Michael Blechman Discusses the Influence of Competition Law on Arbitration in Global Competition Review

Global Competition Review reports on a panel discussion from the International Bar Association’s Annual Conference regarding competition law and arbitration. The subjects covered included whether arbitrators can and should apply antitrust law as well as the standard by which courts should review such arbitration decisions.

According to Kaye Scholer Antitrust Special Counsel Michael Blechman, the problems facing an arbitrator applying antitrust law in the United States are different from those found in Europe. One difference is that, while European competition law is often spelled out in group exemptions and other kinds of regulations, antitrust laws in the United States are broad and almost “constitutional in scope”. Also, while antitrust issues usually arise in European arbitrations in the context of determining whether a contract is enforceable, in the United States antitrust arbitrations often involve claims for treble damages. Accordingly, “Making an antitrust ruling could lead to significant damage awards against one of the parties involved.” Another problem is that  “While not all arbitrators have antitrust experience, judges, on the other hand, have almost always previously handled antitrust cases in their courtrooms.”

However, perhaps most important, “When judges decide antitrust cases, their decisions can be reversed at the court of appeals, if need be. Arbitration awards, on the other hand, are subject to very limited review and, therefore, usually final as a practical matter.” He continues, “Think of all of the judges who have been reversed. Imagine what would have happened if they couldn’t have been reversed. I think that’s what scares companies about the prospect of submitting antitrust claims to arbitration.”