Originally from World Arbitration And Mediation Review (WAMR)

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THE SUPREME COURT’S RECENT PERSPECTIVE

ON PARTY AUTONOMY IN ARBITRATION:
WHAT DOES IT MEAN FOR THE PROPOSED
ALI RESTATEMENT ON INTERNATIONAL
COMMERCIAL ARBITRATION?
Linda J. Silberman∗

I. INTRODUCTION

The question of the limitations that international and national
law place on party autonomy is a recurring theme in international
arbitration. Legislatures can impose limits on the parties’ choice
through the enactment of national laws, and courts can impose
limits through interpretation of such laws or by judicially
imposing other limitations. Several recent Supreme Court
decisions in the United States have focused attention on the role
of party autonomy in arbitration. The first of these is the decision
in Hall Street Assocs. v. Mattel,1 where the U.S. Supreme Court (in a
6-3 decision) interpreted the Federal Arbitration Act to render
unenforceable party agreements to expand judicial review of an
arbitral award. In rejecting the view that “contractual expansion”
of vacatur grounds followed from the “supposed judicial
expansion” of statutory grounds, the Court in Hall Street also cast
doubt on whether such non-statutory grounds existed; it
explicitly questioned the viability of dicta in Wilko v. Swan,2 which
represents the source for the “manifest disregard of the law”
ground recognized by some U.S. courts as an additional basis for
vacatur of an arbitral award.

The second decision, Stolt-Nielsen v. Animal Feeds,3 appeared
to create some tension with Hall Street in two ways. First, the
Court, in a 5-4 decision, reiterated the significance of party
autonomy in requiring that there be a clear contractual basis for
concluding that the parties had agreed to class arbitration.
Second, the five justice majority opinion – in a footnote – stated
that while it was “not decid[ing] whether ‘manifest disregard’
survives our decision in Hall Street . . . ,”4 it found the standard
satisfied on the facts of Stolt-Nielsen in any event.