Originally from American Review of International Arbitration - ARIA

Preview Page

This essay sets out to examine the role that arbitration plays in the context of the financial markets, focusing mainly on its use in banking and financial transactions.  In recent years, financiers and bankers, despite their traditional resistance, are increasingly finding the benefits of arbitration.  A heated debate, hardly foreseeable some years ago, has arisen over the concrete advantages of arbitration as a valid alternative to state courts in this field,  but the entire subject matter cannot be considered fully explored yet.  It seems probable that this trend will continue, but the future role of arbitration in financial markets certainly remains open to discussion.  After examining the main arguments in favor of more extensive recourse to arbitration and whether it may be considered responsive to the needs of the financial community (Section II), special attention will be given to the specific institutions expressly founded for the settlement of financial and banking disputes (Section III).  Next, this essay will discuss various types of financial relationships and transactions, the documents of which contain arbitration clauses (Section IV).  One of the most significant examples of the growing use of arbitration in financial matters will then be analyzed: securities controversies.  More specifically, this discussion will focus on broker-dealer securities transactions, and the most important cases relating to this area (Section V).  Finally, some concluding remarks will be briefly made (Section VI).