Arbitral Autonomy

• Author: L. Ali Khan
• Position: Professor of Law, Washburn University
• Pages: 1-58

Arbitral Autonomy

L. Ali Khan∗

ABSTRACT

This Article presents concrete proposals to amend the current

arbitration law for minimizing court intervention into arbitration

proceedings and enforcement of arbitral awards. As a method of

dispute resolution, arbitration offers an alternative to litigation. Yet

arbitration is frequently interspersed with litigation. As a true

alternative, arbitration can and should be autonomous, that is,

litigation free. Arbitral autonomy fails when parties go to court to

challenge the validity of the arbitration agreement, to obtain

emergency relief, or to contest enforceability of the award, among

other reasons. To accomplish litigation-free arbitration, first, the

need to go to court must be minimized; second, the desire to go to

court must be deterred. In developing arbitral autonomy, this Article

offers theoretically defensible and practically feasible proposals to

remove both the need and the desire to go to court. In endorsing

arbitral autonomy, however, this Article warns against an

arbitration blackout that thrives on secrecy, quasi-lawlessness, and

pro-arbitration judicial exuberance—a blackout that hurts weak and

vulnerable parties drawn into mandatory arbitration.

TABLE OF CONTENTS

Abstract ................................................................................1

I. Introduction ..........................................................................2

II. Forfeiting Litigation .............................................................8

A. Right to Litigation ........................................................8

B. Foregoing Litigation Rights ........................................12

Copyright 2013, by L. ALI KHAN.

∗ Professor of Law, Washburn University. I am grateful to a number of

colleagues for making instructive comments when I presented the thesis of this

Article at a faculty development workshop in 2011. Freddy Sourgens and Patricia

Judd offered useful suggestions to improve the thesis of the Article. I also wish to

thank scores of students who, while studying arbitration law with me, reacted to

and commented on the ideas that would over the years develop into the concept of

arbitral autonomy. This Article is dedicated to Syed Maqbool Alam and Tanvir

Ahmed Khan, friends who died long before death was due.

2 LOUISIANA LAW REVIEW [Vol. 74

III. Attributes of Arbitral Autonomy .......................................14

IV. Autonomy and Arbitrability................................................17

A. State Non-arbitrability ................................................18

B. Party Non-arbitrability ................................................23

1. Prohibiting Fractional Arbitration ....................... 24

2. Arbitrating Fractional Arbitration ....................... 25

V. Severability Doctrine ..........................................................28

A. Existence and Enforceability ......................................31

B. Revisiting Volt ............................................................33

VI. Parity Principle ...................................................................35

A. Preliminary Relief .......................................................36

B. Emergency Relief .......................................................38

C. Exemplary Relief ........................................................39

VII. Vacating Arbitration Awards ..............................................42

VIII. Arbitration Blackout ...........................................................46

A. Arbitration Secrecy .....................................................49

B. Quasi-lawlessness .......................................................51

C. Reasonless Awards .....................................................52

D. Pro-arbitration Exuberance .........................................55

IX. Conclusion ..........................................................................57

I. INTRODUCTION

In 1981, the Connecticut Supreme Court offered an insightful

paradigm: “Arbitration is a contractual remedy designed to expedite

informal dispute resolution. Its autonomy requires a minimum of

judicial intrusion.”1 Although other jurisdictions rarely cite the

Connecticut court’s words,2 the autonomy of arbitration, as a

guiding paradigm for restraining judicial intrusion, is a topic in need

1. State v. Conn. Emps. Union Indep., 440 A.2d 229, 230 (Conn. 1981)

(citations omitted).

2. As of February 14, 2013, the Westlaw “all cases” database revealed only

seven cases, all in Connecticut , which repeat this formulation of the autonomy of

arbitration.

2013] ARBITRAL AUTONOMY 3

of scholarly attention. Autonomous arbitration occurs when it is

initiated, conducted, and concluded, and the arbitration award is

enforced, all without any need or desire for judicial intervention.3

Endorsing the autonomy paradigm in its own words, the U.S.

Supreme Court has affirmed “the unmistakably clear congressional

purpose that the arbitration procedure, when selected by the parties

to a contract, be speedy and not subject to delay and obstruction in

the courts.”4 Derived from the contract theory of arbitration,5

arbitration statutes, court rulings, and arbitrational institutional rules,

the autonomy paradigm proposed in this Article offers concrete

suggestions for minimizing court intervention in arbitration

processes and outcomes. If these proposals aimed at transforming

the technical infrastructure of arbitration law6 are adopted,

arbitration will undergo a revolutionary change, developing into a

complete alternative to litigation. In presenting these proposals, this

Article invites scholars, lawyers, and judges to further refine the

concept of arbitral autonomy (or the “autonomy paradigm”)7 that is

framed in this Article.

The autonomy paradigm does not advocate that arbitration, as a

method of dispute resolution, is inherently superior to litigation.

Rather, litigation conducted in public courts is critical for clarifying

cases and statutes for future guidance. Arbitration cannot supplant

litigation. In the past few decades, however, arbitration has gone

well beyond commercial dispute resolution; it has proliferated in

numerous areas of law reserved for litigation, including antitrust

laws and statutory rights. The historical common law prejudice

against pre-dispute arbitration clauses has waned, expanding the

scope of arbitration.8 Courts burdened with cases are eager to

3. Developments in the Law — The Paths of Civil Litiga tion, 113 HARV. L.

REV. 1851, 1862−63 (2000) (stating that courts and commentators are conflicted

over the efficiency benefits and fairness concerns of arbitration).

4. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404

(1967).

5. The contract theory of arbitration, as explained in this Article, states that

arbitration is a creature of contract. Arbitration is a method of dispute resolution

that parties choose by means of a contract. Under the contract theory, therefore,

arbitration cannot be imposed on a party without the party’s consent.

6. Unless otherwise indicated, “arbitration law” refers to the Federal

Arbitration Act, the Uniform Arbitration Act, st ate and federal cases decided

under these statutes, and common law. Even though this Article is confined to the

United States, the principles discussed may have universal appeal and application.

9 U.S.C. §§ 1–16 (2006); UNIF. ARBITRATION ACT (amended 2000), 1 U.L.A. 1

(2009).

7. This Article uses “arbitral auto nomy” and “autonomy paradigm” as

synonymous concepts.

8. Common law was averse to enforcing pre-dispute arbitration agreements

but was wholly willing to enforce post-dispute arbitration agreements. In the 19th