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Giuditta Cordero-Moss

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Giuditta Cordero-Moss

Starting from party autonomy’s generally recognized importance in international commerce, this chapter argues that the parties’ ability to choose the applicable law is not an absolute universal principle. It is a conflict rule deriving from state private international laws. This implies various restrictions. Recognizing the limits of party autonomy, however, is more friendly to international commercial contract practice and arbitration than assuming that party autonomy is absolute. It allows for the applicable law to be predicted and for valid and enforceable arbitral awards to be rendered. Furthermore, it prevents an erosion of trust in the institution of arbitration, which in turn may result in restricted arbitrability. The chapter discusses the scope and object of party autonomy in courts and in arbitration. In arbitration, parties may choose non-state law (‘rules of law’). Considered to be party autonomy’s apotheosis, paradoxically, choosing these sources may end up limiting contract freedom.

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Giuditta Cordero-Moss

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George A. Bermann and Giuditta Cordero-Moss

This is a landmark decision that rules in favour of the arbitrability – in the European sense of the possibility of submitting to arbitration – of antitrust claims in international cases. Soler Chrysler-Plymouth, Inc., a Puerto Rico car dealer’s franchise, entered into distribution and sales agreements with Mitsubishi Motors, a Japanese automobile manufacturer. The sales agreement contained an arbitration clause in which all disputes arising out of certain articles of the agreement would be resolved by the Japanese Commercial Arbitration Association. Upon a dispute related to the decrease of automobile sales, Mitsubishi brought an action in federal court under the Federal Arbitration Act and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, seeking an order to compel arbitration of the disputes in accordance with the arbitration clause. Soler filed counterclaims, invoking antitrust violations under the Sherman Act. It argued that the statutory claims were unwaivable under the Act and that this meant that the courts could not be sidelined by arbitration. However, the district court ordered arbitration of all claims, holding that the international nature of the dispute required enforcement of the arbitration clause. The US Court of Appeals for the First Circuit reversed. Hence, the crucial issue before the United States Supreme Court was the possibility of arbitrating claims arising under the Sherman Act. Should federal courts enforce an agreement to arbitrate when the dispute involves the determination of unwaivable antitrust claims?