When parties seek to settle a dispute not by the adjudication of a count that is a national agency, but by the award of an arbitrator who is a private person, it is likely to matter practically whether the dispute can be a subject of arbitration. The arbitrability issues are determined by the legislative policy of the nation in which arbitration is being used. According to Korean Arbitration Act §3 (1), any dispute in private laws can be a subject of arbitration. Therefore, if arbitrability of any dispute comes into question, it should be examined whether the dispute is with regard to a legal relationship in private laws. It needs to consider whether parties can discretionally decide on the ways and contents of resolving a dispute. From this point of view, the dispute on securities transactions comes under that of private laws and can be a subject of arbitration.
In the United States, there is no provisions of arbitrability under the Federal Arbitration Act and other statues. It has been discussed whether disputes are brought about in the areas to which regulation law, such as the Securities Exchange Act, the antitrust laws, etc. in relation with the public interest which the laws will serve. At one time, there were decisions that securities disputes can not be a subject of arbitration, because it is against public order to exclude court’s adjudication for resolving the dispute by means of arbitration. But these precedents have been changed to acknowledge the arbitrability of securities disputes in domestic arbitration as well as in international arbitration.
It could be a matter for debate whether an arbitrator or an arbitral tribunal rules on its own jurisdiction including the questions that who makes the arbitrability decision during the arbitral proceeding. This is about competence-competence means an arbitral tribunal’s power to determine whether it has jurisdiction to decide a controversy. But there is no provisions of competence-competence under the Federal Arbitration Act. The Supreme Court held as a means gauging a clear and mistakable agreement of these issues to the tribunal itself. If there is this agreement between parties, the tribunal has competence to rule on issues of arbitrability. But if there is no such agreement, only a court has the competence.
It could be a problem in resolving securities dispute by arbitration whether an arbitral tribunal makes an award on punitive damages. The Supreme Court found that the problem should be determined by interpreting parties’ intention within the scope of their contract. When it is likely that the United States is a place of arbitration or the United States law is applied to arbitral proceedings in relation with securities disputes, the party who desires to settle the disputes through arbitration keeps in mind the United States courts’ decisions on the arbitration of securities disputes. It is desirable for parties to operate arbitration system in manner consistent with their intention by inquiring into arbitration rules of arbitration institutions when they use institutional arbitration.