitration panel pose too great a danger
of innate hostility to the constraints on business conduct that
antitrust law imposes. And the importance of the private damages
remedy in enforcing the regime of antitrust laws does not compel
the conclusion that such remedy may not be sought outside an
American court. Pp.
473 U. S.
628-640.
723 F.2d 155, affirmed in part, reversed in part, and
remanded.
BLACKMUN, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, REHNQUIST, and O'CONNOR, JJ., joined.
STEVENS, J., filed a dissenting opinion, in which BRENNAN, J.,
joined, and in which MARSHALL, J., joined except as to Part II,
post, p.
473 U. S. 640.
POWELL, J., took no part in the decision of the cases.
Page 473 U. S. 616
JUSTICE BLACKMUN delivered the opinion of the Court.
The principal question presented by these cases is the
arbitrability, pursuant to the Federal Arbitration Act, 9 U.S.C. §
1
et seq., and the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (Convention), [1970] 21
U.S.T. 2517, T.I.A.S. No. 6997, of claims arising under the Sherman
Act, 15 U.S.C. § 1
et seq., and encompassed within a valid
arbitration clause in an agreement embodying an international
commercial transaction.
I
Petitioner-cross-respondent Mitsubishi Motors Corporation
(Mitsubishi) is a Japanese corporation which manufactures
automobiles and has its principal place of business in Tokyo,
Japan. Mitsubishi is the product of a joint venture between, on the
one hand, Chrysler International, S.A. (CISA), a Swiss corporation
registered in Geneva and wholly owned by Chrysler Corporation, and,
on the other, Mitsubishi Heavy Industries, Inc., a Japanese
corporation. The
Page 473 U. S. 617
aim of the joint venture was the distribution through Chrysler
dealers outside the continental United States of vehicles
manufactured by Mitsubishi and bearing Chrysler and Mitsubishi
trademarks. Respondent-cross-petitioner Soler Chrysler-Plymouth,
Inc. (Soler), is a Puerto Rico corporation with its principal place
of business in Pueblo Viejo, Guaynabo, Puerto Rico.
On October 31, 1979, Soler entered into a Distributor Agreement
with CISA which provided for the sale by Soler of
Mitsubishi-manufactured vehicles within a designated area,
including metropolitan San Juan. App. 18. On the same date, CISA,
Soler, and Mitsubishi entered into a Sales Procedure Agreement
(Sales Agreement) which, referring to the Distributor Agreement,
provided for the direct sale of Mitsubishi products to Soler and
governed the terms and conditions of such sales.
Id. at
42. Paragraph VI of the Sales Agreement, labeled "Arbitration of
Certain Matters," provides:
"All disputes, controversies or differences which may arise
between [Mitsubishi] and [Soler] out of or in relation to Articles
I-B through V of this Agreement or for the breach thereof, shall be
finally settled by arbitration in Japan in accordance with the
rules and regulations of the Japan Commercial Arbitration
Association."
Id. at 52-53.
Initially, Soler did a brisk business in Mitsubishi-manufactured
vehicles. As a result of its strong performance, its minimum sales
volume, specified by Mitsubishi and CISA, and agreed to by Soler,
for the 1981 model year was substantially increased.
Id.
at 179. In early 1981, however, the new-car market slackened. Soler
ran into serious difficulties in meeting the expected sales volume,
and by the spring of 1981, it felt itself compelled to request that
Mitsubishi delay or cancel shipment of several orders. 1 Record
181, 183. About the same time, Soler attempted to arrange for
the
Page 473 U. S. 618
transshipment of a quantity of its vehicles for sale in the
continental United States and Latin America. Mitsubishi and CISA,
however, refused permission for any such diversion, citing a
variety of reasons, [
Footnote
1] and no vehicles were transshipped. Attempts to work out
these difficulties failed. Mitsubishi eventually withheld shipment
of 966 vehicles, apparently representing orders placed for May,
June, and July, 1981, production, responsibility for which Soler
disclaimed in February, 1982. App. 131.
The following month, Mitsubishi brought an action against Soler
in the United States District Court for the District of Puerto Rico
under the Federal Arbitration Act and the Convention. [
Footnote 2] Mitsubishi sought an order,
pursuant to 9 U.S.C. §§ 4 and 201, [
Footnote 3] to compel arbitration in accord with
Page 473 U. S. 619
� VI of the Sales Agreement. App. 15. [
Footnote 4] Shortly after filing the complaint,
Mitsubishi filed a request for arbitration before the Japan
Commercial Arbitration Association.
Id. at 70.
Soler denied the allegations and counterclaimed against both
Mitsubishi and CISA. It alleged numerous breaches by Mitsubishi of
the Sales Agreement, [
Footnote
5] raised a pair of defamation claims, [
Footnote 6] and asserted causes of action under the
Sherman
Page 473 U. S. 620
Act, 15 U.S.C. § 1
et seq.; the federal Automobile
Dealers' Day in Court Act, 70 Stat. 1125, 15 U.S.C. § 1221
et
seq.; the Puerto Rico competition statute, P.R.Laws Ann., Tit.
10, § 257
et seq. (1976); and the Puerto Rico Dealers'
Contracts Act, P.R.Laws Ann., Tit. 10, § 278
et seq. (1976
and Supp.1983). In the counterclaim premised on the Sherman Act,
Soler alleged that Mitsubishi and CISA had conspired to divide
markets in restraint of trade. To effectuate the plan, according to
Soler, Mitsubishi had refused to permit Soler to resell to buyers
in North, Central, or South America vehicles it had obligated
itself to purchase from Mitsubishi; had refused to ship ordered
vehicles or the parts, such as heaters and defoggers, that would be
necessary to permit Soler to make its vehicles suitable for resale
outside Puerto Rico; and had coercively attempted to replace Soler
and its other Puerto Rico distributors with a wholly owned
subsidiary which would serve as the exclusive Mitsubishi
distributor in Puerto Rico. App. 91-96.
After a hearing, the District Court ordered Mitsubishi and Soler
to arbitrate each of the issues raised in the complaint and in all
the counterclaims save two and a portion of a third. [
Footnote 7] With regard to the federal
antitrust issues, it recognized that the Courts of Appeals,
following
American Safety Equipment
Page 473 U. S.
621
Corp. v. J. P. Maguire & Co., 391 F.2d 821 (CA2
1968), uniformly had held that the rights conferred by the
antitrust laws were "
of a character inappropriate for
enforcement by arbitration.'" App. to Pet. for Cert. in No.
83-1569, p. B9, quoting Wilko v. Swan, 201 F.2d 439, 444
(CA2 1953), rev'd, 346 U. S. 427
(1953). The District Court held, however, that the international
character of the Mitsubishi-Soler undertaking required enforcement
of the agreement to arbitrate even as to the antitrust claims. It
relied on Scherk v. Alberto-Culver Co., 417 U.
S. 506, 417 U. S.
515-520 (1974), in which this Court ordered arbitration,
pursuant to a provision embodied in an international agreement, of
a claim arising under the Securities Exchange Act of 1934
notwithstanding its assumption, arguendo, that Wilko,
supra, which held nonarbitrable claims arising under the
Securities Act of 1933, also would bar arbitration of a 1934 Act
claim arising in a domestic context.
The United States Court of Appeals for the First Circuit
affirmed in part and reversed in part. 723 F.2d 155 (1983). It
first rejected Soler's argument that Puerto Rico law precluded
enforcement of an agreement obligating a local dealer to arbitrate
controversies outside Puerto Rico. [
Footnote 8] It also rejected Soler's suggestion that it
could not have intended to arbitrate statutory claims not mentioned
in the arbitration agreement. Assessing arbitrability "on an
allegation-by-allegation basis,"
id. at 159, the court
then read the arbitration
Page 473 U. S. 622
clause to encompass virtually all the claims arising under the
various statutes, including all those arising under the Sherman
Act. [
Footnote 9]
Page 473 U. S. 623
Finally, after endorsing the doctrine of
American
Safety, precluding arbitration of antitrust claims, the Court
of Appeals concluded that neither this Court's decision in
Scherk nor the Convention required abandonment of that
doctrine in the face of an international transaction. 723 F.2d at
164-168. Accordingly, it reversed the judgment of the District
Court insofar as it had ordered submission of "Soler's antitrust
claims" to arbitration. [
Footnote 10] Affirming the remainder of the judgment,
[
Footnote 11] the court
directed the District Court to consider in the first instance how
the parallel judicial and arbitral proceedings should go forward.
[
Footnote 12]
Page 473 U. S. 624
We granted certiorari primarily to consider whether an American
court should enforce an agreement to resolve antitrust claims by
arbitration when that agreement arises from an international
transaction. 469 U.S. 916 (1984).
II
At the outset, we address the contention raised in Soler's
cross-petition that the arbitration clause at issue may not be read
to encompass the statutory counterclaims stated in its answer to
the complaint. In making this argument, Soler does not question the
Court of Appeals' application of � VI of the Sales Agreement to the
disputes involved here as a matter of standard contract
interpretation. [
Footnote
13] Instead, it argues
Page 473 U. S. 625
that, as a matter of law, a court may not construe an
arbitration agreement to encompass claims arising out of statutes
designed to protect a class to which the party resisting
arbitration belongs "unless [that party] has expressly agreed" to
arbitrate those claims,
see Pet. for Cert. in No. 83-1733,
pp. 8, i, by which Soler presumably means that the arbitration
clause must specifically mention the statute giving rise to the
claims that a party to the clause seeks to arbitrate.
See
723 F.2d at 159. Soler reasons that, because it falls within the
class for whose benefit the federal and local antitrust laws and
dealers' Acts were passed, but the arbitration clause at issue does
not mention these statutes or statutes in general, the clause
cannot be read to contemplate arbitration of these statutory
claims.
We do not agree, for we find no warrant in the Arbitration Act
for implying in every contract within its ken a presumption against
arbitration of statutory claims. The Act's centerpiece provision
makes a written agreement to arbitrate
"in any maritime transaction or a contract evidencing a
transaction involving commerce . . . valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract."
9 U.S.C. § 2. The "liberal federal policy favoring arbitration
agreements,"
Moses H. Cone Memorial Hospital v. Mercury
Construction Corp., 460 U. S. 1,
460 U. S. 24
(1983), manifested by this provision and the Act as a whole, is at
bottom a policy guaranteeing the enforcement of private contractual
arrangements: the Act simply "creates a body of federal substantive
law establishing and regulating the duty to honor an agreement to
arbitrate."
Id. at
460 U. S. 25, n.
32. [
Footnote 14] As this
Court recently observed, "[t]he preeminent concern of Congress in
passing the Act was to enforce private agreements into which
parties had entered,"
Page 473 U. S. 626
a concern which "requires that we rigorously enforce agreements
to arbitrate."
Dean Witter Reynolds Inc. v. Byrd,
470 U. S. 213,
470 U. S. 221
(1985).
Accordingly, the first task of a court asked to compel
arbitration of a dispute is to determine whether the parties agreed
to arbitrate that dispute. The court is to make this determination
by applying the "federal substantive law of arbitrability,
applicable to any arbitration agreement within the coverage of the
Act."
Moses H. Cone Memorial Hospital, 460 U.S. at
460 U. S. 24.
See Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
388 U. S. 395,
388 U. S.
400-404 (1967);
Southland Corp. v. Keating,
465 U. S. 1,
465 U. S. 12
(1984). And that body of law counsels
"that questions of arbitrability must be addressed with a
healthy regard for the federal policy favoring arbitration. . . .
The Arbitration Act establishes that, as a matter of federal law,
any doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration, whether the problem at hand is
the construction of the contract language itself or an allegation
of waiver, delay, or a like defense to arbitrability."
Moses H. Cone Memorial Hospital, 460 U.S. at
460 U. S. 24-25.
See, e.g., Steelworkers v. Warrior & Gulf Navigation
Co., 363 U. S. 574,
363 U. S.
582-583 (1960). Thus, as with any other contract, the
parties' intentions control, but those intentions are generously
construed as to issues of arbitrability.
There is no reason to depart from these guidelines where a party
bound by an arbitration agreement raises claims founded on
statutory rights. Some time ago, this Court expressed "hope for
[the Act's] usefulness both in controversies based on statutes or
on standards otherwise created,"
Wilko v. Swan,
346 U. S. 427,
346 U. S. 432
(1953) (footnote omitted);
see Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Ware, 414 U. S. 117,
414 U. S. 135,
n. 15 (1973), and we are well past the time
Page 473 U. S. 627
when judicial suspicion of the desirability of arbitration and
of the competence of arbitral tribunals inhibited the development
of arbitration as an alternative means of dispute resolution. Just
last Term in
Southland Corp., supra, where we held that §
2 of the Act declared a national policy applicable equally in state
as well as federal courts, we construed an arbitration clause to
encompass the disputes at issue without pausing at the source in a
state statute of the rights asserted by the parties resisting
arbitration. 465 U.S. at
465 U. S. 15, and
n. 7. [
Footnote 15] Of
course, courts should remain attuned to well-supported claims that
the agreement to arbitrate resulted from the sort of fraud or
overwhelming economic power that would provide grounds "for the
revocation of any contract." 9 U.S.C. § 2;
see Southland
Corp., 465 U.S. at
465 U. S. 16, n.
11;
The Bremen v. Zapata Off-Shore Co., 407 U. S.
1,
407 U. S. 15
(1972). But, absent such compelling considerations, the Act itself
provides no basis for disfavoring agreements to arbitrate statutory
claims by skewing the otherwise hospitable inquiry into
arbitrability.
That is not to say that all controversies implicating statutory
rights are suitable for arbitration. There is no reason to distort
the process of contract interpretation, however, in order to ferret
out the inappropriate. Just as it is the congressional policy
manifested in the Federal Arbitration Act that requires courts
liberally to construe the scope of arbitration agreements covered
by that Act, it is the congressional intention expressed in some
other statute on which the courts must rely to identify any
category of claims as to which agreements to arbitrate will be held
unenforceable.
Page 473 U. S. 628
See Wilko v. Swan, 346 U.S. at
346 U. S.
434-435;
Southland Corp., 465 U.S. at
465 U. S. 16, n.
11;
Dean Witter Reynolds Inc., 470 U.S. at
470 U. S.
224-225 (concurring opinion). For that reason, Soler's
concern for statutorily protected classes provides no reason to
color the lens through which the arbitration clause is read. By
agreeing to arbitrate a statutory claim, a party does not forgo the
substantive rights afforded by the statute; it only submits to
their resolution in an arbitral, rather than a judicial, forum. It
trades the procedures and opportunity for review of the courtroom
for the simplicity, informality, and expedition of arbitration. We
must assume that, if Congress intended the substantive protection
afforded by a given statute to include protection against waiver of
the right to a judicial forum, that intention will be deducible
from text or legislative history.
See Wilko v. Swan,
supra. Having made the bargain to arbitrate, the party should
be held to it unless Congress itself has evinced an intention to
preclude a waiver of judicial remedies for the statutory rights at
issue. Nothing, in the meantime, prevents a party from excluding
statutory claims from the scope of an agreement to arbitrate.
See Prima Paint Corp., 388 U.S. at
388 U. S.
406.
In sum, the Court of Appeals correctly conducted a two-step
inquiry, first determining whether the parties' agreement to
arbitrate reached the statutory issues, and then, upon finding it
did, considering whether legal constraints external to the parties'
agreement foreclosed the arbitration of those claims. We endorse
its rejection of Soler's proposed rule of arbitration clause
construction.
III
We now turn to consider whether Soler's antitrust claims are
nonarbitrable even though it has agreed to arbitrate them. In
holding that they are not, the Court of Appeals followed the
decision of the Second Circuit in
American Safety Equipment
Corp. v. J. P. Maguire & Co., 391 F.2d 821 (1968).
Notwithstanding the absence of any explicit support
Page 473 U. S. 629
for such an exception in either the Sherman Act or the Federal
Arbitration Act, the Second Circuit there reasoned that
"the pervasive public interest in enforcement of the antitrust
laws, and the nature of the claims that arise in such cases,
combine to make . . . antitrust claims . . . inappropriate for
arbitration."
Id. at 827-828. We find it unnecessary to assess the
legitimacy of the
American Safety doctrine as applied to
agreements to arbitrate arising from domestic transactions. As in
Scherk v. Alberto-Culver Co., 417 U.
S. 506 (1974), we conclude that concerns of
international comity, respect for the capacities of foreign and
transnational tribunals, and sensitivity to the need of the
international commercial system for predictability in the
resolution of disputes require that we enforce the parties'
agreement, even assuming that a contrary result would be
forthcoming in a domestic context.
Even before
Scherk, this Court had recognized the
utility of forum-selection clauses in international transactions.
In
The Bremen, supra, an American oil company, seeking to
evade a contractual choice of an English forum and, by implication,
English law, filed a suit in admiralty in a United States District
Court against the German corporation which had contracted to tow
its rig to a location in the Adriatic Sea. Notwithstanding the
possibility that the English court would enforce provisions in the
towage contract exculpating the German party which an American
court would refuse to enforce, this Court gave effect to the
choice-of-forum clause. It observed:
"The expansion of American business and industry will hardly be
encouraged if, notwithstanding solemn contracts, we insist on a
parochial concept that all disputes must be resolved under our laws
and in our courts. . . . We cannot have trade and commerce in world
markets and international waters exclusively on our terms, governed
by our laws, and resolved in our courts."
407 U.S. at
407 U. S. 9.
Page 473 U. S. 630
Recognizing that "agreeing in advance on a forum acceptable to
both parties is an indispensable element in international trade,
commerce, and contracting,"
id. at
407 U. S. 13-14,
the decision in
The Bremen clearly eschewed a provincial
solicitude for the jurisdiction of domestic forums.
Identical considerations governed the Court's decision in
Scherk, which categorized
"[a]n agreement to arbitrate before a specified tribunal [as],
in effect, a specialized kind of forum-selection clause that posits
not only the situs of suit but also the procedure to be used in
resolving the dispute."
417 U.S. at
417 U. S. 519.
In
Scherk, the American company Alberto-Culver purchased
several interrelated business enterprises, organized under the laws
of Germany and Liechtenstein, as well as the rights held by those
enterprises in certain trademarks, from a German citizen who, at
the time of trial, resided in Switzerland. Although the contract of
sale contained a clause providing for arbitration before the
International Chamber of Commerce in Paris of "any controversy or
claim [arising] out of this agreement or the breach thereof,"
Alberto-Culver subsequently brought suit against Scherk in a
Federal District Court in Illinois, alleging that Scherk had
violated § 10(b) of the Securities Exchange Act of 1934 by
fraudulently misrepresenting the status of the trademarks as
unencumbered. The District Court denied a motion to stay the
proceedings before it and enjoined the parties from going forward
before the arbitral tribunal in Paris. The Court of Appeals for the
Seventh Circuit affirmed, relying on this Court's holding in
Wilko v. Swan, 346 U. S. 427
(1953), that agreements to arbitrate disputes arising under the
Securities Act of 1933 are nonarbitrable. This Court reversed,
enforcing the arbitration agreement even while assuming for
purposes of the decision that the controversy would be
nonarbitrable under the holding of
Wilko had it arisen out
of a domestic transaction. Again, the Court emphasized:
Page 473 U. S. 631
"A contractual provision specifying in advance the forum in
which disputes shall be litigated and the law to be applied is . .
. an almost indispensable precondition to achievement of the
orderliness and predictability essential to any international
business transaction. . . ."
"A parochial refusal by the courts of one country to enforce an
international arbitration agreement would not only frustrate these
purposes, but would invite unseemly and mutually destructive
jockeying by the parties to secure tactical litigation advantages.
. . . [It would] damage the fabric of international commerce and
trade, and imperil the willingness and ability of businessmen to
enter into international commercial agreements."
417 U.S. at
417 U. S.
516-517. Accordingly, the Court held Alberto-Culver to
its bargain, sending it to the international arbitral tribunal
before which it had agreed to seek its remedies.
The Bremen and
Scherk establish a strong
presumption in favor of enforcement of freely negotiated
contractual choice-of-forum provisions. Here, as in
Scherk, that presumption is reinforced by the emphatic
federal policy in favor of arbitral dispute resolution. And at
least since this Nation's accession in 1970 to the Convention,
see [1970] 21 U.S.T. 2517, T.I.A.S. 6997, and the
implementation of the Convention in the same year by amendment of
the Federal Arbitration Act, [
Footnote 16] that federal policy applies with special
force in the field of international commerce. Thus, we must weigh
the concerns of
American Safety against a strong belief in
the efficacy of arbitral procedures for the resolution of
international commercial disputes and an equal commitment to the
enforcement of freely negotiated choice-of-forum clauses.
Page 473 U. S. 632
At the outset, we confess to some skepticism of certain aspects
of the
American Safety doctrine. As distilled by the First
Circuit, 723 F.2d at 162, the doctrine comprises four ingredients.
First, private parties play a pivotal role in aiding governmental
enforcement of the antitrust laws by means of the private action
for treble damages. Second,
"the strong possibility that contracts which generate antitrust
disputes may be contracts of adhesion militates against automatic
forum determination by contract."
Third, antitrust issues, prone to complication, require
sophisticated legal and economic analysis, and thus are
"ill-adapted to strengths of the arbitral process,
i.e., expedition, minimal requirements of written
rationale, simplicity, resort to basic concepts of common sense and
simple equity."
Finally, just as
"issues of war and peace are too important to be vested in the
generals, . . . decisions as to antitrust regulation of business
are too important to be lodged in arbitrators chosen from the
business community -- particularly those from a foreign community
that has had no experience with or exposure to our law and
values."
See American Safety, 391 F.2d at 826-827.
Initially, we find the second concern unjustified. The mere
appearance of an antitrust dispute does not alone warrant
invalidation of the selected forum on the undemonstrated assumption
that the arbitration clause is tainted. A party resisting
arbitration of course may attack directly the validity of the
agreement to arbitrate.
See Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 U. S. 395
(1967). Moreover, the party may attempt to make a showing that
would warrant setting aside the forum-selection clause -- that the
agreement was "[a]ffected by fraud, undue influence, or overweening
bargaining power"; that "enforcement would be unreasonable and
unjust"; or that proceedings
"in the contractual forum will be so gravely difficult and
inconvenient that [the resisting party] will for all practical
purposes be deprived of his day in court."
The Bremen, 407 U.S. at
Page 473 U. S. 633
407 U. S. 12,
407 U. S. 15,
407 U. S. 18. But
absent such a showing -- and none was attempted here -- there is no
basis for assuming the forum inadequate or its selection
unfair.
Next, potential complexity should not suffice to ward off
arbitration. We might well have some doubt that even the courts
following
American Safety subscribe fully to the view that
antitrust matters are inherently insusceptible to resolution by
arbitration, as these same courts have agreed that an undertaking
to arbitrate antitrust claims entered into
after the
dispute arises is acceptable.
See, e.g., Coenen v. R. W.
Pressprich & Co., 453 F.2d 1209, 1215 (CA2),
cert.
denied, 406 U.S. 949 (1972);
Cobb v. Lewis, 488 F.2d
41, 48 (CA5 1974).
See also in the present cases, 723 F.2d
at 168, n. 12 (leaving question open). And the vertical restraints
which most frequently give birth to antitrust claims covered by an
arbitration agreement will not often occasion the monstrous
proceedings that have given antitrust litigation an image of
intractability. In any event, adaptability and access to expertise
are hallmarks of arbitration. The anticipated subject matter of the
dispute may be taken into account when the arbitrators are
appointed, and arbitral rules typically provide for the
participation of experts either employed by the parties or
appointed by the tribunal. [
Footnote 17] Moreover, it is often a judgment that
streamlined proceedings and expeditious results will best serve
their needs that causes parties to agree to arbitrate their
disputes; it is typically a desire to keep the effort and expense
required to resolve a dispute within manageable bounds that prompts
them mutually to forgo access to judicial remedies. In sum, the
factor of potential complexity
Page 473 U. S. 634
alone does not persuade us that an arbitral tribunal could not
properly handle an antitrust matter.
For similar reasons, we also reject the proposition that an
arbitration panel will pose too great a danger of innate hostility
to the constraints on business conduct that antitrust law imposes.
International arbitrators frequently are drawn from the legal as
well as the business community; where the dispute has an important
legal component, the parties and the arbitral body with whose
assistance they have agreed to settle their dispute can be expected
to select arbitrators accordingly. [
Footnote 18] We decline to indulge the presumption that
the parties and arbitral body conducting a proceeding will be
unable or unwilling to retain competent, conscientious, and
impartial arbitrators.
We are left, then, with the core of the
American Safety
doctrine -- the fundamental importance to American democratic
capitalism of the regime of the antitrust laws.
See,
Page 473 U. S.
635
e.g., United States v. Topco Associates, Inc.,
405 U. S. 596,
405 U. S. 610
(1972);
Northern Pacific R. Co. v. United States,
356 U. S. 1,
356 U. S. 4
(1958). Without doubt, the private cause of action plays a central
role in enforcing this regime.
See, e.g., Hawaii v. Standard
Oil Co., 405 U. S. 251,
405 U. S. 262
(1972). As the Court of Appeals pointed out:
"'A claim under the antitrust laws is not merely a private
matter. The Sherman Act is designed to promote the national
interest in a competitive economy; thus, the plaintiff asserting
his rights under the Act has been likened to a private
attorney-general who protects the public's interest.'"
723 F.2d at 168, quoting
American Safety, 391 F.2d at
826. The treble damages provision wielded by the private litigant
is a chief tool in the antitrust enforcement scheme, posing a
crucial deterrent to potential violators.
See, e.g., Perma Life
Mufflers, Inc. v. International Parts Corp., 392 U.
S. 134,
392 U. S.
138-139 (1968).
The importance of the private damages remedy, however, does not
compel the conclusion that it may not be sought outside an American
court. Notwithstanding its important incidental policing function,
the treble damages cause of action conferred on private parties by
§ 4 of the Clayton Act, 15 U.S.C. § 15, and pursued by Soler here
by way of its third counterclaim, seeks primarily to enable an
injured competitor to gain compensation for that injury.
"Section 4 . . . is in essence a remedial provision. It provides
treble damages to '[a]ny person who shall be injured in his
business or property by reason of anything forbidden in the
antitrust laws. . . .' Of course, treble damages also play an
important role in penalizing wrongdoers and deterring wrongdoing,
as we also have frequently observed. . . . It nevertheless is true
that the treble damages provision, which makes awards available
only to injured parties, and measures the awards by a
Page 473 U. S. 636
multiple of the injury actually proved, is designed primarily as
a remedy."
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U. S. 477,
429 U. S.
485-486 (1977).
After examining the respective legislative histories, the Court
in
Brunswick recognized that, when first enacted in 1890
as § 7 of the Sherman Act, 26 Stat. 210, the treble damages
provision "was conceived of primarily as a remedy for
[t]he
people of the United States as individuals,'" 429 U.S. at
429 U. S. 486,
n. 10, quoting 21 Cong.Rec. 1767-1768 (1890) (remarks of Sen.
George); when reenacted in 1914 as § 4 of the Clayton Act, 38 Stat.
731, it was still
"conceived primarily as 'open[ing] the door of justice to every
man, whenever he may be injured by those who violate the antitrust
laws, and giv[ing] the injured party ample damages for the wrong
suffered.'"
429 U.S. at
429 U. S. 486,
n. 10, quoting 51 Cong.Rec. 9073 (1914) (remarks of Rep. Webb).
And, of course, the antitrust cause of action remains at all times
under the control of the individual litigant: no citizen is under
an obligation to bring an antitrust suit,
see Illinois Brick
Co. v. Illinois, 431 U. S. 720,
431 U. S. 746
(1977), and the private antitrust plaintiff needs no executive or
judicial approval before settling one. It follows that, at least
where the international cast of a transaction would otherwise add
an element of uncertainty to dispute resolution, the prospective
litigant may provide in advance for a mutually agreeable procedure
whereby he would seek his antitrust recovery as well as settle
other controversies.
There is no reason to assume at the outset of the dispute that
international arbitration will not provide an adequate mechanism.
To be sure, the international arbitral tribunal owes no prior
allegiance to the legal norms of particular states; hence, it has
no direct obligation to vindicate their statutory dictates. The
tribunal, however, is bound to effectuate the intentions of the
parties. Where the parties have agreed that the arbitral body is to
decide a defined set of claims which includes, as in these cases,
those arising from the application of American antitrust law, the
tribunal there
Page 473 U. S. 637
fore should be bound to decide that dispute in accord with the
national law giving rise to the claim.
Cf. Wilko v. Swan,
346 U.S. at
346 U. S.
433-434. [
Footnote
19] And so long as the prospective litigant effectively may
vindicate its statutory cause of action in the arbitral forum, the
statute will continue to serve both its remedial and deterrent
function.
Page 473 U. S. 638
Having permitted the arbitration to go forward, the national
courts of the United States will have the opportunity at the
award-enforcement stage to ensure that the legitimate interest in
the enforcement of the antitrust laws has been addressed. The
Convention reserves to each signatory country the right to refuse
enforcement of an award where the "recognition or enforcement of
the award would be contrary to the public policy of that country."
Art. V(2)(b), 21 U.S.T. at 2520;
see Scherk, 417 U.S. at
417 U. S. 519,
n. 14. While the efficacy of the arbitral process requires that
substantive review at the award-enforcement stage remain minimal,
it would not require intrusive inquiry to ascertain that the
tribunal took cognizance of the antitrust claims and actually
decided them. [
Footnote
20]
As international trade has expanded in recent decades, so too
has the use of international arbitration to resolve disputes
arising in the course of that trade. The controversies that
international arbitral institutions are called upon to resolve have
increased in diversity as well as in complexity. Yet the potential
of these tribunals for efficient disposition of legal disagreements
arising from commercial relations has not yet been tested. If they
are to take a central place in the international legal order,
national courts will need to "shake off the old judicial hostility
to arbitration,"
Kulukundis Shipping Co. v. Amtorg Trading
Corp., 126 F.2d 978, 985 (CA2 1942), and also their customary
and understandable unwillingness to cede jurisdiction of a claim
arising under domestic law to a foreign or transnational tribunal.
To this extent, at
Page 473 U. S. 639
least, it will be necessary for national courts to subordinate
domestic notions of arbitrability to the international policy
favoring commercial arbitration.
See Scherk, supra.
[
Footnote 21]
Page 473 U. S. 640
Accordingly, we "require this representative of the American
business community to honor its bargain,"
Alberto-Culver Co. v.
Scherk, 484 F.2d 611, 620 (CA7 1973) (Stevens, J.,
dissenting), by holding this agreement to arbitrate "enforce[able]
. . . in accord with the explicit provisions of the Arbitration
Act."
Scherk, 417 U.S. at
417 U. S.
520.
The judgment of the Court of Appeals is affirmed in part and
reversed in part, and the cases are remanded for further
proceedings consistent with this opinion.
It is so ordered.
JUSTICE POWELL took no part in the decision of these cases.
* Together with No. 83-1733,
Soler Chrysler-Plymouth, Inc.
v. Mitsubishi Motors Corp., also on certiorari to the same
court.
[
Footnote 1]
The reasons advanced included concerns that such diversion would
interfere with the Japanese trade policy of voluntarily limiting
imports to the United States, App. 143, 177-178; that the
Soler-ordered vehicles would be unsuitable for use in certain
proposed destinations because of their manufacture, with use in
Puerto Rico in mind, without heaters and defoggers,
id. at
182; that the vehicles would be unsuitable for use in Latin America
because of the unavailability there of the unleaded, high-octane
fuel they required,
id. at 177, 181-182; that adequate
warranty service could not be ensured,
id. at 176, 182;
and that diversion to the mainland would violate contractual
obligations between CISA and Mitsubishi,
id. at 144,
183.
[
Footnote 2]
The complaint alleged that Soler had failed to pay for 966
ordered vehicles; that it had failed to pay contractual "distress
unit penalties," intended to reimburse Mitsubishi for storage costs
and interest charges incurred because of Soler's failure to take
shipment of ordered vehicles; that Soler's failure to fulfill
warranty obligations threatened Mitsubishi's reputation and
goodwill; that Soler had failed to obtain required financing; and
that the Distributor and Sales Agreements had expired by their
terms or, alternatively, that Soler had surrendered its rights
under the Sales Agreement.
Id. at 11-14.
[
Footnote 3]
Section 4 provides in pertinent part:
"A party aggrieved by the alleged failure, neglect, or refusal
of another to arbitrate under a written agreement for arbitration
may petition any United States district court which, save for such
agreement, would have jurisdiction under title 28, in a civil
action or in admiralty of the subject matter of a suit arising out
of the controversy between the parties, for an order directing that
such arbitration proceed in the manner provided for in such
agreement. . . . The court shall hear the parties, and upon being
satisfied that the making of the agreement for arbitration or the
failure to comply therewith is not in issue, the court shall make
an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement."
Section 201 provides:
"The Convention on the Recognition and Enforcement of Foreign
Arbitral Awards of June 10, 1958, shall be enforced in United
States courts in accordance with this chapter."
Article II of the Convention, in turn, provides:
"1. Each Contracting State shall recognize an agreement in
writing under which the parties undertake to submit to arbitration
all or any differences which have arisen or which may arise between
them in respect of a defined legal relationship, whether
contractual or not, concerning a subject matter capable of
settlement by arbitration."
"
* * * *"
"3. The court of a Contracting State, when seized of an action
in a matter in respect of which the parties have made an agreement
within the meaning of this article, shall, at the request of one of
the parties, refer the parties to arbitration, unless it finds that
the said agreement is null and void, inoperative or incapable of
being performed."
21 U.S.T. at 2519. Title 9 U.S.C. § 203 confers jurisdiction on
the district courts of the United States over an action falling
under the Convention.
[
Footnote 4]
Mitsubishi also sought an order against threatened litigation.
App. 15-16.
[
Footnote 5]
The alleged breaches included wrongful refusal to ship ordered
vehicles and necessary parts, failure to make payment for warranty
work and authorized rebates, and bad faith in establishing
minimum-sales volumes.
Id. at 97-101.
[
Footnote 6]
The fourth counterclaim alleged that Mitsubishi had made
statements that defamed Soler's good name and business reputation
to a company with which Soler was then negotiating the sale of its
plant and distributorship.
Id. at 96. The sixth
counterclaim alleged that Mitsubishi had made a willfully false and
malicious statement in an affidavit submitted in support of its
application for a temporary restraining order, and that Mitsubishi
had wrongfully advised Soler's customers and the public in its
market area that they should no longer do business with Soler.
Id. at 98-99.
[
Footnote 7]
The District Court found that the arbitration clause did not
cover the fourth and sixth counterclaims, which sought damages for
defamation,
see n 6,
supra, or the allegations in the seventh counterclaim
concerning discriminatory treatment and the establishment of
minimum sales volumes. App. to Pet. for Cert. in No. 83-1569, pp.
B10-B11. Accordingly, it retained jurisdiction over those portions
of the litigation. In addition, because no arbitration agreement
between Soler and CISA existed, the court retained jurisdiction,
insofar as they sought relief from CISA, over the first, second,
third, and ninth counterclaims, which raised claims under the
Puerto Rico Dealers' Contracts Act, the federal Automobile Dealers'
Day in Court Act, the Sherman Act, and the Puerto Rico competition
statute, respectively.
Id. at B12. These aspects of the
District Court's ruling were not appealed, and are not before this
Court.
[
Footnote 8]
Soler relied on P.R.Laws Ann., Tit. 10, § 278b-2 (Supp.1983),
which purports to render null and void
"[a]ny stipulation that obligates a dealer to adjust, arbitrate
or litigate any controversy that comes up regarding his dealer's
contract outside of Puerto Rico, or under foreign law or rule of
law."
See Walborg Corp. v. Superior Court, 104 P.R.R. 258
(1975). The Court of Appeals held this provision preempted by 9
U.S.C. § 2, which declares arbitration agreements valid and
enforceable "save upon such grounds as exist at law or in equity
for the revocation of any contract." 723 F.2d at 158.
See
Southland Corp. v. Keating, 465 U. S. 1 (1984).
See also Ledee v. Ceramiche Ragno, 684 F.2d 184 (CA1
1982). Soler does not challenge this holding in its cross-petition
here.
[
Footnote 9]
As the Court of Appeals saw it,
"[t]he question . . . is not whether the arbitration clause
mentions antitrust or any other particular cause of action, but
whether the factual allegations underlying Soler's counterclaims --
and Mitsubishi's bona fide defenses to those counterclaims -- are
within the scope of the arbitration clause, whatever the legal
labels attached to those allegations."
723 F.2d at 159. Because Soler's counterclaim under the Puerto
Rico Dealers' Contracts Act focused on Mitsubishi's alleged failure
to comply with the provisions of the Sales Agreement governing
delivery of automobiles, and those provisions were found in that
portion of Article I of the Agreement subject to arbitration, the
Court of Appeals placed this first counterclaim within the
arbitration clause.
Id. at 159-160.
The court read the Sherman Act counterclaim to raise issues of
wrongful termination of Soler's distributorship, wrongful failure
to ship ordered parts and vehicles, and wrongful refusal to permit
transshipment of stock to the United States and Latin America.
Because the existence of just cause for termination turned on
Mitsubishi's allegations that Soler had breached the Sales
Agreement by, for example, failing to pay for ordered vehicles, the
wrongful termination claim implicated at least three provisions
within the arbitration clause: Article I-D(1), which rendered a
dealer's orders "firm"; Article I-E, which provided for "distress
unit penalties" where the dealer prevented timely shipment; and
Article I-F, specifying payment obligations and procedures. The
court therefore held the arbitration clause to cover this dispute.
Because the nonshipment claim implicated Soler's obligation under
Article I-F to proffer acceptable credit, the court found this
dispute covered as well. And because the transshipment claim
prompted Mitsubishi defenses concerning the suitability of vehicles
manufactured to Soler's specifications for use in different locales
and Soler's inability to provide warranty service to transshipped
products, it implicated Soler's obligation under Article IV,
another covered provision, to make use of Mitsubishi's trademarks
in a manner that would not dilute Mitsubishi's reputation and
goodwill or damage its name and reputation. The court therefore
found the arbitration agreement also to include this dispute,
noting that such trademark concerns "are relevant to the legality
of territorially based restricted distribution arrangements of the
sort at issue here." 723 F.2d at 160-161, citing
Continental
T.V., Inc. v. GTE Sylvania Inc., 433 U. S.
36 (1977).
The Court of Appeals read the federal Automobile Dealers' Day in
Court Act claim to raise issues as to Mitsubishi's good faith in
establishing minimum sales volumes and Mitsubishi's alleged attempt
to coerce Soler into accepting replacement by a Mitsubishi
subsidiary. It agreed with the District Court's conclusion, in
which Mitsubishi acquiesced, that the arbitration clause did not
reach the first issue; it found the second, arising from Soler's
payment problems, to restate claims already found to be covered.
723 F.2d at 161.
Finally, the Court of Appeals found the antitrust claims under
Puerto Rico law entirely to reiterate claims elsewhere stated;
accordingly, it held them arbitrable to the same extent as their
counterparts.
Ibid.
[
Footnote 10]
Soler suggests that the court thereby declared antitrust claims
arising under Puerto Rico law nonarbitrable as well. We read the
Court of Appeals' opinion to have held only the federal antitrust
claims nonarbitrable.
See id. at 157 ("principal issue on
this appeal is whether arbitration of federal antitrust claims may
be compelled under the Federal Arbitration Act");
id. at
161 ("major question in this appeal is whether the antitrust issues
raised by Soler's third counterclaim [grounded on Sherman Act] are
subject to arbitration"). In any event, any contention that the
local antitrust claims are nonarbitrable would be foreclosed by
this Court's decision in
Southland Corp. v. Keating, 465
U.S. at
465 U. S. 10,
where we held that the Federal Arbitration Act
"withdrew the power of the states to require a judicial forum
for the resolution of claims which the contracting parties agreed
to resolve by arbitration."
[
Footnote 11]
In this Court, Soler suggests for the first time that Congress
intended that claims under the federal Automobile Dealers' Day in
Court Act be nonarbitrable. Brief for Respondent and
Cross-Petitioner 21, n. 12. Because Soler did not raise this
question in the Court of Appeals or present it in its
cross-petition, we do not address it here.
[
Footnote 12]
Following entry of the District Court's judgment, both it and
the Court of Appeals denied motions by Soler for a stay pending
appeal. The parties accordingly commenced preparation for the
arbitration in Japan. Upon remand from the Court of Appeals,
however, Soler withdrew the antitrust claims from the arbitration
tribunal and sought a stay of arbitration pending the completion of
the judicial proceedings on the ground that the antitrust claims
permeated the claims that remained before that tribunal. The
District Court denied the motion, instead staying its own
proceedings pending the arbitration in Japan. The arbitration
recommenced, but apparently came to a halt once again in September,
1984, upon the filing by Soler of a petition for reorganization
under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101
et
seq.
[
Footnote 13]
We therefore have no reason to review the Court of Appeals'
construction of the scope of the arbitration clause in the light of
the allegations of Soler's counterclaims.
See n 9,
supra; Southland Corp. v.
Keating, 465 U.S. at
465 U. S. 15, n.
7.
Soler does suggest that, because the title of the clause
referred only to "certain matters," App. 52, and the clause itself
specifically referred only to "Articles I-B through V,"
ibid., it should be read narrowly to exclude the statutory
claims. Soler ignores the inclusion within those "certain matters"
of
"[a]ll disputes, controversies or differences which may arise
between [Mitsubishi] and [Soler] out of or in relation to [the
specified provisions] or for the breach thereof."
Contrary to Soler's suggestion, the exclusion of some areas of
possible dispute from the scope of an arbitration clause does not
serve to restrict the reach of an otherwise broad clause in the
areas in which it was intended to operate. Thus, insofar as the
allegations underlying the statutory claims touch matters covered
by the enumerated articles, the Court of Appeals properly resolved
any doubts in favor of arbitrability.
See 723 F.2d at
159.
[
Footnote 14]
The Court previously has explained that the Act was designed to
overcome an anachronistic judicial hostility to agreements to
arbitrate, which American courts had borrowed from English common
law.
See Dean Witter Reynolds Inc. v. Byrd, 470 U.
S. 213,
470 U. S.
219-221, and n. 6 (1985);
Scherk v. Alberto-Culver
Co., 417 U. S. 506,
417 U. S. 510,
and n. 4 (1974).
[
Footnote 15]
The claims whose arbitrability was at issue in
Southland
Corp. arose under the disclosure requirements of the
California Franchise Investment Law, Cal.Corp. Code Ann. § 31000
et seq. (West 1977). While the dissent in
Southland
Corp. disputed the applicability of the Act to proceedings in
the state courts, it did not object to the Court's reading of the
arbitration clause under examination.
[
Footnote 16]
Act of July 31, 1970, Pub.L. 91-368, 84 Stat. 692, codified at 9
U.S.C. §§ 201-208.
[
Footnote 17]
See, e.g., Japan Commercial Arbitration Association
Rule 26, reprinted in App. 218-219; L. Craig, W. Park, & J.
Paulsson, International Chamber of Commerce Arbitration §§ 25.03,
26.04 (1984); Art. 27, Arbitration Rules of United Nations
Commission on International Trade Law (UNCITRAL) (1976), reprinted
in 2 Yearbook Commercial Arbitration 167 (1977).
[
Footnote 18]
See Craig, Park, & Paulsson,
supra, §
12.03, p. 28; Sanders, Commentary on UNCITRAL Arbitration Rules §
15.1, in 2 Yearbook Commercial Arbitration,
supra, at
203.
We are advised by Mitsubishi and
amicus International
Chamber of Commerce, without contradiction by Soler, that the
arbitration panel selected to hear the parties' claims here is
composed of three Japanese lawyers, one a former law school dean,
another a former judge, and the third a practicing attorney with
American legal training who has written on Japanese antitrust law.
Brief for Petitioner in No. 83-1569, p. 26; Brief for International
Chamber of Commerce as
Amicus Curiae 16, n. 28.
The Court of Appeals was concerned that international
arbitrators would lack "experience with or exposure to our law and
values." 723 F.2d at 162. The obstacles confronted by the
arbitration panel in this case, however, should be no greater than
those confronted by any judicial or arbitral tribunal required to
determine foreign law.
See, e.g., Fed.Rule Civ.Proc. 44.1.
Moreover, while our attachment to the antitrust laws may be
stronger than most, many other countries, including Japan, have
similar bodies of competition law.
See, e.g., 1 Law of
Transnational Business Transactions, ch. 9 (Banks, Antitrust
Aspects of International Business Operations), § 9.03[7] (V. Nanda
ed.1984); H. Iyori & A. Uesugi, The Antimonopoly Laws of Japan
(1983).
[
Footnote 19]
In addition to the clause providing for arbitration before the
Japan Commercial Arbitration Association, the Sales Agreement
includes a choice-of-law clause which reads:
"This Agreement is made in, and will be governed by and
construed in all respects according to the laws of the Swiss
Confederation as if entirely performed therein."
App. 56. The United States raises the possibility that the
arbitral panel will read this provision not simply to govern
interpretation of the contract terms, but wholly to displace
American law even where it otherwise would apply. Brief for United
States as
Amicus Curiae 20. The International Chamber of
Commerce opines that it is
"[c]onceivabl[e], although we believe it unlikely, [that] the
arbitrators could consider Soler's affirmative claim of
anticompetitive conduct by CISA and Mitsubishi to fall within the
purview of this choice-of-law provision, with the result that it
would be decided under Swiss law rather than the U.S. Sherman
Act."
Brief for International Chamber of Commerce as
Amicus
Curiae 25. At oral argument, however, counsel for Mitsubishi
conceded that American law applied to the antitrust claims, and
represented that the claims had been submitted to the arbitration
panel in Japan on that basis. Tr. of Oral. Arg. 18. The record
confirms that, before the decision of the Court of Appeals, the
arbitral panel had taken these claims under submission.
See District Court Order of May 25, 1984, pp. 2-3.
We therefore have no occasion to speculate on this matter at
this stage in the proceedings, when Mitsubishi seeks to enforce the
agreement to arbitrate, not to enforce an award. Nor need we
consider now the effect of an arbitral tribunal's failure to take
cognizance of the statutory cause of action on the claimant's
capacity to reinitiate suit in federal court. We merely note that,
in the event the choice-of-forum and choice-of-law clauses operated
in tandem as a prospective waiver of a party's right to pursue
statutory remedies for antitrust violations, we would have little
hesitation in condemning the agreement as against public policy.
See, e.g., Redel's Inc. v. General Electric Co., 498 F.2d
95, 98-99 (CA5 1974);
Gaines v. Carrollton Tobacco Board of
Trade, Inc., 386 F.2d 757, 759 (CA6 1967);
Fox Midwest
Theatres v. Means, 221 F.2d 173, 180 (CA8 1955).
Cf.
Lawlor v. National Screen Service Corp., 349 U.
S. 322,
349 U. S. 329
(1955).
See generally 15 S. Williston, Contracts § 1750A
(3d ed.1972).
[
Footnote 20]
See n19,
supra. We note, for example, that the rules of the Japan
Commercial Arbitration Association provide for the taking of a
"summary record" of each hearing, Rule 28.1; for the stenographic
recording of the proceedings where the tribunal so orders or a
party requests one, Rule 28.2; and for a statement of reasons for
the award unless the parties agree otherwise, Rule 36.1(4).
See App. 219 and 221.
Needless to say, we intimate no views on the merits of Soler's
antitrust claims.
[
Footnote 21]
We do not quarrel with the Court of Appeals' conclusion that
Art. II(1) of the Convention, which requires the recognition of
agreements to arbitrate that involve "subject matter capable of
settlement by arbitration," contemplates exceptions to
arbitrability grounded in domestic law.
See 723 F.2d at
164-166; G. Gaja, International Commercial Arbitration: New York
Convention I.B.2 (1984); A. van den Berg, The New York Convention
of 1958: Towards a Uniform Judicial Interpretation 152-154 (1981);
Contini, International Commercial Arbitration: The United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 8 Am.J.Comp.L. 283, 296 (1959).
But see Van den
Berg,
supra, at 154, and n. 98 (collecting contrary
authorities); Gaja,
supra, at I.D., n. 43 (same). And it
appears that, before acceding to the Convention, the Senate was
advised by a State Department memorandum that the Convention
provided for such exceptions.
See S.Exec.Doc. E, 90th
Cong., 2d Sess., 19 (1968).
In acceding to the Convention, the Senate restricted its
applicability to commercial matters, in accord with Art. I(3).
See 21 U.S.T. at 2519, 2560. Yet in implementing the
Convention by amendment to the Federal Arbitration Act, Congress
did not specify any matters it intended to exclude from its scope.
See Act of July 31, 1970, Pub.L. 91-368, 84 Stat. 692,
codified at 9 U.S.C. §§ 201-208. In
Scherk, this Court
recited Art. II(1), including the language relied upon by the Court
of Appeals, but paid heed to the Convention delegates'
"frequent[ly voiced] concern that courts of signatory countries
in which an agreement to arbitrate is sought to be enforced should
not be permitted to decline enforcement of such agreements on the
basis of parochial views of their desirability or in a manner that
would diminish the mutually binding nature of the agreements."
417 U.S. at
417 U. S. 520,
n. 15, citing G. Haight, Convention on the Recognition and
Enforcement of Foreign Arbitral Awards: Summary Analysis of Record
of United Nations Conference, May/June 1958, pp. 24-28 (1958).
There, moreover, the Court dealt,
arguendo, with an
exception to arbitrability grounded in express congressional
language; here, in contrast, we face a judicially implied
exception. The utility of the Convention in promoting the process
of international commercial arbitration depends upon the
willingness of national courts to let go of matters they normally
would think of as their own. Doubtless, Congress may specify
categories of claims it wishes to reserve for decision by our own
courts without contravening this Nation's obligations under the
Convention. But we decline to subvert the spirit of the United
States' accession to the Convention by recognizing subject matter
exceptions where Congress has not expressly directed the courts to
do so.
JUSTICE STEVENS, with whom JUSTICE BRENNAN joins, and with whom
JUSTICE MARSHALL joins except as to Part II, dissenting.
One element of this rather complex litigation is a claim
asserted by an American dealer in Plymouth automobiles that two
major automobile companies are parties to an international cartel
that has restrained competition in the American market. Pursuant to
an agreement that is alleged to have violated § 1 of the Sherman
Act, 15 U.S.C. § 1, those companies allegedly prevented the dealer
from transshipping some 966 surplus vehicles from Puerto Rico to
other dealers in the American market. App. 92.
Petitioner denies the truth of the dealer's allegations and
takes the position that the validity of the antitrust claim must be
resolved by an arbitration tribunal in Tokyo, Japan. Largely
because the auto manufacturers' defense to the antitrust allegation
is based on provisions in the dealer's franchise agreement, the
Court of Appeals concluded that the arbitration clause in that
agreement encompassed the antitrust
Page 473 U. S. 641
claim. 723 F.2d 155, 159 (CA1 1983). It held, however, as a
matter of law, that arbitration of such a claim may not be
compelled under either the Federal Arbitration Act [
Footnote 2/1] or the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards. [
Footnote 2/2]
Id. at 161-168.
This Court agrees with the Court of Appeals' interpretation of
the scope of the arbitration clause, but disagrees with its
conclusion that the clause is unenforceable insofar as it purports
to cover an antitrust claim against a Japanese company. This
Court's holding rests almost exclusively on the federal policy
favoring arbitration of commercial disputes and vague notions of
international comity arising from the fact that the automobiles
involved here were manufactured in Japan. Because I am convinced
that the Court of Appeals' construction of the arbitration clause
is erroneous, and because I strongly disagree with this Court's
interpretation of the relevant federal statutes, I respectfully
dissent. In my opinion, (1) a fair construction of the language in
the arbitration clause in the parties' contract does not encompass
a claim that auto manufacturers entered into a conspiracy in
violation of the antitrust laws; (2) an arbitration clause should
not normally be construed to cover a statutory remedy that it does
not expressly identify; (3) Congress did not intend § 2 of the
Federal Arbitration Act to apply to antitrust claims; and (4)
Congress did not intend the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards to apply to disputes that
are not covered by the Federal Arbitration Act.
I
On October 31, 1979, respondent, Soler Chrysler-Plymouth, Inc.
(Soler), entered into a "distributor agreement" to govern the sale
of Plymouth passenger cars to be manufactured by petitioner,
Mitsubishi Motors Corporation
Page 473 U. S. 642
of Tokyo, Japan (Mitsubishi). [
Footnote 2/3] Mitsubishi, however, was not a party to
that agreement. Rather, the "purchase rights" were granted to Soler
by a wholly owned subsidiary of Chrysler Corporation that is
referred to as "Chrysler" in the agreement. [
Footnote 2/4] The distributor agreement does not contain
an arbitration clause. Nor does the record contain any other
agreement providing for the arbitration of disputes between Soler
and Chrysler.
Paragraph 26 of the distributor agreement authorizes Chrysler to
have Soler's orders filled by any company affiliated with Chrysler,
that company thereby becoming the "supplier" of the products
covered by the agreement with Chrysler. [
Footnote 2/5] Relying on paragraph 26 of their
distributor-agreement, [
Footnote
2/6]
Page 473 U. S. 643
Soler, Chrysler, and Mitsubishi entered into a separate Sales
Procedure Agreement designating Mitsubishi as the supplier of the
products covered by the distributor agreement. [
Footnote 2/7] The arbitration clause the Court
construes today is found in that agreement. [
Footnote 2/8] As a matter of ordinary contract
interpretation, there are at least two reasons why that clause does
not apply to Soler's antitrust claim against Chrysler and
Mitsubishi.
First, the clause only applies to two-party disputes between
Soler and Mitsubishi. The antitrust violation alleged in Soler's
counterclaim is a three-party dispute. Soler has joined both
Chrysler and its associated company, Mitsubishi, as
counterdefendants. The pleading expressly alleges that
Page 473 U. S. 644
both of those companies are
"engaged in an unlawful combination and conspiracy to restrain
and divide markets in interstate and foreign commerce, in violation
of the Sherman Antitrust Act and the Clayton Act."
App. 91. It is further alleged that Chrysler authorized and
participated in several overt acts directed at Soler. At this stage
of the case, we must, of course, assume the truth of those
allegations. Only by stretching the language of the arbitration
clause far beyond its ordinary meaning could one possibly conclude
that it encompasses this three-party dispute.
Second, the clause only applies to disputes "which may arise
between MMC and BUYER out of or in relation to Articles I-B through
V of this Agreement or for the breach thereof. . . ."
Id.
at 52. Thus, disputes relating to only 5 out of a total of 15
Articles in the Sales Procedure Agreement are arbitrable. Those
five Articles cover: (1) the terms and conditions of direct sales
(matters such as the scheduling of orders, deliveries, and
payment); (2) technical and engineering changes; (3) compliance by
Mitsubishi with customs laws and regulations, and Soler's
obligation to inform Mitsubishi of relevant local laws; (4)
trademarks and patent rights; and (5) Mitsubishi's right to cease
production of any products. It is immediately obvious that Soler's
antitrust claim did not arise out of Articles I-B through V, and it
is not a claim "for the breach thereof." The question is whether it
is a dispute "in relation to" those Articles.
Because Mitsubishi relies on those Articles of the contract to
explain some of the activities that Soler challenges in its
antitrust claim, the Court of Appeals concluded that the
relationship between the dispute and those Articles brought the
arbitration clause into play. I find that construction of the
clause wholly unpersuasive. The words "in relation to" appear
between the references to claims that arise under the contract and
claims for breach of the contract; I believe all three of the
species of arbitrable claims must be predicated on contractual
rights defined in Articles I-B through V.
Page 473 U. S. 645
The federal policy favoring arbitration cannot sustain the
weight that the Court assigns to it. A clause requiring arbitration
of all claims "relating to" a contract surely could not encompass a
claim that the arbitration clause was itself part of a contract in
restraint of trade.
Cf. Paramount Famous Lasky Corp. v. United
States, 282 U. S. 30
(1930);
see also United States v. Paramount Pictures,
Inc., 334 U. S. 131,
334 U. S. 176
(1948). Nor in my judgment should it be read to encompass a claim
that relies, not on a failure to perform the contract, but on an
independent violation of federal law. The matters asserted by way
of defense do not control the character, or the source, of the
claim that Soler has asserted. [
Footnote 2/9] Accordingly, simply as a matter of
ordinary contract interpretation, I would hold that Soler's
antitrust claim is not arbitrable.
II
Section 2 of the Federal Arbitration Act describes three kinds
of arbitrable agreements. [
Footnote
2/10] Two -- those including maritime transactions and those
covering the submission of an existing dispute to arbitration --
are not involved in this case. The language of § 2 relating to the
Soler-Mitsubishi arbitration clause reads as follows:
Page 473 U. S. 646
"A written provision in . . . a contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract . . . or the
refusal to perform the whole or any part thereof, . . . shall be
valid, irrevocable, and enforceable, save upon such grounds as
exist at law or in equity for the revocation of any contract."
The plain language of this statute encompasses Soler's claims
that arise out of its contract with Mitsubishi, but does not
encompass a claim arising under federal law, or indeed one that
arises under its distributor agreement with Chrysler. Nothing in
the text of the 1925 Act, nor its legislative history, suggests
that Congress intended to authorize the arbitration of any
statutory claims. [
Footnote
2/11]
Until today, all of our cases enforcing agreements to arbitrate
under the Arbitration Act have involved contract claims. In one,
the party claiming a breach of contractual warranties also claimed
that the breach amounted to fraud actionable under § 10(b) of the
Securities Exchange Act of 1934.
Scherk v. Alberto-Culver
Co., 417 U. S. 506
(1974). [
Footnote 2/12]
Page 473 U. S. 647
But this is the first time the Court has considered the question
whether a standard arbitration clause referring to claims arising
out of or relating to a contract should be construed to cover
statutory claims that have only an indirect relationship to the
contract. [
Footnote 2/13] In my
opinion, neither the Congress that enacted the Arbitration Act in
1925 nor the many parties who have agreed to such standard clauses
could have anticipated the Court's answer to that question.
On several occasions, we have drawn a distinction between
statutory rights and contractual rights and refused to hold that an
arbitration barred the assertion of a statutory right. Thus, in
Alexander v. Gardner-Denver Co., 415 U. S.
36 (1974), we held that the arbitration of a claim of
employment discrimination would not bar an employee's statutory
right to damages under Title VII of the Civil Rights Act of 1964,
42 U.S.C. §§ 2000e - 2000e-17, notwithstanding the strong federal
policy favoring the arbitration of labor disputes. In that case,
the Court explained at some length why it would be unreasonable to
assume that Congress intended to give arbitrators the final
authority to implement the federal statutory policy:
"[W]e have long recognized that 'the choice of forums inevitably
affects the scope of the substantive right to be vindicated.'
U.S.
Bulk Carriers v. Arguelles, 400
Page 473 U. S. 648
U.S. 351,
400 U. S. 359-360 (1971)
(Harlan, J., concurring). Respondent's deferral rule is necessarily
premised on the assumption that arbitral processes are commensurate
with judicial processes and that Congress impliedly intended
federal courts to defer to arbitral decisions on Title VII issues.
We deem this supposition unlikely."
"Arbitral procedures, while well suited to the resolution of
contractual disputes, make arbitration a comparatively
inappropriate forum for the final resolution of rights created by
Title VII. This conclusion rests first on the special role of the
arbitrator, whose task is to effectuate the intent of the parties,
rather than the requirements of enacted legislation. . . . But
other facts may still render arbitral processes comparatively
inferior to judicial processes in the protection of Title VII
rights. Among these is the fact that the specialized competence of
arbitrators pertains primarily to the law of the shop, not the law
of the land.
United Steelworkers of America v. Warrior &
Gulf Navigation Co., 363 U. S. 574,
363 U. S.
581-583 (1960). Parties usually choose an arbitrator
because they trust his knowledge and judgment concerning the
demands and norms of industrial relations. On the other hand, the
resolution of statutory or constitutional issues is a primary
responsibility of courts, and judicial construction has proved
especially necessary with respect to Title VII, whose broad
language frequently can be given meaning only by reference to
public law concepts."
415 U.S. at
415 U. S. 56-57
(footnote omitted). In addition, the Court noted that the informal
procedures which make arbitration so desirable in the context of
contractual disputes are inadequate to develop a record for
appellate review of statutory questions. [
Footnote 2/14] Such review is essential on
Page 473 U. S. 649
matters of statutory interpretation in order to assure
consistent application of important public rights.
In
Barrentine v. Arkansas-Best Freight System, Inc.,
450 U. S. 728
(1981), we reached a similar conclusion with respect to the
arbitrability of an employee's claim based on the Fair Labor
Standards Act, 29 U.S.C. §§ 201-219. We again noted that an
arbitrator, unlike a federal judge, has no institutional obligation
to enforce federal legislative policy:
"Because the arbitrator is required to effectuate the intent of
the parties, rather than to enforce the statute, he may issue a
ruling that is inimical to the public policies underlying the FLSA,
thus depriving an employee of protected statutory rights."
"Finally, not only are arbitral procedures less protective of
individual statutory rights than are judicial procedures,
see
Gardner-Denver, supra, at
415 U. S.
57-58, but arbitrators very often are powerless to grant
the aggrieved employees as broad a range of relief. Under the FLSA,
courts can award actual and liquidated damages, reasonable
attorney's fees, and costs. 29 U.S.C. § 216(b). An arbitrator, by
contrast, can award only that compensation authorized by the wage
provision of the collective bargaining agreement. . . . It is most
unlikely that he will be authorized to award liquidated damages,
costs, or attorney's fees."
450 U.S. at
450 U. S.
744-745 (footnote omitted).
Page 473 U. S. 650
The Court has applied the same logic in holding that federal
claims asserted under the Ku Klux Act of 1871, 42 U.S.C. § 1983,
and claims arising under § 12(2) of the Securities Act of 1933, 15
U.S.C. § 771(2), may not be finally resolved by an arbitrator.
McDonald v. City of West Branch, 466 U.
S. 284 (1984);
Wilko v. Swan, 346 U.
S. 427 (1953).
The Court's opinions in
Alexander, Barrentine,
McDonald, and
Wilko all explain why it makes good
sense to draw a distinction between statutory claims and contract
claims. In view of the Court's repeated recognition of the
distinction between federal statutory rights and contractual
rights, together with the undisputed historical fact that
arbitration has functioned almost entirely in either the area of
labor disputes or in "ordinary disputes between merchants as to
questions of fact,"
see 473
U.S. 614fn2/11|>n. 11,
supra, it is reasonable to
assume that most lawyers and executives would not expect the
language in the standard arbitration clause to cover federal
statutory claims. Thus, in my opinion, both a fair respect for the
importance of the interests that Congress has identified as worthy
of federal statutory protection, and a fair appraisal of the most
likely understanding of the parties who sign agreements containing
standard arbitration clauses, support a presumption that such
clauses do not apply to federal statutory claims.
III
The Court has repeatedly held that a decision by Congress to
create a special statutory remedy renders a private agreement to
arbitrate a federal statutory claim unenforceable. Thus, as I have
already noted, the express statutory remedy provided in the Ku Klux
Act of 1871, [
Footnote 2/15] the
express statutory remedy in the Securities Act of 1933, [
Footnote 2/16] the express statutory
remedy in the Fair Labor Standards Act, [
Footnote 2/17] and the express
Page 473 U. S. 651
statutory remedy in Title VII of the Civil Rights Act of 1964,
[
Footnote 2/18] each provided the
Court with convincing evidence that Congress did not intend the
protections afforded by the statute to be administered by a private
arbitrator. The reasons that motivated those decisions apply with
special force to the federal policy that is protected by the
antitrust laws.
To make this point, it is appropriate to recall some of our past
appraisals of the importance of this federal policy, and then to
identify some of the specific remedies Congress has designed to
implement it. It was Chief Justice Hughes who characterized the
Sherman Antitrust Act as "a charter of freedom" that may fairly be
compared to a constitutional provision.
See Appalachian Coals,
Inc. v. United States, 288 U. S. 344,
288 U. S.
359-360 (1933). In
United States v. Philadelphia
National Bank, 374 U. S. 321,
374 U. S. 371
(1963), the Court referred to the extraordinary "magnitude" of the
value choices made by Congress in enacting the Sherman Act. More
recently, the Court described the weighty public interests
underlying the basic philosophy of the statute:
"Antitrust laws in general, and the Sherman Act in particular,
are the Magna Carta of free enterprise. They are as important to
the preservation of economic freedom and our free enterprise system
as the Bill of Rights is to the protection of our fundamental
personal freedoms. And the freedom guaranteed each and every
business, no matter how small, is the freedom to compete -- to
assert with vigor, imagination, devotion, and ingenuity whatever
economic muscle it can muster. Implicit in such freedom is the
notion that it cannot be foreclosed with respect to one sector of
the economy because certain private citizens or groups believe that
such foreclosure might promote greater competition in a more
important sector of the economy."
United States v. Topco Associates, Inc., 405 U.
S. 596,
405 U. S. 610
(1972).
Page 473 U. S. 652
The Sherman and Clayton Acts reflect Congress' appraisal of the
value of economic freedom; they guarantee the vitality of the
entrepreneurial spirit. Questions arising under these Acts are
among the most important in public law.
The unique public interest in the enforcement of the antitrust
laws is repeatedly reflected in the special remedial scheme enacted
by Congress. Since its enactment in 1890, the Sherman Act has
provided for public enforcement through criminal as well as civil
sanctions. The preeminent federal interest in effective enforcement
once justified a provision for special three-judge district courts
to hear antitrust claims on an expedited basis, as well as for
direct appeal to this Court bypassing the courts of appeals.
[
Footnote 2/19]
See, e.g.,
United States v. National Assn. of Securities Dealers, Inc.,
422 U. S. 694
(1975).
The special interest in encouraging private enforcement of the
Sherman Act has been reflected in the statutory scheme ever since
1890. Section 7 of the original Act, [
Footnote 2/20] used the broadest possible language to
describe the class of litigants who may invoke its protection.
"The Act is comprehensive in its terms and coverage, protecting
all who are made victims of the forbidden practices by whomever
they may be perpetrated."
Mandeville Island Farms, Inc. v. American Crystal Sugar
Co., 334 U. S. 219,
334 U. S. 236
(1948);
See also Associated
Page 473 U. S. 653
General Contractors of California,
Inc. v. Carpenters, 459 U. S. 519,
459 U. S. 529
(1983).
The provision for mandatory treble damages -- unique in federal
law when the statute was enacted -- provides a special incentive to
the private enforcement of the statute, as well as an especially
powerful deterrent to violators. [
Footnote 2/21] What we have described as "the public
interest in vigilant enforcement of the antitrust laws through the
instrumentality of the private treble damage action,"
Lawlor v.
National Screen Service Corp., 349 U.
S. 322,
349 U. S. 329
(1955), is buttressed by the statutory mandate that the injured
party also recover costs, "including a reasonable attorney's fee."
15 U.S.C. § 15(a). The interest in wide and effective enforcement
has thus, for almost a century, been vindicated by enlisting the
assistance
Page 473 U. S. 654
of "private Attorneys General"; [
Footnote 2/22] we have always attached special
importance to their role because "[e]very violation of the
antitrust laws is a blow to the free enterprise system envisaged by
Congress."
Hawaii v. Standard Oil Co., 405 U.
S. 251,
405 U. S. 262
(1972).
There are, in addition, several unusual features of the
antitrust enforcement scheme that unequivocally require rejection
of any thought that Congress would tolerate private arbitration of
antitrust claims in lieu of the statutory remedies that it
fashioned. As we explained in
Blumenstock Brothers Advertising
Agency v. Curtis Publishing Co., 252 U.
S. 436,
252 U. S. 440
(1920), an antitrust treble damages case "can only be brought in a
District Court of the United States." The determination that these
cases are "too important to be decided otherwise than by competent
tribunals" [
Footnote 2/23] surely
cannot allow private arbitrators to assume a jurisdiction that is
denied to courts of the sovereign States.
Page 473 U. S. 655
The extraordinary importance of the private antitrust remedy has
been emphasized in other statutes enacted by Congress. Thus, in
1913, Congress passed a special Act guaranteeing public access to
depositions in Government civil proceedings to enforce the Sherman
Act. 37 Stat. 731, 15 U.S.C. § 30. [
Footnote 2/24] The purpose of that Act plainly was to
enable victims of antitrust violations to make evidentiary use of
information developed in a public enforcement proceeding. This
purpose was further implemented in the following year by the
enactment of § 5 of the Clayton Act providing that a final judgment
or decree in a Government case may constitute
prima facie
proof of a violation in a subsequent treble damages case. 38 Stat.
731, 15 U.S.C. § 16(a). These special remedial provisions attest to
the importance that Congress has attached to the private
remedy.
In view of the history of antitrust enforcement in the United
States, it is not surprising that all of the federal courts that
have considered the question have uniformly and unhesitatingly
concluded that agreements to arbitrate federal antitrust issues are
not enforceable. In a landmark opinion for the Court of Appeals for
the Second Circuit, Judge Feinberg wrote:
"A claim under the antitrust laws is not merely a private
matter. The Sherman Act is designed to promote the national
interest in a competitive economy; thus, the plaintiff asserting
his rights under the Act has been likened to a private
attorney-general who protects the public's interest. . . .
Antitrust violations can affect hundreds of thousands -- perhaps
millions -- of people, and inflict staggering economic damage. . .
. We do not believe that Congress intended such claims to be
resolved elsewhere than in the courts. We do not suggest that all
antitrust litigations attain these swollen proportions; the courts,
no less than the public, are thankful
Page 473 U. S. 656
that they do not. But in fashioning a rule to govern the
arbitrability of antitrust claims, we must consider the rule's
potential effect. For the same reason, it is also proper to ask
whether contracts of adhesion between alleged monopolists and their
customers should determine the forum for trying antitrust
violations."
American Safety Equipment Corp. v. J. P. Maguire &
Co., 391 F.2d 821, 826-827 (1968) (footnote omitted). This
view has been followed in later cases from that Circuit [
Footnote 2/25] and by the First,
[
Footnote 2/26] Fifth, [
Footnote 2/27] Seventh, [
Footnote 2/28] Eighth, [
Footnote 2/29] and Ninth Circuits. [
Footnote 2/30] It is clearly a correct statement
of the law.
This Court would be well advised to endorse the collective
wisdom of the distinguished judges of the Courts of Appeals who
have unanimously concluded that the statutory remedies fashioned by
Congress for the enforcement of the antitrust laws render an
agreement to arbitrate antitrust disputes unenforceable.
Arbitration awards are only reviewable for manifest disregard of
the law, 9 U.S.C. §§ 10, 207, and the rudimentary procedures which
make arbitration so desirable in the context of a private dispute
often mean that the record is so inadequate that the arbitrator's
decision is virtually
Page 473 U. S. 657
unreviewable. [
Footnote 2/31]
Despotic decisionmaking of this kind is fine for parties who are
willing to agree in advance to settle for a best approximation of
the correct result in order to resolve quickly and inexpensively
any contractual dispute that may arise in an ongoing commercial
relationship. Such informality, however, is simply unacceptable
when every error may have devastating consequences for important
businesses in our national economy, and may undermine their ability
to compete in world markets. [
Footnote 2/32] Instead of "muffling a grievance in the
cloakroom of arbitration," the public interest in free competitive
markets would be better served by having the issues resolved "in
the light of impartial public court adjudication."
See Merrill
Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.
S. 117,
414 U. S. 136
(1973). [
Footnote 2/33]
Page 473 U. S. 658
IV
The Court assumes for the purposes of its decision that the
antitrust issues would not be arbitrable if this were a purely
domestic dispute,
ante at
473 U. S. 629,
but holds that the international character of the controversy makes
it arbitrable. The holding rests on vague concerns for the
international implications of its decision and a misguided
application of
Scherk v. Alberto-Culver Co., 417 U.
S. 506 (1974).
International Obligations of the United States
Before relying on its own notions of what international comity
requires, it is surprising that the Court does not determine the
specific commitments that the United States has made to enforce
private agreements to arbitrate disputes arising under public law.
As the Court acknowledges, the only treaty relevant here is the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards. [1970] 21 U.S.T. 2517, T.I.A.S. No. 6997. The Convention
was adopted in 1958 at a multilateral conference sponsored by the
United Nations. This Nation did not sign the proposed convention at
that time; displaying its characteristic caution before entering
into international compacts, the United States did not accede to it
until 12 years later.
As the Court acknowledged in
Scherk v. Alberto-Culver
Co., 417 U.S. at
417 U. S. 520,
n. 15, the principal purpose of the Convention
"was to encourage the recognition and enforcement of commercial
arbitration agreements in international contracts and to unify the
standards by which agreements to arbitrate are observed and
arbitral awards are enforced in the signatory countries."
However, the United States, as
amicus curiae, advises
the Court that the Convention "clearly contemplates" that signatory
nations will enforce domestic laws prohibiting the arbitration of
certain subject matters. Brief for United States as
Amicus
Curiae 28. This interpretation of the Convention was adopted
by the Court of Appeals, 723 F.2d at 162-166, and the Court
Page 473 U. S. 659
declines to reject it,
ante at
473 U. S.
639-640, n. 21. The construction is beyond doubt.
Article II(3) of the Convention provides that the court of a
Contracting State,
"when seized of an action in a matter in respect of which the
parties have made an agreement within the meaning of this article,
shall, at the request of one of the parties, refer the parties to
arbitration."
This obligation does not arise, however, (i) if the agreement
"is null and void, inoperative or incapable of being performed,"
Art. II(3), or (ii) if the dispute does not concern "a subject
matter capable of settlement by arbitration," Art. II(1). The
former qualification principally applies to matters of fraud,
mistake, and duress in the inducement, or problems of procedural
fairness and feasibility. 723 F.2d at 164. The latter clause
plainly suggests the possibility that some subject matters are not
capable of arbitration under the domestic laws of the signatory
nations, and that agreements to arbitrate such disputes need not be
enforced.
This construction is confirmed by the provisions of the
Convention which provide for the enforcement of international
arbitration awards. Article III provides that each "Contracting
State shall recognize arbitral awards as binding and enforce them."
However, if an arbitration award is "contrary to the public policy
of [a] country" called upon to enforce it, or if it concerns a
subject matter which is "not capable of settlement by arbitration
under the law of that country," the Convention does not require
that it be enforced. Arts. V(2)(a) and (b). Thus, reading Articles
II and V together, the Convention provides that agreements to
arbitrate disputes which are nonarbitrable under domestic law need
not be honored, nor awards rendered under them enforced. [
Footnote 2/34]
Page 473 U. S. 660
This construction is also supported by the legislative history
of the Senate's advice and consent to the Convention. In presenting
the Convention for the Senate's consideration, the President
offered the following interpretation of Article II(1):
"The requirement that the agreement apply to a matter capable of
settlement by arbitration is necessary in order to take proper
account of laws in force in many countries which prohibit the
submission of certain questions to arbitration. In some States of
the United States, for example, disputes affecting the title to
real property are not arbitrable."
S.Exec.Doc. E at 19. The Senate's consent to the Convention
presumably was made in light of this interpretation, and thus it is
to be afforded considerable weight.
Sumitomo Shoji America,
Inc. v. Avagliano, 457 U. S. 176,
457 U. S.
184-185 (1982).
International Comity
It is clear then that the international obligations of the
United States permit us to honor Congress' commitment to the
exclusive resolution of antitrust disputes in the federal courts.
The Court today refuses to do so, offering only vague concerns for
comity among nations. The courts of other nations, on the other
hand, have applied the exception provided in the Convention, and
refused to enforce agreements to arbitrate specific subject matters
of concern to them. [
Footnote
2/35]
Page 473 U. S. 661
It may be that the subject matter exception to the Convention
ought to be reserved -- as a matter of domestic law -- for matters
of the greatest public interest which involve concerns that are
shared by other nations. The Sherman Act's commitment to free
competitive markets is among our most important civil policies.
Supra at
473 U. S.
650-657. This commitment, shared by other nations which
are signatory to the Convention, [
Footnote 2/36] is hardly the sort of parochial concern
that we should decline to enforce in the interest of international
comity. Indeed, the branch of Government entrusted with the conduct
of political relations with foreign governments has informed us
that the
"United States' determination that federal antitrust claims are
nonarbitrable under the Convention . . . is not likely to result in
either surprise or recrimination on the part of other signatories
to the Convention."
Brief for United States as
Amicus Curiae 30.
Lacking any support for the proposition that the enforcement of
our domestic laws in this context will result in international
recriminations, the Court seeks refuge in an obtuse application of
its own precedent,
Scherk v. Alberto-Culver Co.,
417 U. S. 506
(1974), in order to defend the contrary result. The
Scherk
case was an action for damages brought by an American purchaser of
three European businesses in which it was claimed that the seller's
fraudulent representations concerning the status of certain
European trademarks constituted a violation of § 10(b) of the
Securities Exchange
Page 473 U. S. 662
Act of 1934, 15 U.S.C. § 78j(b). The Court held that the
parties' agreement to arbitrate any dispute arising out of the
purchase agreement was enforceable under the Federal Arbitration
Act. The legal issue was whether the Court's earlier holding in
Wilko v. Swan, 346 U. S. 427
(1953) -- "that an agreement to arbitrate could not preclude a
buyer of a security from seeking a judicial remedy under the
Securities Act of 1933,"
see 417 U.S. at
417 U. S. 510
-- was "controlling authority."
Ibid.
The Court carefully identified two important differences between
the
Wilko case and the
Scherk case. First, the
statute involved in
Wilko contained an express private
remedy that had "no statutory counterpart" in the statute involved
in
Scherk, see 417 U.S. at
417 U. S. 513.
Although the Court noted that this difference provided a "colorable
argument" for reaching a different result, the Court did not rely
on it.
Id. at
417 U. S.
513-514.
Instead, it based its decision on the second distinction -- that
the outcome in
Wilko was governed entirely by American
law, whereas, in
Scherk, foreign rules of law would
control and, if the arbitration clause were not enforced, a host of
international conflict-of-laws problems would arise. The Court
explained:
"Alberto-Culver's contract to purchase the business entities
belonging to Scherk was a truly international agreement.
Alberto-Culver is an American corporation with its principal place
of business and the vast bulk of its activity in this country,
while Scherk is a citizen of Germany whose companies were organized
under the laws of Germany and Liechtenstein. The negotiations
leading to the signing of the contract in Austria and to the
closing in Switzerland took place in the United States, England,
and Germany, and involved consultations with legal and trademark
experts from each of those countries and from Liechtenstein.
Finally, and most significantly, the subject matter of the contract
concerned the
Page 473 U. S. 663
sale of business enterprises organized under the laws of and
primarily situated in European countries, whose activities were
largely, if not entirely, directed to European markets."
"Such a contract involves considerations and policies
significantly different from those found controlling in
Wilko. In
Wilko, quite apart from the arbitration
provision, there was no question but that the laws of the United
States generally, and the federal securities laws in particular,
would govern disputes arising out of the stock purchase agreement.
The parties, the negotiations, and the subject matter of the
contract were all situated in this country, and no credible claim
could have been entertained that any international conflict-of-laws
problems would arise. In this case, by contrast, in the absence of
the arbitration provision, considerable uncertainty existed at the
time of the agreement, and still exists, concerning the law
applicable to the resolution of disputes arising out of the
contract."
417 U.S. at
417 U. S.
515-516 (footnote omitted). Thus, in its opinion in
Scherk, the Court distinguished
Wilko because, in
that case, "no credible claim could have been entertained that any
international conflict-of-laws problems would arise." 417 U.S. at
417 U. S. 516.
That distinction fits this case precisely, since I consider it
perfectly clear that the rules of American antitrust law must
govern the claim of an American automobile dealer that he has been
injured by an international conspiracy to restrain trade in the
American automobile market. [
Footnote
2/37]
The critical importance of the foreign law issues in
Scherk was apparent to me even before the case reached
this Court.
See 473
U.S. 614fn2/12|>n. 12,
supra. For that reason, it
is especially distressing
Page 473 U. S. 664
to find that the Court is unable to perceive why the reasoning
in
Scherk is wholly inapplicable to Soler's antitrust
claims against Chrysler and Mitsubishi. The merits of those claims
are controlled entirely by American law. It is true that the
automobiles are manufactured in Japan and that Mitsubishi is a
Japanese corporation, but the same antitrust questions would be
presented if Mitsubishi were owned by two American companies
instead of by one American and one Japanese partner. When
Mitsubishi enters the American market and plans to engage in
business in that market over a period of years, it must recognize
its obligation to comply with American law and to be subject to the
remedial provisions of American statutes. [
Footnote 2/38]
The federal claim that was asserted in
Scherk, unlike
Soler's antitrust claim, had not been expressly authorized by
Congress. Indeed, until this Court's recent decision in
Landreth Timber Co. v. Landreth, 471 U.
S. 681 (1985), the federal cause of action asserted in
Scherk would not have been entertained in a number of
Federal Circuits, because it did not involve the kind of securities
transaction that Congress intended to regulate when it enacted the
Securities Exchange Act of 1934. [
Footnote 2/39] The fraud claimed in
Scherk was
virtually identical to the breach of warranty claim; arbitration of
such claims arising out of an agreement between parties of equal
bargaining strength does not conflict with any significant federal
policy.
In contrast, Soler's claim not only implicates our fundamental
antitrust policies,
supra at
473 U. S.
650-657, but also should
Page 473 U. S. 665
be evaluated in the light of an explicit congressional finding
concerning the disparity in bargaining power between automobile
manufacturers and their franchised dealers. In 1956, when Congress
enacted special legislation to protect dealers from bad-faith
franchise terminations, [
Footnote
2/40] it recited its intent "to balance the power now heavily
weighted in favor of automobile manufacturers." 70 Stat. 1125. The
special federal interest in protecting automobile dealers from
overreaching by car manufacturers, as well as the policies
underlying the Sherman Act, underscore the folly of the Court's
decision today.
V
The Court's repeated incantation of the high ideals of
"international arbitration" creates the impression that this case
involves the fate of an institution designed to implement a formula
for world peace. [
Footnote 2/41]
But just as it is improper to subordinate the public interest in
enforcement of antitrust policy to the private interest in
resolving commercial disputes, so is it equally unwise to allow a
vision of world unity to distort the importance of the selection of
the proper forum for resolving this dispute. Like any other
mechanism for resolving controversies, international arbitration
will only succeed if it is realistically limited to tasks it is
capable of performing well -- the prompt and inexpensive resolution
of essentially contractual disputes between commercial partners. As
for matters involving the political passions and the fundamental
interests of nations, even the multilateral convention adopted
under the auspices of the United Nations recognizes that private
international arbitration is incapable of achieving satisfactory
results.
Page 473 U. S. 666
In my opinion, the elected representatives of the American
people would not have us dispatch an American citizen to a foreign
land in search of an uncertain remedy for the violation of a public
right that is protected by the Sherman Act. This is especially so
when there has been no genuine bargaining over the terms of the
submission, and the arbitration remedy provided has not even the
most elementary guarantees of fair process. Consideration of a
fully developed record by a jury, instructed in the law by a
federal judge, and subject to appellate review, is a surer guide to
the competitive character of a commercial practice than the
practically unreviewable judgment of a private arbitrator.
Unlike the Congress that enacted the Sherman Act in 1890, the
Court today does not seem to appreciate the value of economic
freedom. I respectfully dissent.
[
Footnote 2/1]
9 U.S.C. §§ 4, 201.
[
Footnote 2/2]
[1970] 21 U.S.T. 2517, T.I.A.S. NO. 6997.
[
Footnote 2/3]
The distributor agreement provides, in part:
"This Agreement is made by and between CHRYSLER INTERNATIONAL
S.A. a corporation organized and existing under the laws of the
Swiss Confederation with its principal office in Geneva,
Switzerland (hereinafter sometimes called CHRYSLER), and SOLER
CHRYSLER-PLYMOUTH INC., . . . (hereinafter sometimes called
DISTRIBUTOR), and will govern the sale by CHRYSLER to DISTRIBUTOR
of PLYMOUTH PASSENGER CARS AND CAR DERIVATIVES MANUFACTURED BY
MITSUBISHI MOTORS CORPORATION OF TOKYO, JAPAN and automotive
replacement parts and accessories (said motor vehicles, replacement
parts and accessories hereinafter sometimes called Products)."
App. 18.
[
Footnote 2/4]
"
PURCHASE RIGHTS"
"Subject to the provisions of this Agreement, CHRYSLER grants to
DISTRIBUTOR the non-exclusive right to purchase Products from
CHRYSLER, and DISTRIBUTOR agrees to buy Products from CHRYSLER, for
resale within the following described territory (hereinafter called
Sales Area): METROPOLITAN SAN JUAN, PUERTO RICO. . . ."
Ibid. This is the same company that is referred to as
"CISA" in the sales purchase agreement and in the Court's
opinion.
[
Footnote 2/5]
Paragraph 26 of the distributor agreement provides:
"
DIRECT SALES"
"CHRYSLER and DISTRIBUTOR agree that CHRYSLER may, at its
option, forward orders received from DISTRIBUTOR pursuant to this
Agreement to its parent company, Chrysler Corporation, or to any
subsidiary, associated or affiliated company (hereinafter called
'SUPPLIER') which will then sell the Products covered by such order
directly to DISTRIBUTOR, CHRYSLER and DISTRIBUTOR hereby
acknowledge and agree that, unless otherwise agreed in writing, any
such direct sales between SUPPLIER and DISTRIBUTOR will be governed
by the terms and conditions contained on the order form and in this
Agreement and that any such sales will not constitute the basis
forming a distributor relationship between SUPPLIER and
DISTRIBUTOR. Further, DISTRIBUTOR acknowledges and agrees that any
claim or controversy resulting from such direct sales by SUPPLIER
will be handled by CHRYSLER as though such sale had been made by
CHRYSLER."
Id. at 39-40.
[
Footnote 2/6]
"WHEREAS, pursuant to Article 26 of the Distributor Agreement,
CISA may forward orders received from BUYER to an associated
company;"
"WHEREAS, MMC and CISA have agreed that MMC, which is an
associated company of CISA, may sell such MMC Products directly to
BUYER pursuant to Article 26 of the Distributor Agreement."
Id. at 43.
[
Footnote 2/7]
Mitsubishi is jointly owned by Chrysler and by Mitsubishi Heavy
Industries, Ltd., a Japanese corporation.
Id. at
200-201.
[
Footnote 2/8]
That clause reads as follows:
"
ARBITRATION OF CERTAIN MATTERS"
"All disputes, controversies or differences which may arise
between MMC and BUYER out of or in relation to Articles I-B through
V of this Agreement or for the breach thereof, shall be finally
settled by arbitration in Japan in accordance with the rules and
regulations of the Japan Commercial Arbitration Association."
Id. at 52-53.
[
Footnote 2/9]
Even if Mitsubishi can prove that it did not violate any
provision of the contract, such proof would not necessarily
constitute a defense to the antitrust claim. In contrast, in
Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
388 U. S. 395
(1967), Prima Paint's claim of fraud in the inducement was asserted
to rescind the contract, not as an independent basis of
recovery.
[
Footnote 2/10]
Section 2 provides:
"A written provision in any maritime transaction or a contract
evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract
or transaction, or the refusal to perform the whole or any part
thereof, or an agreement in writing to submit to arbitration an
existing controversy arising out of such a contract, transaction,
or refusal, shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any
contract."
9 U.S.C. § 2.
[
Footnote 2/11]
In his dissent in
Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U.S. at
388 U. S. 415, Justice Black quoted the following
commentary written shortly after the statute was passed:
"Not all questions arising out of contracts ought to be
arbitrated. It is a remedy peculiarly suited to the disposition of
the ordinary disputes between merchants as to questions of fact --
quantity, quality, time of delivery, compliance with terms of
payment, excuses for nonperformance, and the like. It has a place
also in the determination of the simpler questions of law -- the
questions of law which arise out of these daily relations between
merchants as to the passage of title, the existence of warranties,
or the questions of law which are complementary to the questions of
fact which we have just mentioned."
Cohen & Dayton, The New Federal Arbitration Law, 12
Va.L.Rev. 265, 281 (1926). In the
Prima Paint case, the
Court held that the Act applied to a claim of fraud in the
inducement of the contract, but did not intimate that it might also
cover federal statutory claims.
See 473
U.S. 614fn2/9|>n. 9,
supra.
[
Footnote 2/12]
"The dispute between these parties over the alleged shortage in
defendant's inventory of European trademarks, a matter covered by
contract warranties and subject to pre-closing verification, is the
kind of commercial dispute for which arbitration is entirely
appropriate. In my opinion, the fact that the 'fraud' language of
Rule 10(b)(5) has been included in the complaint is far less
significant than the desirability of having the Court of
Arbitration of the International Chamber of Commerce in Paris,
France, decide the various questions of foreign law which should
determine the rights of these parties."
Alberto-Culver Co. v. Scherk, 484 F.2d 611, 619-620
(CA7 1973) (Stevens, J., dissenting),
rev'd, 417 U.
S. 506 (1974).
[
Footnote 2/13]
It is interesting to note that, in
Moses H. Cone Memorial
Hospital v. Mercury Construction Corp., 460 U. S.
1 (1983), the Court referred to the standard clause
describing claims "arising out of, or relating to, this Contract or
the breach thereof" as a provision "for resolving disputes arising
out of the contract or its breach."
Id. at
460 U. S. 4-5.
[
Footnote 2/14]
"Moreover, the factfinding process in arbitration usually is not
equivalent to judicial factfinding. The record of the arbitration
proceedings is not as complete; the usual rules of evidence do not
apply; and rights and procedures common to civil trials, such as
discovery, compulsory process, cross-examination, and testimony
under oath, are often severely limited or unavailable.
See
Bernhardt v. Polygraphic Co., 350 U. S.
198,
350 U. S. 203 (1956);
Wilko v. Swan, 346 U.S. at
346 U. S.
435-437. And as this Court has recognized,
'[a]rbitrators have no obligation to the court to give their
reasons for an award.'
United Steelworker of America v.
Enterprise Wheel & Car Corp., 363 U.S. at
363 U. S.
598. Indeed, it is the informality of arbitral procedure
that enables it to function as an efficient, inexpensive, and
expeditious means for dispute resolution. This same characteristic,
however, makes arbitration a less appropriate forum for final
resolution of Title VII issues than the federal courts."
415 U.S. at
415 U. S. 57-58
(footnote omitted).
[
Footnote 2/15]
McDonald v. City of West Branch, 466 U.
S. 284 (1984).
[
Footnote 2/16]
Wilko v. Swan, 346 U. S. 427
(1953)
[
Footnote 2/17]
Barrentine v. Arkansas-Best Freight System, Inc.,
450 U. S. 728
(1981).
[
Footnote 2/18]
Alexander v. Gardner-Denver Co., 415 U. S.
36 (1974).
[
Footnote 2/19]
See 32 Stat. 823, 88 Stat. 1708, repealed 98 Stat. 3358
(Pub.L. 98-620, § 402(11)). The Act still provides an avenue for
directly appealing to this Court from a final judgment in a
Government antitrust suit. 15 U.S.C. § 29(b).
[
Footnote 2/20]
"Any person who shall be injured in his business or property by
any other person or corporation by reason of anything forbidden or
declared to be unlawful by this act, may sue therefor in any
circuit court of the United States in the district in which the
defendant resides or is found, without respect to the amount in
controversy, and shall recover three fold the damages by him
sustained, and the costs of suit, including a reasonable attorney's
fee."
26 Stat. 210. The current version of the private remedy is
codified at 15 U.S.C. § 15(a).
[
Footnote 2/21]
"We have often indicated the inappropriateness of invoking broad
common law barriers to relief where a private suit serves important
public purposes. It was for this reason that we held in
Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S.
211 (1951), that a plaintiff in an antitrust suit could
not be barred from recovery by proof that he had engaged in an
unrelated conspiracy to commit some other antitrust violation.
Similarly, in
Simpson v. Union Oil Co., 377 U. S. 13
(1964), we held that a dealer whose consignment agreement was
canceled for failure to adhere to a fixed resale price could bring
suit under the antitrust laws even though, by signing the
agreement, he had to that extent become a participant in the
illegal, competition-destroying scheme. Both
Simpson and
Kiefer-Stewart were premised on a recognition that the
purposes of the antitrust laws are best served by insuring that the
private action will be an ever-present threat to deter anyone
contemplating business behavior in violation of the antitrust laws.
The plaintiff who reaps the reward of treble damages may be no less
morally reprehensible than the defendant, but the law encourages
his suit to further the overriding public policy in favor of
competition. A more fastidious regard for the relative moral worth
of the parties would only result in seriously undermining the
usefulness of the private action as a bulwark of antitrust
enforcement. And permitting the plaintiff to recover a windfall
gain does not encourage continued violations by those in his
position, since they remain fully subject to civil and criminal
penalties for their own illegal conduct."
Perma Life Mufflers, Inc. v. International Parts Corp.,
392 U. S. 134,
392 U. S.
138-139 (1968).
[
Footnote 2/22]
Under the Panama Canal Act, any private shipper -- in addition
to the United States -- may also bring an action seeking to bar
access to the canal for any vessel owned by a company "doing
business" in violation of the antitrust laws. 37 Stat. 567, 15
U.S.C. § 31.
[
Footnote 2/23]
In
University Life Insurance Co. v. Unimarc Ltd., 699
F.2d 846 (CA7 1983), Judge Posner wrote:
"The suit brought by Unimarc and Huff . . . raises issues of
state tort and contract law and federal antitrust law. The tort and
contract issues may or may not be within the scope of the
arbitration clauses in the coinsurance and second marketing
agreements, but they are arbitrable in the sense that an agreement
to arbitrate them would be enforceable. Federal antitrust issues,
however, are nonarbitrable in just that sense.
Applied Digital
Technology, Inc. v. Continental Casualty Co., 576 F.2d 116,
117 (7th Cir.1978). They are considered to be at once too difficult
to be decided competently by arbitrators -- who are not judges, and
often not even lawyers -- and too important to be decided otherwise
than by competent tribunals.
See American Safety Equipment
Corp. v. J. P. Maguire & Co., 391 F.2d 821, 826-27 (2d
Cir.1968). The root of the doctrine is in the same soil as the
principle, announced in
Blumenstock Bros. Adv. Agency v. Curtis
Pub. Co., 252 U. S. 436,
252 U. S.
440-41 (1920), that federal antitrust suits may not be
brought in state courts."
Id. at 850-851.
[
Footnote 2/24]
See United States v. Procter & Gamble Co.,
356 U. S. 677,
356 U. S. 683
(1958).
[
Footnote 2/25]
N. V. Maatschappij Voor Industriele Waarden v. A. O. Smith
Corp., 532 F.2d 874, 876 (1976) (per curiam).
[
Footnote 2/26]
723 F.2d 155, 162 (1983) (Coffin, J., for the court) (opinion
below).
[
Footnote 2/27]
Cobb v. Lewis, 488 F.2d 41, 47 (1974) (Wisdom, J., for
the court).
[
Footnote 2/28]
University Life Insurance Co. v. Unimarc Ltd., 699 F.2d
at 850-851 (1983) (Posner, J., for the court);
Applied Digital
Technology, Inc. v. Continental Casualty Co., 576 F.2d 116,
117 (1978) (Pell, J., for the court).
[
Footnote 2/29]
Helfenbein v. International Industries, Inc., 438 F.2d
1068, 1070 (Lay, J., for the court),
cert. denied, 404
U.S. 872 (1971).
[
Footnote 2/30]
Lake Communications, Inc. v. ICC Corp., 738 F.2d 1473,
1477-1480 (1984) (Browning, C.J., for the court);
Varo v.
Comprehensive Designers, Inc., 504 F.2d 1103, 1104 (1974)
(Chambers, J., for the court);
Power Replacements, Inc. v. Air
Preheater Co., 426 F.2d 980, 983-984 (1970) (Jameson, J., for
the court);
A. & E. Plastik Pak Co. v. Monsanto Co.,
396 F.2d 710, 715-716 (1968) (Merrill, J., for the court).
[
Footnote 2/31]
The arbitration procedure in this case does not provide any
right to evidentiary discovery or a written decision, and requires
that all proceedings be closed to the public. App. 220-221.
Moreover, Japanese arbitrators do not have the power of compulsory
process to secure witnesses and documents, nor do witnesses who are
available testify under oath.
Id. at 218-219.
Cf.
9 U.S.C. § 7 (arbitrators may summon witnesses to attend
proceedings and seek enforcement in a district court).
[
Footnote 2/32]
The greatest risk, of course, is that the arbitrator will
condemn business practices under the antitrust laws that are
efficient in a free competitive market.
Cf. Northwest Wholesale
Stationers, Inc. v. Pacific Stationer & Printing Co.,
472 U. S. 284
(1985),
rev'g 715 F.2d 1393 (CA9 1983). In the absence of
a reviewable record, a reviewing district court would not be able
to undo the damage wrought. Even a Government suit or an action by
a private party might not be available to set aside the award.
[
Footnote 2/33]
The Court notes that some courts which have held that agreements
to arbitrate antitrust claims generally are unenforceable have
nevertheless enforced arbitration agreements to settle an existing
antitrust claim.
Ante at
473 U. S. 633.
These settlement agreements, made after the parties have had every
opportunity to evaluate the strength of their position, are
obviously less destructive of the private treble damages remedy
that Congress provided. Thus, it may well be that arbitration as a
means of settling existing disputes is permissible.
[
Footnote 2/34]
Indeed, it has been argued that a state may refuse to enforce an
agreement to arbitrate a subject matter which is nonarbitrable in
domestic law under Article II(3) as well as under Article II(1).
Since awards rendered under such agreements need not be enforced
under Article V(2), the agreement is "incapable of being
performed." Art. II(3). S.Exec.Doc. E, 90th Cong., 2d Sess., 19
(1968) (hereinafter S.Exec.Doc. E); G. Haight, Convention on the
Recognition and Enforcement of Foreign Arbitral Awards 27-28
(1958).
[
Footnote 2/35]
For example, the Cour de Cassation in Belgium has held that
disputes arising under a Belgian statute limiting the unilateral
termination of exclusive distributorships are not arbitrable under
the Convention in that country,
Audi-NSU Auto Union A. G. v. S.
A. Adelin Petit & Cie. (1979), in 5 Yearbook Commercial
Arbitration 257, 259 (1980), and the Corte di Cassazione in Italy
has held that labor disputes are not arbitrable under the
Convention in that country,
Compagnia Generale Construzioni v.
Piersanti, [1980] Foro Italiano I 190, in 6 Yearbook
Commercial Arbitration 229, 230 (1981).
[
Footnote 2/36]
For example, the Federal Republic of Germany has a vigorous
antitrust program, and prohibits the enforcement of predispute
agreements to arbitrate such claims under some circumstances.
See Act Against Restraints of Competition § 91(1), in 1
Organisation for Economic Cooperation and Development, Guide to
Legislation on Restrictive Business Practices, Part D, p. 49
(1980).
See also 2 G. Delaume, Transnational Contracts §
13.06, p. 31, and n. 3 (1982).
[
Footnote 2/37]
Cf. Compagnia Generale Construzioni v. Piersanti,
[1980] Foro Italiano I 190 (Corte Cass. Italy), in 6 Yearbook
Commercial Arbitration, at 230;
Audi-NSU Auto Union A. G. v. S.
A. Adelin Petit & Cie. (Cour Cass. Belgium 1979), in 5
Yearbook Commercial Arbitration, at 259.
[
Footnote 2/38]
Cf. Sumitomo Shoji America, Inc. v. Avaliano,
457 U. S. 176
(1982) (Japanese general trading company's wholly owned subsidiary
which is incorporated in the United States is not exempt under
bilateral commercial treaty from obligations under Title VII of the
Civil Rights Act of 1964).
[
Footnote 2/39]
The Court's opinion in
Landreth Timber, 471 U.S. at
471 U. S.
694-695, n. 7, does not take issue with my assertion, in
dissent, that Congress never
"intended to cover negotiated transactions involving the sale of
control of a business whose securities have never been offered or
sold in any public market."
Id. at
471 U. S.
699.
[
Footnote 2/40]
Automobile Dealer's Day in Court Act, 15 U.S.C. §§
1221-1225.
[
Footnote 2/41]
E.g., Charter of the United Nations and Statute of the
International Court of Justice, 59 Stat. 1031, T.S. No. 993 (1945);
Constitution of the International Labor Organisation, 49 Stat.
2712, T.S. No. 874 (1934); Treaty of Versailles, S.Doc. 49, 66th
Cong., 1st Sess., pt. 1, pp. 8-17 (1919) (Covenant of the League of
Nations); Kant, Perpetual Peace, A Philosophical Sketch, in Kant's
Political Writings 93 (H. Reiss ed.1971).