Vanderbilt Journal of Transnational Law

Article Title

Recent Decisions

First Page



Arbitration--Transnational Antitrust Claims are Nonarbitrable under the Federal Arbitration Act and Article II (1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards--Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 723 F.2d 155 (1st Cir.1983), cert. granted, 105 S. Ct. 291 (1984).


The instant decision marks the first time a court has considered whether to apply the United States domestic policy of preserving antitrust issues for judicial determination to an international contract containing a mandatory arbitration clause. The First Circuit's decision to apply domestic policy undermines the preeminent goal of the Convention, which is to encourage arbitration of international commercial disputes, and diminishes the advantages traditionally associated with arbitration. A policy encouraging litigants to raise minor and possibly fabricated antitrust claims will encumber an already overloaded judicial system. The party who perceives a disadvantage in prompt and certain arbitration before a predetermined forum can now opt to delay the proceeding by raising a collateral antitrust claim. The court reached its conclusion by applying a dormant provision of the Convention and distinguishing the precedent established by the Supreme Court in Scherk. Its reasoning on both counts is not persuasive.

Lucy C. Gratz


International Banking--The International Banking Act of 1978 Limits the States' Ability to Regulate Foreign Bank Entry, Conference of State Bank Supervisors v. Conover, 715 F.2d 604 (D.C. Cir. 1983), cert. denied, 104 S. Ct. 1708 (1984).


The instant decision is the first to address whether the IBA permits states to exercise their reciprocity laws to prohibit the entry of foreign banks operating pursuant to federal charter. In determining whether section 4(a) enables states to prohibit foreign bank entry on a discretionary basis, the court of appeals prudently declined to rely on either the language or the legislative history of that section because neither offers a clear indication of Congressional intent. Instead, the court based its decision on the overriding objective of Congress to accord foreign banks national treatment through the IBA. The legislative history of the IBA clearly indicates Congressional intent to treat foreign banks essentially the same as similarly situated domestic banks . Accordingly, consideration of the broad legislative policy was a sound basis for the court's decision. If Congress had wanted to enable states to exercise their reciprocity laws to prohibit the entry of federally chartered branches or agencies, it could have made that purpose explicit in the statute. Without an unequivocal mandate, a policy that would allow individual states to discriminate in regulating foreign bank entry would be inconsistent with the IBA's goal of national treatment. The instant decision supports the general United States policy to treat foreign enterprises doing business in the United States as the competitive equals of their domestic counterparts."

Laurel Comstock Williams