Rau: Fear of Freedom

Alan Scott Rau (Univ. of Texas - Law) has posted Fear of Freedom (American Review of International Arbitration, forthcoming). Here's the abstract:

The Supreme Court, in a highly-anticipated decision, has recently held that the FAA's statutory grounds for vacatur of awards may not be supplemented by contract. So the illicit character of contractual provisions purporting to expand judicial review of arbitral awards is firmly established. However, even to phrase the issue in Hall Street in terms of extended judicial review is already tendentious: For it is not even necessary to characterize in that way an agreement to subject arbitral conclusions of law to a court's second look; alternative characterizations are available which make the contractual arrangement attempted by the parties in that case quite unproblematical. In addition, the familiar, century-old assertion to the effect that expanded review would be a perversion of the goals of arbitration - contrary to its ethos, given that finality is its indispensable characteristic - although trotted out once again in Justice Souter's opinion for the Court - seems perfectly beside the point. What is truly appalling about Hall Street, however, is not so much the unfortunate result, but rather the grotesque deficiencies in craftsmanship, in rhetoric, in argument. Most of the Court's opinion dwells on the textual features of the FAA that are supposedly at odds with enforcement of the contractual provision: This forces us to confront directly the question of how one ought to go about reading a statute - and how not to. As to that question, the Hall Street opinion must represent a new low in context-free, policy-free, abstract, non-functional decision-making. Finally, I consider briefly three questions that the holding seems to pose for the future: (a) What remains of manifest disregard and other supposedly non statutory grounds for the vacatur of awards? (b) What ways out are there in future cases? What, for example, are we to make of Justice Souter's suggestion that the Court's holding need not exclude more searching review based on authority outside the statute - for example, enforcement under state statutory or common law? (c) No matter how unsatisfactory the opinion, what factors might explain this decision? In particular, how can one account for the fact that the largest providers of arbitration services should have lined up so strongly on the defendant's side in Hall Street? Surely this is paradoxical, as one would have thought that the arbitration establishment is made up precisely of those least likely to remain fettered to the historically contingent, modal form of the arbitration process - most likely by contrast to have internalized all the vaunted advantages of tailoring the arbitration mechanism to individual needs.