Arbitration and Antitrust An overview of EU and national case law

tions, but the one it considered the most forceful (calling
it the “American Safety doctrine”) was that accepting the
arbitrability of international antitrust disputes would
weaken the private enforcement of antitrust laws.
The Court found though that there was no reason from
the outset to conclude that arbitrators would not apply
antitrust law. Arbitrators are bound to “effectuate the intentions
of the parties” [4] and if one party makes a claim
based on antitrust law the tribunal will be required to
decide it. Moreover, the Supreme Court pointed to the
availability of public policy review at the stage of the enforcement
of the arbitral award. Under the widely-applicable
1958 New York Convention on the Recognition and
Enforcement of Arbitration Awards, one of the few
grounds to refuse to enforce is where the award is
contrary to public policy. The Supreme Court famously
held in Mitsubishi that “it would not require intrusive
inquiry to ascertain that the tribunal took cognizance of
the antitrust claims and actually decided them”. This has
come to be known as the “second look doctrine”.
In Vimar Seguros [5] the Supreme Court held that an arbitration
clause was enforceable insofar as the alleged attenuation
of statutory rights had not yet occurred. The
rights there were not rights under the Sherman Act, but
rather rights under the Carriage of Goods by Sea Act.
Since, however, before an arbitral tribunal has the opportunity
to determine statutory rights it will almost never be
clear that it will not do so, Vimar Seguros appears firmly
to establish the principle of arbitrability of antitrust rights
arising by statute, such as under the Sherman Act.
There is a significant body of case law in the US on the
question of whether the lessening of particular rights due
to their having to be asserted in arbitration, or in arbitration
of a certain character, may result in the invalidation
of an arbitration clause. As regards antitrust law, these
cases are material for two reasons. First, statutory rights
such as those under the Sherman Act are often intended
to be mandatory, and may not therefore be attenuated by
private agreement, such as an agreement to arbitrate.
Secondly, where arbitration lessens the ability to bring a
claim, or otherwise the prospects of it, it might be unenforceable
for unconscionability. Especially with horizontal
agreements in restrain of competition, there are often a
multitude of antitrust plaintiffs each with a claim of modest
value. Arbitration and features of arbitration (classically a
prohibition on representative and class actions, and even
consolidation) may make the vindication of such claims
an impossibility.
In AT&T Mobility v. Concepcion [6] the US Supreme Court
held that a prohibition on class arbitration and consolidation
in arbitration did not invalidate the arbitration clause
there. The Federal Arbitration Act favouring arbitration
took primacy over state law seeking to protect from
unconscionable contracts. In Vimar Securos [7] , the majority
of the US Supreme Court held that the mere increased
costs entailed in arbitrating statutory rights in a far-flung
place does not invalidate the arbitration clause. In Green
Tree Financial Corp.-Alabama v. Randolph [8] the US
Supreme Court accepted (unanimously on this point) the
principle that high costs of arbitrating a statutory claim
(there Truth in Lending Act and Equal Credit Opportunity
Act claims) may be a basis to invalidate the arbitration
clause, but placed the burden of showing this squarely
upon the party impugning the arbitration clause. In In re
American Express Merchants’ Litigation [9] the Court of
Appeals for the Second Circuit found, on the meticulous
evidence there, that the exclusion of class actions, representative
actions, and consolidation in an arbitration
clause effectively deprived the “small merchant” plaintiffs
of the statutory protections under antitrust laws, on the
basis that the size of any potential remedy would not
justify the expense of an individual arbitration. The Court
pronounced the whole arbitration clause unenforceable,
and not just the class action waiver. In Kristian and Masterman
v. Comcast Corporation [10] the Court of Appeals
for the First Circuit declared in obiter that an exclusion of
§4 Clayton Act treble damages and reasonable attorney’s
fees as remedies that arbitrators could award would have
been unenforceable. The Court also invalidated a prohibition
on class-action arbitration and required that any
arbitration proceed as a class-action arbitration, but this
does not survive the US Supreme Court’s decision
in Stolt-Nielsen [11] . In In re Cotton Yarn Antitrust Litigation
[12] , the Court of Appeals for the Fourth Circuit held
(unanimously on these points) that an exclusion of joinder
and a contractually agreed shortening of the four-year
time limitation period in the Clayton Act to one year untollable
in an arbitration did not prevent that plaintiff from
asserting its rights under antitrust statutes. The Court
emphasized that the burden on the party impugning the
arbitration clause is a substantial one and proof must be
concrete and not speculative.
B. EU and EU Member State Law
There is no decision of the EU legal order explicitly pronouncing
EU competition law to be arbitrable, although
this is not doubted since it is an inference which can be
drawn from a number of decisions of the European Court
of Justice (ECJ), and at all events the EU has never done
much to resist such arbitrability. The EU has in recent
years itself positively embraced arbitration, by subjecting
certain EU competition law determinations to arbitral tribunals.
In the Eco Swiss [13] case the ECJ was expressly concerned
not to interfere with arbitration and the finality of arbitration
awards. In that case, moreover, it limited the required
material review of arbitration awards to review for
public policy violations. By inference then, in Eco
Swiss the ECJ, and with it the EU legal order, accepts the
arbitrability of EU competition law.
Where the question has even arisen, courts in various EU
Member States have pronounced their respective competition
law to be arbitrable [14] . It would appear moreover
that there is nothing in EU law which would prevent the
legal order of an EU Member State from treating EU competition
law as inarbitrable, but none has done so.
Arbitration and Antitrust: An overview of EU and national case law
PHILLIP LANDOLT l 13 April 2012 l e-Competitions l N°45083 l www.concurrences.com
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