Originally from: Lowenfeld on International Arbitration

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Arbitration of Public Issues

Andreas F. Lowenfeld

9. THE MITSUBISHI CASE

      [In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., decided in July,
1985, the United States Supreme Court held (five votes to three) that if an
international contract contained an agreement to arbitrate, that agreement would
normally be given effect to include even submission to arbitration of a claim or
defense arising under the U.S. antitrust laws. In the preceding issue of
Arbitration International, Professor Thomas F. Carbonneau strongly criticised
the decision, deploring the Court’s “failure to acknowledge logical, sensible, and
necessary restraints” on the use of arbitration to settle international controversies.
The article here reproduced responds to Professor Carbonneau, and takes the
discussion somewhat further.]

      When the United States Supreme Court accepted the Mitsubishi
case for review in October of 1984, the arbitration community was
happy indeed. Both the American Arbitration Association and the
International Chamber of Commerce filed briefs amicus curiae with the
Supreme Court, designed to destroy, or at least weaken, the myth that
particularly complicated issues such as those arising under the
antitrust laws could not be entrusted to arbitrators, who might be
tired businessmen contributing a few hours after their real work, and
might be interested in the functioning of an industry but not in the
major concerns of public law such as those involved in antitrust
cases. Not so, said the arbitration community. In international cases
generally, the arbitrators were important and serious jurists, typically
judges (or retired judges), law professors, and leaders of the bar; they
were certainly interested in all aspects of law, not in shielding a
particular industry from public scrutiny; and they had the ability as well
as incentive to pursue complicated issues of law as well as fact, not just
to decide whether a given shipment of cotton met the standard of ‘fair
to middling’ called for by some trade association standard form
contract. Also, international arbitrators virtually always wrote
opinions, giving detailed statements of the reasons for their award.
Accordingly, the standard objections to submission of antitrust
disputes to arbitration — or at least most of them — did not fit the
modern institution of international commercial arbitration.
      On the whole, the Supreme Court accepted these arguments.
Possibly the contention that antitrust issues were non-arbitrable was
unpersuasive even in a wholly domestic context, but that need not be
decided for the moment. In the international context, using antitrust
claims to defeat an agreement on a forum for dispute resolution was
no longer acceptable.
      Comes now Professor Carbonneau, hitherto known as an
internationalist, to say that the Supreme Court has blundered,
seduced by “quixotic internationalism” to arrive at an unworkable
and unsound result. The Court of Appeals, he writes, was correct in
splitting arbitrable from non-arbitrable — or commercial from
antitrust — issues, and now the Supreme Court has spoiled all that.