Originally from Dispute Resolution Journal

Advocates of arbitration are confronted with the courts' unwillingness to uphold arbitration agreements in controversies involving patents, antitrust, and investment disputes, because of the belief that the public's need for protection can only be accomplished in judicial context. The Supreme Court decision in a 1953 case, Wilko v. Swan, established that investors may not waive their right to judicial review, even in the presence of an agreement to arbitrate. It was not until 1974 that the Court reconsidered this position in Scherk v. Alberto-Culer Co. Thai decision that a contractual relationship is decisive, and enforced an arbitration clause in a case that involved an international commercial transaction. The Scherk decision, however, failed to end the controversy over the arbitration of future disputes in domestic securities cases. A Supreme Court decision is still needed that would resolve the issue. In any event, it is clear that, until the Court has made a definitive statement on the enforceability of such arbitration clauses, the role of arbitration in the securities field will continue to be a cause of contusion.