As Justice Frankfurter noted in his dissent in Wilko, the Court's opinion did not rest on any evidence, either "in the record . . . [or] in the facts of which [it could] take judicial notice," that "the arbitral system . . . would not afford the plaintiff the rights to which he is entitled." Id., at 439. Instead, the reasons given in Wilko reflect a general suspicion of the desirability of arbitration and the competence of arbitral tribunals - most apply with no greater force to the arbitration of securities disputes than to the arbitration of legal disputes generally. It is difficult to reconcile Wilko's mistrust of the arbitral process with this Court's subsequent [482 U.S. 220, 232] decisions involving the Arbitration Act. See, e. g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., supra; Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985); Southland Corp. v. Keating, 465 U.S. 1 (1984); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983); Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974)
Indeed, most of the reasons given in Wilko have been rejected subsequently by the Court as a basis for holding claims to be nonarbitrable. In Mitsubishi, for example, we recognized that arbitral tribunals are readily capable of handling the factual and legal complexities of antitrust claims, notwithstanding the absence of judicial instruction and supervision. See 473 U.S., at 633 -634. Likewise, we have concluded that the streamlined procedures of arbitration do not entail any consequential restriction on substantive rights. Id., at 628. Finally, we have indicated that there is no reason to assume at the outset that arbitrators will not follow the law; although judicial scrutiny of arbitration awards necessarily is limited, such review is sufficient to ensure that arbitrators comply with the requirements of the statute. See id., at 636-637, and n. 19 (declining to assume that arbitration will not be resolved in accordance with statutory law, but reserving consideration of "effect of an arbitral tribunal's failure to take cognizance of the statutory cause of action on the claimant's capacity to reinstate suit in federal court").
The suitability of arbitration as a means of enforcing Exchange Act rights is evident from our decision in Scherk. Although the holding in that case was limited to international agreements, the competence of arbitral tribunals to resolve 10(b) claims is the same in both settings. Courts likewise have routinely enforced agreements to arbitrate 10(b) claims where both parties are members of a securities exchange or the National Association of Securities Dealers (NASD), suggesting that arbitral tribunals are fully capable of handling such matters. See, e. g., Axelrod & Co. v. Kordich, Victor [482 U.S. 220, 233] & Neufeld, 320 F. Supp. 193 (SDNY 1970), aff'd, 451 F.2d 838 (CA2 1971); Brown v. Gilligan, Will & Co., 287 F. Supp. 766 (SDNY 1968). And courts uniformly have concluded that Wilko does not apply to the submission to arbitration of existing disputes, see, e. g., Gardner v. Shearson, Hammill & Co., 433 F.2d 367 (CA5 1970); Moran v. Paine, Webber, Jackson & Curtis, 389 F.2d 242 (CA3 1968), even though the inherent suitability of arbitration as a means of resolving 10(b) claims remains unchanged. Cf. Mitsubishi, 473 U.S., at 633.
Thus, the mistrust of arbitration that formed the basis for the Wilko opinion in 1953 is difficult to square with the assessment of arbitration that has prevailed since that time. This is especially so in light of the intervening changes in the regulatory structure of the securities laws. Even if Wilko's assumptions regarding arbitration were valid at the time Wilko was decided, most certainly they do not hold true today for arbitration procedures subject to the SEC's oversight authority. |
