The American Influences on International Commercial Arbitration Published online by Cambridge University Press: 11 July 2009
THE HISTORICALLY CONVENTIONAL VIEW OF ARBITRATION IN THE UNITED STATES
It is impossible to sever the U.S. judiciary's early bias against arbitration from the disdain of arbitral proceedings that pervaded English courts. A brief historical schematic is presented here.
After the 1687 enactment of the Statute of Fines and Penalties, arbitration agreements were stripped of all juridic efficacy for many reasons. The primary reasons, however, were that they were not enforceable in equity, could not give rise to a cognizable cause of action, and did not constitute a viable ground for issuing a stay of a judicial proceeding based on the identical underlying cause of action between the same parties. Significantly, the Act of 1854 vested courts with the discretion to stay a legal proceeding in deference to arbitration agreements, and such stays would be irrevocable but for leave of court. In this same vein, the Arbitration Act of 1889 rendered arbitration agreements irrevocable absent a court order to the contrary. Additionally, this Act provided that an arbitration agreement was endowed with the same effect as if issued by court order and bestowed courts with authority to review legal questions raised during the final arbitration hearing. Notwithstanding these enactments, in the middle of the eighteenth century arbitration agreements were deemed to be against public policy for two rudimentary reasons. First, arbitration agreements were perceived as private contracts that “oust the jurisdiction” of otherwise courts of competent jurisdiction.
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