The International Scope of Transnational Arbitration Agreements and Their Effect on United States Corporations
The world as it is today is not as it was centuries, or even decades ago. Business transactions have progressed beyond members of villages interacting with each other. In modern society, billions upon billions of dollars of trade are transacted each and every day. Inevitably, there will be disputes that occur in the normal course of business. As there is no uniform international law, these disputes could cripple business on a global scale, as no respectable business would contract with a party from a foreign country out of fear of breach. Arbitration alleviates that fear. The two opposing parties can contract for virtually every term that they can imagine, and these imagined terms can include a remedy for breach, so the party who was breached against does not suffer irreparable economic harm.
The United States Supreme Court adopted, and has continually supported, transborder arbitration - arbitration between two parties of differing domiciles - and the Court has preferred to let the contracts, the instruments that authorize and control the arbitration, stand as written. That is, the Court has not carefully scrutinized contract terms, preferring instead a system that favors international progress, even at the expense of the American domiciliary.
This article focuses on the history of arbitration to provide a general background of arbitration, and a discussion of federal and international arbitration acts. There is a discussion on the backbone of the United States’ transnational arbitration policy adopted by the United States Supreme Court by looking at decisional law and analyzing the language used. Subsequent to that, the realities of transnational business, followed by the recognition of judgments against American domiciliaries. Finally, this article examines the pitfalls that this policy creates, and alternative, more isolationist, policies will be examined to the existing policy will be examined.
Article published in Revista Contrapunto, 1(1): 146-180 (2014).
The United States Supreme Court adopted, and has continually supported, transborder arbitration - arbitration between two parties of differing domiciles - and the Court has preferred to let the contracts, the instruments that authorize and control the arbitration, stand as written. That is, the Court has not carefully scrutinized contract terms, preferring instead a system that favors international progress, even at the expense of the American domiciliary.
This article focuses on the history of arbitration to provide a general background of arbitration, and a discussion of federal and international arbitration acts. There is a discussion on the backbone of the United States’ transnational arbitration policy adopted by the United States Supreme Court by looking at decisional law and analyzing the language used. Subsequent to that, the realities of transnational business, followed by the recognition of judgments against American domiciliaries. Finally, this article examines the pitfalls that this policy creates, and alternative, more isolationist, policies will be examined to the existing policy will be examined.
Article published in Revista Contrapunto, 1(1): 146-180 (2014).
