Writers Den

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth

United States Supreme Court 473 U.S. 614 (1985)

Plaintiff Mitsubishi, a Japanese corporation, and Chrysler
International, a Swiss corporation, formed a joint venture, Mitsubishi Motors,
to distribute worldwide motor vehicles manufactured in the United States and
bearing Mitsubishi and Chrysler trademarks. Defendant Soler Chrysler-Plymouth,
a dealership incorporated in Puerto Rico, entered into a distributorship
agreement with Mitsubishi that included a binding arbitration clause. When
Soler began having difficulty selling the requisite number of cars, it first
asked Mitsubishi to delay shipment of several orders and then subsequently
refused to accept liability for its failure to sell vehicles under the
contract.

Plaintiff Mitsubishi filed an action to compel arbitration.
The district court ordered arbitration of all claims, including the defendants’
allegations of antitrust violations. The court of appeals reversed in favor of
the defendant. The plaintiff, Mitsubishi, appealed to the U.S. Supreme Court.

Justice Blackmun

We granted certiorari primarily to consider whether an
American court could enforce an agreement to resolve antitrust claims by
arbitration when that agreement arises from an international transaction. Soler
reasons that because it falls within a class [for] whose benefit the federal and
local antitrust laws were passed, the clause cannot be read to contemplate
arbitration of these statutory claims.

We do not agree, for we find no warrant in the Arbitration
Act for implying in every contract a presumption against arbitration of
statutory claims. The “liberal federal policy favoring arbitration agreements,”
manifested by the act as a whole, is at bottom a policy guaranteeing the
enforcement of private contractual arrangements: the act simply “creates a body
of federal substantive law establishing and regulating the duty to honor an
agreement to arbitrate.”

There is no reason to depart from these guidelines where a
party bound by an arbitration agreement raises claims founded on statutory
rights. Of course, courts should remain attuned to well-supported claims that
the agreement to arbitrate resulted from the sort of fraud or overwhelming
economic power that would provide grounds “for the revocation of any contract.”
But, absent such compelling considerations, the act itself provides no basis for
disfavoring agreements to arbitrate statutory claims.

By agreeing to arbitrate a statutory claim, a party does not
forgo the substantive rights afforded by the statute, it only submits to their
resolution in an arbitral, rather than a judicial, forum. It trades the
procedures and opportunity for review of the courtroom for the simplicity,
informality, and expedition of arbitration.

We now turn to consider whether Soler’s antitrust claims are
nonarbitrable even though it agreed to arbitrate them…. [W]e conclude that
concerns of international comity, respect for the capacities of foreign and
transnational tribunals, and sensitivity to the need of the international
commercial system for predictability in the resolution of disputes require that
we enforce the parties’ agreement, even assuming that a contrary result would
be forthcoming in a domestic context.

There is no reason to assume at the outset of the dispute
that international arbitration will not provide an adequate mechanism. To be
sure, the international arbitral tribunal owes no prior allegiance to the legal
norms of particular states; hence, it has no direct obligation to vindicate
their statutory dictates. The tribunal, however, is bound to effectuate the
intentions of the parties. Where the parties have agreed that the arbitral body
is to decide a defined set of claims that includes, as in these cases, those
arising from the application of American antitrust law, the tribunal therefore
should be bound to decide that dispute in accord with the national law giving
rise to the claim.

As international trade has expanded in recent decades, so
too has the use of international arbitration to resolve disputes arising in the
course of that trade. The controversies that international arbitral institutions
are called upon to resolve have increased in diversity as well as in
complexity. Yet the potential of these tribunals for efficient disposition of
legal disagreements arising from commercial relations has not yet been tested.
If they are to take a central place in the international legal order, national
courts will need to “shake off the old judicial hostility to arbitration,” and
also their customary and understandable unwillingness to cede jurisdiction of a
claim arising under domestic law to a foreign or transnational tribunal. To
this extent, at least, it will be necessary for national courts to subordinate
domestic notions of arbitrability to the international policy favoring
commercial arbitration.

Accordingly, we “require this representative of the American
business community to honor its bargain,” … by holding this agreement to
arbitrate “enforce[able] in accord with the explicit provisions of the
Arbitration Act.”

[As to the issue of arbitrability] Reversed and remanded
in favor of the Plaintiff, Mitsubishi.

(Kubasek 92-93)

Kubasek, Nancy K., Bartley Brennan, M. Browne. The Legal
Environment of Business, 7th Edition.
Pearson Learning Solutions, 12/2013. VitalBook file.