Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc.
(1985)
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Rule of Law:
Claims arising under United States antitrust laws are arbitrable pursuant to a broad arbitration clause in an agreement embodying an international commercial transaction.
Facts:
- Mitsubishi Motors Corporation (Mitsubishi), a Japanese corporation, formed a joint venture with Chrysler International, S.A. (CISA), a Swiss corporation, to distribute Mitsubishi-manufactured vehicles outside the continental U.S.
- On October 31, 1979, Soler Chrysler-Plymouth, Inc. (Soler), a Puerto Rico corporation, entered into a Distributor Agreement with CISA to sell these vehicles in San Juan, Puerto Rico.
- On the same day, Mitsubishi, CISA, and Soler entered into a Sales Procedure Agreement which contained a clause requiring arbitration in Japan for all disputes arising out of or in relation to specific articles of the agreement.
- Initially successful, Soler's business declined in early 1981 due to a market slackening, causing it to have trouble meeting its increased minimum sales volume.
- Soler requested to delay or cancel several orders and also attempted to arrange for the transshipment of its vehicles for sale in the continental U.S. and Latin America.
- Mitsubishi and CISA refused to permit the transshipment of vehicles.
- Following these disagreements, Mitsubishi withheld shipment of 966 vehicles that Soler had ordered.
Procedural Posture:
- Mitsubishi Motors Corporation sued Soler Chrysler-Plymouth, Inc. in the U.S. District Court for the District of Puerto Rico, seeking an order to compel arbitration pursuant to their Sales Agreement.
- Soler filed counterclaims against Mitsubishi and CISA, alleging breaches of contract and violations of the Sherman Act and other statutes.
- The District Court ordered arbitration on most of the claims, including the Sherman Act antitrust claims, concluding that the international character of the transaction required enforcement of the arbitration clause.
- Soler, as appellant, appealed the decision to the U.S. Court of Appeals for the First Circuit, with Mitsubishi as appellee.
- The Court of Appeals affirmed in part and reversed in part, holding that federal antitrust claims were non-arbitrable as a matter of public policy, and reversed the District Court's order compelling arbitration of those specific claims.
- The U.S. Supreme Court granted certiorari to consider the issue.
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Issue:
Does the Federal Arbitration Act require a court to enforce an agreement to arbitrate claims arising under the Sherman Act when that agreement is part of an international commercial transaction?
Opinions:
Majority - Justice Blackmun
Yes. An agreement to arbitrate claims arising under the Sherman Act must be enforced when that agreement is part of an international commercial transaction. The strong federal policy favoring arbitration applies with special force in the field of international commerce, and concerns of international comity, respect for foreign tribunals, and the need for predictability in global business outweigh domestic judicial policies against arbitrating antitrust claims. The Court relied heavily on its prior decisions in The Bremen and Scherk, which treated arbitration agreements as specialized forum-selection clauses that are presumptively enforceable in international deals. The Court expressed skepticism about the reasoning of the American Safety doctrine, which held domestic antitrust claims non-arbitrable, finding its concerns about adhesion contracts, the complexity of antitrust law, and the potential bias of arbitrators to be unpersuasive in an international context. The Court concluded that an arbitral tribunal can effectively handle such claims and that U.S. courts retain a limited opportunity at the award-enforcement stage to ensure the tribunal's decision does not violate fundamental U.S. public policy.
Dissenting - Justice Stevens
No. An agreement to arbitrate should not be enforced for claims arising under the Sherman Act, even in an international context. First, as a matter of contract interpretation, the arbitration clause was narrow and did not encompass a three-party conspiracy claim arising under an independent federal statute. Second, the Federal Arbitration Act was intended to cover contractual, not statutory, claims, particularly those involving important public rights. Third, Congress established a special remedial scheme for antitrust laws, including treble damages and the role of private attorneys general, which reflects a clear intent to have these claims resolved exclusively in federal courts. Finally, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards explicitly allows signatory nations to refuse to compel arbitration of subject matters that are non-arbitrable under their domestic law, and U.S. antitrust policy is precisely such a matter. Scherk is distinguishable because, unlike this case, it involved significant international conflict-of-laws issues, whereas Soler's claim is governed entirely by American law.
Analysis:
This decision significantly elevated the importance of enforcing arbitration agreements in international commerce over domestic public policy concerns, such as the judicial enforcement of antitrust laws. By creating a distinction between domestic and international transactions, the Court signaled that concerns for international comity and predictability could override judicially created exceptions to arbitrability. This ruling paved the way for the arbitration of other complex federal statutory claims and marked a major step in the judiciary's shift from hostility toward arbitration to a strong presumption in its favor, especially in the global arena. The case diminished the long-standing American Safety doctrine, at least in international disputes, and affirmed that parties can be held to their bargain to arbitrate even when it means ceding jurisdiction over fundamental U.S. statutory claims to a foreign tribunal.
