Arbitration Legitimacy and Party Autonomy Under The Restatement of the Law, the U.S. Law of International Commercial and Investor-State Arbitration - Chapter 63 - Reflections on International Arbitration
It is considered essential to [the] legitimacy [of arbitration] that persons sought to be bound by agreements to arbitrate and by the resulting awards consented to be so bound.
Under United States arbitration law, “arbitration is a matter of contract, and courts must enforce arbitration contracts according to its terms.” Based on this principle, in the U.S. parties enjoy extraordinary latitude in structuring their arbitration agreements. This freedom allows parties to make choices to better serve their interests and goals, consistent with the characteristics of the underlying transaction and anticipated disputes.
Although party autonomy in the U.S. is not unlimited, as no right is, this freedom of contract has driven U.S. arbitration law in the last decades, and the U.S. Supreme Court has held that the goal is to ensure that arbitration agreements are enforced according to their terms.
It is presumed that the parties’ consent is informed, requiring the parties to be aware of the consequences of agreeing to arbitrate under specific terms. Predictability is an important part of informed consent: the more predictable the consequences, the more informed the parties’ consent will be. The law applicable to the arbitration agreement, proceeding and award, is a critical piece in this effort, as it is this law’s interpretation by the courts, which will inevitably be asked to get involved one way or the other. Restatements enable “courts to render their judgments in a consistent and predictable manner.”