By Abdul Rehman T
The author is a student at the School of Law, Christ University
Introduction
Arbitration in recent times has been a chosen mechanism for dispute resolution in International Commercial disputes. The reason for selecting this mechanism for dispute resolution is its advantages, such as confidentiality, enforcement of its decisions through the New York Convention, Tribunal expertise, and neutrality through party-appointment of arbitrators, and limited grounds such as fraud, misconduct and gross unfairness of the arbitrator, etc on which the award can be challenged.
Using arbitration to settle Antitrust disputes has come into existence in recent years. There are various doubts regarding the usage of arbitration for antitrust disputes, especially the public policy concern as, Antitrust deals with matters which impact the public interest at large. To ensure a level playing field, the government should exercise control over the antitrust disputes and not the private bodies such as arbitrators. But this is not the view; several cases have been decided by using arbitration as a dispute resolution mechanism in the United States (US), and the European Union (EU).
American and European perspectives on the Arbitrability of Antirust claims
The US case law, which dealt with the arbitrability of Antitrust disputes, sets an international precedent, which was adopted by the EU. In Mitsubishi Motor Corp v. Soler Chrysler-Plymouth Inc, The US Supreme Court opened the doors for resolving future disputes related to antitrust law under arbitration. The question before the Court was regarding the arbitrability of the claims arising under the Sherman Act, 1890. The Supreme Court held that claims arising under the Sherman Anti-Trust Act, 1890 and those in the valid arbitration clause in international commercial transactions are arbitrable.
Important points to be considered, which the court observed in the Mitsubishi case, are: first, Antitrust disputes are arbitrable and wanted courts to be open to this process. Second, a generally worded arbitrable clause would suffice; no requirement of a specific Statute allowing parties to arbitrate was needed. Third, to ensure the maintenance of public interest would enforce the arbitral award through the supervision of National Courts, which secures the public interest, which is a cause of concern in the arbitrability of antitrust claims. By incorporating a clause for arbitration in the agreement is sufficient for its enforcement by the Courts.
There is a contrast when it comes to the implementation of competition law in the EU and the US. In the EU, the Commission is responsible for applying the European Competition rules, and there is no reference to the enforcement bodies or the arbitral tribunal. The Commission's decision is binding; however, an appeal can be made to the Court of Justice of the European Union (CJEU). Although arbitration has not and cannot be used as part of the Commission's enforcement decisions, it has relevance in the EU competition law as it has been recognised as a dispute resolution mechanism alternative to litigation. It plays a role in enforcing commitments in merger clearance procedures and public policy consideration in international arbitration disputes.
The stance taken by the US Supreme Court in the Mitsubishi case towards arbitrability of antitrust disputes influenced the EU's position, and it can be seen in Eco-Swiss China Time Ltd. V. Benneton International NV, the issue was with reference to the enforcement of the arbitration award when the Dutch Court posed a question before the (CJEU) whether an arbitral award should be annulled if it is contrary to Article 101 of The Treaty for the Functioning of the European Union (TFEU). CJEU held that Article 101 TFEU is an essential provision that deals with public policy and National Courts can set aside the arbitral awards if it's inconsistent with Article 101. As a result of this Judgement, it can be implied that antitrust claims can be subject to arbitration under EU law. This decision requires the arbitrators dealing with the competition law claims to respect the European Competition law while issuing an arbitral award. Issues concerning competition rules are arbitrable, and they can be reanalysed by courts if there is a challenge, but they are not considered, ab initio, contrary to public policy.
The decision in the Eco Swiss constructs the notion of arbitrability of the competition law disputes subject to Article 101 of TFEU which deals with public policy. The decision in Eco Swiss in comparison with Mitsubishi is not detailed but it is sufficient to draw an inference for arbitrability of Competition law disputes.
The Arbitrability of Antitrust Disputes: The UK position
Arbitration Act 1996 does not mention anything regarding the arbitrability of antitrust claims, and the common law deals with this matter on a case-by-case basis. In English Law, one case has dealt with this subject matter, and before that, no case law dealt with the arbitrability of antitrust disputes. US Supreme Court in Mitsubishi and the CJEU in Eco-Swiss have allowed for the arbitrability of antitrust claims, and there was a tendency for leading academic commentators and practitioners from the UK to argue in favour of arbitrability of the English competition rules.
In Et Plus SA v. Welter, the English High Court dealt with the infringement of Articles 101 and 102 of the TFEU. Justice Gross states that "there is no realistic doubt that such 'competition' or 'antitrust' claims are arbitrable; the issue is whether they come within the scope of the arbitration clause, a s a matter of its true construction." In accordance with the decision, If the tortious claims are the cause of action then they are susceptible to arbitration.
Due to this decision of the English High Court, it can be concluded that antitrust disputes arising in both English Law and the EU can be adjudicated by arbitration under the Arbitration Act, 1996. Professor Julian Lew has stated that "The Principle that Competition Law is arbitrable is well established in English Law, as it is Internationally. Accordingly, there is no doubt that an arbitration tribunal conducting arbitration in England can, or indeed may have to apply Articles 81 and 82 (now Articles 101 and 102 TFEU) and the English Law Equivalents."
Conclusion
The doubt concerning the arbitrability of antitrust disputes is now clear not only in one but multiple jurisdictions, it has been accepted as a mechanism for resolving antitrust claims. Several courts across the US, EU and the UK have accepted the fact that arbitrators can determine antitrust disputes. The decision in Eco-Swiss captures an important aspect of public policy that has to be kept in mind while adjudicating the antitrust claims. The arbitrator should give an award that encompasses the principles of the Competition Law and public policy. In order to ensure the spirit of Justice, equity, and good conscience in the arbitral awards, they can be enforced through the National Courts, which will help in strengthening the use of arbitration to settle these types of claims; this was one of the key pointers in Mitsubishi. Though there might be some concerns about arbitration as a dispute resolution mechanism for antitrust disputes, there are no negative impacts of this mechanism. There is always a scope to challenge the award given by the arbitrator, which ensures that the public interest will always be protected.