Tuesday, March 20, 2007
Posted by D. Daniel Sokol
A new working paper suggests that antitrust arbirtration cases will tend to follow an EU rather than US law model. The authors of the paper, Arbitration of Antitrust Claims in the United States and Europe, are Niccolo Landi and Catherine Rogers. The paper can be downloaded here.
ABSTRACT: Today, most countries have relinquished antitrust claims to the jurisdiction of arbitrators. While the expansion of arbitral competence can be seen as a global trend, it has not been an entirely uniform trend. The United States was the first country to allow international arbitrators the power to resolve statutory claims that implicate public policy, starting with securities fraud and antitrust claims, but later extending to RICO claims, claims involving patent validity and employment discrimination. In allowing these claims to go to arbitration, the U.S. Supreme Court originally suggested that the public policy interests implicated in antitrust arbitration can be safeguarded during award review, but that dicta has proven largely illusory in practice.
Meanwhile, other countries, particularly those with a civil law tradition in Europe, have been more circumspect and more circumscribed in allowing arbitration of antitrust claims in the first place, and more active in reviewing awards to ensure adherence with statutory objectives. While there is extensive commentary regarding the risks of allowing arbitration of mandatory claims, our focus in this Essay is instead on the narrower issue of the effect that different national approaches to arbitrability and award review have on competing national antitrust policies.
For many disputes, more than one antitrust regime can be applied because the extraterritorial reach of national antitrust laws of different jurisdictions overlap in international transactions. Our thesis is that, when faced with a conflict of laws question about the application of European versus American antitrust law, arbitrators will be inclined to systematically prefer European law since they know that failure to do so is more likely to result in an unenforceable award. The effects of this preference may not be enormous given noted convergences between U.S. and EU antitrust law, and it is likely be mollified in practice by skilled arbitrators who can often craft an award that is valid under both legal regimes. But there are some important areas in which U.S. and European antitrust laws produce different outcomes.