“Arbitrability of Antitrust Law"- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc 473 U.S. 614
Facts of the case
- Mitsubishi Motors Corporation a joint venture of Chrysler International, S.A. (CISA) and Mitsubishi Heavy Industries. In October 1979, Mitsubishi Motors Corporation entered into a contract in respect of sales agreement with Soler Chrysler-Plymouth, Inc. (Soler) and CISA for the sale of Mitsubishi products to Soler as per the specified terms, and that contract included an arbitration clause according to that clause all disputes or differences arising out of, or about the agreement are to be settled by way of arbitration in Japan.
- In 1981 due to a downturn in the market & sales, Soler canceled an order of approximately 1000 vehicles on that. Mitsubishi sued Soler in the district court. Mitsubishi sought to compel the arbitration clause under Federal Arbitral Act from the court order. In contrast, Soler counterclaimed that for antitrust violations and violations of the Sherman Act, in this district court ordered soler and Mitsubishi to arbitrate all claims by relying on Scherk v. Alberto-Culver Co., 417 U.S. 506.
- Aggrieved by the decision, Soler filed an appeal in the First circuit court of Appeals, where the court held while referring to the Second Circuit in American Safety Equipment Corp. v. J.P. Maguire & Co., 391 F.2d 821 (1968) that it’s not appropriate to arbitrate antitrust laws.
Supreme Court’s Judgement
The main issue that arose before the court was whether the court should enforce an agreement to antitrust claims by way of arbitration because the agreement arose out of an international transaction.
With the majority of the decision, the court affirmed that statutory claims are arbitrable with that antitrust claims are arbitrable as well.
The antitrust claims of the respondent are arbitrable under the Arbitration Act. Even if a different result would be obtained in a domestic context, international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need for predictability in the resolution of disputes in the international commercial system all necessitate enforcement of the arbitration clause in question.
Several federal courts have ruled Mitsubishi to compel arbitration of statutory claims unless the act expresses congressional intent to exempt the claims from arbitration- Ross v. Mathis, 624 F. Supp. 110, 115. As a result of Mitsubishi, several circuits have reinterpreted the Wilko rule, requiring claims to be arbitrated. The Mitsubishi decision has resulted in a federal court pattern of allowing the arbitration of a wide range of statutory issues.
The Supreme Court's judgment in Mitsubishi Motors v. Soler Chrysler-Plymouth Inc., which upholds an arbitration agreement between two parties to an international commercial contract, is contrary to US public interest. The United Nations Convention and recognized case law allow such a dispute to be kept out of the hands of arbitral tribunals.
The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as implemented by the Federal Arbitration Act, provides for the refusal to recognize and enforce foreign arbitral awards if the subject matter of the dispute is not capable of resolution by arbitration under the law of the party or if recognition and enforcement of the award would be contrary to the country's public policy. Because antitrust claims raise essential public policy issues, the US has a vested interest in avoiding arbitration when there is no guarantee of a competent, unbiased arbitrator or an adequate record for court review. The relevance of this fundamental domestic policy is not overshadowed by the involvement of global business concerns in the arbitration.
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