¹ The verbs “annul,” “vacate” and “set aside” represent different labels for analogous actions, depending on the country, and are used interchangeably in this article.

² See Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 UST 2517, 330 UNTS 38 [hereinafter New York Convention]. In force in 120 nations, the Convention mandates enforcement of foreign awards subject to a set of defenses that include vacatur at the arbitral situs. See discussion in text at notes 33–43 infra.

³ See discussion of the Hilmarton and Chromalloy cases in text at notes 7–25 infra.

⁴ See Albert Jan van den Berg, The NewYork Convention of 1958 §III(4), (5), at 331–58 (1981) [hereinafter van Den Berg, Convention]; Albert Jan van den Berg, Annulment of Awards in International Arbitration, in International Arbitration in the 21st Century 133 (Richard B. Lillich & Charles N. Brower eds., 1994) [hereinafter van den Berg, Annulment]. For illustration, see Southern Pacific Properties v. Egypt, where vacatur in Paris led to dismissal of enforcement in the Netherlands. CA Paris, July 12, 1984, 1986 Revue de l’Arbitrage [Rev. arb.] 75, 23 ILM 1048 (Emmanuel Gaillard trans., 1984); D Amsterdam, July 12, 1984, 24 ILM 1040 (A. J. van den Berg trans., 1985). The Dutch action was dismissed after the Cour de cassation confirmed the lower court’s decision. See Cass, le civ., Jan. 6, 1987, 1987 Bulletin des arrêts de la Cour de Cassation, chambres civiles [Bull. Civ. I], No. 24, 1987 Rev. arb. 469, note Ph. Leboulanger, 26 ILM 1004 (Emmanuel Gaillard trans., 1987); D Amsterdam, 1988 N.J. 67,1985 Y.B. Com. Arb. 487.

⁵ For example, a court in the United States might grant interest on a debt contracted in Saudi Arabia even if a Saudi court would not. Whether the relevant choice-of-law principles involve looking to Saudi public policy might depend on factors such as the nationality and residence of the parties, the place of performance and the otherwise applicable law. See Restatement (Second) of Conflict of Laws §187 (1971) (law chosen by the parties given effect unless it conflicts with a fundamental policy of “a state which has a materially greater interest… in the determination of the particular issue”). See generally Maurice Rosenberg et al., Conflict of Laws 536–49 (10th ed. 1996).

⁶ A Belgian court also refused to enforce an annulled award rendered in Algiers against the Algerian Government’s gas exporter. See Sonatrach v. Ford, Bacon & Davis, T.P.I. Brussels, July 23, 1987, T.P.I. Brussels, Dec. 6, 1988, 1990 Annales de droit de Liège 267, 7 Bulletin de l’Association Suisse de l’arbitrage 213 (1989), 1990 Y.B. Com. Arb. 370, aff’d, CA Brussels, 8e ch., Jan. 9, 1990, 1990 Journal des Tribunaux 386. The special facts of the case (New York Convention held not to have retroactive application) make it inappropriate for comparative analysis. See generally Guy Horsmans, Actualité et évolution du droit beige de l’arbitrage, 1992 Rev. arb. 417, 426.

⁷ See 1997 Rev. arb. 376, note Ph. Fouchard. See generally Philippe Fouchard, La Portée internationale de l’annulation de la sentence arbitrate dans son pays d’origine, 1997 Rev. arb. 329 [hereinafter Fouchard, La Pontée internationale] Jean-François Poudret, Quelle Solution pour en finir avec l’affaire Hilmarton? 1998 Rev. arb. 7; Eric Schwartz, French Supreme Court Renders Final Judgment in the Hilmarton Case, 1997 Int’l Arb. L. Rev. 45; Jan Paulsson, Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment, ICC Bull., May 1998, at 14; Georges Delaume, Enforcement against a Foreign Stale of an Arbitral Award Annulled in theForeign State, 1997 Revue de droit des affaires internationales/Int’l BUS. L.J. 253. For an earlier decision along these lines, see Pabalk v. Norsolor, Cass, le civ., Oct. 9,1984, No. 730, 1985 Rev. arb. 431, note B. Goldman, 112 Journal de droit international 679, note Ph. Kahn (1985) (award vacated in Austria qualified for enforcement in France).

⁸ The consultant helped obtain a contract for drainage in Algiers. While there was no allegation of bribery, the consultant’s activity allegedly ran afoul of an Algerian statute on commercial intermediaries.

⁹ The award was rendered in August 1988, and thus was subject to challenge for “arbitrariness” under Article 36 of the Intercantonal Arbitration Concordat. Since January 1989, awards in international arbitration would normally be subject to the Loi federate sur le droit international prive, infra note 68. Upheld by the Swiss Tribunal fédéral, the Geneva court found that the conflict with Algerian legislation did not constitute a violation of Swiss public policy. See Cantonal Ct. Geneva, Nov. 17, 1989, 1993 Rev. arb. 315, 316, aff’d, Trib. fed., Apr. 17, 1990, id. at 322.

¹⁰ CA Paris, Dec. 19, 1991, 1993 Rev. arb. 300 (relying on Nouveau code de procédure civile [N.C.P.C.] Arts. 1498, 1502, which limit appeal against recognition to grounds that do not include annulment of the award where rendered). The appellate court was upheld by the Cour de cassation, le civ., Mar. 23, 1994, Bull. Civ. I, No. 484, 1994 Rev. arb. 327, with commentary by Charles Jarrosson, translated in Mealey’s Int’l Arb. Rep., May 1994, at E–3, 1995 Y.B. Com. Arb. 663. See generally Vincent Heuzé, La Morale, l’arbitre et le juge, 1993 Rev. Arb. 179.

¹¹ The order of the Nanterre Tribunal de grande instance, which recognized the second award (as well as the Swiss court’s annulment of the first award), was confirmed by the Versailles Cour d’appel. See CA Versailles, June 29, 1995, 1995 Rev. Arb. 639.

¹² Cass, le civ. June 10,1997,1997 Bull Civ. I, No. 1250,1997 Rev. Arb. 376.

¹³ See die decision of the Cour de cassation affirming the lower court’s recognition of the annulled award, supra note 10, 1994 Rev. arb. at 328 (stating that the Geneva award “n’était pas intégrée dans l’ordre juridique de [la Suisse]”).

¹⁴ See N.C.P.C. Art. 1502. See also Bruno Leurent, La Notion, de siège de I’arbitrage, Note on Hilmarton v. OTV, 1998 REV. ARB. 399, 407. Commenting on a court’s refusal to monitor arbitration conducted in France because its official seat was Geneva, Leurent notes the inconsistency of giving significance to the arbitral seat in that case while assuming that the Hilmarton award was not integrated into the Swiss legal order. See id.

¹⁵ A different result obtained across the Channel, where the English High Court recognized the second award, finding that the award offended neither the governing law of the contract nor the public policy of the arbitral situs. Q.B. Commercial Ct., May 24, 1999, Mealey’s Int’l Arb. Rep., June 1999, §A. Since the claimant’s performance did not include acts contrary to English public policy, it was irrelevant that an English arbitrator might have decided differendy. Compare Soleimany v. Soleimany, [1993] 3 W.L.R. 811 (refusing to enforce an award that on its face implemented a smuggling contract).

¹⁶ 939 F.Supp. 907 (D.D.C. 1996). See generally Richard Hulbert, Further Observations on Chromalloy: A Contract Misconstrued, a Law Misapplied, and an Opportunity Foregone, 13 ICSID Rev. 124 (1998); Gary Sampliner, Enforcement of Foreign Arbitral Awards after Annulment in their Country of Origin, Mealey’s Int’l Arb. Rep., Sept. 1996, at 22; Eric Schwartz, A Comment on Chromalloy: Hilmarton à l’américaine, J. Int’l Arb. June 1997, at 125; Hamid Gharavi, A Nightmare Called Hilmarton, Mealey’s Int’l Arb. Rep., Sept. 1997, at 20; Jan Paulsson, Rediscovering tlie New York Convention: Further Reflections on Chromalloy, Mealey’s Int’l Arb. Rep., Apr. 1997, at 20; Paulsson, supra note 7; Pierre Karrer, Judicial Review of International Arbitration, Awards: Who Needs it? Table Talk (International Arbitation Club, London), Summer 1998, at 9; Albert Jan van den Berg, Enforcement of Annulled Awards? ICC Int’l Ct. Arb. Bull. [ICC Bull.], Nov. 1998, at 15; DanaFreyer & Hamid Gharavi, Finality and Enforceability of Foreign Arbitral Awards, 13 ICSID Rev. 101 (1998); Lawrence Newman & Michael Burrows, Setting aside Arbitral Awards under the New York Convention, N.Y.L.J., Nov. 18,1997, at 3; Stephen Ostrowski & Yuval Shany, Chromalloy. United States Law and International Arbitration at the Crossroads, 73 N.Y.U.L. Rev. 1650 (1998); Ray Chan, The Enforceability of Foreign Arbitral Awards in the United States, 17 B.U. Int’l L.J. 141 (1999).

¹⁷ The text of the award can be found in Mealey’s Int’l Arb. Rep., Aug. 1996, at C–I.

¹⁸ See Egyptian Arbitration Law of 1994, Arts. 53(1) (d), 54, reprinted in Smit’s Guides to International Arbitration, 1 National Arbitration Laws at EGY B–1 (H. Smit & V. Pechota eds. 1998). The contract was subject to Egyptian law, and the Cairo court reasoned that this meant the civil code.

¹⁹ Not surprisingly, die Paris Cour d’appel also enforced the award. See CA Paris, Jan. 14,1997,1997 Rev. Arb. 395.

²⁰ In Baker Marine Ltd. v. Chevron Ltd., 191 F.3d 194 (2d Cir. 1999), the court refused to enforce two awards rendered in Lagos but vacated by a Nigerian court. In addition, the Second Circuit has held that a district court should wait to enforce an Italian award until after judicial review in Italy. See Europcar Italia v. Maiellano Tours, 156 F.3d 310, 317 (2d Cir. 1998) (citing possibly “conflicting results and the consequent offense to international comity”). While respectful of the judiciary at the arbitral situs, the deferral of enforcement in Europcar is not the same as the deference to the foreign court in Baker Marine. In deferring enforcement, an American judge might merely want the benefit of the foreign court’s findings.

²¹ Chromalloy, 939 F.Supp at 910. The court referred to the New York Convention, supra note 2, Article VII of which provides that the Convention shall not “deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied on.” See text at note 40 infra. The Second Circuit in Baker Marine, 191 F.3d at *197, rejected this argument by noting that “[n] o thing suggests that the parties intended United States domestic arbitral law to govern their disputes.”

²² On “manifest disregard,” see note 100 infra and corresponding text. On review of choice-of-law methodology, see Mastrobuono v. Shearson Lehman, 514 U.S. 52 (1995), which interprets the proper scope of a New York choice selection clause.

²³ Chromalloy looked to 9 U.S.C. §10 in chapter I of the Federal Arbitration Act, 9 U.S.C. §§1–208 (1994), which applies to domestic awards. However, foreign awards are subject to chapter II, which gives chapter I residual effect only if not inconsistent with chapter II. See 9 U.S.C. §208.

²⁴ See International Standard Elec. Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Commercial, 745 F.Supp. 172 (S.D.N.Y. 1990) (holding that the Federal Arbitration Act did not allow vacatur of an award rendered in Mexico even if the merits of the dispute were to be decided under New York law).

²³ In theory, parties might stipulate that an arbitration will be conducted in one country subject to the procedural law of another. New York Convention, supra note 2, Article V(1) (e) speaks of awards set aside by a competent authority “of the country in which, or under the law of which, the award was made” (emphasis added). Thus, two Israelis might elect to arbitrate in New York subject to the arbitration law of Israel. In such rare situations, however, it would create unnecessary conflict if Israeli courts were to attempt to vacate the resulting award, since courts in New York might also set aside a local award that violated the mandatory American norms. See generally Oil & Natural Gas Comm’n v. Western Co. of N. Am., A.I.R. 1987 S.C. 674 (India), 1988 Y.B. Com. Arb. 473 (action to annul foreign award on the basis that Indian law applied to the arbitration agreement); National Thermal Power Corp. v. Singer Co., 1993 Y.B. Com. Arb. 403 (Sup. Ct. India, 1992) (action to annul London award when Indian law governed the dispute). Compare Renusagar Power Co. v. General Elec. Co., [1985] 1 S.C.R. 432 (India), discussed in Tony Khindria, Enforcement of Arbitration Awards in India, 23 Int’l Bus. Law. 11 (1995).

²⁶ An individual cannot be an arbitrator unless the person alleged to have waived court jurisdiction has in fact authorized that individual to decide the disputed issues.

²⁷ See generally W. Michael Reisman, Systerms of Control in International Adjudication and Arbitration (1992).

²⁸ In recourse to third-country courts, uncertainties result from factors such as forum non conveniens, lack of subject matter jurisdiction and the absence of comprehensive treaties on jurisdiction and judgments. See William W. Park, International Forum Selection (1995); William W. Park, When, and Why Arbitration Matters, in The Commercial Way to Justice 73 (G. Beresford Hartwell ed., 1997); William W. Park, Bridging the Gap in Forum Selection, 8 Transnat’l L. & Contemp. Probs. 19 (1998).

²⁹ The reality of bias in litigation may be less significant than the perception that it exists. In federal civil actions in the United States, foreigners actually fare better than domestic parties, perhaps because fear of bias causes foreigners to continue to judgment only with particularly strong cases. See Kevin Clermont & Theodore Eisenberg, Xenophilia in American Courts, 109 Harv. L. Rev. 1122 (1996).

³⁰ Greater risks require greater returns. To illustrate, imagine two potential investments, one in country A that presents an opportunity for a large profit, but with a good chance that local courts will be biased against a foreign party, and another in country B that will yield a smaller profit, but with fair dispute resolution. Depending on the magnitude of the disparity between the expected returns, many risk-averse foreign merchants will choose the lower return coupled with the fairer legal system. See generally William W. Park, Neutrality, Predictability and Economic Cooperation, J. Int’l Arb., Dec. 1995, at 99.

³¹ Commercial actors are not likely to retain confidence in a dispute resolution system that allows arbitrators to roll dice, flip coins or consult the entrails of disemboweled poultry. Nor do business managers expect arbitrators to deny one side the opportunity to present its case, or to decide issues never submitted to them.

³² See Reisman, supra note 27, at 113 (distinguishing between “primary” and “secondary” control). See also Anthony Diamond & V.V. Veeder, The New English Arbitration Act 1996: Challenging an English Award before the English Court, 8 Am. Rev. Int’l Arb. 47 (1997) (making a distinction between passive waiting for an opponent to seek enforcement and active challenge to an award immediately after it is made).

³³ New York Convention, supra note 2, Article 11(3) requires national courts to “refer parties to arbitration” in respect of matters covered by an agreement to arbitrate.

³⁴ Although its principal focus is on foreign awards (i.e., awards rendered in a country other than the one where enforcement is sought), the Convention also covers awards “not considered as domestic.” This latter category includes awards arising from disputes that directly implicate international commerce. See Lander Co. v. MMP Invs., 107 F.3d 476 (7th Cir. 1997) (arbitration between two American companies selling shampoo in Poland); Bergesen v. Joseph Muller Corp., 710 F.2d 928 (2d Cir. 1983) (arbitration between Swiss company and Norwegian shipowner).

³⁵ New York Convention, supra note 2, Article III provides for award enforcement “in accordance with the rules of procedure of the territory where the award is relied upon,” leaving open the theoretical possibility of onerous conditions on all arbitral decisions, domestic and foreign. Such an abuse of rights would violate the Convention, just as onerous state arbitration laws violate the Federal Arbitration Act. See Doctor’s Associates v. Casarotto, 517 U.S. 681 (1996).

³⁶ New York Convention, supranote 2, Article V(1) (a)–(d) deals with invalid arbitration agreements, lack of due process, excess of authority and irregular composition of the arbitral tribunal. See also Article V(l) (e) concerning annulled awards, discussed in text at notes 44–57 infra.

³⁷ New York Convention, supra note 2, Art. V(2). A growing consensus urges a narrow applicadon of the public policy defense to enforcement. See Audley Sheppard, Public Policy as a Ground for Refusing Enforcement of Foreign Arbitral Awards, in Int’l Law Ass’n, Committee on International Commercial Arbitration, Report to the Taipei Conference (1998). See also Homayoon Arfazadeh, L’Ordre public du fond et l’annulation des sentences arbitrates internationaUs en Suisse, 1995 Revue suisse de droit international et de droit européen 223.

³⁸ For one attempt at achieving uniformity in arbitration law, see UNCITRAL Model Law on International Commercial Arbitrationjune 21, 1985, UN Doc. A/40/17, Annex 1, reprinted in 24 ILM 1302 (1985) [hereinafter UNCITRAL Model Law]. See generally Howard Holtzmann & Joseph Newhaus, Guide to the Uncitral Model Law on International Commercial Arbitration (1989); Gerold Hermann, Does the World Need Additional Uniform Legislation on Arbitration? 15 Arb. Int’l 211 (1999).

³⁹ New York Convention, supra note 2, Art. 11(3). In the United States the validity of arbitration clauses is generally determined by state law principles governing the formation of contracts. See First Options v. Kaplan, 514 U.S. 938, 943 (1995). Only rarely does one find invocation of supranational standards for the validity of arbitration agreements. See Rhone Mediterranée v. Achille Lauro, 712 F.2d 50, 53 (3d Cir. 1983) (referring to an “internationally recognized defense such as duress, mistake, fraud or waiver”). See also Municipalité de Khoms El Mergeb v. Société Dalico, Cass, le civ. (Fr.), Dec. 20,1993, Bull. Civ. I, No. 1675,1994 Rev. Arb. 116, 117 (holding that the existence of an international arbitration clause is determined without reference to national law (“sans qu’il soit nécessaire de se référer á une loi étatique”)).

⁴⁰ See New York Convention, supra note 2, Art. VII, quoted in note 21 supra.

⁴¹ N.C.P.C. Art. 1498.

⁴² N.C.P.C. Article 1502 permits appeal of recognition orders for (1) lack of a valid arbitration agreement, (2) irregular composition of die arbitral tribunal, (3) excess of authority, (4) failure to respect due process (principe de la contradiction), and (5) violation of international public policy.

⁴³ 9 U.S.C. §207 (1994). Since one ground for nonrecognition under the Convention is vacatur at the arbitral situs, some observers consider Chromalloy to be wrongly decided as a matter of statutory interpretation.

⁴⁴ Under New York Convention, supra note 2, Article XVI, the Chinese, English, French, Russian and Spanish texts are “equally authentic.” On die comparison of treaty texts with different meanings, see Vienna Convention on the Law of Treaties, opened for signature May 23,1969, Art. 33 (4), 1155 UNTS 331, which provides for adoption of the “meaning which best reconciles the texts, having regard to the object and purpose of the treaty.” See also Georgios Petrochilos, On the Mechanics and Rationale of Enforcing Awards Annulled in Their State of Origin under the New York Convention, 48 Int’l & Comp. L.Q. (forthcoming 1999).

⁴⁵ The French text provides that “recognition and enforcement will not be refused unless the award … was annulled or suspended” (La reconnaissance et l’exécution de la sentence ne seront refusées … que si … la sentence … a été annulée ou suspendue). This future indicative was given a mandatory reading in Clair v. Berardi, CA Parisjune 20, 1980, 1981 Rev. Arb. 424, note Mezger, discussed in 1982 Y.B. Com. Arb. 319, a case that would be decided differently today under the 1981 arbitration decree. See also Fouchard, La Portée intemationale, supra note 7, at 344 (commenting that “the English text’s ambiguity does not exist in the French version”).

⁴⁶ See Hulbert, supra note 16, at 144;Jan Paulsson, May or Must under the New York Convention: An Exercise in Syntax and Linguistics, 14 Arb. Int’l 227, 229 (1998).

⁴⁷ See van den Berg, Annulment, supra note 4, at 137 (referring to the “erga omnes effect” of annulled awards); W. Laurence Craig, Some Trends and Developments in the Laws and Practice of International Commercial Arbitration, 30 Tex. Int’l L.J. 1,58 (1995) (warning—in connection with attempts to enjoin arbitration conducted abroad—of dangers in failing to recognize the “primacy of the procedural law of the place of arbitration”).

⁴⁸ See Reisman, supra note 27, at 113–20.

⁴⁹ See Van Den Berg, Convention, supra note 4, at 355–58.

⁵⁰ See Paulsson, supra note 7, at 29; Jan Paulsson, The Case for Disregarding Local Standard Annulments under the New York Convention, 7 Am. Rev. Int’l Arb. 99 (1996).

⁵¹ See New York Convention, supra note 2, Art. VII, discussed in text at notes 21, 40 supra.

⁵² See discussion of the difference between French and American arbitration law, text at notes 40–43 supra

⁵³ See Convention on the Execution of Foreign Arbitral Awards, Sept. 26, 1927, Art. 4, 92 LNTS 301 (requiring the party seeking recognition to have an award “duly authenticated” under the law of the country where made, as well as evidence that the award was not “open to opposition, appel or pourvoi en cassation” or pending proceedings to contest its validity) (French used in English version).

⁵⁴ ICC, Enforcement of International Arbitral Awards: Report and Preliminary Draft Convention (ICC Brochure No. 174, 1953), UN Doc. E/C.2/373, reprinted in ICC Bull., May 1998, at 32. In language prefiguring Professor Goldman’s theories of “a-national arbitration,” see note 103 infra, the ICC proposed giving “full value to the autonomy of the [parties’] will,” noting with admirable candor that this position contradicted the traditional view that commercial relationships are “subject to some national law.” ICC Bull., supra, at 32. For a critique of the ICC proposal, see W. Michael Reisman, Nullity and Revision 825–33 (1971) (stating that “[t]he point overlooked [by the ICC] is that if an [enforcement] action of this type should arise, some community or communities must assert a valid interest in supervision”; id. at 829).

⁵⁵ Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, UN Doc. E/2704 & Corr.1 (1955); for comments by governments, see UN Doc. E/2822 & Adds.1–6 (1956–58). See generally van den Berg, Convention, supra note 4, at 6–8.

⁵⁶ Vienna Convention on the Law of Treaties, supra note 44, Art. 31. Article 32 allows recourse to other elements when the ordinary meaning is “ambiguous or obscure” or leads to “manifestly absurd or unreasonable” results. See generally Paul Reuter, Introduction to the Law of Treaties §§142–48, 96–98 (José Mico & Peter Haggenmacher trans., 2d Eng. ed. 1995). The Vienna Convention does not apply retroactively, see Art. 4, and thus as a technical matter does not cover the New York Convention.

⁵⁷ New York Convention, supra note 2, Art. V( 1) (a)–(d). Article V(2) also uses the very same permissive language (recognition “may be refused”) with respect to public policy violations, which almost by definition make awards unenforceable, notwithstanding recourse to local courts in circumscribing the relevant policies.

⁵⁸ See European Convention on International Commercial Arbitration, Apr. 21,1961, Art. 9, 484 UNTS 349, which was adopted to supplement the New York Convention among residents of member states. For support of this position, see Paulsson, supra note 7.

⁵⁹ See reference to “ordre public international” as a ground for annulment under N.C.P.C. Art. 1502 (5).

⁶⁰ For instance, requiring that all arbitrators sign awards (a standard abolished by Austria in 1983) gives dissenting arbitrators a tool to sabotage the arbitration.

⁶¹ In some cases, of course, biased behavior and manifest disregard of the law might be characterized as conduct outside the arbitrator’s jurisdiction.

⁶² For example, London courts that hear appeals on points of English law (allowed by the 1996 Arbitration Act unless the parties agree otherwise) promote the development of a legal system on which many business managers rely.

⁶³ Some litigants, for example, might see judicial review as enhancing predictability in interpreting contracts.

⁶⁴ On the distinction between error of law and excess of authority, see notes 100 and 102 infra.

⁶⁵ See, e.g., European Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Sept. 27, 1968, Art. 27(1), 1990 O.J. (C 189) 2 (consolidated text).

⁶⁶ See generally Ronald A. Brand, Enforcing Foreign Judgments in the United States and United States Judgments Abroad (1992); Ronald A. Brand, Enforcement of Foreign Money-Judgments in the United States: In Search of Uniformity and International Acceptance, 67 Notre Dame L. Rev. 253 (1991); Dennis Campbell, Enforcement of Foreign Judgments (1997); Note, Predictability and Comity: Toward Common Principles of Extraterritorial Jurisdiction, 95 Harv. L. Rev. 1310 (1985).

⁶⁷ See New York Convention, supra note 2, Arts. III, V, discussed in notes 34–37 supra and corresponding text.

⁶⁸ Factors relevant to comity include the absence of fraud, public policy violations, and conflict with a prior judgment or forum selection agreement, as well as the foreign court’s impartiality, jurisdiction, and granting of due process and proper notice. For U.S. law on comity, see Restatement (Third) of the Foreign Relations Law of the United States §§481, 482 (1987) (“impartial tribunals or procedures compatible with due process of law”); Restatement (Second) of Conflict of Laws §98 (1971) (“fair trial in a contested proceeding”); Uniform Foreign Money Judgments Act, 13 U.L.A. 261, §4. Under different names, similar principles are contained in conflict-of-laws rules in France, see Munzer, Cass., Jan. 7, 1964, discussed in Bernard Audit, Droit International Privé §§440–54 (2d ed. 1997); Germany, see ZVO [civil procedure statute] Arts. 328, 722, 723; and Switzerland, see Loi federate surle droit international privé [LDIP] Art. 27, translated in Switzerland’s Private International Law (Pierre A. Karrer, Karl W. Arnold & Paolo Michele Patocchi eds., 2d ed. 1994). In England foreign awards can be enforced by common law actions on a debt. See Adams v. Cape Indus., [1990] 1 Ch. 433 (C.A.) (denying enforcement of a Texas judgment owing to lack of due process). Reciprocity is sometimes required. See German ZPO Arts. 328(1), (5) & 722–23; UK Foreign Judgments (Reciprocal Enforcement) Act 1933,23 & 24 Geo. 5, ch. 13; Hilton v. Guyot, 159 U.S. 113, 202 (1895) (declining to recognize French judgment on the assumption that French courts did not recognize American judgments, but stating that the merits of a foreign judgment should not otherwise be tried again when there has been “opportunity for a full and fair trial abroad before a court of competent jurisdiction … and there is nothing to show either prejudice in die court … or fraud in procuring the judgment”).

⁶⁹ The functional similarity between annulments and other money judgments can be illustrated by a contract interpreted under English law by a London court resulting in a judgment that “Defendant owes nothing to Claimant.” Had the contract provided for arbitration in London subject to appeal on points of English law, the same conclusion would have been expressed by annulment of the arbitrator’s erroneous award for claimant.

⁷⁰ One reason for American interest in a multilateral judgments treaty is that courts do not always enforce foreign judgments. See Hague Conference on Private International Law, Proposed Convention on International Jurisdiction and the Effects of Foreign Judgments in Civil and Commercial Matters (Working Document No. 144 E; synthesis by C. Kessedjian, 1998). See generally Russell J. Weintraub, How Substantial Is Our Need for a Judgments Recognition Convention and What Should We Bargain away to Get It? 24 Brook. J. Int’l L. 174 (1998).

⁷¹ One intriguing variant on the good faith standard suggests that annulments be disregarded if “arbitrary or clearly erroneous.” See Gary H. Sampliner, Enforcement of Nullified Foreign Arbitral Awards—Chromalloy Revisited, J. Int’l Arb., Sept. 1997, at 141, 161–62. The virtue of this approach is that it points toward the heart of the annulment problem: aberrantjudicial behavior. Itidrawback is that courts must look at an arbitration’s substantive merits. For a methodology that weighs multiple factors (grounds for vacatur, intentions ofthe parties, policies of the enforcement forum, the need for uniformity and a presumption favoring recognition of foreign judgments), see Ostrowski & Shany, supra note 16.

⁷² See discussion in text at notes 78–90 infra.

⁷³ Contrast French and English decisions in Hilmarton, discussed in notes 7 and 15 supra and corresponding text.

⁷⁴ In some cases, of course, a vacated award will be refused enforcement even widiout considering comity, because of overlapping grounds for annulment and nonrecognition. For example, if arbitrators in New York disregard their mission, die award could be vacated under §10 of the Federal Arbitration Act; the excess of jurisdiction would also impair recognition in Paris under both N.C.P.C. Article 1502 and Article V of die New York Convention.

⁷⁵ Named for the 16th-century British financier, the original Gresham’s law observed that “bad money drives out good.” If two coins have equal nominal value but different metallic content, the one with less precious metal remains in circulation.

⁷⁶ A different rule would normally obtain in federal systems. See Fauntleroy v. Lum, 210 U.S. 230 (1908) (interpreting the “full faith and credit” clause in Article IX of the Constitution).

⁷⁷ This point was noted in Poudret, supra note 7, at 23 (“[L]e juge du siège est en général plus neutre que celui de l’exequatur …’); as well as in Dana Freyer & Hamid Gharavi, Finality and Enforceability of Foreign Arbitral Awards, 13 ICSID Rev. 101, 113 (1998) (“self-help is available … by carefully selecting the arbitral situs”).

⁷⁸ The 1996 English Arbitration Act, ch. 23, §69, reprinted in 36 ILM 155 (1997), allows judicial review on questions of English law if die parties have not agreed otherwise. In all events, an award is subject tojudicial review for arbitrator excess of jurisdiction and serious procedural irregularity. Id. §§67, 68.

⁷⁹ For some of the principles applicable to interpreting commitments such as those inherent in arbitration clauses, see generally E. Allan Farnsworth, United States Contract Law §6.4, at 130–35 (1991); Steven J. Burton & Eric G. Andersen, Contractual Good Faith: Formation, Performance, Breach, Enforcement §1.3.8, at 16–17 (1995); 1 Chittyon Contracts §§13-006–008, at 621–24 (A. G. Guest ed., 27th ed. 1994).

⁸⁰ In some cases the parties delegate the choice of a situs, like the selection of the arbitrators, to an arbitral body.

⁸¹ For a recent articulation of this view, see Minmetals Germany GmbH v. Ferco Steel Ltd, [1999] 1 All E.R. (Comm) 315 (Q.B.). After an arbitration under the auspices of the China International Economic Trade Arbitration Commission in Beijing, the losing party was deemed to have waived its right to resist enforcement of the award in England, owing to an unreasonable failure to present its case in an arbitration resumed after its initial stages. Mr. Justice Colman wrote that “Ferco had not been unable to present its case. On the contrary,…. its counsel had simply failed to take that opportunity.” Id. at 327. His opinion continued with the dictum:

In international commerce a party who contracts into an agreement to arbitrate in a foreign jurisdiction is bound … by the supervisory jurisdiction of the courts of die seat of the arbitration. If the award is defective or die arbitration is defectively conducted the party who complains of the defect must in the first instance pursue such remedies as exist under diat supervisory jurisdiction. That is because by his agreement to the place in question as the seat of arbitration he has agreed not only to refer all disputes to arbitration but that the conduct of the arbitration should be subject to that particular supervisory jurisdiction.

Id. at 330–31. See comment by Hong-Lin Yu, 65 Arbitration 195 (1999), 1999 Int’l Arb. L. Rev. 83.

⁸² See, e.g., ICC Arbitration Rules, Art. 28(6), 28 ILM 231 (1989) (award “binding”); London Court of International Arbitration, Arbitration Rules, Art. 26.9, 37 ILM 669 (1998) (award “final and binding”); American Arbitration Association [AAA], International Arbitration Rules, Art. 27(1), 1992 Y.B. Com. Arb. 310 (award “final and binding”);UNCITRAL Arbitration Rules, Art. 32(2), 15 ILM 701 (1976) (award “final and binding”).

⁸³ See, e.g., M & C Corp. v. Erwin Behr GmbH, 87 F.3d 844, 847 (6th Cir.) (stating that waiver provisions in the ICC Rules “merely reflect a contractual intent that the issues joined and resolved in the arbitration may not be tried de novo in any court” (quoting Iran Aircraft Indus, v. Avco Corp., 980 F.2d 141, 145 (2d Cir. 1992))), stay denied, 935 F.Supp. 910 (E.D. Mich. 1996), subsequent appeal, 143 F.3d 1033 (6th Cir. 1998). See also Iran Aircraft Indus, v. Avco Corp., 980 F.2d 141 (2d Cir. 1992); First Nat’l Supermarkets v. Retail Wholesale & Chain Store Employers Union, 118 F.3d 892 (2d Cir. 1997).

⁸⁴ For analysis of when and why the law restrains people from reneging on commitments, see E. Allan Farnsworth, Changing Your Mind: The Law of Regretted Decisions (1998). See also Randy E. Barnett, A Consent Theory of Contract, 86 Colum. L. Rev. 269 (1986) (discussing the notions of reliance, efficiency and fairness underlying contract enforcement).

⁸⁵ See Ken Rokison, Pastures New: The 1997 Freshfields Lecture, 14 Arb. Int’l 361, 363 (1998) (“the presumed intention of the parties [is] that all aspects of the merits of their dispute should be decided by their chosen tribunal and not by the court”); Paulsson, supra note 7, at 25 (labeling as “mythical” parties who seek merits review through choice of arbitral situs).

⁸⁶ See Carroll E. Neesemann, More Certainty Comes to Arbitration, N.Y. L.J., Mar. 26, 1998, at 1; Carroll E. Neesemann, Party-chosen Arbitral Review Standards Can Inspire Confidence in the Process, Disp. Resol. J., Fall 1998, at 18.

⁸⁷ In addition to the form of judicial review, the choice of an arbitral seat implicates the selection of the arbitrators by the court in the event of party default. See, e.g., UNCITRAL Model Law, supra note 38, Art. 11 (3); English Arbitration Act, supra note 78, §18; Federal Arbitration Act, 9 U.S.C. §5; Swiss LDIP, supra note 68, Art. 179; French N.C.P.C. Arts. 1454, 1455.

⁸⁸ On the relationship between fairness and the parties’ “veil of ignorance,” see John Rawls, A Theory of Justice §24, at 136 (1971).

⁸⁹ In one well-known case, the business managers agreed to the ICC Arbitration Rules (which provide forwaiver of appeal), while stipulating appeal on the legal and factual merits of the case. See Lapine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997).

⁹⁰ Unique aspects of ICC procedure include “Terms of Reference” (which sometimes bar new claims and counterclaims) and institutional scrutiny of the award (which may cause arbitrators to rethink their decision). Moreover, the ICC does not allow the “non-neutral” arbitrator common in domestic American arbitration (see AAA Code of Ethics for Arbitrators in Commercial Disputes, Doc. AAA 196–20M (1977), reprinted in W. Michael Reisman et al., International Commercial Arbitration 763 (1997)), but requires all arbitrators to be independent of the parties. See respectively Articles 18, 27 and 7 of the ICC Arbitration Rules, supra note 82, discussed in W. Laurence Craig, William W. Park & Jan Paulsson, Annotated Guide to 1998 Icc Arbitration Rules (1998).

⁹¹ A different issue presents itself when the losing party in an allegedly defective arbitration simply fails to invoke remedies available in the arbitration, thereby waiving its right to challenge the award later. See the discussion of Minmetals v. Ferco, supra note 81.

⁹² New York Convention, supra note 2, Art. V(1) (a)–(d) and Art. V(1) (e).

⁹³ While the New York Convention attempts to harmonize defenses to enforcement, it says nothing about correct or incorrect grounds for vacatur. On the role of arbitration law in general, see Michael Mustill, Too Many Laws, 63 Arbitration 248 (1997).

⁹⁴ In some cases duly appointed arbitrators may overreach their mandates. In other cases, absent a valid arbitration clause covering the controverted event, the excess of authority may be that of an unauthorized meddler.

⁹⁵ See, e.g., Federal Arbitration Act, 9 U.S.C. §10; French N.C.P.C. Art. 1502.; Swiss LDIP, supra note 68, Art. 190; UNCITRAL Model Law, supra note 38, Art. 34. While these last three statutes do not enumerate bias explicitly, other bases for vacating awards could serve to deal with this defect. For example, the LDIP includes in its list of defects both unequal treatment of the parties (Art. 190(2) (d)) and violation of public policy (Art. 190(2) (e)).

⁹⁰ See 1996 English Arbitration Act, supra note 78, §§67–69. See also William W. Park, The Interaction of Courts and Arbitrators in England, 1998 Int’l Arb. L. Rev. 54, reprinted in Mealey’s Int’l Arb. Rep., June 1998, at 21.

⁹⁷ For American cases allowing contractual expansion of grounds for vacatur, see Lapine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997); Gateway Techs, v. MCI Telecomms. Corp., 64 F.3d 993 (5th Cir. 1995); Syncor Int’l Corp. v. David L. McLeland, 120 F.3d 262 (4th Cir. 1997); Fils et Cables d’Acier de Lens v. Midland Metals Corp., 584 F.Supp. 240 (S.D.N.Y. 1984); New Eng. Utils. v. Hydro-Quebec, 10 F.Supp.2d 53 (D. Mass. 1998). The opposite conclusion was suggested in Chicago Typographical Union v. Chicago Sun-Times, 935 F.2d 1501 (7th Cir. 1995), which states that review power of federal courts cannot be created by contract. See generally Hans Smit, Contractual Modification of the Scope of Judicial Review of Arbitral Awards, 9 Am. Rev. Int’l Arb. 147 (1997); Andreas F. Lowenfeld, Can Arbitration Coexist with Judicial Review? ADR Currents (AAA), Sept. 1998, at 1; Alan S. Rau, Contracting out of the Arbitration Act, 8 Am. Rev. Int’l Arb. 225 (1997). Compare the position in France, where courts have voided arbitration clauses attempting to change the judicial review procedures of the N.C.P.C. See Diseno v. Société Mendes, CA Paris, Oct. 27, 1994, 1995 Rev. Arb. 263. See generally Philippe Fouchard et al., Traité de l’arbitrage commercial international §1597, at 931 nn.42–46 (1996).

⁹⁸ See 1996 English Arbitration Act, supra note 78, §69 (requiring exclusion of appeal on questions of English law).

⁹⁹ Switzerland offers a choice among federal standards (limited to procedural integrity and public policy under the LDIP, supra note 68, Article 190), more expansive scrutiny under cantonal standards (including vacatur for “arbitrariness” under Article 36 (f) of Concordat intercantonal sur l’arbitrage) and exclusion of alljudicial scrutiny (assuming neither party has a Swiss residence or place of business, the parties may conclude an explicit exclusion agreement (déclaration expresse/ausdrückliche Erklärung) under LDIP Article 192). See generally Pierre Lalive et al., Droit de l’arbitrage interne et international en Suisse (1989). See also Belgian Code judiciaire, Art. 1717, discussed in notes 111–13 infra and corresponding text.

¹⁰⁰ Introduced through dictum in Wilko v. Swan, 346 U.S. 427 (1953), “manifest disregard of the law” may (depending on perspective) either incarnate excess of authority by arbitrators or serve as a back door to merits review of awards “contrary to the plain language” of the contract. See Advest, Inc. v. McCarthy, 914 F.2d 6, 9 (1st Cir. 1990). Awards in international arbitrations in the United States may be vacated for “manifest disregard.” See Alghanim v. Toys “R” Us, 126 F.3d 15 (2d Cir. 1997). An expanded notion of “manifest disregard” has been applied in employment discrimination claims. See Halligan v. Piper Jaffray, 148 F.3d 197 (2d Cir. 1998), cert, denied., 119 S.Ct. 1286 (1999). See generally Barry Garfinkel & Rona Shamoon, ADR Currents, Dec. 1998, at 1; Norman S. Poser, Judicial Review of Arbitration. Awards: Manifest Disregard of the Law, 64 Brook. L. Rev. 471 (1998).

¹⁰¹ Swiss Concordat intercantonal sur l’arbitrage, Art. 36(f) (defining arbitrariness to include “evident violations of law or equity”).

¹⁰² See, e.g., Kenneth R. Davis, Wien Ignorance of the Law Is No Excuse: Judicial Review of Awards, 45 Buff. L. Rev. 49, 126, 138 (1997) (suggesting that mistakes of law can constitute excess of authority). See also Inter-City Gas v. Boise Cascade, 845 F.2d 184 (8th Cir. 1988). In England, Lord Denning reversed otherwise unappealable decisions by reasoning that since judges are not authorized to make mistakes, in so doing they exceed their power. See Alfred Thompson Denning, The Discipline of the Law 74 (1979) (“Whenever a tribunal goes wrong in law it goes outside die jurisdiction conferred on it and its decision is void.”). See also Pearlman v. Keepers & Governors of Harrow School, [1978] 3 W.L.R. 736, 743 (CA.) (“The distinction between an error which entails absence of jurisdiction and an error made within jurisdiction is [so] fine … that it is rapidly being eroded.”).

¹⁰³ See Berthold Goldman, Les Conflits de bis dans l’arbitrage internationalde droitprive, 109 Recueil des Cours 347, 379–80, 479–80 (1963 II) (“Unless one adopts the irrational and unjustifiable system of attaching the arbitral process to its seat … any search for a way of grounding the arbitration in some system leads one unavoidably to the need for an autonomous non-national system.”); Fouchard, La Portée internationale, supra note 7, discussed in note 105 infra and corresponding text.

¹⁰⁴ See F. A. Mann, Lex Facit Arbitrurn, in International Arbitration: Liber Amicorum for Martin Domke 157 (Pieter Sanders ed., 1967), reprinted in 2 Arb. Int’l 241 (1986); Michael Kerr, Arbitration and the Courts: The UNCITRAL Model Law, 34 Int’l & Comp. L.Q. 1, 15 (1985) (“No one having the power to make legally binding decisions … should be altogether outside and immune from [the legal] system.”); William W. Park, Lex Loci Arbitri and International Commercial Arbitration., 32 Int’l & Comp. L.Q. 21 (1983); William W. Park, National Law and Commercial Justice: Safeguarding Procedural Integrity in International Arbitration, 63 Tul. L. Rev. 647 (1989).

¹⁰⁵ See Fouchard, La Portée internationale, supra note 7, at 351–52. Fouchard admits the proposal’s radical nature by observing, “That which is the most bizarre is not necessarily the most illogical” (La plus saugrenue n’est pas la plus illogique). Id. at 351. For an earlier incarnation of his views on the subject, see Philippe Fouchard, L’Arbitrage commercial international 22–23 (1964), in which he urges that particularities of national norms and conflict-of-laws rules should no longer play any role in international arbitration.

¹⁰⁶ New York Convention, supra note 2, Article V(1) (e) permits nonrecognition of an award set aside where “made,” which will normally be the designated seat of proceedings, notwithstanding the place of signature or location of hearings. However, in Hiscox v. Outhwaite, [1991] 3 All E.R. 641 (H.L.), an award signed in Paris was considered made in France although the arbitral seat for purposes of appeal remained in England. The result would be different under England’s 1996 Arbitration Act, supra note 78.

¹⁰⁷ Décret No. 81-500, May 12, 1981, 1981 Journal Officiel de la République Française, p. 1398.

¹⁰⁸ See General Nat’l Maritime Transp. Co. v. Société Gätaverken Arendal, CA Paris, Feb. 21, 1980, 1980 Rev. Arb. 524, translated in 20 ILM 884 (1981); Société AKSA v. Société NORSOLOR, CA Paris, Dec. 9, 1980, 1981 Rev. Arb. 306, translated in 20 ILM at 887.

¹⁰⁹ N.C.P.C. Art. 1502 (permitting awards in international arbitration to be annulled for invalid agreement, irregular composition of the arbitral tribunal, excess of jurisdiction, failure to respect due process or violation of international public policy).

¹¹⁰ On die derealization debate, see discussion at notes 103–05 supra and corresponding text.

¹¹¹ See Article 1717(4) of the Belgian Code judiciaire as enacted in 1985, before amendment of May 19, 1998, effective August 17, 1998.

¹¹² See Bernard Hanotiau & Guy Block, La Loi du 19 mai 1998 modificant la législation beige relative á l’arbitrage, 16 Bulletin de l’Association Suisse de l’Arbitrage 528, 532 (1998).

¹¹³ Effective August 17, 1998, Article 1717(4) of die Belgian Code judiciaire provides that challenge to awards must be made through an explicit statement:

Les parties peuvent, par une déclaration expresse dans la convention d’arbitrage ou par une convention ulterieure, exclure tout recours en annulation d’une sentence arbitrate lorsqu’aucune d’elles n’est soit une personne physique ayant la nationalité beige ou une résidence en Belgique, soit une personne morale ayant en Belgique son principal établissement ou y ayant une succursale.

¹¹⁴ Under the “public law model” of litigation, cases guide future transactions of nonlitigants. See Robert G. Bone, Lon Fuller’s Theory of Adjudication and the False Dichotomy between Dispute Resolution and Public Law Models of Litigation, 75 B.U. L. Rev. 1273 (1995).

¹¹⁵ 1979 Arbitration Act §4 (abrogated in 1996), discussed in William W. Park, Judicial Supervision of Transnational Commercial Arbitration, 21 Harv. Int’l L.J. 87 (1980).

¹¹⁶ See Shearson/American Express v. McMahon, 482 U.S. 220 (1987) (fraud claims under Exchange Act § 10b and Rule 10b-5); Rodriguez de Quijas v. Shearson/American Express, 490 U.S. 477 (1989) (Securities Act §12(2) claims).

¹¹⁷ See Alan R. Palmiter, Securities Regulation §11.2.5, at 344 (1998).

¹¹⁸ For a comparison of die situation with respect to international commercial awards, see W. Laurence Craig, William W. Park & Jan Paulsson, International Chamber of Commerce, ch. 19 (2d ed. 1990). See also 1 ICC Arbitral Awards 1971–85 (Sigvard Jarvin & Yves Derains eds., 1990); 2 ICC Arbitral Awards 1986–90 (Sigvard Jarvin et al. eds., 1994); 3 ICC Arbitral Awards 1991–95 (Jean-Jacques Amaldez et al. eds., 1997).

¹¹⁹ Most observers rightly see an agreement to waive recourse to otherwise competent courts as qualitatively more serious than other contract terms, such as price or interest rate. On the perceived abuse of employment arbitration, see Renteria v. Prudential Ins., 113 F.3d 1104 (9th Cir. 1997); Prudential Ins. v. Lai, 42 F.3d 1299 (9th Cir. 1994). See generally Gilmer v. Interstate/Johnson Lane, 500 U.S. 20 (1991); Wright v. Universal Maritime Servs., 119 S.Ct. 391 (1998); StephenJ. Ware, Employment Arbitration and Voluntary Consent, 25 Hofstra L. Rev. 83 (1996). For similar concerns about consumer arbitration, see Badie v. Bank of Am., 79 Cat. Rptr. 2d 273 (1998); 111 Cons. Fin. Corp. v. Patterson, 18 Cal. Rptr. 2d 563 (1993); Teleserve Sys. v. MCI, 659 N.Y.2d 658 (N.Y. App. Div. 1997); Brower v. Gateway 2000, 676 N.Y.S.2d 569 (N.Y. App. Div. 1998); Randolph v. Green Tree Fin. Corp., 178 F.3d 1149 (11th Cir. 1999) (refusing to enforce an arbitration clause that failed to provide “minimum guarantees” permitting a borrower to enforce statutory rights under the Truth in Lending Act); Symposium on Arbitration in the Securities Industry, 63 Fordham L. Rev. 1495 (1995); Lisa Myers, NBC Nightly News (July 14, 1999) <http://www.msnbc.com/news/289800.asp> (report on arbitration of credit card disputes).

¹²⁰ While collective-bargaining arbitration rests on its own statutory basis, see 29 U.S.C. §185, the U.S. Supreme Court has held that the Federal Arbitration Act applies to almost all other contracts that in any way involve interstate commerce. See Allied-Bruce Terminix v. Dobson, 513 U.S. 265 (1995). State statutes fill gaps in federal arbitration law only if consistent with the latter’s general purposes. See Alan S. Rau, The UNCTTRAL Model Law in State and Federal Courts: The Case of Waiver, 6 Am. Rev. Int’l Arb. 223 (1995); Alan S. Rau, Does State Arbitration Law Matter At All? ADR Currents, June 1998, at 19. The Federal Arbitration Act’s exclusion of “contracts of employment” has been narrowly interpreted to cover only contracts to transport goods or provide services directly in foreign or interstate commerce. See, e.g., Dickstein v. DuPont, 443 F.2d 783 (1st Cir. 1971).

¹²¹ For example, courts have ordered costly discovery about the fairness of institutional arbitral rules used in employment arbitration. See Rosenberg v. Merrill Lynch Pierce, 965 F.Supp. 190 (D. Mass. 1997), aff’d on other grounds, 170 F.3d 1 (1st Cir. 1999). See also discussion of vacatur for “manifest disregard of the law,” supranote 100.

¹²² See legislation in Belgium, France and Switzerland, discussed respectively in notes 113, 107 and 99 supra. See also Hong Kong Arbitration Ordinance, Hong Kong Laws, ch. 341, pt. IIA §34A–D, which for international arbitration incorporates the UNCITRAL Model Law.

¹²³ See discussion in text at notes 29–30 supra.

¹²⁴ Such domestic concerns are discussed in National Conference of Commissioners on Uniform State Laws, Proposed Revisions of the Uniform Arbitrationact (Denverjuly 1999). See also Stephen J. Ware, Default Rules from Mandatory Rules: Privatization of Law through Arbitration, 83 Minn. L. Rev. 703 (1999); Michael Scodro, Arbitrating Novel Legal Questions: A Recommendation far Reform, 105 Yale L.J. 1927 (1996).

¹²⁵ Making the United States a more user-friendly place to arbitrate would also increase invisible exports in the form of work for local arbitrators, lawyers and experts.

¹²⁶ The statute would complement Federal Arbitration Act chapters II and III, which deal with enforcement and confirmation (but not vacatur) of awards covered by the New York Convention and the Inter-American Convention on International Commercial Arbitration, Jan. 30, 1975, 9 U.S.C.A. §300 (1999), 14 ILM 336 (1975).

¹²⁷ Consumer contracts would include agreements with individuals related to property, services or credit, unless within the scope of an individual’s profession. For an example of existing restrictions on arbitration clauses in consumer contracts, see EU Council Directive 93/13, 1993 O.J. (L 95) 29. France also prohibits predispute arbitration clauses except in contracts between merchants. See Code Civil Art. 2061; Code de commerce Art. 63.

¹²⁸ See Meglio v. Société V2000, Cass, le civ., May 21, 1997, Bull. Civ. I, No. 911, 1997 Rev. Arb. 537, note E. Gaillard, 1998 Revue Critique de droit international privé 87, note V. Heuzé (holding that French resident’s purchase of limited series Jaguar escaped restrictions on consumer arbitration).

¹²⁹ Article 34 of the Model Law, supra note 38, allows vacatur for (1) invalidity of die agreement, (2) lack of proper notice, (3) excess of arbitral jurisdiction, (4) irregular composition of the arbitral tribunal, (5) non-arbitrable subject matter, and (6) conflict with public policy.

¹³⁰ Since the uncitral Model Law contains no explicit reference to bias, public policy must be pressed into service to deal with bias and corruption of arbitrators.

¹³¹ See, e.g., Laminoirs-Trefileries-Cableries de Lens, S.A. v. Southwire Co., 484 F.Supp. 1063 (N.D. Ga. 1980) (where the court vacated application of a French interest rate in a Franco-American contract). While public policy analysis is unavoidable whenjudges seize property, such malleable notions are unnecessary where no enforcement is requested. For example, if French and British companies choose Boston for arbitration of a dispute that has no effect in the United States, then unless one side seeks to enforce the award locally, American judges can leave to colleagues abroad the task of deciding whether the award is compatible widi European competition law. Similar arguments might be made with respect to vacatur for excess of authority and violation of due process; however, the more circumscribed nature of these procedural defects makes them less likely to cause mischief.

¹³² These principles of “compétence-compétence” and “separability” are discussed in William W. Park, Determining Arbitral Jurisdiction: Allocation of Tasks between Courts and Arbitrators, 8 Am. Rev. Int’l Arb. 133 (1997). See also Antonias Dimolitsa, Autonomie et “Kompetenz-Kompetenz,” 1998 Rev. Arb. 305.

¹³³ Compare Volt v. Stanford, 489 U.S. 468 (1989) (arbitration in California stayed under provisions of state law on assumption that the parties had incorporated California arbitration law into their agreement); Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52 (1995) (upholding award for punitive damages notwithstanding choice-of-law clause designating state law that prohibited such awards); Doctor’s Associates v. Casarotto, 517 U.S. 681 (1996) (striking down Montana notice statute requiring arbitration clauses to be in capital letters on the first page of the contract).

¹³⁴ Compare McCreary Tire & Rubber v. CEAT, 501 F.2d 1032 (3d Cir. 1974) (preaward attachment denied); Carolina Power & Light v. Uranex, 451 F.Supp. 1044 (N.D. Cal. 1977) (preaward attachment allowed); Cooper v. Ateliers Motobecane, 57 N.Y.2d 408 (1982) (preaward attachment permitted by state legislation held inconsistent with the New York Convention).

¹³⁵ The Federal Arbitration Act does not authorize forced consolidation of different proceedings, even if they present similar questions of law and fact. See United Kingdom v. Boeing, 998 F.2d 68 (2d Cir. 1993) (denying consolidation of arbitrations with Boeing and Textron, Inc. relating to contract with the British Ministry of Defence to develop an electronic fuel system).

¹³⁶ Compare Chicago Typographical Union v. Chicago Sun-Times, 935 F.2d 1501 (7th Cir. 1995) (stating that federal court review power cannot be created by contract), with Lapine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997) (parties permitted to expand scope ofjudicial review), and Gateway Techs, v. MCI Telecomms. Corp., 64 F.3d 993 (5th Cir. 1995) (court allows de novo review of issues of law according to parties’ agreement).

¹³⁷ See First Options of Chicago v. Kaplan, 514 U.S. 938 (1995) (suggesting in dictum that in some cases courts must defer to arbitrators’ decisions on theirjurisdiction). See generally William W. Park, The Arbitrability Dicta in First Options v. Kaplan, 12 ARB. Int’l 137 (1996). In particular, the circuits are split on whether time limits contained in arbitration rules constitute a jurisdictional prerequisite to be determined by courts. See cases summarized in PaineWebber v. Elahi, 87 F.3d 589 (1st Cir. 1996).

¹³⁸ In England the 1979 Arbitration Act prohibited predispute waiver of appeal on points of English law in contracts among residents and/or citizens of the United Kingdom. Similar provisions in §87 of the 1996 Arbitration Act never entered into force owing to a perceived conflict with Article 6 (to be renumbered Article 12 pursuant to the Treaty of Amsterdam, see 1997 O.J. (C 340) 185) of the Treaty on European Union, which forbids “discrimination on the grounds of nationality.”

¹³⁹ The French N.C.P.C. Article 1492 defines arbitration as international if it “implicates international commerce.”

¹⁴⁰ See, e.g., Swiss LDIP, supra note 68, Arts. 176, 140, 192.

¹⁴¹ The UNCITRAL Model Law, supra note 38, in §1(3) adopts both tests, characterizing arbitration as international if the parties’ places of business are in different states or the transaction has a connection to a state other than the parties’ places of business. In addition, the Model Law allows parries to opt to treat their agreement as international. See id.

¹⁴² The statute might cover disputes of a pecuniary nature unless entirely among American residents. Corporations and partnerships would be considered U.S. residents if they were organized under American law, or if they have a principal place of business in the United States. A U.S. branch of a foreign corporation would be considered a U.S resident. An individual would be considered a resident if physically present in the United States more than 183 days during any calendar year.

¹⁴³ See, e.g., Klaus-Peter Berger, The Implementation of the UNCITRAL Model Law in Germany, Mealey’s Int’l Arb. Rep. Jan. 1998, at 38, 39.

¹⁴⁴ One is reminded of Justice Holmes’s comment that” [t]he most enlightened judicial policy is to let people manage their own business in their own way, unless the ground for interference is very clear.” See Dr. Miles Medical Co. v. John D. Park & Sons, 31 U.S. 373, 386 (1911) (Holmes, J., dissenting).