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This paper examines the role of the Sicilian Mafia and Cosa Nostra in alternate dispute resolution. This paper makes some inferences regarding the methods and ideologies which are depicted in literary works which are which are partially based on real life incidents. There is not much information available regarding the Mafia as a third party in dispute resolution, primarily due to the secrecy Omerta which engulfs all their activities. The Valachi hearings provided an inside view of the organization, but did not bring forward much information pertinent paper. This goes to prove that Omerta is very deeply instilled within the Sicilians and their descendants. In the realm of international law, the settlement of trade disputes and issues regarding the conflict of laws is settled in accordance with the substantive law under which the parties opt to perform the contract. The substantive law chosen can be any legislation or set of conflict-of-law rules that pertain to the subject matter of the contract1. In the event of a contingency, where the parties fall into a situation where the laws or set of rules they have chosen to adhere to do not provide for the particular circumstances that need to be resolved, the arbitrators may decide which rules or laws to subscribe to, or may choose to apply general principles of law, as per their discretion. The parties may also choose to resolve any dispute referred to arbitration by using general principles from the very onset of the transaction as well.2 In the absence of an agreement on the laws and rules to be applied, the arbitrators decide which of such laws or rules is applied, sometimes on an ad-hoc basis3. However, irrespective of whether the arbitrators choose to apply substantive legislations or not, there are a few general universally accepted principles which are always followed. Sometimes, adherence to these principles dictates that when the transaction is between a private party and a nation, the transaction cannot be conducted following the laws of that nation without causing prejudice to the private entity, which leads us to situations calling for the selection of the laws applicable to the transaction4. The general principles are always present and cannot be undermined if an arbitral process is to be carried out fairly. It is, naturally, up to the arbitrators to ensure that these principles are followed. However, there is a desperate need for there to be an exhaustive list of such principles of international arbitration. No such document exists and because because there is no clearly delineated set of general principles, it is uncertain at the time of contracting what general principles will govern disputes arising under the agreement.5 But these general principles do exist, irrespective of whether they are codified. They are observed in the world of arbitration today, primarily because they prove to be useful owing to their neutral and objective nature.6

General Principles of Law in International Commercial Arbitration, Harvard Law Review, Vol. 101, No. 8 (Jun., 1988), pp. 1816-1834, pp.1816. Available at ( 2 Id at pp. 1822. 3 Id. at pp. 1822, 1823. 4 Id. at pp. 1823. 5 Id. 6 Id.

THE SICILIAN MAFIA Since their appearance in the 1800s, the Italian criminal society known as the Mafia have infiltrated the social and economic fabric of Italy and now impact the world.7 Now one may wonder how a criminal organization can, in a way, aid the general public by resolving disputes. The mafia in Sicily, which was first heard of in the early 1800s, came about to to unify the Sicilian peasants against their enemies8, which meant the government and any other oppressive authorities, making them what is known as vigilantes today. But a century onward, they became more of a criminal organization, operating beyond the law and constantly fighting the authority of Mussolini. They were mostly involved in protection rackets, to ensure that their own brand of order was maintained within their sphere of influence. Even in modern-day Sicily, the Mafia are very influential and it is estimated by officials in Palermo, Sicily that about 80 percent of the businessmen pay pizzo or protection money.9 Each group or family or cosca of would claim sovereignty over the territory it would exercise their influence in, even from the government. The Sicilians were very disdainful of the government and always considered themselves as an independent state as they had only been included as a part of Italy in the year 1860.10 They immigrated to America since the early 1900s and many who fled here in the early 1920s helped establish what is known today as La Cosa Nostra or the American Mafia.11 They enjoyed immense amounts of success and profit, particularly during The Prohibition until the American Government came down on them, starting in the 1950s, with the Apalachin meeting12 compelling the government to acknowledge their existence. Following this, the Valachi hearings provided a lot of vital information regarding the structure and functions of the criminal organization, as it was the first confession to be made by a Mafiosi to the government13. The Valachi papers shed further light on the matter, thought they did have much to say on the role of the organizations in dispute resolution14. The RICO act, which was passed in 1970, helped law enforcement agencies to bring criminal organizations to justice and continues to be a thorn in their side, up till this day.

MODES OF ALTERNATE DISPUTE RESOLUTION EMPLOYED BY THE MAFIA The Mafia resolve disputes between contracting parties as a neutral third party in manners resembling arbitration (where the resolution is imposed by the neutral party) or as a conciliator, helping the parties come to a favorable solution. The Mafia usually have some self-interest in the proceedings and may end
7 8 Id. 9 Available at ( 10 Available at ( 11 Supra note 7. 12 Toledo Blade (Associated Press): pp. 2, 2nd July 1958. (available at,3946334&dq=apalachin+meeting &hl=en) 13 "The Smell of It", Time Magazine, October 11, 1963 14 Peter Maas, The Valachi Papers (1986).

up arriving at a solution keeps their interests intact, rather than those of the parties, which is one of the downsides of the approaching them. Their role in dispute resolution should not be confused with their racketeering and when they conductors of illegal trade themselves. For example, we are not considering situations where a party approaches the Mafia to exact revenge on a person who has committed a fraud against him. We must also ignore the exploits of random criminals who seek to exploit to the brandname or reputation of the Mafia for their own profit, as these criminals function of their own accord and do not follow the same moral principles as the truly organized crime families, with their Sicilian values. Primary focus should be given the role to instances where such organizations are the third party. There were often mediators to resolve disputes between rival Mafia families as well, as seen in the Godfather when Virgil Sollozzo was to speak to Sonny Corleone after the assassination attempt against the Don15. The Mafia almost always have some interest in ensuring that any dispute brought before them is resolved. This could be so because they choose to wet their beak in the profits as consideration for their assistance, or just to have powerfully people on their side, willing to return a favor when necessary, because it helped increase their influence in society as they began to have state officials and policemen on their side. The Mafia makes more money by ensuring that there is justice in illegal trade than the state were to earn by taxing the goods. With the profits the Mafia feeds and infiltrates the government. Thus the government too reaps the profit from such illegal trade by the bribes and cuts the Mafia offer in order to influence the government. The fact that there was collusion between the Mafia and law enforcement agencies is substantiated by the trial of Linda Schiro in 200716. This has resulted in the Mafia to become a normative and permanent fixture as a third party enforcer in trade that is illegal in America. The mafia and other criminal organizations have played a major role in dissolving disputes without litigation. When the subject matter of a business transaction between two parties happened to be illegal, the parties would resort to taking the mafias help to arbitrate, mediate, or conciliate if any one of the parties defaulted on their obligations under the contract. They would oversee the entire transaction in exchange for a commission and had the right to use force on any defaulting party to ensure performance of their obligations in the transaction. Thus, when it came to gambling, the narcotics trade, or illegal liquor trade (as seen during the United States Prohibition of Alcohol between 1920 and 1933), any individual or group of individuals would seek the Mafias help to ensure smooth execution of the transaction. The Mafia had the brawn and the political connections to make this possible. This is very similar to a situation where parties choose to refer any dispute arising from their transactions/contract to arbitration instead of approaching any Court of competent jurisdiction. The differences are that on one hand the subject matter of the transaction is legal (when conflicts are referred to arbitration), whereas it is illegal in the other. Apart from this, when a dispute is referred to arbitration, there is generally a clause in the arbitration agreement stating which laws would be applicable to the dispute, whereas when parties take a dispute
15 16

Mario Puzo, The Godfather, pp. 92. Available at ( Micheal Brick, At Trial of Ex-F.B.I. Supervisor, How to Love a Mobster, The New York Times (Oct. 30th, 2007)

to the Mafia, the Mafia use principles loosely based on good faith and fairness and their Sicilian morals, with the overall aim to ensure that both the parties perform their duties under the contract. This does result in a massive amount of uncertainty with regard to the outcome and the parties are expected to fulfill their obligations bearing in mind that the Mafia would not hesitate to cause harm to their person or their business, whereas under arbitration, since the principles and laws applied are well-defined, the consequences in the event of a breach of contract are clearly stated, but such sanctions are imposed by those entitled to do so under a law which the parties have chosen and are rarely as brutal as they can be with the Mafia involved. It is the reputation for violence and disdain for government authorities that attract people to the Mafia for dispute resolution. Thus, the ensured enforcement of the award or solution arrived at between the parties is probably one of the reasons behind parties choosing the Mafia. Resorting to seek the Mafias help and submit to their jurisdiction is uncannily akin to what is known as forum shopping in the world of international commercial arbitration, though at times the parties are compelled to go to the Mafia for help, as opposed to choosing. It is a well-known fact parties often choose arbitration solely because they would rather have their transactions governed under different laws. At times, the reasons which motivate parties to use the Mafias help are the same as those which make parties prefer arbitration to litigation to resolve the dispute without the hassles of delay in the judicial machinery, inaccessibility of courts, inability of the contracting parties to bear the expenses of litigation, inability of the courts to provide the kind of remedies and reliefs sought etc., since the legal process is bound by public policy. When only one of the parties was under their protection, the Mafia would first try to convince the parties to see things their way or give them an offer they cant refuse . Most of these parties, though they worked with the Mafia, were not a part of the Cosa Nostra, and were more of customers to the Mafia and paid protection money to them.

PRINCIPLES INVOLVED: As per Dr. Madabhushi Sridhar( Faculty, NALSAR), the sole basis of ADR is founded in two basic principles. They are: 1. Nemo judex in causa sua= no one should be made a judge in his own cause (rule against bias) 17 2. audi alterum partem (hear the other side).18 These are general principle of all judicial procedure, which should ideally be adhered to in all judicial and quasi-judicial proceedings. These principals are applied by the Mafia as well, though not as strictly. The Mafia trust only information which comes from reliable sources, but go great lengths to find out the truth in a matter. Therefore, they effectively preclude the party from being heard before suffering the consequences of its actions, though the Mafia always verify their facts, as they do not believe in harming anyone who has caused no harm to them as is mentioned countless times in The Godfather. They also try being as neutral as possible when they are the third party arbitrators or mediators, except when it comes to the terms of their payment or when their payment is the profits of the transaction.

Dr. Madabhushi Sridhar, Faculty, NALSAR ADR: An Attempt to Achieve Constitutional Goal of Complete Justice in India, pp. 1 18 Id.

Force majeure justifies nonperformance of a contract such that the loss is borne fairly by the parties19Another principle arising out of equity; this distinguishes between a breach of a contract and mere nonperformance due to extraneous circumstances. However, the loss from the force majeure must be borne fairly by the parties20. There is nonetheless little international agreement as to what constitutes force majeure, so this principle as yet offers little specific guidance.21 To quote the Godfather again He made no empty promises, nor the craven excuse that his hands were tied by more powerful forces in the world than himself.22 This depicts how the Mafia did not believe that a man must stick to his word. However, there is nothing to substantiate what the consequences of force majeure, but one use common sense to assume that none of the parties were harmed and that the losses were borne jointly between the parties, in order to protect their goodwill and keep the venture afloat.

A party may not receive unjust enrichment23 Parties in international commercial context can bring a suit against the other for when the defendant has unjustly benefitted or been enriched at the expense of the plaintiff. This rule against unjust enrichment is embodied in most recognized legal systems and is mentioned frequently in international and arbitral case law.24 It is basically a principle arising out of equity, against a man profiting off another in an unjust manner. Antonino Calderone, a Mafiosi-turned-state witness, who was arrested in Italy in 1986, provided details about the beliefs and principles of the Mafia in Italy, which are the same for the Cosa Nostra in America. These rules are not to touch the women of other men of honour; not to steal from other men of honour or, in general, from anyone.25 When called upon for dispute resolution, the Mafia would enforce these principles, as is evident from the Godfather, where it is stated numerous times that if the Godfather or his Family ever did a favor for a person, that person was considered to be in their debt. The discussion between Don Corleone and Amerigo Bonesera on the day of Constanza Corleones wedding in The Godfather makes this evident. The same principle is used when resolving a dispute brought before them.


Supra note 1 at pp.1828. (Fed.) Germany v. Yugoslav defendant, Yugoslav ATFEC, Award No. T 52/67-54, June 25, 1970 (unreported) (breach of agreement to supply 200 tons of Dalmatian marasca because of crop failure), cited in J. LEW, APPLICABLE LAW IN INTERNATIONACLO MMERCIAL ARBITRATION, para. 397, at 519-20 (1978) (stating that this award was fair and just because the loss was not the fault of either party and that such a loss-sharing decision would foster future business between the parties). This result is mandated by the principle of unjust enrichment; Id. 21 Supra note 1 at pp.1828. 22 Supra note 15 at pp. 6. 23 Supra note 1 at pp.1833. 24 Lena Goldfields Arbitration, 1929-1930 ANNUAL DIGEST, Case No. 1 and 258, at 3, 426 25 Gambetta, The Sicilian Mafia, pp. 147 and 268

WHY ALTERNATE DISPUTE RESOLUTION? 1) Problems regarding the substantive law: The Mafia are known to oversee and run illegal trades, because the subject matter of the transaction they are overseeing happens to be illegal as per the law of the land. Parties to such transactions cannot file a suit in court to enforce their rights, since the contract would be deemed void and the parties would face criminal prosecution. Therefore, they approach the Mafia and ask them to adjudicate upon the arousal of a dispute. Similarly, when the laws of a state do not provide for circumstances which may arise in the course of doing business, the parties have no choice but to refer the proceedings to arbitration and have some other substantive law applied. For example, if a state bans the sale of liquor within its territories, a manufacturer would have to form an arbitration agreement as part of a contract with another state. As a term of the agreement, the parties may choose which substantial laws any dispute will be resolved in accordance with. This ensures that the manufacturers interests are not compromised. A national legislature might, for example, impose import restrictions that substantially affect the contractual rights of private parties. Thus, if an arbitral tribunal applied the law of such a nation in a dispute between the government and a private party, it might include as part of the applicable law the decree or legislation imposing the import restrictions, resulting in an automatic finding for the government26. However, claims of sovereignty are not ordinarily allowed as means to disregard earlier contractual commitments, at least in the commercial context.27 2) Inaccessibility of the judiciary: One of the main reasons parties to any transactions refer their disputes to arbitration or conciliation is the dissatisfaction with the judiciary. Long-drawn and expensive litigation is undesirable as parties to any contract would rather have their disputes settled in an expedient manner. Also, physical constraints, i.e. where the courts are at too great a distance for the parties to travel to, they opt to form contracts with an arbitration clause which enable them to engage in the dispute-resolution process in a manner, place and time of their convenience. The Mafia too, take it upon themselves to be polite and considerate to their clients, keeping their own interests intact simultaneously. 3) Smoother, simpler process: When it comes to arbitration, firms do their very best to ensure that the whole process is conducted in a manner which does not inconvenience at the slightest. In a legal proceeding, the courts have very strict rules and regulations which could cause a great amount of difficulties to the litigants.

Texaco Overseas Petroleum Co. v. Government of the Libyan Arab Republic, Award on the Merits of January 19, 1977 (Dupuy, arb.), 17 I.L.M. I (1978), at pp. 23. 27 Id. at pp. 24.

Furthermore, neither arbitrators nor the parties are bound to precedent like judges; they are free to utilize common sense when making their decisions.28 There is, however, a certain amount of predictability regarding the outcome. Likewise, the Mafia are not bound to precedent and try to reach the most profitable solution, so long as they get to wet their beaks to the profits. They do their very best to ensure that they get more than their fair share out of a transaction, but often go the extra mile to honor their commitments. As it is commonly known, taking a life is not unheard of in life of a Mafiosi, if that it was the agreement demands. They are willing to go beyond the limitations put by law to meet their desired end. They were however strict about certain things and those who chose to flout these rules were often murdered, ever since the Mafia came into existence all the way back in the early 19th century in Italy. They were strict about omerta, an oath of silence forbidding anyone in or working with the Mafia from talking to the government authorities and divulging details about the Mafia. Omert implies "the categorical prohibition of cooperation with state authorities or reliance on its services, even when one has been victim of a crime."29 Breaking the oath would often result in death. 4) Enforcement of the dispute settlement decision: The enforcement of the decision of an alternate dispute resolution proceeding is a matter of great difficulty, since arbitrators do not have the legal authority to bind the parties to the decision reached. In case one of the parties refuses to comply with the solution, the matter will eventually but surely be taken to court, defeating one of the main purposes of ADR, which is to avoid the complexities of litigation. The Mafia ensures full compliance to the decisions on part of all the parties. The reputation the criminal organization has for violence is usually enough to ensure that the parties adhere to the conditions of the Mafias version of an award, which is the solution, arrived at by the Mafia. When the need arises the members of the organization may even act as conciliator or mediators, to help the parties reach an amicable solution. If they do not see eye to eye with a party in a certain matter, they often use their influence and affluence to convince said party to cooperate. They would resort to making threats and preferred to achieve their ends in a peaceful manner, violence being one of the last resorts. Even the method of payment is negotiable when it comes to alternate dispute resolution. And with the Mafia, one has the option of paying in cash or kind, or in the form of a favor to the organization. An excerpt from the Godfather exemplifies this Don Vito Corleone was a man to whom everyone came to for help, and never were they disappointed. He made no empty promises, nor the craven excuse that his hands were tied by more powerful forces in the world than himself. It was not necessary that he be your friend, it was not even important that you had no means by which to repay him. Only one thing

Joshua R. Welsh, Comment, Has Expansion of the Federal Arbitration Act Gone Too Far?: Enforcing Arbitration Clauses in Void Ab Initio Contracts, 86 MARQ. L. REV. 581, 582 (2002); Kevin M. Lemley, ILL MAKE HIM AN OFFER HE CANT REFUSE: A PROPOSED MODEL FOR ALTERNATIVE DISPUTE RESOLUTION IN INTELLECTUAL PROPERTY DISPUTES, AKRON LAW REVIEW [37:287], pp. 287-327, at pp. 305. 29 Paoli, Mafia Brotherhoods, p. 109

was required. That you, you yourself, proclaim your friendship. Then, no matter how poor or powerless the supplicant, Don Corleone would take that mans troubles to his heart. And he would let nothing stand in the way to a solution of that mans woe. His reward? Friendship, the respectful title of Don, and sometimes the more affectionate salutation of Godfather. And sometime, to show respect only, never for profit a humble gift.It was understood, it was mere good manners to proclaim that you were in his debt and that he had a right to call upon you at any time to redeem your debt by some small service.30 Also, in instances where the Mafia collaborated with the U.S government, one can safely say that they was no valid contract between the parties and that the Mafia were not paid for their consideration. Therefore, one would not be far off the mark to assume that the government might have promised them some leniency (plea-bargaining) or found some other way to repay them for their services. Either way, this goes to prove that the Mafia accepted non-cash payments for their services.

RECOGNITION OF THE ROLE OF CRIMINAL ORGANIZATIONS IN DISPUTE RESOLUTION IN PRESENT TIMES. Amidst the chaos and near-collapse of the early years of Georgias independent state, a distinct group called thieves-in-law emerged as key players in the countrys economy and power-structures31. As Georgiansautomatically resist law in any and all formsIt could also be said that the society of Thieves has given the country of Georgia the only uncorrupted and enforceable judicial system Georgia has ever known.32 Though many blame the historical and cultural dispositions of the Georgians as the sole reason for the emergence and longevity of the thieves-in-law, their role in Georgian society gives us a more practical cause. As a mafia which operates in the market for protection, regulates disputes, extracts taxes and claims authority over both areas of business and territory. On this view, the thievesin-law - regardless of cultural tendencies or practices - compete with other protection-producers and will be strong according to the demand for their services.33 It was the presence of illegal transactions which the state could not regulate and then the degree of state collapse experienced by Georgia in the 1990s - possibly the most extreme of any Soviet republic. In this decade, the legalisation of capitalist transactions meant that the demand for protection-provision multiplied, but many transactions remained unprotected - this time because of the states weakness rather than (as in the Soviet era) its ideological rigidity. Thus, Georgias state collapse allowed other actors to appropriate governance functions to a degree not seen in most other post-Soviet republics.34 The courts in Georgia, which were not reformed after the Rose Revolution, have only succeeded in inspiring a lack of faith in the population, compelling them to seek the assistance of the thieves-in-law.


Supra note 15 Gavin Slade, Georgias mafia: the politics of survival, August 2010. Available at ( slade/georgia%E2%80%99s-mafia-politics-of-survival) 32 VD Nordin & G Glonti, Thieves of the Law and the Rule of Law in Georgia, Caucasian Review of International Affairs, 1/1, 2006. 33 Supra note 31.


CONCLUSION As seen with both the Cosa Nostra and the thieves-in-law, shortcomings in the legal system of a country give rise to the need for means of alternate dispute resolution. This would normally give rise to legitimate institutes which follow internationally recognized principles of law, but when the failure of a judiciary is combined with the lack of efficient law enforcement agencies, criminal organizations pop up, dispensing their own brand of justice to the masses. An organizations reputation for violence is what instills confidence to an outsider who agrees with their brand of justice. They results of dispute resolution at the hands of the Mafia might be unpredictable and violent, their brand of justice is often extreme and though they might not truly be objective and neutral, but they still do not have a dearth of clients approaching them. The only way to put an end to the Mafias role in alternate dispute resolution is by ensuring that the flaws in the state machinery which are responsible for bringing these organizations into existence are remedied. Reforms in judiciaries and legislations would result in a substantial decrease in the number of transactions the Mafia are brought into as third parties. This would leave transactions whose subject matter is beyond the law as the only ones brought before the Mafia, since the Mafia are generally more than willing to function beyond the law, but efficient law enforcement will curb the success of these transactions. As mentioned earlier, the Mafia have been known to have cooperated with the U.S government occasionally, be it to assassinate Fidel Castro35 or to protect the docks in New York, subsequent to the demolition of the SS Normandie36. These instances go to show how deeply the Mafia had infiltrated the government. This infiltration has been one of the primary reasons why the Mafia has not been wiped out completely - corrupt officials provide them with the influence they need to function smoothly, without interference. This, along with the need for their services in dispute resolution, have been the primary reasons responsible for their longevity. Omerta has played a huge part in their success, keeping their methods and secrets intact, making it extremely tedious for anyone who wishing to gather information about them.

- Uday Singh Chopra 20100148


Michael Evans. "''Bay of Pigs Chronology'', The National Security Archive (at The George Washington University) Available at ( 36 Tim Newark, Mafia Allies, MBI Publishing Co., 2007 at pp. 288, 292