Originially from: World Arbitration and Mediation Review (WAMR)

The Rise of International Commercial
Arbitration and The Demise of
Judicial Recourse: Whatever Happened
to "Public Policy"?
by Cathleen Hopfe
I. Introduction
Over the last decade, a revolution has been in-the-making in
international commercial dispute resolution. Since 1986, the U.S. Supreme
Court has espoused a decisional doctrine that reflects an ever-broadening
deferral of judicial authority to the emerging institutions of private justice.
The enormous practical benefits of this policy—benefits to commercial
disputants as well as to courts—are enjoyed at a cost. The once ubiquitous
notion of "public policy," and the unique role that courts played in
protecting peremptory ideals, have been eclipsed by the brave new world
of an almost completely unfettered system of private justice.

Historically, the courts deemed disputes relating to a number of
vital U.S. legal interests inarbitrable—for example, claims of anti-trust,
securities, patent, or RICO violations. The courts' reasoning in these cases
was anchored in the fundamental belief that core public policies which
protected the individual rights of consumers and the public at large could
only be given effective vindication in a judicial setting. This was not only
because of the procedural protections afforded a litigant in the process of a
formal trial, but also because of an implicit awareness that only a judge, as
a duly-appointed public servant, could fairly administer justice in a dispute
which had an impact not only upon the two parties, but—to some extent—
upon the interests of the unrepresented public. Indeed, recourse to a public