The Conflict Between Party Autonomy and Consumer Protection: Applying the Public Policy Exception to Arbitral Awards in B2C E-Commerce

Abstract

The enforcement of arbitral awards in business-to-consumer e-commerce creates a difficult conflict between two legal principles. Arbitration depends on party autonomy and the finality of awards, while consumer law proceeds from the assumption that the consumer is normally the weaker contractual party and therefore requires mandatory protection. The conflict becomes particularly visible when courts review arbitral awards against public policy. Article V(2)(b) of the 1958 New York Convention permits refusal of recognition or enforcement where enforcement would be contrary to the public policy of the enforcing State. Although the Convention intended refusal to remain exceptional, consumer protection rules may enter the enforcement process through this exception or through comparable domestic public-policy review. European case law concerning unfair arbitration clauses illustrates how mandatory consumer rules can require judicial intervention even after arbitration has been completed. This thesis examines the relationship between party autonomy, consumer protection and public policy through the New York Convention, Directive 93/13/EEC and the judgments in Eco Swiss, Mostaza Claro and Asturcom. I argue that public policy remains necessary in B2C arbitration, but its application should depend on a serious violation of mandatory consumer protection and a material effect on the consumer's ability to participate in or defend the claim.