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United States: Supreme Court Decision in Mitsubishi Motors Corp; v. Soler Chrysler-Plymouth, Inc. (International Arbitration; Exception to Arbitrability of Antitrust Denominated Disputes in International Commercial Relationships)

Published online by Cambridge University Press:  20 March 2017

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Legislation and Regulations
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Copyright © American Society of International Law 1985

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References

* [Reproduced from the U.S. Supreme Court Slip Opinion of July 2, 1985.

[Judge Blackmun delivered the opinion of the Court, in which Chief Justice Burger and Judges White, Rehnquist and O'Connor joined. Judge Stevens filed a dissenting opinion, at I.L.M. page 1078, in which Judge Brennan joined and in which Judge Marshall joined except as to Part II. Judge Powell took no part in the decision of the cases.]

1 The reasons advanced included concerns that such diversion would interfere with the Japanese trade policy of voluntarily limiting imports to the United States, App. 143, 177-178; that the Soler-ordered vehicles would be unsuitable for use in certain proposed destinations because of their manufacture', with use in Puerto Rico in mind, without heaters and defoggers, id., at 182; that the vehicles would be unsuitable for use in Latin America because of the unavailability there of the unleaded, high-octane fuel they required, id., at 177,181-182; that adequate warranty service could not be ensured, id., at 176, 182; and that diversion to the mainland would violate contractual obligations between CISA and Mitsubishi, id., at 144, 183.

2 The complaint alleged that Soler had failed to pay for 966 ordered vehicles; that it had failed to pay contractual “distress unit penalties,” intended to reimburse Mitsubishi for storage costs and interest charges incurred because of Soler's failure to take shipment of ordered vehicles; that Soler's failure to fulfill warranty obligations threatened Mitsubishi's reputation and good will; that Soler had failed to obtain required financing; and that the Distributor and Sales Agreements had expired by their terms or, alternatively, that Soler had surrendered its rights under the Sales Agreement. Id., at 11-14.

3 Section 4 provides in pertinent part:

“A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. . . . The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.”

Section 201 provides: “The Convention on the Recognition and Enforcement” of Foreign Arbitral Awards of June 10, 1958, shall be enforced in United States courts in accordance with this chapter.“ Article II of the Convention, in turn, provides:

”1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

“3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.” 21 U. S. T., at 2519. Title 9 U. S. C , § 203 confers jurisdiction on the district courts of the United States over an action falling under the Convention.

4 Mitsubishi also sought an order against threatened litigation. App. 15-16.

5 The alleged breaches included wrongful refusal to ship ordered vehicles and necessary parts, failure to make payment for warranty work and authorized rebates, and bad faith in establishing minimum-sales volumes. Id., at 97-101.

6 The fourth counterclaim alleged that Mitsubishi had made statements that defamed Soler's good name and business reputation to a company with which Soler was then negotiating the sale of its plant and distributorship. Id., at 96. The sixth counterclaim alleged that Mitsubishi had made a willfully false and malicious statement in an affidavit submitted in support of its application for a temporary restraining order, and that Mitsubishi had wrongfully advised Soler's customers and the public in its market area that they should no longer do business with Soler. Id., at 98-99.

7 The District Court found that the arbitration clause did not cover the fourth and sixth counterclaims, which sought damages for defamation, see n. 6, supra, or the allegations in the seventh counterclaim concerning discriminatory treatment and the establishment of minimum-sales volumes. App. to Pet. for Cert, in No. 83-1569, pp. B10-B11. Accordingly, it retained jurisdiction over those portions of the litigation. In addition, because no arbitration agreement between Soler and CISA existed, the court retained jurisdiction, insofar as they sought relief from CISA, over the first, second, third, and ninth counterclaims, which raised claims under the Puerto Rico Dealers' Contracts Act; the federal Automobile Dealers' Day in Court Act; the Sherman Act; and the Puerto Rico competition statute, respectively. App. to Pet. for Cert. B12. These aspects of the District Court's ruling were not appealed and are not before this Court.

8 Soler relied on P. R. Laws Ann., Tit. 10, §278b-2 (Supp. 1983), which purports to render null and void “[a]ny stipulation that obligates a dealer to adjust, arbitrate or litigate any controversy that comes up regarding his dealer's contract outside of Puerto Rico, or under foreign law or rule of law.” See Walborg Corp. v. Superior Court, 104 D. P. R. 184 (1975). The Court of Appeals held this provision pre-empted by 9 U. S. C. § 2, which declares arbitration agreements valid and enforceable “save upon such grounds as exist at law or in equity for the revocation of any contract.” 723 F. 2d, at 158. See Southland Corp. v. Keating—U. S.—(1984). See also Ledee v. Ceramiche Ragno, 684 F. 2d 184 (CA1 1982). Soler does not challenge this holding in its cross-petition here.

9 As the-Court of Appeals saw it, “[t]he question . . . is not whether the arbitration clause mentions antitrust or any other particular cause of action, but whether the factual allegations underlying Soler's counterclaims—and Mitsubishi's bona fide defenses to those counterclaims—are within the scope of the arbitration clause, whatever the legal labels attached to those allegations.” 723 F. 2d, at 159. Because Soler's counterclaim under the Puerto Rico Dealers' Contracts Act focused on Mitsubishi's alleged failure to comply with the provisions of the Sales Agreement governing delivery of automobiles, and those provisions were found in that portion of Article I of the Agreement subject to arbitration, the Court of Appeals placed this first counterclaim within the arbitration clause. 723 F. 2d, at 159-160.

The court read the Sherman Act counterclaim to raise issues of wrongful termination of Soler's distributorship, wrongful failure to ship ordered parts and vehicles, and wrongful refusal to permit transshipment of stock to the United States and Latin America. Because the existence of just cause for termination turned on Mitsubishi's allegations that Soler had breached the Sales Agreement by, for example, failing to pay for ordered vehicles, the wrongful termination claim implicated at least three provisions within the arbitration clause: Article I-D(l), which rendered a dealer's orders “firm;” Article I-E, which provided for “distress unit penalties” where the dealer prevented timely shipment; And Article I-F, specifying payment obligations and procedures. The court therefore held the arbitration clause to cover this dispute. Because the nonshipment claim implicated Soler's obligation under Article I-F to proffer acceptable credit, the court found this dispute covered as well. And because the transshipment claim prompted Mitsubishi defenses concerning the suitability of vehicles manufactured to Soler's specifications for use in different locales and Soler's inability to provide warranty service to transshipped products, it implicated Soler's obligation under Article IV, another covered provision, to make use of Mitsubishi's trademarks in a manner that would not dilute Mitsubishi's reputation and good will or damage its name and reputation. The court therefore found the arbitration agreement also to include this dispute, noting that such trademark concerns “are relevant to the legality of territorially based restricted distribution arrangements of the sort at issue here.” 723 F. 2d, at 160-161, citing Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36 (1977).

The Court of Appeals read the federal Automobile Dealers' Day in Court Act claim to raise issues as to Mitsubishi's good faith in establishing minimum-sales volumes and Mitsubishi's alleged attempt to coerce Soler into accepting replacement by a Mitsubishi subsidiary. It agreed with the District Court's conclusion, in which Mitsubishi acquiesced, that the arbitration clause did not reach the first issue; it found the second, arising from Soler's payment problems, to restate claims already found to be covered. 723 F. 2d, at 161.

Finally, the Court of Appeals found the antitrust claims under Puerto Rico law entirely to reiterate claims elsewhere stated; accordingly, it held them arbitrable to the same extent as their counterparts. Ibid.

10 Soler suggests that the court thereby declared antitrust claims arising under Puerto Rico law nonarbitrable as well. We read the Court of Appeals' opinion to have held only the federal antitrust claims nonarbitrable. See id., at 157 (“principal issue on this appeal is whether arbitration of federal antitrust claims may be compelled under the Federal Arbitration Act”); id., at 161 (“major question in this appeal is whether the antitrust issues raised by Soler's third counterclaim [grounded on Sherman Act] are subject to arbitration”). In any event, any contention that the local antitrust claims are nonarbitrable would be foreclosed by this Court's decision in Southland Corp. v. Keating, U. S. , (1984) (slip op. 7), where we held that the Federal Arbitration Act “withdrew the power of the States to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.”

11 In this Court, Soler suggests for the first time that Congress intended that claims under the federal Automobile Dealers' Day in Court Act be nonarbitrable. Brief for Respondent and Cross-Petitioner 21, n. 12. Because Soler did not raise this question in the Court of Appeals or present it in its cross-petition, we do not address it here.

12 Following entry of the District Court's judgment, both it and the Court of Appeals denied motions by Soler for a stay pending appeal. The parties accordingly commenced preparation for the arbitration in Japan. Upon remand from the Court of Appeals, however, Soler withdrew the antitrust claims from the arbitration tribunal and sought a stay of arbitration pending the completion of the judicial proceedings on the ground that the antitrust claims permeated the claims that remained before that tribunal. The District Court denied the motion, instead staying its own proceedings pending the arbitration in Japan. The arbitration recommenced, but apparently came to a halt once again in September 1984 upon the filing by Soler of a petition for reorganization under Chapter 11 of the Bankruptcy Code, 11 U. S. C. § 1101 et seq.

13 We therefore have no reason to review the Court of Appeals' construction of the scope of the arbitration clause in the light of the allegations of Soler's counterclaims. See n. 9, supra; Southland Corp. v. Keating, U. S., at , n. 7 (slip op. 12, n. 7).

Soler does suggest that, because the title of the clause referred only to “certain matters,” App. 52, and the clause itself specifically referred only to “Articles I-B through V,” ibid., it should be read narrowly to exclude the statutory claims. Soler ignores the inclusion within those “certain matters” of “[a]ll disputes, controversies or differences which may arise between [Mitsubishi] and [Soler] out of or in relation to [the specified provisions] or for the breach thereof.” Contrary to Soler's suggestion, the exclusion of some areas of possible dispute from the scope of an arbitration clause does not serve to restrict the reach of an otherwise broad clause in the areas in which it was intended to operate. Thus, insofar as the allegations underlying the statutory claims touch matters covered by the enumerated articles, the Court of Appeals properly resolved any doubts in favor of arbitrability. See 723 F. 2d, at 159.

14 The Court previously has explained that the Act was designed to overcome an anachronistic judicial hostility to agreements to arbitrate, which American courts had borrowed from English common law. See Dean Witter Reynolds Inc. v. Byrd—U. S.——and n. 6 (1985) (slip op. 6-8, and n. 6); Scherk v. Alberto-Culver Co., 417 U. S. 506, 510, and n. 4 (1974).

15 The claims whose arbitrability was at issue in Southland Corp. arose under the disclosure requirements of the California Franchise Investment Law, Cal. Corp. Code Ann. § 31000 et seq. (West 1977). While the dissent in Southland Corp. disputed the applicability of the Act to proceedings in the state courts, it did not object to the Court's reading of the arbitration clause under examination.

16 Act of July 31, 1970, Pub. L. 91-368, 84 Stat. 692, codified at 9 U.S. C. §§201-208.

17 See, e.g., Japan Commercial Arbitration Association Rule 26, reprinted in App. 218-219; W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration §§25.03, 26.04 (1984); Art. 27, Arbitration Rules of United Nations Commission on International Trade Law (UNCITRAL) (1976), reprinted in II Yearbook Commercial Arbitration 167 (1977).

18 See W. Craig, W. Park & J. Paulsson, supra, § 12.03, p. 28; Sanders, Commentary on UNCITRAL Arbitration Rules §15.1, in II Yearbook Commercial Arbitration, supra, at 203.

We are advised by Mitsubishi and amicus International Chamber of Commerce, without contradiction by Soler, that the arbitration panel selected to hear the parties' claims here is composed of three Japanese lawyers, one a former law school dean, another a former judge, and the third a practicing attorney with American legal training who has written on Japanese antitrust law. Brief for Petitioner 26; Brief for International Chamber of Commerce as Amicus Curiae 16, n. 28.

The Court of Appeals was concerned that international arbitrators would lack "experience with or exposure to our law and values. 723 F. 2d, at 162. The obstacles confronted by the arbitration panel in this case, however, should be no greater than those confronted by any judicial or arbitral tribunal required to determine foreign law. See, e. g., Fed. Rule Civ. Proc. 44.1. Moreover, while our attachment to the antitrust laws may be stronger than most, many other countries, including Japan, have similar bodies of competition law. See, e. g., 1, The Law of Transnational Business Transactions, ch. 9 (Banks, Antitrust Aspects of International Business Operations), § 9.03[7] (V. Nanda ed. 1984); H. Iyori & A. Uesugi, The Antimonopoly Laws of Japan (1983).

19 In addition to the clause providing for arbitration before the Japan Commercial Arbitration Association, the Sales Agreement includes a choice-of-law clause which reads: “This Agreement is made in, and will be governed by and construed in all respects according to the laws of the Swiss Confederation as if entirely performed therein.” App. 56. The United States raises the, possibility that the arbitral panel will read this provision not simply to govern interpretation of the contract terms, but wholly to displace American law even where it otherwise would apply. Brief for United States as Amicus Curiae 20. The International Chamber of Commerce opines that it is “[c]onceivabl[e], although we believe it unlikely, [that] the arbitrators could consider Soler's affirmative claim of anticompetitive conduct by CISA and Mitsubishi to fall within the purview of this choice-of-law provision, with the result that it would be decided under Swiss law rather than the U. S. Sherman Act.” Brief for International Chamber of Commerce as Amicus Curiae 25. At oral argument, however, counsel for Mitsubishi conceded that American law applied to the antitrust claims and represented that the claims had been submitted to the arbitration panel in Japan on that basis. Tr. of Oral. Arg. 18. The record confirms that before the decision of the Court of Appeals the arbitral panel had taken these claims under submission. See District Court Order of May 25, 1984, pp. 2-3.

We therefore have no occasion to speculate on this matter at this stage in the proceedings, when Mitsubishi seeks to enforce the agreement to arbitrate, not to enforce an award. Nor need we consider now the effect of an arbitral tribunal's failure to take cognizance of the statutory cause of action on the claimant's capacity to reinitiate suit in federal court. We merely note that in the event the choice-of-forum and choice-of-law clauses operated in tandem as a prospective waiver of a party's right to pursue statutory remedies for antitrust violations, we would have little hesitation in condemning the agreement as against public policy. See, e. g., Redel's Inc. v. General Electric Co., 498 F. 2d 95, 98-99 (CA5 1974); Gaines v. Carrollton Tobacco Board of Trade, Inc., 386 F. 2d 757, 759 (CA6 1967); Fox Midwest Theatres v. Means, 221 F. 2d 173, 180 (CA8 1955). Cf. Lawlor v. National Screen Service, 349 U. S. 322, 329 (1955). See generally 15 S. Williston on Contracts § 1750A (3d ed. 1972).

20 See n. 19, supra. We note, for example, that the rules of the Japan Commercial Arbitration Association provide for the taking of a “summary record” of each hearing, Rule 28.1; for the stenographic recording of the proceedings where the tribunal so orders or a party requests one, Rule 28.2; and for a statement of reasons for the award unless the parties agree otherwise, Rule 36.1(4). See App. 219 and 221.

Needless to say, we intimate no views on the merits of Soler's antitrust claims.

21 We do not quarrel with the Court of Appeals' conclusion that Art. II.1 of the Convention, which requires the recognition of agreements to arbitrate that involve “subject matter capable of settlement by arbitration,” contemplates exceptions to arbitrability grounded in domestic law. See 723 F. 2d, at 164-166; G. Gaja, International Commercial Arbitration: New York Convention I. B.2 (1984); A. van den Berg, The New York Convention of 1958: Towards a Uniform Judicial Interpretation 152-154 (1981); Contini, International Commercial Arbitration: The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 8 Am. J. Comp. L. 283, 296 (1959). But see A. van den Berg, supra, at 154, and n. 98 (collecting contrary authorities); G. Gaja, si^pra, at I. D., n. 43 (same). And it appears that before acceding to the Convention the Senate was advised by a State Department memorandum that the Convention provided for such exceptions. See S. Exec. Doc. E, 90th Cong., 2d Sess.19 (1968).

In acceding to the Convention the Senate restricted its applicability to commercial matters, in accord with Art. 1.3. See 21 U. S. T., at 2519, 2560. Yet in implementing the Convention by amendment to the federal Arbitration Act, Congress did not specify any matters it intended to exclude from its scope. See Act of July 31, 1970, Pub. L. 91-368, 84 Stat. 692, codified at 9 U. S. C. §§ 201-208. In Scherk, this Court recited Art. II.l, including the language relied upon by the Court of Appeals, but paid heed to the Convention delegates' “frequent[ly voiced] concern that courts of signatory countries in which an agreement to arbitrate is sought to be enforced should not be permitted to decline enforcement of such agreements on the basis of parochial views of their desirability or in a manner that would diminish the mutually binding nature of the agreements.” 417 U. S., at 520, n. 15, citing G. Haight, Convention on the Recognition and Enforcement of Foreign Arbitral Awards: Summary Analysis of Record of United Nations Conference, May/June 1958, pp. 24-28 (1958). There, moreover, the Court dealt arguendo with an exception to arbitrability grounded in express congressional language; here, in contrast, we face a judicially implied exception. The utility of the Convention in promoting the process of international commercial arbitration depends upon the willingness of national courts to let go of matters they normally would think of as their own. Doubtless, Congress may specify categories of claims it wishes to reserve for decision by our own courts without contravening this Nation's obligations under the Convention. But we decline to subvert the spirit of the United States' accession to the Convention by recognizing subject-matter exceptions where Congress has not expressly directed the courts to do so.

1 9 U. S. C. §§4,201.

2 21 U. S. T. 2517, T. I. A. S. No. 6997.

3 The distributor agreement provides, in part:“This Agreement is made by and between CHRYSLER INTERNATIONALS. A., a corporation organized and existing under the laws of theSwiss Confederation with its principal office in Geneva, Switzerland (hereinaftersometimes called CHRYSLER), and SOLER CHRYSLER–PLYMOUTHINC.,. . . (hereinafter sometimes called DISTRIBUTOR), and willgovern the sale by CHRYSLER to DISTRIBUTOR of PLYMOUTHPASSENGER CARS AND CAR DERIVATIVES MANUFACTUREDBY MITSUBISHI MOTORS CORPORATION OF TOKYO, JAPAN andautomotive replacement parts and accessories (said motor vehicles, replacementparts and accessories hereinafter sometimes called Products).”App. 18.

4 “PURCHASE RIGHTS”“Subject to the provisions of this Agreement, CHRYSLER grants toDISTRIBUTOR the non-exclusive right to purchase Products fromCHRYSLER, and DISTRIBUTOR agrees to buy Products from CHRYLSER, for resale within the following described territory (hereinaftercalled Sales Area): METROPOLITAN SAN JUAN, PUERTORICO” Id., at 18.This is the same company that is referred to as “CISA”in the sales purchaseagreement and in the Court's opinion.

5 Paragraph 26 of the distributor agreement provides:

“DIRECT SALES”

CHRYSLER and DISTRIBUTOR agree that CHRYSLER may, at itsoption, forward orders received from DISTRIBUTOR pursuant to thisAgreement to its parent company, Chrysler Corporation, or to any subsid-iary, associated or affiliated company (hereinafter called “SUPPLIER”) which will then sell the Products covered by such order directly to DISTRIBUTOR,CHRYSLER and DISTRIBUTOR hereby acknowledge andagree that, unless otherwise agreed in writing, any such direct sales between SUPPLIER and DISTRIBUTOR will be governed by the terms andconditions contained on the order form and in this Agreement and that anysuch sales will not constitute the basis forming a distributor relationshipbetween SUPPLIER and DISTRIBUTOR.s by SUPPLIER will be handled by CHRYSLER asthough such sale had been made by CHRYSLER.“ Further, DISTRIBUTORacknowledges and agrees that any claim or controversy resultingfrom such direct sales by SUPPLIER will be handled by CHRYSLER asthough such sale had been made by CHRYSLER.” Id., at 39s by SUPPLIER will be handled by CHRYSLER asthough such sale had been made by CHRYSLER.–40.

6 “WHEREAS, pursuant to Article 26 of the Distributor Agreement,CISA may forward orders received from BUYER to an associatedcompany;”“WHEREAS, MMC and CISA have agreed that MMC, which is an associatedcompany of CISA, may sell such MMC Products directly to BUYERpursuant to Article 26 of the Distributor Agreement.” Id., at 43.

7 Mitsubishi is jointly owned by Chrysler and by Mitsubishi Heavy Industries, Ltd, a Japanese corporation. Id., at 200-201.

8 That clause reads as follows: “ARBITRATION OF CERTAIN MATTERS “All disputes, controversies or differences which may arise between MMC and BUYER out of or in relation to Articles I-B through V of this Agreement or for the breach thereof, shall be finally settled by arbitration in Japan in accordance with the rules and regulations of the Japan Commercial Arbitration Association.” Id., at 52-53.

9 Even if Mitsubishi can prove that it did not violate any provision of the contract, such proof would not necessarily constitute a defense to the antitrust claim. In contrast, in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395 (1967), Prima Paint's claim of fraud in the inducement was asserted to rescind the contract, not as an independent basis of recovery.

10 Section 2 provides: “A written provision in any maritime transaction or contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2.

11 In his dissent in Prima Paint Corp. v. Flood and Conklin Mfg. Co., 388 U. S., at 415, Justice Black quoted the following ommentary written shortly after the statute was passed: “Not all questions arising out of contracts ought to be arbitrated. It is a remedy peculiarly suited to the disposition of the ordinary disputes between merchants as. to questions of fact—quantity, quality, time of delivery, compliance with terms of payment, excuses for non-performance, and the like. It has a place also in the ermination of the simpler questions of law—the questions of law which arise out of these daily relations between merchants as to the passage of title, the existence of warranties, or the questions of law which are complementary to the questions of fact which we have just mentioned.” Cohen & Dayton, The New Federal Arbitration Law, 12 Va. L. Rev. 265, 281 (1926). In the Prima Paint case the Court held that the Act applied to a claim of fraud in the inducement of the contract, but did not intimate that it might also cover federal statutory claims. See n. 9, supra.

12 “The dispute between these parties over the alleged shortage in defendant's inventory of European trademarks, a matter covered by contract warranties and subject to pre-closing verification, is the kind of commercial dispute for which arbitration is entirely appropriate. In my opinion, the fact that the ‘fraud’ language of Rule 10(b)(5) has been included in the complaint is far less significant than the desirability of having the Court of Arbitration of the International Chamber of Commerce in Paris, France, decide the various questions of foreign law which should determine the rights of these parties.” Alberto-Culver Co., v. Scherk, 484 F. 2d 611, 619-620 (CA7 1973) (Stevens, J. dissenting), reversed 417 U. S. 506 (1974).

13 It is interesting to note that in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U. S. 1 (1983), the Court referred to the standard clause describing claims “arising out of, or relating to, this contract or the breach thereof” as a provision “for resolving disputes arising out of the contract or its breach.” Id., at 4-5.

14 “Moreover, the factfinding process in arbitration usually is not equivalent to judicial factfinding. The record of the arbitration proceedings is not as complete; the usual rules of evidence do not apply; and rights and procedures common to civil trials, such as discovery, compulsory process, cross-examination, and testimony under oath, are often severely limited or unavailable. See Bernhardt v. Polygraphic Co., 350 U. S. 198, 203 (1956); Wilko v. Swan, 346 U. S., at 435-417. And as this Court has ecognized, ‘[ajrbitrators have no obligation to the court to give their reasons for an award.’ United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U. S., at 598. Indeed, it is the informality of arbitral procedure that enables it to function as an efficient, inexpensive, and expeditious means for dispute resolution. This same characteristic, however, makes arbitration a less appropriate forum for final resolution of Title VII issues than the federal courts.” 415 U. S., at 57-58 (footnote omitted).”

15 McDonald v. City of West Branch, U. S. (1984).

16 Wilko v. Sivan, 346 U. S. 427 (1953).

17 Barrentine v. Arkansas-Best Freight System, Inc., 450 U. S. 728 (1981)

18 Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974).

19 See 32 Stat. 823 (1903), repealed 88 Stat. 1708 (1974), 98 Stat. 3358 (1984) (P. L. No. 98-620, § 402(11)). The Act still rovides an avenue for directly appealing to this Court from a final judgment in a Government antitrust suit. 15 U. S. C. § 29(b).

20 “Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.” 26 Stat. 210.

21 “We have often indicated the inappropriateness of invoking broad common-law barriers to relief where a private suit serves important public purposes. It was for this reason that we held in Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211 (1951), that a plaintiff in an antitrust suit could not be barred from recovery by proof that he had engaged in an unrelated conspiracy to commit some other antitrust violation. Similarly, in Simpson v. Union Oil Co., 377 U. S. 13 (1964), we held that a dealer

whose consignment agreement was canceled for failure to adhere to a fixed resale price could bring suit under the antitrust laws even though by signing the agreement he had to that extent become a participant in the illegal, competition-destroying scheme. Both Simpson and Kiefer-Stewart were premised on a recognition that the purposes of the antitrust laws are best served by insuring that the private action will be an ever-present threat to deter anyone contemplating business behavior in violation of the antitrust laws. The plaintiff who reaps the reward of treble damages may be no less morally reprehensible than the defendant, but the law encourages his suit to further the overriding public policy in favor of competition. A more fastidious regard for the relative moral worth of the parties would only result in seriously undermining the usefulness of the private action as a bulwark of antitrust enforcement. And permitting the plaintiff to recover a windfall gain does not encourage continued violations by those in his position since they remain fully subject to civil and criminal penalties for their own illegal conduct.” Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134, 138-139 (1968).

22 Under the Panama Canal Act, any private shipper—in addition to the United States—may also bring an action seeking to bar access to the canal for any vessel owned by a company “doing business” in violation of the antitrust laws. 37 Stat. 567 (1912), 15 U. S. C. §31 a In University Life Insurance Co. v. Unimarc Ltd., 699 F. 2d 846 (CA7 1983), Judge Posner wrote:

23 “The suit brought by Unimarc and Huff … raises issues of state tort and contract law and federal antitrust law. The tort and contract issues may or may not be within the scope of the arbitration clauses in the coinsurance and second marketing agreements but they are arbitrable in the sense that an agreement to arbitrate them would be enforceable. Federal antitrust issues, however, are nonarbitrable in just that sense. Applied Digital Technology, Inc. v. Continental Casulty Co., 576 F. 2d 116, 117 (7th Cir. 1978). They are considered to be at once too difficult to be decided competently by arbitrators—who are not judges, and often not even lawyers—and too important to be decided otherwise than by competent tribunals. See American Safety Equipment Corp. v. J. P. Maguire & Co., 391 F. 2d 821, 826-27 (2d Cir. 1968). The root of the doctrine is in the same soil as the principle, announced in Blumenstock Bros. Adv. Agency v. Curtis Pub. Co., 252 U. S. 436, 440-41 (1920), that federal antitrust suits may not be brought in state courts.” Id., at 850-851.

24 See United States v. Procter & Gamble Co., 356 U. S. 677, 683 (1958).

25 “N. V. Maatschappij Voor Industriele Waarden v. A. 0. Smith Corp., 532 F. 2d 874, 876 (CA2 1976) (per curiam).

26 “723 F. 2d, at 162 (Coffin, J., for the court) (opinion below).

27 “Cobb v. Lewis, 488 F. 2d 41, 47 (1974) (Wisdom, J., for the court).

28 University Life Insurance Co. v. Unimarc Ltd., 699 F. 2d, at 850-851 (1983) (Posner, J., for the court); Applied Digital Technology Inc. v. Continental Casualty Co., 576 F. 2d 116, 117 (1978) (Pell, J., for the court).

29 Helfenbein v. International Industries, Inc., 438 F. 2d 1068, 1070 (Lay, J., for the court), cert, denied, 404 U. S. 872 (1971). 30

30 “Lake Communications, Inc. v. ICC Corp., 738 F. 2d 1473, 1477-1480 (1984) (Browning, C. J., for the court); Varo v. omprehensive Designers, Inc., 604 F. 2d 1103, 1104 (1974) (Chambers, J., for the court); Power Replacements, Inc. v. Air Preheater Co., 426 F. 2d 980, 983-984 (1970) (Jameson, J., for the court); A. & E. Plastik Pak Co. v. Monsanto Co., 396 F. 2d 710, 715-716 (1968) (Merrill, J., for the court).

31 “ The arbitration procedure in this case does not provide any right to evidentiary discovery or a written decision, and requires that all proceedings be closed to the public. App. 220-221. Moreover, Japanese arbitrators do not have the power of compulsory process to secure witnesses and documents, nor do witnesses who are available testify under oath. Id., at 218-219. Cf. 9 U. S. C. § 7 (arbitrators may summon witnesses to attend proceedings and seek enforcement in a district court).

32 “The greatest risk, of course, is that the arbitrator will condemn business practices under the antitrust laws that are efficient in a free competitive market. Cf. Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., U. S. (1985), rev'g 715 F. 2d 1393 (CA9 1983). In the absence of a reviewable record, a reviewing district court would not be able to undo the damage wrought. Even a Government suit or an action by a private party might not be available to set aside the award.

33 “The Court notes that some courts which have held that agreements to arbitrate antitrust claims generally are unenforceable have nevertheless enforced arbitration agreements to settle an existing antitrust claim. Ante, at 18. These settlement agreements, made after the parties have had every opportunity to evaluate the strength of their position, are obviously less destructive of the private treble damages remedy that Congress provided. Thus, it may well be that arbitration as a means of settling existing diputes is permissible.

34 Indeed, it has been argued that a State may refuse to enforce an agreement to arbitrate a subject matter which is nonarbitrable in domestic law under Article 11(3) as well as under Article 11(1). Since awards rendered under such agreements need not be enforced under Article V(2) the agree ment is “incapable of being performed.” Art. 11(3). S. Exec. Doc. E, 90th Cong., 2d Sess. 19 (1968) (hereinafter S. Exec. Doc. E.); G. Haight, Convention on the Recognition and Enforcement of Foreign Arbitral Awards 27-28 (1958).

35 For example, the Cour de Cassation in Belgium has held that disputes arising under a Belgian statute limiting the unilateral termination of exclusive distributorships are not arbitrable under the Convention in that country, Audi-NSU Auto Union A. G. v. S. A. Adelin Petit & Cie. (1979), in 5 Y. B. Commercial Arbitration 257, 259, and the Corte di Cassazione in Italy has held that labor disputes are not arbitrable under the Convention in that country, Compagnia Generate Construzioni v. Piersanti, [1980] Foro Italiano I 190, in 6 Y. B. Commercial Arbitration 229, 230.

36 For example, the Federal Republic of Germany has a vigorous antitrust program, and prohibits the enforcement of pre-dispute agreements to arbitrate such claims under some circumstances. See Act Against Restraints of Competition § 91(1), in Organisation for Economic Co-operation and Development, Guide to Legislation on Restrictive Business Practices, Part D, 49 (1980). See also 2 G. Delaume, Transnational Contracts § 13.06, at 31 and n. 3 (1982).

37 Cf. Compagnia Generate Construzioni v. Piersanti, [1980] Foro Italiano I 190 (Corte Cass. Italy), in 6 Y. B. Commercial Arbitration 229, 230; Audi-NSU Auto Union A. G. v. S. A. Adelin Petit & Cie. (Cour Cass. Belgium 1979), in 5 Y. B. Commercial Arbitration 257, 259.

38 Cf. Sumitomo Shoji America, Inc. v. Avagliano, 457 U. S. 176 (1982) (Japanese general trading company's wholly owned subsidiary which is incorporated in the United States is not exempt from obligations under Title VII under bilateral commercial treaty).

39 The Court's opinion in Landreth Timber, U. S., at , n. 7, does not take issue with my assertion, in dissent, that Congress never “intended to cover negotiated transactions involving the sale of control of a business whose securities have never been offered or sold in any public market.”.

40 Automobile Dealer's Day in Court Act, 15 U. S. C. § 1221-1225.

41 E. g., Charter of the United Nations and Statute of the InternationalCourt of Justice, 59 Stat. 1031, T. S. No. 993 (1945); Constitution of theInternational Labor Organisation, 49 Stat. 2712, T. S. No. 874 (1936);Treaty of Versailles, Pt. 1, S. Doc. 49, 66th Cong., 1st Sess. 8-17 (1919)(Covenant of the League of Nations); I. Kant, Perpetual Peace (1795), inKant's Political Writings (H. Reiss, ed. 1971).

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United States: Supreme Court Decision in Mitsubishi Motors Corp; v. Soler Chrysler-Plymouth, Inc. (International Arbitration; Exception to Arbitrability of Antitrust Denominated Disputes in International Commercial Relationships)
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