ARBITRABILITY AND PUBLIC POLICY

INTRODUCTION

Tackling the ever-growing burden on courts and speeding up the process of dispute resolution

were some of the essential reasons why the relevant stakeholders decided to turn to Alternate

Dispute Resolution (ADR). Of the various types of ADR mechanisms that exist, Arbitration

has, undoubtedly, gained prominence and grown at a significant pace, so much so that it

won’t be an exaggeration to state that Arbitration is no longer just an alternative to courts,

rather it is considered as a primary choice of dispute resolution, especially for parties to a

commercial dispute. This was, however, not always the case, as Arbitration as a dispute

resolution mechanism faced hostility from courts and other judicial bodies, often viewed

through a lens of suspicion, for not being appropriate to adjudicate upon disputes and the

rights of parties.1 There were skeptics who would admonish the process of arbitration for its

apparent inability to carry out the purpose of laws and regulations, unlike courts, arguing that

arbitration would allow for parties to circumvent the law and their responsibilities as the

forum was private, and not one sanctioned by the State.2

Needless to say, in modern times, when most contracts include an arbitration clause, be it in

case of regular commercial contracts at domestic or transnational level, or agreements as

significant as investment contracts, arbitration has come a long way from being seen as a

suspicious alternative to courts to one that is now encouraged by most institutions, including

the aforementioned State sanctioned courts. This, however, does not mean that arbitration as

an option for dispute resolution is one that is freely available for all kinds of disputes. Even in

the status quo, where the global consensus is that arbitration is an efficient and reliable tool

1
Gary Born, “Chapter 1: Overview of International Commercial Arbitration,” International Commercial Arbitration (Third
Edition) (© Kluwer Law International; Kluwer Law International 2021) 7
2
Garth BG, “Tilting the Justice System: From ADR as Idealistic Movement to a Segmented Market in Dispute Resolution”
(2002) 18 Georgia State University Law Review 927
for dispute resolution, there are still certain subject matters that are not considered ones that

can be resolved through arbitration. It seems that the skepticism towards arbitration, though

not always without reasons and while largely eroded, still remains intact when considering

certain fields of law. For example, it is universally accepted that disputes of a criminal nature

are not fit to be resolved by arbitration and should only be reserved for State-sanctioned

courts.3

Arbitrability deals with the question of whether the dispute at hand can be resolved through

arbitration. Whether a dispute can be resolved through arbitration, depends largely on the

laws and regulations of a particular State, and the intent of the legislature. This, arguably,

gives rise to the notion of public policy. Often criticised for lacking a precise definition, 4

public policy is nevertheless integral to arbitration. This is because the process of arbitration

and arbitral awards only hold value in law if they are in coherence with the public policy of a

state where either the arbitration is seated, or enforcement of the award is sought. Given the

vague and ambiguous definition of public policy, more precise and specific restrictions on

arbitrations have given rise to the notion of arbitrability. Prima facie, the concepts of public

policy and arbitrability are similar, to the extent that some scholarship has discarded the

notion of arbitrability for being a superfluous concept rooted in public policy. 5 Nonetheless,

most relevant national legislations as well as international treaties and conventions such as

the New York Convention list public policy and arbitrability as separate grounds for the

refusal of enforcement of an arbitral award. 6 This suggests that even though these concepts

are similar in nature, there is substantial difference between these two based on their
3
Gary Born, “Chapter 26: Recognition and Enforcement of International Arbitral Awards” International Commercial
Arbitration (Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 4028
4
Marie Louise Seelig, 'The Notion of Transnational Public Policy and Its Impact on Jurisdiction Arbitrability and
Admissibility' (2009) 2009 Annals Fac L Belgrade Int'l Ed 117
5
Vasselina Shaleva, The ‘Public Policy’ Exception to the Recognition and Enforcement of Arbitral Awards in the Theory
and Jurisprudence of the Central and East European States and Russia (2003) 19 (1) Arbitration International 77; Nigel
Blackby and others, Redfern and Hunter on International Arbitration (Sixth edn, OUP 2015) 112.
6
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) art
V
interpretation and application by courts and tribunals. With this background, the chapter

analyzes the concept of arbitrability and its relationship with the broad understanding of the

doctrine of public policy, with the objective of identifying the not-so-direct role that public

policy gets to play vis a vis deciding whether or not an arbitral tribunal should proceed with

arbitration.

This chapter is divided into three sections. Section I will analyse the concepts of arbitrability

and public policy and the relation between these two concepts. Section II will analyse the

application of these concepts and the role played by these in various stages of arbitration.

Section III will look into the various interpretations of these concepts in certain jurisdictions

such as …..

SECTION I: Arbitrability and Public Policy

1.1 Why Arbitrability Matters:

Before examining the concepts of arbitrability and public policy, it is important to first

understand why it is important to ascertain whether a dispute can be resolved through

arbitration. There are two aspects to this question that require discussion. First, on a

theoretical front, one needs to understand where these restrictions on arbitration come from,

and the reasoning behind having these restrictions. Second, one needs to consider the

practical implications of the notion of arbitrability and why these are important for

arbitrators.

On the first aspect, there are certain sensitive issues even in commercial transactions that

some States believe should be dealt with by the national courts essentially because allowing

private arbitrators to decide upon issues might adversely affect the larger public interests,
such as insolvency matters, antitrust matters, matters related to grant and issue of patents. 7

This is the primary reason behind there being restrictions on the kind of subject matters that

are suitable for arbitration. There is also an argument against arbitration for being

inadequately equipped to decide on matters which require intensive and rigorous fact-

finding,8 unlike judicial courts. In Alexander v. Gardner-Denver,9 the U.S. Supreme Court

observed that “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. This argument of inadequacy is often extended to the apparent lack of ability

on part of arbitrators to apply the law and public policy principles correctly. 10 When the

ability of the arbitrator isn’t questioned, the argument is often that arbitrators are biased

towards businesses, and that overwhelming dependence on arbitration could potentially lead

to a privatized segmented justice system meant to benefit the wealthy. 11 Other reasons for

considering arbitration as unfit for such disputes include the lack of appeal process, and most

importantly, the fact that these proceedings are private and confidential, removing it from the

eyes of the common public.12

These arguments have varying degrees of credibility, which means a lot of these concerns

might entirely be unnecessary. The belief that arbitration proceedings are limited in terms of

following due process is erroneous. This is because arbitrations while being different from

court proceedings, are nonetheless bound to follow a procedure that is in line with due

7
Reisman, Craig and others, International Commercial Arbitration: Cases, Materials and Notes on the Resolution of
International Business Disputes (Westbury, New York, The Foundation Press 1997) 306; Loukas Mistelis and Stauros
Brekoulakis, Arbitrability: International and Comparative Perspectives (Wolters Kluwer 2009) 4.
8
Loukas Mistelis and Stauros Brekoulakis, Arbitrability: International and Comparative Perspectives (Wolters Kluwer
2009) 23; Alexander v. Gardner-Denver [1974] 415 U.S. SC 36, at 58.
9
415 U.S. 36, 94 S Ct 1011, 39 L.Ed.2d 147 (1974).
10
ibid 26; American Safety Equipment Corp. v J.P. Maguire & Co [1968] 391 F.2d 821; University Life Insurance Co. v.
Unimarc Ltd. [1983] 699 F.2d 846.
11
Garth BG, (n 2).
12
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.S. 117, 136, 94 S Ct 383, 394, 38 L.Ed.2d 348 (1973)
process. If the case were so that due process is not followed, all disputes would be unfit for

arbitration, not just disputes that deal with public policy. It is unfair to claim that arbitrators,

as opposed to national judges, are somehow unlikely to take into account public policy

considerations. On the contrary, it is quite likely that arbitrators will apply relevant public

policy and mandatory rules in order to ensure that the arbitral process reaches its logical

conclusion by passing an award that is enforceable. The fact that most jurisdictions have a

mechanism to set aside or annul an arbitral award means that even if an arbitrator was to not

apply the relevant public policy considerations or wrongly applies the same, courts may

accordingly intervene. Regardless, the fact remains that certain types of issues, even if

closely connected with commercial transactions, are generally reserved by legal systems for

the national courts – hence, non-arbitrable due to the encompassing public interest. 13 Despite

the general acceptance of party autonomy, parties are generally not permitted to derogate

from the mandatory rules established by a state, or their underlying public policies, whether

in the context of substantive law, procedural law or choice of arbitral procedures.14

On the second aspect, as to the practical implications of arbitrability, it must be noted that one

of the basic issues that the arbitrators face at the very beginning of arbitration proceedings is

the determination of the arbitrability of the dispute that is referred to in the arbitration

agreement. This is important because the arbitral process will be rendered useless if the

award passed by the tribunal is one that is not valid because the dispute was non-arbitrable.

As will be discussed in the next section, the question of arbitrability, as well as the notion of

public policy become relevant at different stages of arbitration, which means when deciding

on the arbitrability of a dispute or passing an award, arbitrators need to take into

consideration the laws pertaining to arbitrability and public policy to ensure that the arbitral

13
Nigel Blackby and others, Redfern and Hunter on International Arbitration (Sixth edn, OUP 2015) 110.
14
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1035
process is fruitful. In fact, as will be demonstrated further, it is not the question of whether to

apply public policy that tribunals are confronted with, but the question of ‘which public

policy to apply’.

1.2 ARBITRABILITY

The word “arbitrability” was developed in the context of arbitration to identify the

controversies that may be submitted to arbitration proceedings. This term is relatively new,

and it was only by the 20th Century that the use of the term arbitrability became more

frequent, because of which, many domestic jurisdictions do not refer to the term expressly, 15

relying rather on notions of public policy.

Arbitrations are quite distinct from courts in so far as they allow significant autonomy to the

parties to decide upon various aspects such as the applicable law, procedure, and importantly,

which matters are to be resolved through arbitration. Party autonomy under the international

commercial arbitration regime facilitates significant freedom for parties to settle commercial

disputes through arbitration. However, national laws that are closely connected to the dispute

may inflict restrictions.16 As such, arbitrability is one of those areas where there can be a

collision between ‘the contractual and jurisdictional natures of international commercial

arbitration’.17

The principle of party autonomy which allows significant freedom to the parties of a dispute

is nonetheless restricted by the position on arbitrability held by the State where arbitration is

seated, or for that matter where the award’s enforcement would be sought. For example,

disputes arising between a foreign corporation and its local agent in some Arab countries are

resolved only by national courts, and in Mexico the disputes that concern with the
15
xxxx
16
Loukas Mistelis and Stauros Brekoulakis, Arbitrability: International and Comparative Perspectives (Wolters Kluwer
2009) 4.
17
ibid 4; Sai Anukaran, ‘Scope of Arbitrability of Disputes from the Indian Perspective’ (2018) 14(1) Asian International
Arbitration Journal 73.
administrative recession of contracts where a State entity is a party are dealt exclusively by

the administrative courts.18 Similarly, in India, like in many other jurisdictions, matters

related to consumer disputes, insolvency disputes, and debt recovery-related disputes are

some examples of the kind of disputes that are considered to be non-arbitrable.19

Arbitrability is often defined by national legislation which determines the categories of

disputes that may not be submitted to arbitration. Over the past decades, the scope of disputes

that are arbitrable has been extended significantly to disputes that were previously considered

not fit for arbitration.20 Matters excluded from the scope of arbitration under various

jurisdictions, while not identical, tend to be similar in nature, although the specific disputes

which are arbitrable are decided on a case-by-case basis under the applicable domestic law.21

1.3 Types of Arbitrability

Broadly, arbitrability is categorized into objective arbitrability and subjective arbitrability.

The first one is where a specific dispute or subject matter cannot be solved through

arbitration and is often closely tied in with mandatory laws and the notion of public policy. 22

For example, criminal matters, matrimonial disputes, insolvency disputes, etc. The second is

where certain persons are considered unable to submit their disputes to arbitration because of

their status or function. This includes disputes where certain States or State-owned entities

are restricted from participating in commercial arbitration. The latter type is commonly

referred to as “subjective arbitrability” or “arbitrability ratione personae” which may be

defined as the ability of certain individuals to submit their disputes to arbitration

18
ibid 111.
19
Booze Allen and Hamilton Inc. v SBI Home Finance Ltd. [2011] 5 SCC 532; Aftab Singh v. Emaar MGF Land Limited &
Anr., []2017] Consumer Case No. 701 of 2015, 13 July 2017.
20
Florian Haugeneder, 'A 05 – Objective Arbitrability', in Vienna International Arbitral Centre of the Austrian Federal
Economic Chamber (ed), Selected Arbitral Awards, Vol 1 (2015), (Verlag WKÖ Service GmbH 2015) 398
21
ibid.
22
'Chapter 1: Subjective Arbitrability in International Commercial Arbitration', in Gerold Zeiler and Alfred Siwy , The
European Convention on International Commercial Arbitration: A Commentary, (© Kluwer Law International; Kluwer Law
International 2018) pp. 4
proceedings.23 Some legal scholars have expanded the definition of subjective arbitrability to

refer to the “capacity of parties to the arbitration.” 24 They have maintained that the State’s

prohibition to submit a dispute to arbitration “falls fairly clearly within classic definitions of

legal capacity.”25 Others argue that the two terms are distinguishable. The question of

capacity generally refers to the ability of a natural or legal person to conclude legal acts,

which generally deals with a persons ability to consent to such an act. In contrast, subjective

arbitrability deals with the matter of restrictions that might have been imposed in the interest

of the State to limit the capacity of a type of persons from submitting the dispute to

arbitration.26 In essence, subjective arbitrability are generally restrictions imposed by the

State unto itself, from participating in commercial arbitration.

The term “objective arbitrability” concerns the question as to whether the subject matter of a

dispute is capable of settlement by arbitration. 27 As stated above, arbitrations afford

significant freedom to parties in determining what disputes to refer to arbitration, which

means it is primarily parties to a dispute that decide whether said dispute is to be resolved

through arbitration, if the substantive validity of the arbitration agreement is not questioned.

However, this is different from the notion of objective arbitrability, which also decides

whether a dispute is to be resolved through arbitration.

The substantive validity of an arbitration agreement is based on the intent of the parties and

the applicable rules of contract formation (including rules on error, interpretation of intent,

etc.).28 However, it may be the case that an arbitration agreement is substantially valid and

23
ibid.
24
Formation, Validity and Legality of International Arbitration Agreements, in International Commercial Arbitration, pp.
636–942, pp. 729–230 (2nd ed., Gary B. Born ed., Kluwer Law International, 2014)
25
ibid.
26
ibid.
27
Florian Haugeneder, 'A 05 – Objective Arbitrability', in Vienna International Arbitral Centre of the Austrian Federal
Economic Chamber (ed), Selected Arbitral Awards, Vol 1 (2015), (Verlag WKÖ Service GmbH 2015) 396
28
ibid.
enforceable, but the subject matter might nonetheless be excluded from submission to

arbitration because it is objectively non-arbitrable.

1.4 Public Policy

There is a persistent view that the notion of arbitrability is entangled with the notion of public

policy.29 Simply put, public policy pertains to certain notions that concern issues or interests

of the public at large. Even though the doctrine of public policy has historically been referred

to in multiple jurisdictions, it still lacks an unambiguous meaning or a universal definition. It

is something that depends on the subjective approaches of Courts and on the policy of a

particular State, which varies based on the socio-economic and political factors. In

arbitrations, the notion has been imported multiple times to deny enforcement of an award

because the dispute was not arbitrable. For example, in the case of National Agricultural

Cooperative Marketing Federation of India v. Alimenta S.A., 30 the Supreme Court of India

held that enforcing an award that seeks the payment of damages for the breach of contract

that has been rendered void is contrary to the fundamental policy of Indian and the basic

notion of justice, therefore unenforceable for being contrary to public policy. Depending

upon the public policy notions of a State, certain disputes are often considered to be only

suitable to be tried in state-sanctioned courts and not before private forums.

As is the case with the concept of arbitrability, the notion of public policy may vary based on

whether the arbitration is a domestic arbitration or an international one. As such, there are

domestic notions of public policy that primarily are decided upon by States, and generally

have a wide ambit, while international notions of public policy, which may be termed as a

subset of the domestic notions of public policy, are construed much narrowly. 31 There is a

29
Loukas A. Mistelis, 'Part I Fundamental Observations and Applicable Law, Chapter 2 - On Arbitrability: Persisting
Misconceptions and New Areas of Concern' (2009), International Arbitration Law Library, Volume 19.
30
National Agricultural Coop. Mktg. Federation of India v. Alimenta S.A., (2020) 19 SCC 260
31
Loukas A. Mistelis, (n 29).
trend of liberalization and liberal interpretations given to arbitration agreements which have

led to a lenient approach being adopted when dealing with the question of arbitrability. 32 A

prime example of this is the French legal system which is arguably the most pro-arbitration

legal regime.33 Contrasting this to the likes of the Indian legal system, one which manifests

skepticism towards the private sector and the establishment and development of arbitration,

the notion of arbitrability is often defined not based on the principle of party autonomy, but

on extensive restrictions to arbitration practice under the garb of ‘public policy.’ 34 As stated

above, there is little consensus on what public policy means. Therefore, the notion of public

policy, and by extension, the notion of arbitrability in a particular nation will be decided by

the prevalent laws and norms of a nation.

1.5 Arbitrability and Public Policy:

At the onset, it should be clarified that while the principle of arbitrability is distinguishable

from the doctrine of public policy, the two are interlinked in many ways. 35 Determining the

arbitrability of a dispute under a specific law, especially with respect to objective

arbitrability, is essentially a matter of public policy under the relevant law. When an

arbitrator decides that the subject matter of an agreement is not arbitrable, he basically

reaffirms the State law on the issue – which is nothing but a reflection of the public policy

directing certain classes of matters to be left out exclusively for national courts to adjudicate

upon.36 As such, certain types of disputes that the States believe to be of larger public

importance are reserved for settlement only through conventional court systems or

specifically designated institutions. This would be in line with the public policy of such

32
Loukas A. Mistelis, (n 29).
33
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1048-1050
34
xxx
35
Gary Born, International Commercial Arbitration (Second Edition) (Kluwer Law International 2014) 3695.
36
Pierre Mayer, ‘Mandatory Rules of Law in International Arbitration’ (October 1986) Vol.2 No. 4 Arbitration International
278
States. For example, matters related to competition law, punitive damages, security

regulations, fraud, bribery, etc. are by and large considered non-arbitrable in some

jurisdictions.37

However, the concepts of arbitrability and public policy are distinguishable in certain

respects. Even though public policy requires the application of certain substantive rules in

certain matters, this in itself does not preclude said dispute from arbitration. 38 Arbitrability of

a dispute is a matter of legislative intent, such that if a legislature does not preclude public

law provisions from arbitration, then agreements to arbitrate such matters will almost always

be valid and enforceable.39 This means that a dispute that involves public policy

considerations is not at the onset non-arbitrable, unless the State invokes this as a ground to

justify non-recognition of an award or arbitral agreement, which would otherwise have been

valid.40 A decision by the Paris Cour d’Appel explained this reasoning and concluded that the

impact of public policy on arbitrability of a dispute does not prohibit the arbitrator from

applying mandatory laws, restricting only the disputes which, because of their subject-matter,

can only be heard by courts.41 A decision by the Québec Cour d’Appel, similarly, stated that

regulations of public order do not deprive arbitrators or their jurisdiction to hear the disputes

or require that they be heard by courts. 42 Courts in other jurisdictions have followed the

aforementioned reasoning, such that, a wide range of public policy claims that were

previously deemed incapable of resolution through arbitration, are now considered arbitrable,

such as fraud, trade sanctions, corruption, antitrust disputes etc. 43 From the aforementioned, it
37
Reisman, Craig and others, International Commercial Arbitration: Cases, Materials and Notes on the Resolution of
International Business Disputes (Westbury, New York, The Foundation Press 1997) 04.
38
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1036
39
ibid.
40
ibid.
41
Judgement of 16 February 1989, Société Almira Films v. Pierrel, Rev. Arb 711. 714-15 (Cour d'appel)
42
Judgment of 9 November 1990, Condominiums Mont Saint-Sauveur Inc. v. Constrs. Serge Sauvé Ltée, [1990] RJQ 2783,
2789 (Québec Cour d’Appel).
43
Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc [1985] 473 U.S. SC 614; London S.S. Owners’ Mutual Ins. Ass’n
Ltd v. Spain [2015] EWCA Civ 333 (English Ct. App.); Judgment of 20 March 2008, Jacquetin v. SA Intercaves, 2008 Rev.
is clear that the concepts of arbitrability and public policy are largely intertwined, however, at

the same time they are distinguishable.

This is reflected and further established in the provisions of the New York Convention.

Article V(2)(a) of the New York Convention sets out non-arbitrability rules of a public forum

as a ground for nonrecognition, i.e. matters which are not capable of settlement by arbitration,

whereas Article V(2)(b) sets out public policy of the enforcement forum as a ground for

nonrecognition, i.e. awards that would be contrary to the public policy of the state where

enforcement is being sought. The separate mention of the two grounds under Article V(2)

rather than Article V(1) of the New York Convention, affirms their common yet exceptional

character.44 However, Article V(2) itself lists these two concepts as separate grounds for

refusing enforcement of an award, which means that these are distinguishable concepts. This

is because while the arbitrability doctrine provides that a particular dispute cannot be

resolved through the process of arbitration, the doctrine of public policy provides that certain

decisions reached by a tribunal are contradictory to applicable public policy, and therefore

cannot be recognised. It must also be noted that the non-arbitrability as a ground can also be

found in Article II of the New York Convention, however, there is no mention of public

policy, as is the case with Article V. This is because non-arbitrability of a dispute is a ground

on which both the validity of an arbitral agreement and enforcement of an arbitral award can

be challenged, whereas public policy can only provide a defence against the recognition of

arbitral awards.45 The distinction between the principles of arbitrability and the doctrine of

public policy becomes more apparent in light of the manner in which tribunals and courts

have dealt with these issues.

Arb. 341, 341 (Paris Cour d’Appel; Tomolugen Holding Ltd v. Silica Investors Ltd, [2015] SGCA 57, ¶84 (Singapore Ct.
App.);
44
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1037
45
ibid.
 SECTION II: Role of Arbitrability and Public Policy:

The question of arbitrability and considerations of public policy may arise in various stages

of the arbitration. A dispute might not be suitable for resolution through arbitration at its seat,

which would bar an arbitral tribunal from deciding on such issues. This is because even if

such disputes were referred to arbitration, the arbitral award could be annulled at the seat of

arbitration for being a dispute that is non-arbitrable or contrary to the relevant public policy.

Furthermore, arbitrability and public policy are also relevant during the stage of enforcement,

as courts may refuse enforcement of an award for having a non-arbitrable subject matter or

for being contrary to public policy in the jurisdiction where enforcement is sought. Arbitral

tribunals, while deciding on the arbitrability of a dispute, are often faced with the challenge

of deciding which public policy considerations should the tribunal consider. The fact that

there is no precise definition of public policy, along with the fact that there is no uniformity

in its interpretation across jurisdictions, only adds to this dilemma.

The options before the arbitral tribunal may be to consider the law governing the contract, the

law of the seat of arbitration, the national laws of the parties involved, the law of the country

where the enforcement of the award will most likely be sought, or a combination of all of

these.46 It is to be noted that there is no legal obligation on arbitrators to consider all these

options. However, it is imperative that the tribunals take these factors into consideration so as

to ensure that the award rendered ends up serving its logical conclusion, i.e., it is enforceable.

Tribunals generally rely on the public policy considerations of the legal order of the seat of

arbitration to determine arbitrability.47 This approach, however, runs the risk of the

enforcement of the arbitral award being refused enforcement because of different

considerations of public policy in the jurisdiction where enforcement is sought. For example,

46
Lew, Mistelis and Kröll, Comparative International Commercial Arbitration (Kluwer Law International 2003) 196.
47
ibid, 197.
issues relating to intellectual property rights may be arbitrable at the seat of arbitration but

public policy considerations at the enforcing State might hold a contrary view on the issue. 48

Even with this risk, the best option for tribunals is to rely upon the public policy

considerations of the seat of the arbitration, as it avoids the risk of the award being annulled

at the seat of the arbitration, therefore, increasing the chances of enforcement in other

jurisdictions.49 Given that opinions on arbitrability of issues do not substantially differ across

jurisdictions, this is a reasonable approach to take.

Having said that, it needs to be appreciated that arbitrability of subject matter, under a legal

system, is arguably more closely related to the concept of mandatory rules, and need not

always rise to the level of public policy.50 It is also relevant to make a mention that the rules

that restrict arbitrability may not in all cases be a reflection of or part of public policy, as the

said restrictions could very well be just part of the applicable mandatory rules. 51 Therefore,

should an arbitrator always denounce arbitrability when some relevant mandatory rule of law

suggests so? While there is no definite answer to this question, given that this issue is often

left to the wisdom of the tribunal,52 it can be said that mere application of mandatory laws

does not necessarily prevent a tribunal from rendering a substantive decision on the matter.

The arbitral practice when tribunals are confronted with allegations of corruption best

illustrates this as, barring a few exceptions, arbitral tribunals have held that the application of

mandatory rules does not mean the tribunal can not pass a substantive decision on the matter

48
Shrek Enterprises AG v. Societe des Grandes Marques [1979] IV YBCA 286. (Italian Corte di Cassazione refused to
enforce an arbitral award that decided on a trademark dispute.)
49
Lew, Mistelis and Kröll, (n 47) 13.
50
Karl Heinz Böckstiegel, ‘Public Policy and Arbitrability’ in Pieter Sanders (ed), Comparative Arbitration Practice and
Public Policy in Arbitration (Kluwer Law Taxation 1986) 183.
51
Karl-Heinz Bockstiegel, ‘Public Policy as a Limit to Arbitration and its Enforcement’ (2008) 2 Dispute Resol. Int’l 126.
52
Marc Blessing, ‘Mandatory Rules of Law versus Party Autonomy in International Arbitration’ (1997) 24(4) Journal of
International Arbitration 33.
at hand.53 Furthermore, in Switzerland, the view is that least restrictive opinion of the

arbitrator in this matter should be encouraged.54

In Fincantieri-Cantieri et Oto Melara SpA v. M,55 the Swiss Federal Court while deciding

upon the arbitrability reaffirmed this opinion. In the case at hand, the Italian companies had

entered into an agency agreement with M, where the latter was to act as an intermediary to

conclude a contract with the Republic of Iraq. A dispute arose in the year 1989 and Iraq

seized the payments for the equipment purchased. M commenced arbitral proceedings against

the Italian companies and the arbitral tribunal issued an interim award. Italian companies

challenged the arbitrability, given the embargo imposed by United Nations on having

commercial ties with Iraq. The Swiss Federal Court declined to uphold arguments of non-

arbitrability.

A similar approach was suggested by the U.S. Supreme Court in the landmark case of Scherk v

Alberto-Culver Co.,56 where it observed:

“The invalidation of such an agreement in the case before us would not only allow

the respondent [Alberto-Culver] to repudiate its solemn promise but would, as well,

reflect a parochial concept that all disputes must be resolved under our laws in our

courts…We cannot have trade and commerce in world markets and international

waters exclusively on our terms, governed by our laws, and resolved in our courts.”

The approach in the instances mentioned above prioritized the principle of party autonomy

over notions of public policy or application of mandatory laws. However, this is not an

approach that is uniformly followed by courts across the world. In matters where the

53
Florian Haugeneder, (n 27) 398.
54
Mark Blessing, (n 52) 27; Robert Briner, ‘The Arbitrability of Intellectual Property Disputes with Particular Emphasis on
the Situation in Switzerland’ (1994) 728 WIPO Publication 66.
55
Fincantieri-Cantieri et Oto Melara SpA v. M , 23 June 1993, 353
56
[1974] 417 U.S. SC 519.
mandatory rules reflect international public policy, arbitrability may be denied. 57 For

example, in an ICC award between a Korean party and an Italian party, it was held that

despite the contract being governed by Korean law, the European competition law by reason

of Italy’s public policy would be taken into consideration, to determine whether the contract

in question violated the competition policy within the common market.58

Whether or not the arbitral tribunal is bound by the public policy considerations of any

specific State law while deciding upon the arbitrability - has varying theoretical and practical

answers. Arbitrators, not being guardians of any State’s public policy are under no obligation

to take into account public policy considerations of any State, however, giving due

consideration to it serves as an incentive to assure enforceability of the awards rendered and

effectiveness of the institution of international arbitration. 59 The largely maintained opinion is

that the tribunals, although not being part of any State, must take into consideration the

international public policy while deciding on matters of arbitrability.60

2.1 Application of Substantive and Procedural Law and Public Policy

In International Commercial Arbitration, owing to the principle of party autonomy, it is an

established practice that the parties are free to choose substantive law and procedural law that

regulates their contractual relationship as far as dispute settlement is concerned. 61 The parties

may even opt for a law that has no direct connection, whatsoever, with the dispute involved –

57
Marc Blessing, (n 52) 27.
58
ICC Award No. 4132, [1985] YBCA, 49.

59
Pierre Mayer, ‘Mandatory Rules of Law in International Arbitration’ (October 1986) 2(4) Arbitration International 286;
Nathalie Voser, ‘Current Developments: Mandatory Rules of Law as a Limitation on the Law Applicable in International
Commercial Arbitration’ (1996) 7 The American Review of International Arbitration 322.
60
Nathalie Voser, ‘Current Developments: Mandatory Rules of Law as a Limitation on the Law Applicable in International
Commercial Arbitration’ (1996) 7 The American Review of International Arbitration 324; Marc Blessing, ‘Mandatory Rules
of Law versus Party Autonomy in International Arbitration’ (1997) 24(4) Journal of International Arbitration 28; Loukas
Mistelis and Stauros Brekoulakis, Arbitrability: International and Comparative Perspectives (Wolters Kluwer 2009) 13.
61
Nigel Blackby and others, Redfern and Hunter on International Arbitration (Sixth edn, OUP 2015) 158.
therefore separating the dispute from the law forming closest connection with it. 62 The

applicable law or the substantive law, or as known in some jurisdictions as the governing law of

the contract, basically assists in the interpretation of ‘the validity of the contract, the rights and

obligations of the parties, the mode of performance, and the consequences of breaches of the

contract’.63 And on the other hand the procedural law, which more often than not is the

arbitration law of the seat of arbitration, governs the manner in which arbitration proceedings

are to be conducted.64 Arbitral Tribunals, being inherent a-national characters, are not

constrained by national ‘conflict of law’ rules when it comes to the application of law in

arbitration proceedings. This position was clarified by the U.S. Supreme Court in the Mitsubishi

case where it held that the ‘International Arbitral Tribunal owes no prior allegiance to the legal

norms of particular States’.65

As is evident, there is great flexibility afforded in the arbitral process, in comparison to

conventional courts, both to the parties and the tribunals. However, this does not mean that

arbitrators can always freely apply the law chosen by the parties without any restrictions. 66

These restrictions are also necessary because parties in their own interest might take

advantage of this flexibility to circumvent the application of certain rules of objective

arbitrability.67 Arbitrators have to be wary of the reality that by ignoring certain relevant rules

of objective arbitrability, the award might run the risk of being annulled and later refused

enforcement.68 More so, to completely ignore these rules might result in a situation where
62
Jean-Francois Poudret and Sebastin Besson, Comparative Law of International Arbitration – Translated by Stephen Berti
and Annette Ponti (Second edn, Sweet & Maxwell 2007) 607.
63
ibid 185.
64
ibid 166.
65
Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc [1985] 473 U.S. SC 614.
66
H Kronke and others, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York
Convention (Wolters Kluwer 2010) 284; Lew, Mistelis and Kröll, Comparative International Commercial Arbitration
(Kluwer Law International 2003) 418.
67
Jean-Francois Poudret and Sebastin Besson, Comparative Law of International Arbitration – Translated by Stephen Berti
and Annette Ponti (Second edn, Sweet & Maxwell 2007) 607.
68
Reisman, Craig and others, International Commercial Arbitration: Cases, Materials and Notes on the Resolution of
International Business Disputes (Westbury, New York, The Foundation Press 1997) 728; Pierre Mayer, ‘Mandatory Rules of
Law in International Arbitration’ (October 1986) 2(4) Arbitration International 276.
States would begin denouncing arbitration as an acceptable dispute resolution mechanism as

they would perceive it as an instrument facilitating encroachment upon their sovereignty.

SECTION III: Approaches under Different Jurisdictions:

As has been mentioned above, the principles of arbitrability and the notion of public policy,

while being similar across jurisdictions, are still distinct in the manner in which these are

interpreted. These distinctions are because of the difference between the socio-economic and

political factors that help in determining a nation’s domestic law. Certain jurisdictions have

enacted laws pertaining to arbitration that clearly define the category of disputes that are

arbitrable or non-arbitrable, while others leave it to courts to interpret the same. This section

will look into the various approaches that have been taken across various jurisdictions when

dealing with disputes that are suitable for resolution through arbitration.

3.1 Austria:

The Austrian arbitration law broadly defines arbitrable disputes, such that all matters relating

to ‘economic interests’ (“vermögensrechtlicher Anspruch”) are arbitrable.69 This includes

disputes relating to company law, intellectual property claims, disputes involving a bankrupt

entity as well as disputes relating to the violation of anti-competition claims. 70 Matters that do

not involve economic interests are capable of settlement through arbitration is the parties are

“capable of concluding a settlement concerning the matter in dispute”.71

3.2 Switzerland:

Swiss law on Private International Law provides that “any dispute involving an economic

interest can be the subject-matter of an arbitration.” 72 Similar to Austrian law, Swiss law

69
Florian Haugeneder, (n 27) 399
70
ibid.
71
ibid.
72
Swiss Law on Private International Law, Art. 177(1).
relies on the term “economic interest” (”vermögensrechtlicher Anspruch”) to define which

matters are arbitrable. This term is not given a statutory definition but was meant to have a

liberal interpretation, such that Swiss courts have interpreted Article 177(1) to “cover(s) all

claims which have an either active or passive financial value for the parties or, in other

words, all rights which, at least as far as one of [the parties] is concerned, can be appreciated

in money.”73

Swiss legislation on arbitration differs significantly from other jurisdictions with regards to

limitation places on state parties. Article 177(2) says that a state party "cannot rely on its own

law in order to contest its capacity to be a party to an arbitration or the arbitrability of a

dispute covered by the arbitration agreement." 74 Unlike most other jurisdictions, where

statutes state that arbitration may not occur in certain situations, Swiss law states that

arbitration proceedings can be conducted in any case where there is an economic interest, and

states cannot rely upon domestic law to excuse itself from such arbitration. Therefore, Swiss

law is a lot friendlier towards arbitration, both domestic and international.

3.3 Germany:

Like the approaches in Austrian and Swiss law, German law in the German version of the

UNCITRAL Model Law provides that any claim pertaining to economic interests is arbitrable

in arbitrations seated in Germany, in the absence of statutory provisions to the contrary. 75

Similar to Swiss law, the interpretation of this provision is supposed to be expansive, such

that the scope of non-arbitrability in Germany is limited.76

3.4 France

73
Judgment of 23 June 1992, DFT 118 II 353, 356 (Swiss Fed. Trib.)
74
Swiss Law on Private International Law, Art. 177(2).
75
German ZPO, §1030 I(1).
76
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1047
The French Code allows parties to arbitrate disputes that pertain to rights that one can dispose

freely.77 This, however, is subject to certain restrictions, such that article 2060 of the French

Code states that "one cannot submit to arbitration questions of status and capacity of persons,

questions relative to divorce and separation, or questions respecting controversies that

concern public entities or public establishments and more generally any matter that concerns

the public order."78 With regards to enforcement, the French Code in article 1514 states that

an arbitral award shall be recognized in France if the party seeking enforcement can prove its

existence and that such award is not manifestly contrary to international public policy. 79 In

the absence of any definition of public order, the French Code makes a general statement

regarding the non-arbitrability of a dispute. This wide definition affords enough scope for the

French Government to keep a wide array of issues off the table for arbitration. 80 With regards

to enforcement, while the French Code makes a strong presumption of enforcement, the term

“International public policy” is broad enough to create issues during enforcement when the

countries involved in the arbitration are not political allies, or when it involves issues of

mandatory law that regulate international relationships.81 It would appear that the French

Code envisages an arbitration regime that has numerous limitation given the wide ambit of

interpretation of the term “any matter that concerns public order.” However, as has been

mentioned above, France is arguable one of the most pro-arbitration regimes, which is

primarily because of the lenient approach French courts have taken in interpretation of the

aforementioned provisions of the French Code.

77
Code Civil [C. cIv.] Art. 2059 (Fr.)
78
CODE CIVIL [C. cIv.] Art. 2060 (Fr.)
79
CODE CIVIL [C. cIv.] Art. 1514 (Fr.)
80
Jennifer Vincent, Oh, What a Tangled Web We Weave: The Implications of Conflicting Domestic Policy on Arbitrability
and Award Enforcement, 38 Hastings Int'l & Comp. L. Rev. 141 (2015). Available at:
https://repository.uchastings.edu/hastings_international_comparative_law_review/vol38/iss1/3
81
ibid.
In Meulemans et Cie v. Robert, the Paris Cour d’Appel held that even though arbitration

agreements concerning disputes implicating public policy are prohibited, this does not mean

that all disputes which in some respect depends on regulations based on public policy are

non-arbitrable.82 This judgment rejected the foregoing view that an arbitration agreement is

void whenever the resolution of the arbitration entails interpretation and application of public

policy.83 Further, it has been held that Articles 2059 and 2060 of the Civil Code do not apply

to international arbitration agreements84 and that in cases of international arbitration, claims

of illegality and violations of public policy could be arbitrated. 85 French Courts have also

(repeatedly) upheld the arbitrability of competition law claims, along with other public law

claims, which are matters that concern public order. 86 These judicial developments have

resulted in a substantial retrenchment of non-arbitrability limits in the international context, 87

such that matters that are categorised as non-arbitrable by the French courts are matters where

statutory text expressly excludes arbitration.88

3.5 Japan:

Article 13 of the Japan Arbitration Law89 states that “unless otherwise provided by law, an

arbitration agreement shall be valid only when its subject matter is a civil dispute that may be

resolved by settlement between parties (excluding that of divorce or separation)." Article 13

implies that a dispute may only be arbitrable if the same can be resolved by parties through a
82
Judgment of 21 February 1964, Meulemans et Cie v. Robert, 92 J.D.I. (Clunet) 113, 116 (Paris Cour d’Appel) (1965).
83
Judgment of 15 May 1961, Jean Tardits et Cie v. Jydsk Andels Foderstof Forretning, 89 J.D.I. (Clunet) 140, 148 (Orléans
Cour d’Appel) (1962).
84
Judgment of 20 June 1969, Impex v. Malteria Adriatica, 1969 Rev. Arb. 95 (Paris Cour d’Appel).
85
Judgment of 29 March 1991, Ganz v. Nationale des Chemins de Fers Tunisiens, 1991 Rev. Arb. 478, ¶¶13-14 (Paris Cour
d’Appel).
86
'Chapter 6: Nonarbitrability and International Arbitration Agreements', in Gary B. Born , International Commercial
Arbitration (Third Edition), 3rd edition (© Kluwer Law International; Kluwer Law International 2021) pp. 1027 – 1138,
1050
87
Mourre, Arbitrability of Antitrust Law from the European and US Perspectives, in G. Blanke & P. Landolt (eds.), EU and
US Antitrust Arbitration: A Handbook for Practitioners 3, 6-8 (2011) (Portion on the French legal system)
88
'Chapter 6: Nonarbitrability and International Arbitration Agreements', in Gary B. Born , International Commercial
Arbitration (Third Edition), 3rd edition (© Kluwer Law International; Kluwer Law International 2021) pp. 1027 – 1138,
1050
89
Japan Arbitration Law (Law No. 138 of 2003) available at: http://japan.kantei.go.jp /policy/sihou/ arbitrationlaw.pdf
settlement, and where such settlements are not possible, such matters are non-arbitrable. An

arbitral award, irrespective of whether the place of arbitration is Japan or not, has the same

effect as a final and conclusive judgement of a court in that jurisdiction, subject to limitations

under Article 45, which is analogous to Article 5 of the New York Convention.90

3.6 England:

Unlike other jurisdictions which have specific provisions regarding the arbitrability of a

dispute, the English Arbitration Act, 1996 is entirely silent on the matter. Law pertaining to

arbitrability in England has primarily evolved through court decisions on the matter, most of

which disregarded non-arbitrability arguments.91 English courts have shown little sympathy

towards arguments pertaining to non-arbitrability, such that, even disputes regarding subject-

matters, which were historically considered non-arbitrable such as antitrust disputes, have

been held to be arbitrable. In ET Plus SA v. Jean-Paul Welter, the Court stated that there is

“no realistic doubt that such competition or antitrust claims are arbitrable” 92. In the recent

judgement in the case of Microsoft Mobile OY (Ltd) v. Sony Euro. Ltd, it was held by the

English High Court that cartel damages claims are also arbitrable. 93 In cases where a dispute

could be characterised in multiple ways, including certain ways in which the dispute would

be non-arbitrable, English courts have recently held that the matter would nonetheless be

treated as arbitrable. In the case of Nori Holding Ltd v. Public Joint Stock Company ‘Bank

Otkritie Financial Corporation’, the High Court held that “what matters is the substance of

the case rather than the form,” and that “in each case the essential dispute is the same,

regardless of the label. This is a dispute which arbitrators can define.” 94 It is evident that

90
Japan Arbitration Law (Law No. 138 of 2003), Art. 45, available at: http://japan.kantei.go.jp /policy/sihou/
arbitrationlaw.pdf
91
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1055
92
ET Plus SA v. Jean-Paul Welter [2005] EWHC 2115, ¶ 51
93
Microsoft Mobile OY (Ltd) v. Sony Euro. Ltd [2017] EWHC 374
94
Nori Holding Ltd v. PJSC “Bank Otkritie Fin. Corp.” [2018] EWHC 1343, ¶63 (Comm)
English courts have construed the doctrine of non-arbitrability narrowly, making it

considerable pro-arbitration.

3.7 India:

Indian courts have historically viewed arbitrations with immense suspicion, often refusing

referral of certain matters on the ground that complete justice cannot be obtained between the

parties through arbitration.95 This position taken by courts was also not altered when the

Arbitration and Conciliation Act, 1996 came into force, with the Madras High Court finding

that the new act has in effect not remedied any of the short-comings of arbitration, and

therefore where there were intricate questions of law and evidence involved, it was always

better to rely upon civil courts.96 It would be wrong however to singularly place the blame of

the state of arbitration in India upon the interpretation offered by Courts, as in the absence of

any clear indications under the Arbitration and Conciliation Act regarding the question of

arbitrability, this was a necessity, even if the efforts may be misguided. Section 2(3) of the

Act97 is seen as the sole guide towards the question of arbitrability, and when read along with

sections 34(2)(b)(i)98 and 48(2)(b),99 Courts have held that this Act is consistent with the

notion that there are certain disputes that are just unfit to be resolved by arbitration. 100 In the

absence of any standards or grounds of arbitrability explicitly established by the legislature,

the notion of arbitrability has evolved from decisions of Indian courts.

One of the landmark judgments that laid down tests to determine the arbitrability of a dispute

is the judgment in the Booz Allen101 case which stated the following:

95
Harshad Pathak &Pratyush Panjwani, 'The Arbitrability Doctrine and Tribulations of Tribunalisation' (2021) 10 Indian J
Arb L 72.
96
H.G. Oomor Sait and Ors. vs. O. Aslam Sait (28.06.2001 - MADHC) : MANU/TN/0176/2001
97
The Arbitration and Conciliation Act (Act 26 of 1996) (IN) s 2(3) (Arbitration Act)
98
Arbitration Act s 34(2)(b)(i).
99
Arbitration Act s 48(2)(b).
100
Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1; Harshad Pathak &Pratyush Panjwani (n 22).
101
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532
 "Generally, and traditionally, all disputes relating to rights in personam were

amenable to arbitration; [while] all disputes relating to the rights in rem are required

to be adjudicated by courts and public tribunals, being unsuited for private

arbitration."102

The Court in this judgment stated the general rule that all disputes that relate to rights in

personam are arbitrable, while those that relate to rights in rem require adjudication by courts

or public tribunals.103 Additionally, as an exception to this rule, the court stated that there

might be certain disputes that pertain to rights in personam that may nonetheless be regarded

unfit for arbitration as they may expressly be reserved for a public forum by the legislature,

or may be excluded from a public forum by ‘necessary implication.’ 104 This led to a creation

of a two-fold test of arbitrability. The first is the general rule of whether a certain dispute

pertains to rights in rem, while the second is the exception to the rule, wherein certain

disputes relating to rights in personam would also be considered unfit for arbitration. With

regards to the first aspect, the court laid down various well-known examples of disputes unfit

for arbitration, for example, matrimonial disputes, criminal matters, guardianship matters,

insolvency matters, or eviction matters that are governed by a special statute. 105 However,

there wasn’t much clarity afforded regarding the second aspect, and this remained the

situation until the landmark judgment of Vidya Drolia106, which provided much needed

clarity on the issue.

The judgement in Vidya Drolia gave much clarity towards the kinds of matter fit for

arbitration and established a test of arbitrability. The Court in this case reiterated the views of

Booz Allen, specifically reiterating that rights in rem are not arbitrable while rights in

102
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532, paragraph 23.
103
ibid, para 38.
104
ibid, para 35.
105
ibid, para 36.
106
Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1
personam are. Crucially the court observed that this might not be the appropriate way to

distinguish arbitrable disputes from non-arbitrable disputes because of the interplay of rights

in most disputes and went on to talk about subordinate rights in personam that might arise out

of rights in rem, which would be fit for arbitration. Finally, they laid down a ‘four-fold test of

arbitrability” which has cleared a lot of confusion.107

3.8 United States of America:

Section 2 of the Federal Arbitration Act108 states that arbitration agreements will be enforced

unless they are invalid "upon such grounds as exist at law or in equity for the revocation of a

contract." This means that unless the arbitration clause or the arbitration agreement itself is

one that is void or inoperable under some principle of contract law like unconscionability or

duress, an arbitration agreement will stand, and the dispute may be resolved through

arbitration. The statute does not put any limitations on the arbitrability of disputes based on

public policy, and similar to English law, it leaves it to court decisions and judgements on the

matter to define arbitrability.109

Early judgements by US Courts pertaining to arbitrability often construed the concept

narrowly, fashioning a variety of applications of the non-arbitrability doctrine to protect

perceived U.S. public values or legislative objectives. 110 In the case of Wilko v Swan,111

wherein damages were sought for alleged misrepresentations under the federal securities

laws, the Court held that the dispute was non-arbitrable because Congress “has enacted the

Securities Act to protect the rights of investors and has forbidden a waiver of any of those

107
Vidya Drolia v. Durga Trading Corporation, (n 106) para 45
108
Federal Arbitration Act (US) § 2
109
Jennifer Vincent, Oh, What a Tangled Web We Weave: The Implications of Conflicting Domestic Policy on Arbitrability
and Award Enforcement, 38 Hastings Int'l & Comp. L. Rev. 141 (2015).
Available at: https://repository.uchastings.edu/hastings_international_comparative_law_review/vol38/iss1/3
110
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1027, 1051
111
Wilko v. Swan, 346 U.S. 427 (U.S. S.Ct. 1953).
rights, by means of a specific statutory anti-waiver provision.” Relying on Wilko, lower

courts went on to hold multiple subject-matters to be non-arbitrable, such as matters related

to patent rights, federal antitrust disputes, dispute pertainint to Racketeer-Influenced and

Corrupt Organizations(“RICO”) Act, bankruptcy, and race discrimination.112 However, US

courts would depart from the application of this narrow construction of the concept of

arbitrability, in the decades that followed.

In Southland Corp v. Keating,113 the Supreme Court ruled that the Federal Arbitration Act is

applicable to contracts under state law as well, meaning that the Federal Arbitration Act will

supersede any state law which is unlikely to enforce an arbitration clause. In AT&T Mobility

v. Concepcion, the Supreme Court ruled that the Federal Arbitration Act pre-empts "state-law

rules that stand as an obstacle to the accomplishment of the Federal Arbitration Act's

objectives,"114 barring certain exceptions such as Financial Industry Regulation Authority

Rules (FINRA) which require arbitration to occur through a FINRA panel. 115 Furthermore, in

Allied-Bruce Terminix Companies, Inc. v. Dobson116, the Supreme Court ruled that decline to

enforce arbitration clauses on the basis of generally applicable contract defences, but may not

do so on the basis of state laws that only apply to arbitration provisions, as this puts the

arbitration agreement on a different footing from regular contracts, contrary to Congressional

intent per Sherk v. Alberto-Culver Co.117 (equal footing of arbitration contracts and regular

contracts).118 In the landmark case of Mitsubishi Motors v. Soler Chrysler-Plymouth,119 the

112
Gary Born, “Chapter 6: Nonarbitrability and International Arbitration Agreements” International Commercial Arbitration
(Third Edition) (© Kluwer Law International; Kluwer Law International 2021) 1028, 1051
113
Southland Corp v. Keating, 465 U.S. 1, 1 (1984)
114
AT&T Mobility v. Concepcion, 131 S.Ct. 1740, 1743 (2011)
115
Jennifer Vincent, Oh, What a Tangled Web We Weave: The Implications of Conflicting Domestic Policy on Arbitrability
and Award Enforcement, 38 Hastings Int'l & Comp. L. Rev. 141 (2015), 149.
116
Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 265 (1995);
117
Sherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974)
118
Jennifer Vincent, Oh, What a Tangled Web We Weave: The Implications of Conflicting Domestic Policy on Arbitrability
and Award Enforcement, 38 Hastings Int'l & Comp. L. Rev. 141 (2015), 149.
119
Mitsubishi Motors Corp v. Soler Chrysler Plymouth Inc. 473 U.S. 614 S Ct 3346 (1985) (U.S. Supreme Court, 2 July
1985).
Supreme Court allowed the international arbitration of a dispute pertaining to antitrust law, in

favour of “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.," 120 although it stated that a contrary conclusion

would have been reached in a domestic context.

CONCLUSION

120
ibid.