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3 - Wilko v. Swan, Scherk v. Alberto-Culver, and Mitsubishi v. Soler: Crafting a Level Playing Field

Published online by Cambridge University Press:  11 July 2009

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Summary

WILKO v. SWAN

Despite increasing juridic consciousness concerning virtues endemic to arbitral proceedings, the twin domestic badges of doctrinal hostility against arbitration were not readily dispelled and thus required a case controversy that would appropriately frame an issue that may prove to be determinative. Nothing short of a direct analysis of whether a statutory right is appropriate for arbitration would suffice if the analytical rubric was to be materially reconfigured. This very question was raised and thoroughly addressed by the Supreme Court in the paradigm-setting case of Wilko v. Swan. Indeed, Wilko’s prominent place in the Supreme Court's development of arbitration law is confirmed by even a cursory glance at the interest it has garnered in the academe.

The facts in Wilko seem tailor made for a re-examination of arbitral proceedings that would place alternative dispute resolution on a level playing field with judicial recourse. The plaintiff securities purchaser brought an action against a securities brokerage firm to recover damages pursuant to Section 12(2) of the Securities Act of 1933. The complaint alleged that plaintiff had been defrauded by the brokerage firm through the instrumentalities of interstate commerce into purchasing 1,600 shares of the common stock of Air Associates, Inc. based upon false representations. Specifically, the complaint averred that the defendant had represented that “pursuant to a merger contract with the Borg Warner Corporation, Air Associates' stock would be valued at $6.00 per share over the then-current market price, and that financial interests were buying up the stock for the speculative profit.”

Type
Chapter
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The American Influences on International Commercial Arbitration
Doctrinal Developments and Discovery Methods
, pp. 15 - 37
Publisher: Cambridge University Press
Print publication year: 2009

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