473 U.S. 614 (1985)
Mitsubishi Motors Corporation is a Japanese corporation which manufactures automobiles and has its principal place of business in Tokyo, Japan.1 Mitsubishi is the product of a joint venture between Chrysler International, S. A. (CISA), a Swiss corporation registered in Geneva and wholly owned by Chrysler Corporation, and Mitsubishi Heavy Industries, Inc., a Japanese corporation.2 The aim of the joint venture was the distribution through Chrysler dealers outside the continental United States of vehicles manufactured by Mitsubishi and bearing Chrysler and Mitsubishi trademarks.3 Respondent-cross-petitioner Soler Chrysler-Plymouth, Inc. (Soler), is a Puerto Rico corporation with its principal place of business in Pueblo Viejo, Guaynabo, Puerto Rico.4
On October 31, 1979, Soler entered into a Distributor Agreement with CISA which provided for the sale by Soler of Mitsubishi-manufactured vehicles within a designated area, including metropolitan San Juan.5 On the same date, CISA, Soler, and Mitsubishi entered into a Sales Procedure Agreement which, referring to the Distributor Agreement, provided for the direct sale of Mitsubishi products to Soler and governed the terms and conditions of such sales.6 Paragraph VI of the Sales Agreement, labeled "Arbitration of Certain Matters," provides that all disputes, controversies or differences which may arise between Mitsubishi and Soler 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.7
Initially, Soler did a brisk business in Mitsubishi-manufactured vehicles.8 As a result of its strong performance, its minimum sales volume, specified by Mitsubishi and CISA, and agreed to by Soler, for the 1981 model year was substantially increased.9 In early 1981, however, the new-car market slackened.10 Soler ran into serious difficulties in meeting the expected sales volume, and by the spring of 1981 it felt itself compelled to request that Mitsubishi delay or cancel shipment of several orders.11 About the same time, Soler attempted to arrange for the transshipment of a quantity of its vehicles for sale in the continental United States and Latin America.12 Mitsubishi and CISA, however, refused permission for any such diversion, citing concerns that such diversion would interfere with Japanese trade policy and other reasons, and no vehicles were transshipped.13 Mitsubishi eventually withheld shipment of 966 vehicles, apparently representing orders placed for May, June, and July 1981 production, responsibility for which Soler disclaimed in February 1982.14
The following month, Mitsubishi brought an action against Soler in the United States District Court for the District of Puerto Rico under the Federal Arbitration Act and the Convention.15 Mitsubishi sought an order, pursuant to 9 U. S. C. §§ 4 and 201, to compel arbitration in accord with Paragraph VI of the Sales Agreement.16 Shortly after filing the complaint, Mitsubishi filed a request for arbitration before the Japan Commercial Arbitration Association.17 Soler denied the allegations and counterclaimed against both Mitsubishi and CISA.18 It alleged numerous breaches by Mitsubishi of the Sales Agreement, raised a pair of defamation claims, and asserted causes of action under the Sherman Act, 15 U. S. C. § 1 et seq.; the federal Automobile Dealers' Day in Court Act, 70 Stat. 1125, 15 U. S. C. § 1221 et seq.; the Puerto Rico competition statute, P. R. Laws Ann., Tit. 10, § 257 et seq. (1976); and the Puerto Rico Dealers' Contracts Act, P. R. Laws Ann., Tit. 10, § 278 et seq. (1976 and Supp. 1983).19 In the counterclaim premised on the Sherman Act, Soler alleged that Mitsubishi and CISA had conspired to divide markets in restraint of trade.20
After a hearing, the District Court ordered Mitsubishi and Soler to arbitrate each of the issues raised in the complaint and in all the counterclaims save two and a portion of a third.21 With regard to the federal antitrust issues, it recognized that the Courts of Appeals, following American Safety Equipment Corp. v. J. P. Maguire & Co., 391 F. 2d 821 (CA2 1968), uniformly had held that the rights conferred by the antitrust laws were " `of a character inappropriate for enforcement by arbitration.' "22 The District Court held, however, that the international character of the Mitsubishi-Soler undertaking required enforcement of the agreement to arbitrate even as to the antitrust claims.23 The United States Court of Appeals for the First Circuit affirmed in part and reversed in part.24 Assessing arbitrability "on an allegation-by-allegation basis," the court then read the arbitration clause to encompass virtually all the claims arising under the various statutes, including all those arising under the Sherman Act.25 Finally, after endorsing the doctrine of American Safety, precluding arbitration of antitrust claims, the Court of Appeals concluded that neither this Court's decision in Scherk nor the Convention required abandonment of that doctrine in the face of an international transaction.26 The Supreme Court granted certiorari primarily to consider whether an American court should enforce an agreement to resolve antitrust claims by arbitration when that agreement arises from an international transaction.27
Whether the arbitration clause in the Sales Procedure Agreement encompasses Soler's statutory counterclaims, including those arising under the Sherman Act?28
The Federal Arbitration Act establishes a liberal federal policy favoring arbitration agreements, requiring that doubts concerning the scope of arbitrable issues be resolved in favor of arbitration.29
Yes. The arbitration clause covers all disputes arising out of or in relation to Articles I-B through V of the Sales Agreement.30 Soler's counterclaims, including the Sherman Act claim alleging conspiracy to divide markets through refusal to permit transshipment and other actions, implicate provisions within those articles such as delivery obligations, payment procedures, and trademark use, as the Court of Appeals determined and the Supreme Court endorsed in its two-step inquiry.31
The arbitration clause encompasses Soler's statutory counterclaims, including those arising under the Sherman Act.32
Related opinions on this issue
Joined by Justice Brennan And Justice Marshall
Justice Stevens dissented on the ground that ordinary contract interpretation shows the clause does not reach the antitrust claim.33 He reasoned that the claim presents a three-party dispute involving Chrysler and rests on an independent federal-law violation rather than contractual rights defined in the enumerated articles. In his view the federal policy favoring arbitration cannot stretch the clause's language to cover statutory claims that the parties did not expressly identify.
The clause only applies to two-party disputes between Soler and Mitsubishi.34 The antitrust violation alleged in Soler's counterclaim is a three-party dispute.35 Soler has joined both Chrysler and its associated company, Mitsubishi, as counterdefendants.36 The pleading expressly alleges that both 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.37 It is further alleged that Chrysler authorized and participated in several overt acts directed at Soler.38
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.39 Disputes relating to only 5 out of a total of 15 Articles in the Sales Procedure Agreement are arbitrable.40 Soler's antitrust claim did not arise out of Articles I-B through V and it is not a claim for the breach thereof.41
Whether antitrust claims arising under the Sherman Act are arbitrable pursuant to the Federal Arbitration Act and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards when the agreement arises from an international commercial transaction?42
Concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties' agreement, even assuming that a contrary result would be forthcoming in a domestic context.43
Yes. The international character of the transaction, involving a Japanese manufacturer, a Swiss entity, and a Puerto Rico dealer, triggers the strong presumption favoring enforcement of choice-of-forum provisions established in The Bremen and Scherk.44 The arbitral tribunal can apply United States antitrust law, and national courts retain authority at the award-enforcement stage to ensure that public-policy concerns have been addressed under the Convention.45
Antitrust claims arising under the Sherman Act are arbitrable when the agreement arises from an international commercial transaction.46
Related opinions on this issue
Joined by Justice Brennan And Justice Marshall
Justice Stevens dissented on the ground that the international character of the transaction does not render antitrust claims arbitrable.47 He maintained that the claim is governed entirely by American law, that the Convention permits signatory nations to refuse arbitration of matters nonarbitrable under domestic law, and that the public interest in private enforcement of the Sherman Act through treble-damages actions precludes enforcement of a predispute arbitration clause.48
The Court assumes for the purposes of its decision that the antitrust issues would not be arbitrable if this were a purely domestic dispute, but holds that the international character of the controversy makes it arbitrable.49 The holding rests on vague concerns for the international implications of its decision and a misguided application of Scherk v. Alberto-Culver Co.50 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.51 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.52 The Court today refuses to honor Congress' commitment to the exclusive resolution of antitrust disputes in the federal courts, offering only vague concerns for comity among nations.53