Court Opinion

ID: 9430188
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:29:10.004234+00
Date Added: 2024-06-11T17:23:23.567492
License: Public Domain

Justice Stevens,
with whom Justice Brennan joins, and with whom Justice Marshall joins except as to Part II, dissenting.
One element of this rather complex litigation is a claim asserted by an American dealer in Plymouth automobiles that two major automobile companies are parties to an international cartel that has restrained competition in the American market. Pursuant to an agreement that is alleged to have violated § 1 of the Sherman Act, 15 U. S. C. § 1, those companies allegedly prevented the dealer from transshipping some 966 surplus vehicles from Puerto Rico to other dealers in the American market. App. 92.
Petitioner denies the truth of the dealer’s allegations and takes the position that the validity of the antitrust claim must be resolved by an arbitration tribunal in Tokyo, Japan. Largely because the auto manufacturers’ defense to the antitrust allegation is based on provisions in the dealer’s franchise agreement, the Court of Appeals concluded that the arbitration clause in that agreement encompassed the antitrust *641claim. 723 F. 2d 155, 159 (CA1 1983). It held, however, as a matter of law, that arbitration of such a claim may not be compelled under either the Federal Arbitration Act1 or the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.2 Id., at 161-168.
This Court agrees with the Court of Appeals’ interpretation of the scope of the arbitration clause, but disagrees with its conclusion that the clause is unenforceable insofar as it purports to cover an antitrust claim against a Japanese company. This Court’s holding rests almost exclusively on the federal policy favoring arbitration of commercial disputes and vague notions of international comity arising from the fact that the automobiles involved here were manufactured in Japan. Because I am convinced that the Court of Appeals’ construction of the arbitration clause is erroneous, and because I strongly disagree with this Court’s interpretation of the relevant federal statutes, I respectfully dissent. In my opinion, (1) a fair construction of the language in the arbitration clause in the parties’ contract does not encompass a claim that auto manufacturers entered into a conspiracy in violation of the antitrust laws; (2) an arbitration clause should not normally be construed to cover a statutory remedy that it does not expressly identify; (3) Congress did not intend § 2 of the Federal Arbitration Act to apply to antitrust claims; and (4) Congress did not intend the Convention on the Recognition and Enforcement of Foreign Arbitral Awards to apply to disputes that are not covered by the Federal Arbitration Act.
I — I
On October 31, 1979, respondent, Soler Chrysler-Plymouth, Inc. (Soler), entered into a “distributor agreement” to govern the sale of Plymouth passenger cars to be manufactured by petitioner, Mitsubishi Motors Corpora*642tion of Tokyo, Japan (Mitsubishi).3 Mitsubishi, however, was not a party to that agreement. Rather the “purchase rights” were granted to Soler by a wholly owned subsidiary of Chrysler Corporation that is referred to as “Chrysler” in the agreement.4 The distributor agreement does not contain an arbitration clause. Nor does the record contain any other agreement providing for the arbitration of disputes between Soler and Chrysler.
Paragraph 26 of the distributor agreement authorizes Chrysler to have Soler’s orders filled by any company affiliated with Chrysler, that company thereby becoming the “supplier” of the products covered by the agreement with Chrysler.5 Relying on paragraph 26 of their distributor *643agreement,6 Soler, Chrysler, and Mitsubishi entered into a separate Sales Procedure Agreement designating Mitsubishi as the supplier of the products covered by the distributor agreement.7 The arbitration clause the Court construes today is found in that agreement.8 As a matter of ordinary contract interpretation, there are at least two reasons why that clause does not apply to Soler’s antitrust claim against Chrysler and Mitsubishi.
First, the clause only applies to two-party disputes between Soler and Mitsubishi. The antitrust violation alleged in Soler’s counterclaim is a three-party dispute. Soler has joined both Chrysler and its associated company, Mitsubishi, as counterdefendants. The pleading expressly alleges that *644both of those companies are “engaged in an unlawful combination and conspiracy to restrain and divide markets in interstate and foreign commerce, in violation of the Sherman Antitrust Act and the Clayton Act.” App. 91. It is further alleged that Chrysler authorized and participated in several overt acts directed at Soler. At this stage of the case we must, of course, assume the truth of those allegations. Only by stretching the language of the arbitration clause far beyond its ordinary meaning could one possibly conclude that it encompasses this three-party dispute.
Second, the clause only applies to disputes “which may arise between MMC and BUYER out of or in relation to Articles I-B through V of this Agreement or for the breach thereof. . . .” Id., at 52. Thus, disputes relating to only 5 out of a total of 15 Articles in the Sales Procedure Agreement are arbitrable. Those five Articles cover: (1) the terms and conditions of direct sales (matters such as the scheduling of orders, deliveries, and payment); (2) technical and engineering changes; (3) compliance by Mitsubishi with customs laws and regulations, and Soler’s obligation to inform Mitsubishi of relevant local laws; (4) trademarks and patent rights; and (5) Mitsubishi’s right to cease production of any products. It is immediately obvious that Soler’s antitrust claim did not arise out of Articles I-B through V and it is not a claim “for the breach thereof.” The question is whether it is a dispute “in relation to” those Articles.
Because Mitsubishi relies on those Articles of the contract to explain some of the activities that Soler challenges in its antitrust claim, the Court of Appeals concluded that the relationship between the dispute and those Articles brought the arbitration clause into play. I find that construction of the clause wholly unpersuasive. The words “in relation to” appear between the references to claims that arise under the contract and claims for breach of the contract; I believe all three of the species of arbitrable claims must be predicated on contractual rights defined in Articles I-B through V.
*645The federal policy favoring arbitration cannot sustain the weight that the Court assigns to it. A clause requiring arbitration of all claims “relating to” a contract surely could not encompass a claim that the arbitration clause was itself part of a contract in restraint of trade. Cf. Paramount Famous Lasky Corp. v. United States, 282 U. S. 30 (1930); see also United States v. Paramount Pictures, Inc., 334 U. S. 131, 176 (1948). Nor in my judgment should it be read to encompass a claim that relies, not on a failure to perform the contract, but on an independent violation of federal law. The matters asserted by way of defense do not control the character, or the source, of the claim that Soler has asserted.9 Accordingly, simply as a matter of ordinary contract interpretation, I would hold that Soler’s antitrust claim is not arbitrable.
II
Section 2 of the Federal Arbitration Act describes three kinds of arbitrable agreements.10 Two — those including maritime transactions and those covering the submission of an existing dispute to arbitration — are not involved in this case. The language of § 2 relating to the Soler-Mitsubishi arbitration clause reads as follows:
*646“A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . or the refusal to perform the whole or any part thereof, . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
The plain language of this statute encompasses Soler’s claims that arise out of its contract with Mitsubishi, but does not encompass a claim arising under federal law, or indeed one that arises under its distributor agreement with Chrysler. Nothing in the text of the 1925 Act, nor its legislative history, suggests that Congress intended to authorize the arbitration of any statutory claims.11
Until today all of our cases enforcing agreements to arbitrate under the Arbitration Act have involved contract claims. In one, the party claiming a breach of contractual warranties also claimed that the breach amounted to fraud actionable under § 10(b) of the Securities Exchange Act of 1934. Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974).12 *647But this is the first time the Court has considered the question whether a standard arbitration clause referring to claims arising out of or relating to a contract should be construed to cover statutory claims that have only an indirect relationship to the contract.13 In my opinion, neither the Congress that enacted the Arbitration Act in 1925, nor the many parties who have agreed to such standard clauses, could have anticipated the Court’s answer to that question.
On several occasions we have drawn a distinction between statutory rights and contractual rights and refused to hold that an arbitration barred the assertion of a statutory right. Thus, in Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974), we held that the arbitration of a claim of employment discrimination would not bar an employee’s statutory right to damages under Title VII of the Civil Rights Act of 1964, 42 U. S. C. §§2000e — 2000e-17, notwithstanding the strong federal policy favoring the arbitration of labor disputes. In that case the Court explained at some length why it would be unreasonable to assume that Congress intended to give arbitrators the final authority to implement the federal statutory policy:
“[W]e have long recognized that ‘the choice of forums inevitably affects the scope of the substantive right to be vindicated.’ U. S. Bulk Carriers v. Arguelles, 400 *648U. S. 351, 359-360 (1971) (Harlan, J., concurring). Respondent’s deferral rule is necessarily premised on the assumption that arbitral processes are commensurate with judicial processes and that Congress impliedly intended federal courts to defer to arbitral decisions on Title VII issues. We deem this supposition unlikely.
“Arbitral procedures, while well suited to the resolution of contractual disputes, make arbitration a comparatively inappropriate forum for the final resolution of rights created by Title VII. This conclusion rests first on the special role of the arbitrator, whose task is to effectuate the intent of the parties rather than the requirements of enacted legislation. . . . But other facts may still render arbitral processes comparatively inferior to judicial processes in the protection of Title VII rights. Among these is the fact that the specialized competence of arbitrators pertains primarily to the law of the shop, not the law of the land. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U. S. 574, 581-583 (1960). Parties usually choose an arbitrator because they trust his knowledge and judgment concerning the demands and norms of industrial relations. On the other hand, the resolution of statutory or constitutional issues is a primary responsibility of courts, and judicial construction has proved especially necessary with respect to Title VII, whose broad language frequently can be given meaning only by reference to public law concepts.” 415 U. S., at 56-57 (footnote omitted).
In addition, the Court noted that the informal procedures which make arbitration so desirable in the context of contractual disputes are inadequate to develop a record for appellate review of statutory questions.14 Such review is essential on *649matters of statutory interpretation in order to assure consistent application of important public rights.
In Barrentine v. Arkansas-Best Freight System, Inc., 450 U. S. 728 (1981), we reached a similar conclusion with respect to the arbitrability of an employee’s claim based on the Fair Labor Standards Act, 29 U. S. C. §§201-219. We again noted that an arbitrator, unlike a federal judge, has no institutional obligation to enforce federal legislative policy:
“Because the arbitrator is required to effectuate the intent of the parties, rather than to enforce the statute, he may issue a ruling that is inimical to the public policies underlying the FLSA, thus depriving an employee of protected statutory rights.
“Finally, not only are arbitral procedures less protective of individual statutory rights than are judicial procedures, see Gardner-Denver, swpra, at 57-58, but arbitrators very often are powerless to grant the aggrieved employees as broad a range of relief. Under the FLSA, courts can award actual and liquidated damages, reasonable attorney’s fees, and costs. 29 U. S. C. § 216(b). An arbitrator, by contrast, can award only that compensation authorized by the wage provision of the collective-bargaining agreement. ... It is most unlikely that he will be authorized to award liquidated damages, costs, or attorney’s fees.” 450 U. S., at 744-745 (footnote omitted).
*650The Court has applied the same logic in holding that federal claims asserted under the Ku Klux Act of 1871, 42 U. S. C. § 1983, and claims arising under § 12(2) of the Securities Act of 1933,15 U. S. C. § 771(2), may not be finally resolved by an arbitrator. McDonald v. City of West Branch, 466 U. S. 284 (1984); Wilko v. Swan, 346 U. S. 427 (1953).
The Court’s opinions in Alexander, Barrentine, McDonald, and Wilko all explain why it makes good sense to draw a distinction between statutory claims and contract claims. In view of the Court’s repeated recognition of the distinction between federal statutory rights and contractual rights, together with the undisputed historical fact that arbitration has functioned almost entirely in either the area of labor disputes or in “ordinary disputes between merchants as to questions of fact,” see n. 11, supra, it is reasonable to assume that most lawyers and executives would not expect the language in the standard arbitration clause to cover federal statutory claims. Thus, in my opinion, both a fair respect for the importance of the interests that Congress has identified as worthy of federal statutory protection, and a fair appraisal of the most likely understanding of the parties who sign agreements containing standard arbitration clauses, support a presumption that such- clauses do not apply to federal statutory claims.
hH hH
The Court has repeatedly held that a decision by Congress to create a special statutory remedy renders a private agreement to arbitrate a federal statutory claim unenforceable. Thus, as I have already noted, the express statutory remedy provided in the Ku Klux Act of 1871,15 the express statutory, remedy in the Securities Act of 1933,16 the express statutory remedy in the Fair Labor Standards Act,17 and the express *651statutory remedy in Title VII of the Civil Rights Act of 1964,18 each provided the Court with convincing evidence that Congress did not intend the protections afforded by the statute to be administered by a private arbitrator. The reasons that motivated those decisions apply with special force to the federal policy that is protected by the antitrust laws.
To make this point it is appropriate to recall some of our past appraisals of the importance of this federal policy and then to identify some of the specific remedies Congress has designed to implement it. It was Chief Justice Hughes who characterized the Sherman Antitrust Act as “a charter of freedom” that may fairly be compared to a constitutional provision. See Appalachian Coals, Inc. v. United States, 288 U. S. 344, 359-360 (1933). In United States v. Philadelphia National Bank, 374 U. S. 321, 371 (1963), the Court referred to the extraordinary “magnitude” of the value choices made by Congress in enacting the Sherman Act. More recently, the Court described the weighty public interests underlying the basic philosophy of the statute:
“Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms. And the freedom guaranteed each and every business, no matter how small, is the freedom to compete — to assert with vigor, imagination, devotion, and ingenuity whatever economic muscle it can muster. Implicit in such freedom is the notion that it cannot be foreclosed with respect to one sector of the economy because certain private citizens or groups believe that such foreclosure might promote greater competition in a more important sector of the economy.” United States v. Topco Associates, Inc., 405 U. S. 596, 610 (1972).
*652The Sherman and Clayton Acts reflect Congress’ appraisal of the value of economic freedom; they guarantee the vitality of the entrepreneurial spirit. Questions arising under these Acts are among the most important in public law.
The unique public interest in the enforcement of the antitrust laws is repeatedly reflected in the special remedial scheme enacted by Congress. Since its enactment in 1890, the Sherman Act has provided for public enforcement through criminal as well as civil sanctions. The pre-eminent federal interest in effective enforcement once justified a provision for special three-judge district courts to hear antitrust claims on an expedited basis, as well as for direct appeal to this Court bypassing the courts of appeals.19 See, e. g., United States v. National Assn. of Securities Dealers, Inc., 422 U. S. 694 (1975).
The special interest in encouraging private enforcement of the Sherman Act has been reflected in the statutory scheme ever since 1890. Section 7 of the original Act,20 used the broadest possible language to describe the class of litigants who may invoke its protection. “The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated.” Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 236 (1948); see also Associ*653ated General Contractors of California, Inc. v. Carpenters, 459 U. S. 519, 529 (1983).
The provision for mandatory treble damages — unique in federal law when the statute was enacted — provides a special incentive to the private enforcement of the statute, as well as an especially powerful deterrent to violators.21 What we have described as “the public interest in vigilant enforcement of the antitrust laws through the instrumentality of the private treble-damage action,” Lawlor v. National Screen Service Corp., 349 U. S. 322, 329 (1955), is buttressed by the statutory mandate that the injured party also recover costs, “including a reasonable attorney’s fee.” 15 U. S. C. § 15(a). The interest in wide and effective enforcement has thus, for almost a century, been vindicated by enlisting the assistance *654of “private Attorneys General”;22 we have always attached special importance to their role because “[e]very violation of the antitrust laws is a blow to the free-enterprise system envisaged by Congress.” Hawaii v. Standard Oil Co., 405 U. S. 251, 262 (1972).
There are, in addition, several unusual features of the antitrust enforcement scheme that unequivocally require rejection of any thought that Congress would tolerate private arbitration of antitrust claims in lieu of the statutory remedies that it fashioned. As we explained in Blumenstock Brothers Advertising Agency v. Curtis Publishing Co., 252 U. S. 436, 440 (1920), an antitrust treble-damages case “can only be brought in a District Court of the United States.” The determination that these cases are “too important to be decided otherwise than by competent tribunals”23 surely cannot allow private arbitrators to assume a jurisdiction that is denied to courts of the sovereign States.
*655The extraordinary importance of the private antitrust remedy has been emphasized in other statutes enacted by Congress. Thus, in 1913, Congress passed a special Act guaranteeing public access to depositions in Government civil proceedings to enforce the Sherman Act. 37 Stat. 731, 15 U. S. C. §30.24 The purpose of that Act plainly was to enable victims of antitrust violations to make evidentiary use of information developed in a public enforcement proceeding. This purpose was further implemented in the following year by the enactment of § 5 of the Clayton Act providing that a final judgment or decree in a Government case may constitute prima facie proof of a violation in a subsequent treble-damages case. 38 Stat. 731, 15 U. S. C. § 16(a). These special remedial provisions attest to the importance that Congress has attached to the private remedy.
In view of the history of antitrust enforcement in the United States, it is not surprising that all of the federal courts that have considered the question have uniformly and unhesitatingly concluded that agreements to arbitrate federal antitrust issues are not enforceable. In a landmark opinion for the Court of Appeals for the Second Circuit, Judge Feinberg wrote:
“A claim under the antitrust laws is not merely a private matter. The Sherman Act is designed to promote the national interest in a competitive economy; thus, the plaintiff asserting his rights under the Act has been likened to a private attorney-general who protects the public’s interest. . . . Antitrust violations can affect hundreds of thousands — perhaps millions — of people and inflict staggering economic damage. . . . We do not believe that Congress intended such claims to be resolved elsewhere than in the courts. We do not suggest that all antitrust litigations attain these swollen proportions; the courts, no less than the public, are thankful *656that they do not. But in fashioning a rule to govern the arbitrability of antitrust claims, we must consider the rule’s potential effect. For the same reason, it is also proper to ask whether contracts of adhesion between alleged monopolists and their customers should determine the forum for trying antitrust violations.” American Safety Equipment Corp. v. J. P. Maguire & Co., 391 F. 2d 821, 826-827 (1968) (footnote omitted).
This view has been followed in later cases from that Circuit25 and by the First,26 Fifth,27 Seventh,28 Eighth,29 and Ninth Circuits.30 It is clearly a correct statement of the law.
This Court would be well advised to endorse the collective wisdom of the distinguished judges of the Courts of Appeals who have unanimously concluded that the statutory remedies fashioned by Congress for the enforcement of the antitrust laws render an agreement to arbitrate antitrust disputes unenforceable. Arbitration awards are only reviewable for manifest disregard of the law, 9 U. S. C. §§ 10, 207, and the rudimentary procedures which make arbitration so desirable in the context of a private dispute often mean that the record is so inadequate that the arbitrator’s decision is virtually *657unreviewable.31 Despotic decisionmaking of this kind is fine for parties who are willing to agree in advance to settle for a best approximation of the correct result in order to resolve quickly and inexpensively any contractual dispute that may arise in an ongoing commercial relationship. Such informality, however, is simply unacceptable when every error may have devastating consequences for important businesses in our national economy and may undermine their ability to compete in world markets.32 Instead of “muffling a grievance in the cloakroom of arbitration,” the public interest in free competitive markets would be better served by having the issues resolved “in the light of impartial public court adjudication.” See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U. S. 117, 136 (1973).33
*658I — I
The Court assumes for the purposes of its decision that the antitrust issues would not be arbitrable if this were a purely domestic dispute, ante, at 629, but holds that the international character of the controversy makes it arbitrable. The holding rests on vague concerns for the international implications of its decision and a misguided application of Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974).

International Obligations of the United States

Before relying on its own notions of what international comity requires, it is surprising that the Court does not determine the specific commitments that the United States has made to enforce private agreements to arbitrate disputes arising under public law. As the Court acknowledges, the only treaty relevant here is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. [1970] 21 U. S. T. 2517, T. I. A. S. No. 6997. The Convention was adopted in 1958 at a multilateral conference sponsored by the United Nations. This Nation did not sign the proposed convention at that time; displaying its characteristic caution before entering into international compacts, the United States did not accede to it until 12 years later.
As the Court acknowledged in Scherk v. Alberto-Culver Co., 417 U. S., at 520, n. 15, the principal purpose of the Convention “was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.” However, the United States, as amicus curiae, advises the Court that the Convention “clearly contemplates” that signatory nations will enforce domestic laws prohibiting the arbitration of certain subject matters. Brief for United States as Amicus Curiae 28. This interpretation of the Convention was adopted by the Court of Appeals, 723 F. 2d, at 162-166, and the Court *659declines to reject it, ante, at 639-640, n. 21. The construction is beyond doubt.
Article 11(3) of the Convention provides that the court of a Contracting State, “when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration.” This obligation does not arise, however, (i) if the agreement “is null and void, inoperative or incapable of being performed,” Art. 11(3), or (ii) if the dispute does not concern “a subject matter capable of settlement by arbitration,” Art. 11(1). The former qualification principally applies to matters of fraud, mistake, and duress in the inducement, or problems of procedural fairness and feasibility. 723 P. 2d, at 164. The latter clause plainly suggests the possibility that some subject matters are not capable of arbitration under the domestic laws of the signatory nations, and that agreements to arbitrate such disputes need not be enforced.
This construction is confirmed by the provisions of the Convention which provide for the enforcement of international arbitration awards. Article III provides that each “Contracting State shall recognize arbitral awards as binding and enforce them.” However, if an arbitration award is “contrary to the public policy of [a] country” called upon to enforce it, or if it concerns a subject matter which is “not capable of settlement by arbitration under the law of that country,” the Convention does not require that it be enforced. Arts. V(2)(a) and (b). Thus, reading Articles II and V together, the Convention provides that agreements to arbitrate disputes which are nonarbitrable under domestic law need not be honored, nor awards rendered under them enforced.34
*660This construction is also supported by the legislative history of the Senate’s advice and consent to the Convention. In presenting the Convention for the Senate’s consideration the President offered the following interpretation of Article 11(1):
“The requirement that the agreement apply to a matter capable of settlement by arbitration is necessary in order to take proper account of laws in force in many countries which prohibit the submission of certain questions to arbitration. In some States of the United States* for example, disputes affecting the title to real property are not arbitrable.” S. Exec. Doc. E, at 19.
The Senate’s consent to the Convention presumably was made in light of this interpretation, and thus it is to be afforded considerable weight. Sumitomo Shoji America, Inc. v. Avagliano, 457 U. S. 176, 184-185 (1982).

International Comity

It is clear then that the international obligations of the United States permit us to honor Congress’ commitment to the exclusive resolution of antitrust disputes in the federal courts. The Court today refuses to do so, offering only vague concerns for comity among nations. The courts of other nations, on the other hand, have applied the exception provided in the Convention, and refused to enforce agreements to arbitrate specific subject matters of concern to them.35
*661It may be that the subject-matter exception to the Convention ought to be reserved — as a matter of domestic law — for matters of the greatest public interest which involve concerns that are shared by other nations. The Sherman Act’s commitment to free competitive markets is among our most important civil policies. Supra, at 650-657. This commitment, shared by other nations which are signatory to the Convention,36 is hardly the sort of parochial concern that we should decline to enforce in the interest of international comity. Indeed, the branch of Government entrusted with the conduct of political relations with foreign governments has informed us that the “United States’ determination that federal antitrust claims are nonarbitrable under the Convention . . . is not likely to result in either surprise or recrimination on the part of other signatories to the Convention.” Brief for United States as Amicus Curiae 30.
Lacking any support for the proposition that the enforcement of our domestic laws in this context will result in international recriminations, the Court seeks refuge in an obtuse application of its own precedent, Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974), in order to defend the contrary result. The Scherk case was an action for damages brought by an American purchaser of three European businesses in which it was claimed that the seller’s fraudulent representations concerning the status of certain European trademarks constituted a violation of § 10(b) of the Securities Exchange *662Act of 1934, 15 U. S. C. §78j(b). The Court held that the parties’ agreement to arbitrate any dispute arising out of the purchase agreement was enforceable under the Federal Arbitration Act. The legal issue was whether the Court’s earlier holding in Wilko v. Swan, 346 U. S. 427 (1953)— “that an agreement to arbitrate could not preclude a buyer of a security from seeking a judicial remedy under the Securities Act of 1933,” see 417 U. S., at 510 — was “controlling authority.” Ibid.
The Court carefully identified two important differences between the Wilko case and the Scherk case. First, the statute involved in Wilko contained an express private remedy that had “no statutory counterpart” in the statute involved in Scherk, see 417 U. S., at 513. Although the Court noted that this difference provided a “colorable argument” for reaching a different result, the Court did not rely on it. Id., at 513-514.
Instead, it based its decision on the second distinction— that the outcome in Wilko was governed entirely by American law whereas in Scherk foreign rules of law would control and, if the arbitration clause were not enforced, a host of international conflict-of-laws problems would arise. The Court explained:
“Alberto-Culver’s contract to purchase the business entities belonging to Scherk was a truly international agreement. Alberto-Culver is an American corporation with its principal place of business and the vast bulk of its activity in this country, while Scherk is a citizen of Germany whose companies were organized under the laws of Germany and Liechtenstein. The negotiations leading to the signing of the contract in Austria and to the closing in Switzerland took place in the United States, England, and Germany, and involved consultations with legal and trademark experts from each of those countries and from Liechtenstein. Finally, and most significantly, the subject matter of the contract concerned the *663sale of business enterprises organized under the laws of and primarily situated in European countries, whose activities were largely, if not entirely, directed to European markets.
“Such a contract involves considerations and policies significantly different from those found controlling in Wilko. In Wilko, quite apart from the arbitration provision, there was no question but that the laws of the United States generally, and the federal securities laws in particular, would govern disputes arising out of the stock-purchase agreement. The parties, the negotiations, and the subject matter of the contract were all situated in this country, and no credible claim could have been entertained that any international conflict-of-laws problems would arise. In this case, by contrast, in the absence of the arbitration provision considerable uncertainty existed at the time of the agreement, and still exists, concerning the law applicable to the resolution of disputes arising out of the contract.” 417 U. S., at 515-516 (footnote omitted).
Thus, in its opinion in Scherk, the Court distinguished Wilko because in that case “no credible claim could have been entertained that any international conflict-of-laws problems would arise.” 417 U. S., at 516. That distinction fits this case precisely, since I consider it perfectly clear that the rules of American antitrust law must govern the claim of an American automobile dealer that he has been injured by an international conspiracy to restrain trade in the American automobile market.37
The critical importance of the foreign-law issues in Scherk was apparent to me even before the case reached this Court. See n. 12, supra. For that reason, it is especially distress*664ing to find that the Court is unable to perceive why the reasoning in Scherk is wholly inapplicable to Soler’s antitrust claims against Chrysler and Mitsubishi. The merits of those claims are controlled entirely by American law. It is true that the automobiles are manufactured in Japan and that Mitsubishi is a Japanese corporation, but the same antitrust questions would be presented if Mitsubishi were owned by two American companies instead of by one American and one Japanese partner. When Mitsubishi enters the American market and plans to engage in business in that market over a period of years, it must recognize its obligation to comply with American law and to be subject to the remedial provisions of American statutes.38
The federal claim that was asserted in Scherk, unlike Soler’s antitrust claim, had not been expressly authorized by Congress. Indeed, until this Court’s recent decision in Landreth Timber Co. v. Landreth, 471 U. S. 681 (1985), the federal cause of action asserted in Scherk would not have been entertained in a number of Federal Circuits because it did not involve the kind of securities transaction that Congress intended to regulate when it enacted the Securities Exchange Act of 1934.39 The fraud claimed in Scherk was virtually identical to the breach of warranty claim; arbitration of such claims arising out of an agreement between parties of equal bargaining strength does not conflict with any significant federal policy.
In contrast, Soler’s claim not only implicates our fundamental antitrust policies, supra, at 650-657, but also should *665be evaluated in the light of an explicit congressional finding concerning the disparity in bargaining power between automobile manufacturers and their franchised dealers. In 1956, when Congress enacted special legislation to protect dealers from bad-faith franchise terminations,40 it recited its intent “to balance the power now heavily weighted in favor of automobile manufacturers.” 70 Stat. 1125. The special federal interest in protecting automobile dealers from overreaching by car manufacturers, as well as the policies underlying .the Sherman Act, underscore the folly of the Court’s decision today.
V
The Court’s repeated incantation of the high ideals of “international arbitration” creates the impression that this case involves the fate of an institution designed to implement a formula for world peace.41 But just as it is improper to subordinate the public interest in enforcement of antitrust policy to the private interest in resolving commercial disputes, so is it equally unwise to allow a vision of world unity to distort the importance of the selection of the proper forum for resolving this dispute. Like any other mechanism for resolving controversies, international arbitration will only succeed if it is realistically limited to tasks it is capable of performing well — the prompt and inexpensive resolution of essentially contractual disputes between commercial partners. As for matters involving the political passions and the fundamental interests of nations, even the multilateral convention adopted under the auspices of the United Nations recognizes that private international arbitration is incapable of achieving satisfactory results.
*666In my opinion, the elected representatives of the American people would not have us dispatch an American citizen to a foreign land in search of an uncertain remedy for the violation of a public right that is protected by the Sherman Act. This is especially so when there has been no genuine bargaining over the terms of the submission, and the arbitration remedy provided has not even the most elementary guarantees of fair process. Consideration of a fully developed record by a jury, instructed in the law by a federal judge, and subject to appellate review, is a surer guide to the competitive character of a commercial practice than the practically unreviewable judgment of a private arbitrator.
Unlike the Congress that enacted the Sherman Act in 1890, the Court today does not seem to appreciate the value of economic freedom. I respectfully dissent.

 9 U. S. C. §§4, 201.

 [1970] 21 U. S. T. 2517, T. I. A. S. No. 6997.

 The distributor agreement provides, in part:
“This Agreement is made by and between CHRYSLER INTERNATIONAL S. A., a corporation organized and existing under the laws of the Swiss Confederation with its principal office in Geneva, Switzerland (hereinafter sometimes called CHRYSLER), and SOLER CHRYSLER-PLYMOUTH INC., . . . (hereinafter sometimes called DISTRIBUTOR), and will govern the sale by CHRYSLER to DISTRIBUTOR of PLYMOUTH PASSENGER CARS AND CAR DERIVATIVES MANUFACTURED BY MITSUBISHI MOTORS CORPORATION OF TOKYO, JAPAN and automotive replacement parts and accessories (said motor vehicles, replacement parts and accessories hereinafter sometimes called Products).” App. 18.

 “PURCHASE RIGHTS
“Subject to the provisions of this Agreement, CHRYSLER grants to DISTRIBUTOR the non-exclusive right to purchase Products from CHRYSLER, and DISTRIBUTOR agrees to buy Products from CHRYSLER, for resale within the following described territory (hereinafter called Sales Area): METROPOLITAN SAN JUAN, PUERTO RICO Ibid.
This is the same company that is referred to as “CISA” in the sales purchase agreement and in the Court’s opinion.

 Paragraph 26 of the distributor agreement provides:
“DIRECT SALES
“CHRYSLER and DISTRIBUTOR agree that CHRYSLER may, at its option, forward orders received from DISTRIBUTOR pursuant to this Agreement to its parent company, Chrysler Corporation, or to any subsid*643iary, associated or affiliated company (hereinafter called ‘SUPPLIER’) which will then sell the Products covered by such order directly to DISTRIBUTOR, CHRYSLER and DISTRIBUTOR hereby acknowledge and agree that, unless otherwise agreed in writing, any such direct sales between SUPPLIER and DISTRIBUTOR will be governed by the terms and conditions contained on the order form and in this Agreement and that any such sales will not constitute the basis forming a distributor relationship between SUPPLIER and DISTRIBUTOR. Further, DISTRIBUTOR acknowledges and agrees that any claim or controversy resulting from such direct sales by SUPPLIER will be handled by CHRYSLER as though such sale had been made by CHRYSLER.” Id., at 39-40.

 “WHEREAS, pursuant to Article 26 of the Distributor Agreement, CISA may forward orders received from BUYER to an associated company;
‘WHEREAS, MMC and CISA have agreed that MMC, which is an associated company of CISA, may sell such MMC Products directly to BUYER pursuant to Article 26 of the Distributor Agreement.” Id., at 43.

 Mitsubishi is jointly owned by Chrysler and by Mitsubishi Heavy Industries, Ltd., a Japanese corporation. Id., at 200-201.

 That clause reads as follows:
“ARBITRATION OF CERTAIN MATTERS
“All disputes, controversies or differences which may arise between MMC and BUYER out of or in relation to Articles I-B through V of this Agreement or for the breach thereof, shall be finally settled by arbitration in Japan in accordance with the rules and regulations of the Japan Commercial Arbitration Association.” Id., at 52-53.

 Even if Mitsubishi can prove that it did not violate any provision of the contract, such proof would not necessarily constitute a defense to the antitrust claim. In contrast, in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395 (1967), Prima Paint’s claim of fraud in the inducement was asserted to rescind the contract, not as an independent basis of recovery.

 Section 2 provides:
“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2.

 In his dissent in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S., at 415, Justice Black quoted the following commentary written shortly after the statute was passed:
“Not all questions arising out of contracts ought to be arbitrated. It is a remedy peculiarly suited to the disposition of the ordinary disputes between merchants as to questions of fact — quantity, quality, time of delivery, compliance with terms of payment, excuses for non-performance, and the like. It has a place also in the determination of the simpler questions of law — the questions of law which arise out of these daily relations between merchants as to the passage of title, the existence of warranties, or the questions of law which are complementary to the questions of fact which we have just mentioned.” Cohen & Dayton, The New Federal Arbitration Law, 12 Va. L. Rev. 265, 281 (1926).
In the Prima Paint case the Court held that the Act applied to a claim of fraud in the inducement of the contract, but did not intimate that it might also cover federal statutory claims. See n. 9, supra.

 “The dispute between these parties over the alleged shortage in defendant’s inventory of European trademarks, a matter covered by contract *647warranties and subject to pre-closing verification, is the kind of commercial dispute for which arbitration is entirely appropriate. In my opinion, the fact that the ‘fraud’ language of Rule 10(b)(5) has been included in the complaint is far less significant than the desirability of having the Court of Arbitration of the International Chamber of Commerce in Paris, France, decide the various questions of foreign law which should determine the rights of these parties.” Alberto-Culver Co. v. Scherk, 484 F. 2d 611, 619-620 (CA7 1973) (Stevens, J., dissenting), rev’d, 417 U. S. 506 (1974).

 It is interesting to note that in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U. S. 1 (1983), the Court referred to the standard clause describing claims “arising out of, or relating to, this Contract or the breach thereof” as a provision “for resolving disputes arising out of the contract or its breach.” Id., at 4-5.

 “Moreover, the factfinding process in arbitration usually is not equivalent to judicial factfinding. The record of the arbitration proceedings is not as complete; the usual rules of evidence do not apply; and rights and *649procedures common to civil trials, such as discovery, compulsory process, cross-examination, and testimony under oath, are often severely limited or unavailable. See Bernhardt v. Polygraphic Co., 350 U. S. 198, 203 (1956); Wilko v. Swan, 346 U. S., at 435-437. And as this Court has recognized, ‘[a]rbitrators have no obligation to the court to give their reasons for an award.’ United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U. S., at 598. Indeed, it is the informality of arbitral procedure that enables it to function as an efficient, inexpensive, and expeditious means for dispute resolution. This same characteristic, however, makes arbitration a less appropriate forum for final resolution of Title VII issues than the federal courts.” 415 U. S., at 57-58 (footnote omitted).

 McDonald v. City of West Branch, 466 U. S. 284 (1984).

 Wilko v. Swan, 346 U. S. 427 (1953).

 Barrentine v. Arkansas-Best Freight System, Inc., 450 U. S. 728 (1981).

 Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974).

 See 32 Stat. 823, 88 Stat. 1708, repealed 98 Stat. 3358 (Pub. L. 98-620, § 402(11)). The Act still provides an avenue for directly appealing to this Court from a final judgment in a Government antitrust suit. 15 U. S. C. § 29(b).

 “Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney’s fee.” 26 Stat. 210.
The current version of the private remedy is codified at 15 U. S. C. § 15(a).

 “We have often indicated the inappropriateness of invoking broad common-law barriers to relief where a private suit serves important public purposes. It was for this reason that we held in Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211 (1951), that a plaintiff in an antitrust suit could not be barred from recovery by proof that he had engaged in an unrelated conspiracy to commit some other antitrust violation. Similarly, in Simpson v. Union Oil Co., 377 U. S. 13 (1964), we held that a dealer whose consignment agreement was canceled for failure to adhere to a fixed resale price could bring suit under the antitrust laws even though by signing the agreement he had to that extent become a participant in the illegal, competition-destroying scheme. Both Simpson and Kiefer-Stewart were premised on a recognition that the purposes of the antitrust laws are best served by insuring that the private action will be an ever-present threat to deter anyone contemplating business behavior in violation of the antitrust laws. The plaintiff who reaps the reward of treble damages may be no less morally reprehensible than the defendant, but the law encourages his suit to further the overriding public policy in favor of competition. A more fastidious regard for the relative moral worth of the parties would only result in seriously undermining the usefulness of the private action as a bulwark of antitrust enforcement. And permitting the plaintiff to recover a windfall gain does not encourage continued violations by those in his position since they remain fully subject to civil and criminal penalties for their own illegal conduct.” Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134, 138-139 (1968).

 Under the Panama Canal Act, any private shipper — in addition to the United States — may also bring an action seeking to bar access to the canal for any vessel owned by a company “doing business” in violation of the antitrust laws. 37 Stat. 567, 15 U. S. C. §31.

 In University Life Insurance Co. v. Unimarc Ltd., 699 F. 2d 846 (CA7 1983), Judge Posner wrote:
“The suit brought by Unimare and Huff . . . raises issues of state tort and contract law and federal antitrust law. The tort and contract issues may or may not be within the scope of the arbitration clauses in the coinsurance and second marketing agreements but they are arbitrable in the sense that an agreement to arbitrate them would be enforceable. Federal antitrust issues, however, are nonarbitrable in just that sense. Applied Digital Technology, Inc. v. Continental Casualty Co., 576 F. 2d 116, 117 (7th Cir. 1978). They are considered to be at once too difficult to be decided competently by arbitrators — who are not judges, and often not even lawyers — and too important to be decided otherwise than by competent tribunals. See American Safety Equipment Corp. v. J. P. Maguire & Co., 391 F. 2d 821, 826-27 (2d Cir. 1968). The root of the doctrine is in the same soil as the principle, announced in Blumenstock Bros. Adv. Agency v. Curtis Pub. Co., 252 U. S. 436, 440-41 (1920), that federal antitrust suits may not be brought in state courts.” Id., at 850-851.

 See United States v. Procter & Gamble Co., 356 U. S. 677, 683 (1958).

 N. V. Maatschappij Voor Industriele Waarden v. A. O. Smith Corp., 532 P. 2d 874, 876 (1976) (per curiam).

 723 F. 2d 155, 162 (1983) (Coffin, J., for the court) (opinion below).

 Cobb v. Lewis, 488 F. 2d 41, 47 (1974) (Wisdom, J., for the court).

 University Life Insurance Co. v. Unimarc Ltd., 699 F. 2d, at 850-851 (1983) (Posner, J., for the court); Applied Digital Technology, Inc. v. Continental Casualty Co., 576 F. 2d 116, 117 (1978) (Pell, J., for the court).

 Helfenbein v. International Industries, Inc., 438 F. 2d 1068, 1070 (Lay, J., for the court), cert. denied, 404 U. S. 872 (1971).

 Lake Communications, Inc. v. ICC Corp., 738 F. 2d 1473, 1477-1480 (1984) (Browning, C. J., for the court); Varo v. Comprehensive Designers, Inc., 504 F. 2d 1103, 1104 (1974) (Chambers, J., for the court); Power Replacements, Inc. v. Air Preheater Co., 426 F. 2d 980, 983-984 (1970) (Jameson, J., for the court); A. & E. Plastik Pak Co. v. Monsanto Co., 396 F. 2d 710, 715-716 (1968) (Merrill, J., for the court).

 The arbitration procedure in this case does not provide any right to evi-dentiary discovery or a written decision, and requires that all proceedings be closed to the public. App. 220-221. Moreover, Japanese arbitrators do not have the power of compulsory process to secure witnesses and documents, nor do witnesses who are available testify under oath. Id., at 218-219. Cf. 9 U. S. C. § 7 (arbitrators may summon witnesses to attend proceedings and seek enforcement in a district court).

 The greatest risk, of course, is that the arbitrator will condemn business practices under the antitrust laws that are efficient in a free competitive market. Cf. Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U. S. 284 (1985), rev’g 715 F. 2d 1393 (CA9 1983). In the absence of a reviewable record, a reviewing district court would not be able to undo the damage wrought. Even a Government suit or an action by a private party might not be available to set aside the award.

 The Court notes that some courts which have held that agreements to arbitrate antitrust claims generally are unenforceable have nevertheless enforced arbitration agreements to settle an existing antitrust claim. Ante, at 633. These settlement agreements, made after the parties have had every opportunity to evaluate the strength of their position, are obviously less destructive of the private treble-damages remedy that Congress provided. Thus, it may well be that arbitration as a means of settling existing disputes is permissible.

 Indeed, it has been argued that a state may refuse to enforce an agreement to arbitrate a subject matter which is nonarbitrable in domestic law under Article 11(3) as well as under Article 11(1). Since awards rendered under such agreements need not be enforced under Article V(2) the agree*660ment is “incapable of being performed.” Art. 11(3). S. Exec. Doc. E, 90th Cong., 2d Sess., 19 (1968) (hereinafter S. Exec. Doc. E); G. Haight, Convention on the Recognition and Enforcement of Foreign Arbitral Awards 27-28 (1958).

 For example, the Cour de Cassation in Belgium has held that disputes arising under a Belgian statute limiting the unilateral termination of exclusive distributorships are not arbitrable under the Convention in that country, Audi-NSU Auto Union A. G. v. S. A. Adelin Petit & Cie. (1979), in 5 Yearbook Commercial Arbitration 257, 259 (1980), and the Corte di *661Cassazione in Italy has held that labor disputes are not arbitrable under the Convention in that country, Compagnia Generate Construzioni v. Piersanti, [1980] Poro Italiano I 190, in 6 Yearbook Commercial Arbitration 229, 230 (1981).

 For example, the Federal Republic of Germany has a vigorous antitrust program, and prohibits the enforcement of predispute agreements to arbitrate such claims under some circumstances. See Act Against Restraints of Competition §91(1), in 1 Organisation for Economic Cooperation and Development, Guide to Legislation on Restrictive Business Practices, Part D, p. 49 (1980). See also 2 G. Delaume, Transnational Contracts § 13.06, p. 31, and n. 3 (1982).

 Cf. Compagnia Generate Construzioni v. Piersanti, [1980] Foro Italiano I 190 (Corte Cass. Italy), in 6 Yearbook Commercial Arbitration, at 230; Audi-NSU Auto Union A. G. v. S. A. Adelin Petit & Cie. (Cour Cass. Belgium 1979), in 5 Yearbook Commercial Arbitration, at 259.

 Cf. Sumitomo Shoji America, Inc. v. Avagliano, 457 U. S. 176 (1982) (Japanese general trading company’s wholly owned subsidiary which is incorporated in the United States is not exempt under bilateral commercial treaty from obligations under Title VII of the Civil Rights Act of 1964).

 The Court’s opinion in Landreth Timber, 471 U. S., at 694-695, n. 7, does not take issue with my assertion, in dissent, that Congress never “intended to cover negotiated transactions involving the sale of control of a business whose securities have never been offered or sold in any public market.” Id., at 699.

 Automobile Dealer’s Day in Court Act, 15 U. S. C. §§ 1221-1225.

 E. g., Charter of the United Nations and Statute of the International Court of Justice, 59 Stat. 1031, T. S. No. 993 (1945); Constitution of the International Labor Organisation, 49 Stat. 2712, T. S. No. 874 (1934); Treaty of Versailles, S. Doc. 49, 66th Cong., 1st Sess., pt. 1, pp. 8-17 (1919) (Covenant of the League of Nations); Kant, Perpetual Peace, A Philosophical Sketch, in Kant’s Political Writings 93 (H. Reiss ed. 1971).