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Arbitration of trust disputes: two bodies of law collide.

b. An Arbitration Clause That is Operable, Effective, and Capable of Performance

The second issue to consider involves the arbitration provision itself. For a mandatory arbitration clause found in a trust to be enforceable, "the clause purporting to be an arbitration clause ... [must be] an agreement which is not inoperable, ineffective or incapable of being performed." (257) Furthermore, there must "actually [be] a dispute within the scope of the clause." (258)

The second of these two requirements is easily disposed of. Issues regarding the scope of an arbitration agreement have long been decided by arbitrators pursuant to the doctrine of competence-competence (Kompetenz-Kompetenz), which describes the ability of an arbitral tribunal to decide its own jurisdiction. (259) As a result, allowing arbitral tribunals to determine whether a particular dispute falls within the scope of an arbitration provision found in a trust does not seem problematic in any way.

The first of these two requirements--i.e., the need to establish that the arbitration clause that appears in the trust is operable, effective, and capable of being performed--gives rise to much more significant concerns. Most courts and commentators consider these issues solely from the perspective of national law. However, recent developments in international arbitration suggest some new solutions to some of the more intransigent problems in this area. The following discussion considers the relevant concerns under both national and international law, although it should be noted that some of the innovations in the international realm affect domestic disputes as well.

i. Solutions Suggested Under National Law

Because arbitration is considered "a creature of contract," (260) many jurisdictions require an arbitration agreement to reflect certain contractual qualities. (261) Therefore, if the language invoking arbitration is located within a larger document, as would be the case with mandatory arbitration provisions in trusts, then that larger document must typically meet the formal requirements for a contract. (262)

Trusts run into two difficulties in this regard. First, trusts are typically only signed by the settlor, not by other parties. (263) Second, trusts do not involve the exchange of consideration, which is problematic in jurisdictions that hold that "[a]rbitration rests on an exchange of promises." (264) Although the signature and consideration requirements have proven fatal to mandatory arbitration of trusts on occasion, (265) courts and commentators have identified a number of ways to overcome both problems. However, the approach varies according to the party's relationship to the trust.

Issues relating to trustees are the simplest to address. In these situations, a settlor can explicitly create a contractual relationship with the trustee, either using language in the trust itself or a side agreement. (266) Although the problem of consideration remains, that concern can be addressed in one of three ways, by either (1) paying the trustee for his or her efforts (indeed, it is rare for a trustee to act gratuitously these days); (267) (2) deeming the trustee to have consented to the terms of the trust when he or she accepted the trust appointment; (268) or (3) concluding that there is no need for mutual consideration in cases involving an agreement to arbitrate in the context of a trust. (269)

Issues relating to beneficiaries are more difficult to resolve, since beneficiaries neither sign the trust instrument nor accept any burdens thereunder. However settlors could attempt to draft a trust deed
   in such a way that benefiting from the trust would be deemed an
   agreement to submit trust disputes to arbitration. By accepting the
   gifts or invoking any rights under the trust deed, the
   beneficiaries would be deemed to agree to settle any dispute in
   accordance with the arbitration agreement contained in the trust
   deed. (270)


This technique is known in England as "deemed acquiescence," whereby beneficiaries who receive some sort of benefit under the trust are considered bound by the terms of the instrument, including any mandatory arbitration clause contained therein. (271) Under this doctrine, "any beneficiary (even an unborn or unascertained one) who derives his entire interest in the trust from the settlor, and whose rights and obligations under the trust are hence determined by the trust deed, is deemed to acquiesce to the arbitration provision." (272)

The United States has adopted a similar approach under a theory known as "conditional transfer." (273) Under this doctrine, provisions found in the trust are binding on beneficiaries to the extent that the beneficiary's "rights" in the corpus of the trust are seen as "wholly derivative" of the settlor's "right to pass her property to the persons of her choosing." (274) The settlor is considered capable of conditioning receipt of any benefits on compliance with arbitration provisions contained in the trust because the beneficiary's "rights" in the trust are contingent on the wishes of the settlor. (275)

These theories are not limited to the United States and England. Courts in civil law countries such as Switzerland have used similar techniques to bind beneficiaries to arbitration provisions found in the trust instrument. (276)

As useful as deemed acquiescence and conditional transfer are, they do not eliminate all concerns relating to the operability and effectiveness of an arbitration provision found in a trust. Because these doctrines are derived from the settlor's consent to arbitration, difficulties can arise in situations where the settlor's consent to the trust, and therefore to arbitration, is in doubt (i.e., in cases that challenge or deny the existence of the trust altogether). (277) This issue is discussed below. (278)

Interestingly, deemed acquiescence and conditional transfer resemble certain theories used in arbitration law to consider whether the benefit or burden of an arbitration agreement can or should be extended to various nonsignatories. Arbitration law allows courts and arbitrators to extend an arbitration agreement to nonsignatories in cases involving "agency (actual and apparent), alter ego, implied consent, 'group of companies,' estoppel, third-party beneficiary, guarantor, subrogation, legal succession and ratification or assumption." (279) Deemed acquiescence and conditional transfer could easily be analogized to implied consent, estoppel, or third-party beneficiaries in the arbitral context. Legal succession and ratification might also apply in cases involving a successor trustee or protector. While this analysis suggests a useful overlap between trust law and arbitration law, caution should nevertheless be exercised, since U.S. courts appear somewhat split as to the application of arbitral principles regarding nonsignatories in the context of a trust dispute. (280)

ii. Solutions Suggested Under International Law

Although the techniques suggested above may be sufficient to eliminate concerns about the effectiveness and validity of an arbitration provision arising in a trust, certain international developments relating to form requirements in arbitration shed additional light on these issues. Form requirements in arbitration exist as a matter of both national and international law, and serve two different purposes. "First, some form requirements are relevant to the validity of an arbitration agreement: if these requirements are not satisfied, then the agreement to arbitrate is invalid. Second, other 'form requirements' are in reality jurisdictional conditions that must be satisfied in order for a particular legislative instrument ... to apply...." (281) Both of these types of requirements must be considered in cases involving mandatory trust arbitration.

The analysis begins at the international level. According to the New York Convention:
      Each Contracting State shall recognize an agreement in writing
   under which the parties undertake to submit to arbitration all or
   any differences which have arisen or which may arise between them
   in respect of a defined legal relationship, whether contractual or
   not, concerning a subject matter capable of settlement by
   arbitration. (282)


That provision goes on to indicate that "[t]he term 'agreement in writing' shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams." (283)

If a trust is a contract, then the requirements of the New York Convention are obviously met by an arbitration provision found in the trust. (284) However, the New York Convention does not define what "a contract" is, which means the issue will be determined by reference to domestic law. This is of course problematic, given the uncertainty regarding the contractual nature of trusts. (285) Debate also exists as to whether the New York Convention requires a contract containing an arbitration provision to be signed by the parties in question. (286)

Although the New York Convention's definition of "an agreement in writing" appears clear on its face, certain problems have arisen in practice. (287) For example:
      It has been repeatedly pointed out by practitioners that there
   are a number of situations where the parties have agreed to
   arbitrate (and there is evidence in writing about the agreement),
   but where, nevertheless, the validity of the agreement is called
   into question because of the overly restrictive form requirement.
   The conclusion frequently drawn from those situations is that the
   definition of writing, as contained in ... [various] international
   legislative texts, is not in conformity with international contract
   practices and is detrimental to the legal certainty and
   predictability of commitments entered into in international
   trade. (288)


Concerns about "overly restrictive form requirement[s]" would also seem relevant in the context of trust arbitration, since strict application of contractual requirements currently bars arbitration of disputes in situations where the settlor's intent to require arbitration is clear. (289) The question therefore is whether the international arbitral community's proposed solution to the problem of "overly restrictive form requirements" could be usefully applied directly to international trust disputes and, by analogy, to domestic disputes.

As it turns out, efforts undertaken by the international community may in fact be helpful to mandatory trust arbitration. The issue has been addressed as follows. In 2006, UNCITRAL published a recommendation directed at the various state parties to the New York Convention (UNCITRAL Recommendation), (290) stating that UNCITRAL "[r]ecommends that article II, paragraph 2, of the [New York Convention] be applied recognizing that the circumstances described therein are not exhaustive." (291) This means that the term "agreement in writing" can be considered to include more than just an "arbitral clause in a contract" or a standalone "arbitration agreement, signed by the parties." (292) Instead, the UNCITRAL Recommendation encourages widespread relaxation of existing form requirements. (293)

Because the UNCITRAL Recommendation is suggestive rather than mandatory, it need not be applied by national courts. (294) However, the Recommendation should nevertheless be given serious consideration by judges in the United States and elsewhere, since established principles of international law indicate that courts construing an international treaty should take into account '"the postratification understanding' of signatory states," which would include documents such as the UNCITRAL Recommendation. (295)

The UNCITRAL Recommendation applies to all arbitration agreements and awards falling under the New York Convention and is therefore relevant to most, if not all, international trusts. (296) There are two times when courts will have the opportunity to consider the UNCITRAL Recommendation in the context of a trust dispute: (1) at the initial stage of the dispute, when a party seeks to enforce an arbitration agreement, and (2) at the end stage, when a party seeks to enforce an award under the Convention. (297) That means that courts facing either a motion to compel arbitration or a motion to enforce an arbitral award under the New York Convention can rely on the UNCITRAL Recommendation to adopt a flexible, pro-arbitration approach to the definition of an "agreement in writing." (298)

Having said that, the UNCITRAL Recommendation does not provide any detailed information about what can be considered an "agreement in writing" under this more expansive reading of the New York Convention. (299) Nevertheless, some guidance may be sought from a report put together by a UNCITRAL working group in 2005, just prior to the formal approval of the Recommendation. (300) That report indicated that a number of countries allowed parties to rely on part performance (estoppel) and incorporation by reference to offset the strict application of the writing requirement, among other things. (301) This suggests that the concepts of deemed acquiescence and conditional transfer (which incorporate principles of estoppel) could fall within the expansive approach to form requirements advocated by the UNCITRAL Recommendation, thus allowing international trust arbitration to benefit from the pro-enforcement bias of the New York Convention. (302) Indeed, this appears somewhat consistent with existing U.S. precedent, since one U.S. court has already used principles of equitable estoppel to overcome the technical absence of a "writing" in a trust-related dispute. (303) Incorporation by reference has also been used to allow arbitration of internal trust matters based on an arbitration provision found in a side agreement. (304)

Parties and courts seeking additional guidance on how to interpret the UNCITRAL Recommendation can also look to the 2006 version of the Model Arbitration Law for assistance. (305) UNCITRAL was working on the revisions to the model law at the same time it was drafting the UNCITRAL Recommendation and clearly intended the two documents to be read together. (306) Indeed, it appears that the UNCITRAL Recommendation was meant to liberalize form requirements in the international realm, while revisions to Article 7 of the Model Arbitration Law were meant to have a similar effect at the national level. (307)

Article 7 of the revised Model Arbitration Law contains the definition of an arbitration agreement and therefore addresses the same issues as Article II of the New York Convention. (308) Notably, UNCITRAL proposed two different alternatives with respect to the revised version of Article 7, and both include certain innovations that could affect mandatory trust arbitration. (309)

For example, both Option I and Option II of the revised version of Article 7 of the Model Arbitration Law eliminate the need for the parties to have signed the arbitration agreement in question. (310) This obviously removes one of the primary problems facing mandatory trust arbitration, particularly with respect to disputes involving beneficiaries. (311)

However, Option II goes even further in its relaxation of form requirements, stating that an "'[a]rbitration agreement' is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not." (312) Because Option II does not mention the need for the arbitration provision to appear in a contract, jurisdictions adopting this provision would likely have few, if any, problems enforcing a mandatory arbitration provision found in a trust.

The most direct benefits of the relaxed form requirements in the revised Model Arbitration Law will be felt by parties to an arbitration proceeding in a jurisdiction that has adopted the 2006 version of the Model Arbitration Law. (313) Although neither the United States nor England have adopted the Model Arbitration Law, seven U.S. states have. (314) However, the impact of the Model Arbitration Law extends beyond arbitrations seated in a Model Arbitration Law jurisdiction. (315)

Under Article VII(1) of the New York Convention, parties to an international arbitration may take advantage of any national law that provides an easier route to enforcement than that set forth in the Convention. (316) Notably, this includes provisions regarding form requirements. (317) Therefore, parties seeking to enforce an arbitral award in a jurisdiction that has adopted the 2006 version of the Model Arbitration Law will also be able to rely on these relaxed form requirements. (318)

The innovations reflected in the UNCITRAL Recommendation and the Model Arbitration Law bode well for the future of both commercial and trust arbitration. (319) However, settlors should nevertheless exercise caution and make sure that any arbitration provisions located in a trust comply with currently existing rules regarding form requirements and operability of the arbitration agreement. This can be particularly challenging in international disputes, since drafters need to "ensure that formal and substantial validity requirements for a valid 'arbitration agreement' are met for both the lex arbitri and law governing the arbitration agreement." (320)

c. An Arbitral Clause That is Binding on the Party Seeking to Avoid Arbitration

The third issue to discuss is whether an arbitration clause found in a trust can be considered binding on the party seeking to avoid arbitration. (321) Rather than focusing on the form of the arbitration provision, this concern focuses on whether there is adequate consent to support arbitration. This question can be considered from two perspectives: that of the settlor and that of parties other than the settlor. Each is addressed in turn.

i. Settlor Consent

In some ways, it may seem strange to ask whether a settlor has consented to arbitration, since the settlor is the one who created the trust with the mandatory arbitration provision in the first place. However, settlor consent is essentially what is at issue when a party challenges a trust on grounds such as undue influence, lack of capacity, fraud, duress, forgery, or mistake, since the claim is that neither the underlying document (i.e., the trust) nor the arbitration agreement found in the trust ever came into effect. (322) Challenges to trusts based on incapacity and similar concerns are made relatively frequently, so this is a concern that will arise with some regularity.

The first thing to note is that those who seek to impeach an arbitration provision in a trust based on a challenge to the trust itself may only do so if the challenge denies the existence of the trust in its entirety. (323) If a party bases its claim on any portion of the trust, then the arbitration clause will remain in effect, since it is impossible to make a claim under the trust while simultaneously denying its validity. (324)

Some commentators distinguish clearly between the arbitration of challenges to the trust and the arbitration of disputes arising under the trust, stating that:
   [A]n arbitrator whose authority to adjudicate a ... [trust] dispute
   derives from a clause in the ... [trust] itself should have no
   authority to decide a claim that the ... [trust] is invalid on
   grounds of improper execution, lack of mental capacity, undue
   influence or testamentary fraud. Such a view would give the
   arbitrator the sole authority to interpret the ... [trust's]
   provisions but not to hear challenges to the ... [trust's]
   validity. (325)


This approach is consistent with the analytical approach used outside the context of mandatory arbitration, in that courts faced with claims of undue influence, lack of capacity, fraud, duress, and mistake in other areas of trust law are just as likely to invalidate the entire trust as they are to sever the offending provision. (326) Indeed, one court considering arbitration of a trust dispute appears to have adopted precisely this type of all-or-nothing approach after it was "faced with an arbitration agreement in which no single provision [could] be stricken to remove the unconscionable taint." (327) Because the impropriety was said to permeate the entire arbitration agreement, the court struck the arbitration provision in its entirety. (328)

This approach would, of course, be highly problematic if it were applied to mandatory trust arbitration, since claims regarding lack of capacity, fraud, duress, or mistake could routinely invalidate arbitration provisions found in trusts. However, this is another area where arbitration law might provide a useful framework for analysis.

Courts and commentators considering arbitration in other areas of law recognized early on that the effectiveness of the arbitral regime would be put in jeopardy if parties could avoid arbitration simply by alleging that lack of capacity, fraud, duress, forgery, or mistake not only invalidated the substantive agreement but also impeached any arbitration agreement located within the underlying contract. (329) The arbitral community therefore developed the principle of separability, which, in general terms, states that challenges to the validity or existence of the contract in which an arbitration agreement is found do not affect the validity or existence of the arbitration agreement itself. (330) This proposition holds true even in cases where the claims question the quality or existence of the consent of the signatories, as is the case in challenges based on lack of capacity, fraud, duress, forgery, and mistake. (331)

While the basic principle of separability can be stated succinctly, the doctrine's precise parameters vary somewhat according to national law. Some countries take the view that the only time a claim will be heard by a court is if the party challenges the validity of the arbitration agreement itself (as opposed to the document in which the agreement is found) or if the party has specifically given the issue of validity to the court. (332) Other jurisdictions--most particularly the United States--make further distinctions in their application of the principle of separability. (333)

The separability analysis in the United States is based on two U.S. Supreme Court decisions, Prima Paint Corp. v. Flood & Conklin Manufacturing Co. (334) and Buckeye Check Cashing Inc. v. Cardegna. (335) The essential holding of Prima Paint is that "claims of fraudulent inducement, directed at the underlying contract and capable of rendering it voidable, [do] not impeach the arbitration clause contained in that contract." (336) Buckeye Check Cashing extended this basic principle to "cases involving claims that the underlying contract was void or illegal." (337) Thus, "a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator." (338)

Although Buckeye Check Cashing expressly held that the analysis was to be the same regardless of whether the underlying contract was said to be void or voidable, "U.S. courts have adopted different approaches to the effects of the separability presumption depending on whether (a) the validity, legality, or continued effectiveness of the underlying contract is challenged; or (b) the existence of the underlying contract is challenged." (339) The first category of cases--which includes matters concerning "fraudulent inducement, fraud, lack of consideration, illegality ... [and] mistake"--can be heard by the arbitrator, (340) although the decision to give the issue to the arbitral tribunal does not constitute a final determination of the merits of the issue, since the arbitrators may ultimately decide that the challenge successfully impeaches the arbitration agreement. (341) Instead, this aspect of separability simply reflects a decision about jurisdictional competence and who--the court or the arbitrator--is to hear the argument about the substantive validity of the arbitration agreement. (342) This is also the approach used for trust-related disputes that do not involve challenges to the capacity of the settlor. (343)

Cases involving challenges to the existence of the underlying contract are more difficult, since Buckeye Check Cashing only addressed contract validity and not the question of whether any agreement between the parties was ever concluded. (344) As it currently stands, no consensus exists in the United States as to whether "claims of lack of capacity or authority, directed at the underlying contract, also necessarily impeach the associated agreement to arbitrate." (345) A similar amount of discord exists with regard to the question of who--the court or the arbitral tribunal--has the jurisdictional authority to decide issues relating to the continued existence of an arbitration agreement found in a contract that has been challenged on grounds such as lack of capacity or authority, lack of consent, duress, or forgery. (346) This means that a court could order the parties to arbitration to decide whether the arbitration agreement exists even in cases where the underlying contract never came into existence, although the opposite is also possible. (347)

The unpredictability of this approach has led to numerous criticisms, (348) and these issues will doubtless continue to develop over the coming years. However, the question for this Article is what effect, if any, the U.S. separability analysis has on trust disputes. (349) Only a few courts have addressed this issue, but the decisions already demonstrate the same kind of difficulties that arise in disputes outside the trust context.

So far, three alternatives appear to exist. First, some courts take the view that the standard separability analysis does not apply to trust disputes. For example, Spahr v. Secco considered what effect, if any, the alleged mental incapacity of the settlor might have on the arbitration of a dispute related to the trust. (350) After reviewing relevant precedent regarding separability, the court concluded that:
   [T]he analytical formula developed in Prima Paint cannot be applied
   with precision when a party contends that an entire contract
   containing an arbitration provision is unenforceable because he or
   she lacked the mental capacity to enter into the contract. Unlike a
   claim of fraud in the inducement, which can be directed at
   individual provisions in a contract, a mental capacity challenge
   can logically be directed only at the entire contract. (351)


Because challenges based on lack of mental capacity "naturally go[] to both the entire contract and the specific agreement to arbitrate in the contract," the court decided that disputes based on mental incapacity should be heard in court, not in arbitration. (352)

While the court's analysis was clear, the decision in Spahr was handed down prior to the Supreme Court's decision in Buckeye Check Cashing and may therefore no longer be good law. (353) However, if allowed to stand, this approach would negate the concept of separability in trust disputes. (354) Courts adopting this view would likely not only refuse to enforce an arbitration provision found in a trust whenever a challenge was made to the mental capacity of the settlor, but would also refuse to order arbitration of trust disputes in cases involving duress and forgery. (355)

However, this is not the only possible approach to separability. Other courts appear inclined to adopt the standard separability analysis. For example, in Regions Bank v. Britt, the court was asked to decide whether and to what extent an arbitral tribunal could consider trust-related claims that purportedly affected a party's statutory succession rights. (356) Although this challenge was not based on the alleged incapacity of the settlor, it did attack the underlying validity or existence of the trust in which the arbitration provision was found. (357) Ultimately, the court found that the issue could be, and more properly should be, heard in arbitration, based on the rule in Prima Paint. (358) Interestingly, the court here explicitly distinguished between issues involving substantive validity and jurisdictional competence, and gave the question of substantive validity to the arbitrator. (359)

A third approach to the issue of separability is exemplified by Weizmann Institute of Science v. Neschis, which considered whether and to what extent an arbitral award rendered in Liechtenstein should be given preclusive effect in a U.S. court proceeding involving claims that were very similar to those determined in the arbitration. (360) One of the issues raised in the arbitration involved the mental capacity of the settlor, who was alleged to have been suffering from Alzheimer's disease at the time she established several foundations (stiftung), which are Liechtenstein's version of a trust. (361) The arbitration provision in question was located in the charter establishing the foundation. (362)

At no point did the court in Weizmann Institute take the position that issues of settlor capacity could not be heard in arbitration. Instead, the judge refused to hear argument on matters relating to the mental capacity of the settlor, based on principles of collateral estoppel. (363) This suggests that a per se rule barring arbitration of trust disputes involving the mental capacity of the settlor would not necessarily be appropriate, despite the analysis in Spahr v. Secco. (364)

Other nations have separability analyses that are considerably less complicated than that used in the United States. For example, the English approach to separability is embodied in the Arbitration Act 1996, which states that:
      Unless otherwise agreed by the parties, an arbitration agreement
   which forms or was intended to form part of another agreement
   (whether or not in writing) shall not be regarded as invalid,
   non-existent or ineffective because that other agreement is
   invalid, or did not come into existence or has become ineffective,
   and it shall for that purpose be treated as a distinct
   agreement. (365)


This provision could very well be interpreted as covering an arbitral clause found in a trust, since there is no requirement that the underlying agreement be valid or effective as a contract or even be in writing. (366) Recent judicial statements also suggest that questions regarding settlor capacity can and should be heard in arbitration, particularly in the context of commercial trusts. For example, Lord Hoffman of the House of Lords (the highest court in England prior to the formation of the Supreme Court of the United Kingdom in October 2009) (367) recently opined that:
   [T]he construction of an arbitration clause should start from the
   assumption that the parties, as rational businessmen, are likely to
   have intended any dispute arising out of the relationship into
   which they have entered or purported to enter to be decided by the
   same tribunal. The clause should be construed in accordance with
   this presumption unless the language makes it clear that certain
   questions were intended to be excluded from the arbitrator's
   jurisdiction. (368)


Lord Hope of Craighead took a similar view, noting that no international transaction, particularly of the type at issue in the case at bar, "is complete without a clause which identifies the law to be applied and the methods to be used for the determination of disputes." (369) While these statements were made regarding claims of bribery in the context of an external trust dispute involving a commercial trust, and thus may be limited in terms of their applicability to internal trust disputes, the decision nevertheless provides a useful enunciation of the English view of separability, particularly in the context of commercial relationships. (370) The decision is also consistent with a similarly commercial interpretation that was applied several years earlier in a dispute involving the construction of an arbitration provision found in the trust deed of a business trust. (371)

Other states appear to view separability in much the same light. For example, the German approach to separability has been said to be analogous to that of England. (372) Liechtenstein also appears to have adopted a pro-arbitration approach to matters of separability, even in cases involving the mental capacity of the settlor of a trust. (373)

When contemplating issues of separability going forward, courts should consider whether it is appropriate to adopt a different approach for challenges to trusts, or whether consistency should be the goal regardless of the subject matter of the dispute. Certainly if trusts are seen as reflecting contractual qualities, then a unified approach to separability would appear most appropriate, with no distinction as to the subject matter of the dispute.

However, it does not necessarily follow that a nonuniform approach to separability would be acceptable even if trusts were considered to be primarily or even exclusively donative in nature. Separability is based on principles of consent, and it should not matter whether that consent is unilateral in nature (as it would be under a donative theory of trusts, where only one person--the settlor--can be said to have "consented" to the trust arrangement) or multilateral (374) (as would be the case under a more contractual approach, wherein each of the various parties is said to have actually or constructively agreed to the trust scheme). (375) The only relevant question is whether the consent at issue is sufficient to support arbitration or whether there are enough doubts about the nature and quality of consent that the arbitration agreement should be impeached.

Adopting an approach to separability that is consistent across subject matters would appear particularly appropriate given the large and increasing number of commercial trusts that are in use today. (376) It has been suggested that commercial trusts are best analyzed through a contractual lens, (377) and any disparate treatment of commercial trusts based on a donative rationale would not appear in line with contemporary commercial practices. This is especially true in jurisdictions such as England, where separability is considered in light of the reasonable expectations of a rational commercial actor. (378)

Notably, a rule that required consistency in the application of the principle of separability regardless of the subject matter of the dispute would not necessarily lead to the arbitration of all trust disputes. Instead, such a determination would simply defer the question to preexisting principles of national arbitration law. While this could lead to some disputes about the validity of an arbitration provision found in a trust being heard in arbitration and others being heard in court, this would simply reflect what happens elsewhere in that jurisdiction. Furthermore, application of the standard separability analysis would still support the notion that an arbitral clause found in the trust can be considered binding vis-a-vis the party against whom the arbitration is brought.

ii. Consent of Parties Other Than the Settlor

Consent issues are not limited to concerns relating to the settlor. In fact, the more commonly analyzed question is whether a mandatory arbitration provision can be considered binding on persons other than the settlor (i.e., trustees and beneficiaries). (379)

The analysis here is similar in ways to that regarding the validity, effectiveness, and operability of the arbitration provision itself. (380) An arbitral clause in a trust is considered operable with respect to trustees and protectors to the extent that those persons agree to act under the terms of the trust, whether that agreement is reflected in the trust itself or in an accompanying document. (381) Arbitral provisions are considered operable vis-a-vis beneficiaries through application of the concepts of deemed acquiescence and conditional transfer. (382)

Although these techniques are used to satisfy certain formal requirements regarding the operability and effectiveness of an arbitration provision, that is no bar to their also being used to demonstrate how and why various parties can be said to have consented to the arbitration agreement. Arbitration law adopts a similar methodology with respect to nonsignatories, using the same theories not only to identify which parties can be held to the terms of the arbitration agreement but also to excuse imperfect compliance with form requirements. (383)

Because conditional transfer and deemed acquiescence have not been well-tested in the context of mandatory arbitration, (384) settlors often seek alternative means of binding various parties to the arbitration. (385) One mechanism that has been discussed by a number of commentators involves the use of a forfeiture or in terrorem provision. (386)

In terrorem provisions typically state that any party who challenges a trust or will forfeits any rights he or she may have under the instrument. In the context of mandatory arbitration, forfeiture is triggered by a challenge to the use of arbitration to resolve a particular dispute. (387) Although such language obviously provides a strong incentive for beneficiaries to agree to arbitration, in terrorem clauses are problematic for several reasons. (388)

First, in terrorem provisions are by no means universally embraced, even as a general matter. Indeed, courts often refuse to enforce such provisions if a party has probable cause to bring the claim. (389) Second, in terrorem clauses are particularly suspect in the context of mandatory arbitration, since threatening to revoke a benefit under the trust through a forfeiture provision could be seen as "vitiat[ing] the freedom of will required to contract, and so render the [arbitration] agreement voidable." (390) Third, an in terrorem provision could be considered an impermissible attempt to oust the jurisdiction of the court and hence be void ab initio. (391) Therefore, while some commentators take the view that requiring a legatee or beneficiary to "forfeit her interest should she decline to respect the testator's wishes with respect to arbitration of will [or trust] contests should not discourage any truly meritorious ... contest[, since s]uch a contest may still be brought," (392) the consensus appears to be that settlors should avoid trying to force beneficiaries into arbitration through use of a forfeiture clause. (393)

An interesting concept that has not been explored is the possible use of an incentive in connection with an arbitration agreement concluded by the trustee after the creation of the trust but before the dispute arises. This sort of arbitration would be mandatory in that the trustee would be required to seek pre-dispute arbitration agreements with other potential parties to an internal trust dispute (i.e., any actual or potential beneficiaries, as well as any current or successor trustees and protectors) by virtue of a direction in the trust. However, the arbitration provision could also authorize the trustee to make an immediate payment to these parties in consideration of the agreement. While this approach is not precisely the same as the type of mandatory trust arbitration that is the topic of the current Article, it does (1) effectuate the intent of the settlor, at least to some degree; (394) (2) create explicit bilateral contracts that would meet any necessary form requirements; (395) and (3) avoid concerns about vitiating the beneficiaries' consent, since it acts as a positive, rather than negative, incentive to arbitrate; (396)

Although this is an interesting proposition, it is somewhat problematic in that it creates an additional, unnecessary, and potentially expensive hurdle for settlors to overcome before their wishes vis-a-vis arbitration can be effectuated. It may very well be that a settlor does not want to make provisions for a beneficiary if that person does not want to resolve any disputes in arbitration, and it seems contrary to established principles of trust law to require the settlor to put that condition in a document other than the trust for that condition to be given effect. This approach would also give the trustee more power to initiate arbitration than the settlor, which is again contrary to basic principles of trust law. (397) Since this option is problematic as both a practical and jurisprudential matter, it is therefore better to rely on deemed acquiescence and conditional transfer as an appropriate means of binding all parties. (398)

d. Proper Representation

The fourth concern relating to mandatory arbitration of trust disputes involves the need to ensure that all interested parties are properly represented in the proceedings. (399) Here, the issue is how best to protect the rights of beneficiaries who may be unascertained, unborn, or legally incompetent at the time the dispute arises. (400)

Issues of this nature may appear somewhat unusual to lawyers who do not routinely work with trusts, since very few areas of law require courts or arbitrators to consider the rights of persons who are not actually present in the dispute. One of the few exceptions is the class action and its corollary, the class arbitration, wherein a few named individuals bring a claim on behalf of a large number of unidentified others. (401) While trust disputes are not representative in nature, they do share some attributes with class claims, (402) most prominently their ability to determine the rights of persons not actually present. (403)

However, rather than addressing the collective nature of trusts through class relief, courts consider trust proceedings to be in rem, with decisions binding "all persons having adequate notice, whether or not they actually participate in the proceeding." (404) This process requires a court or arbitral tribunal to give special consideration to a number of related factors, such as who should have notice of a trust proceeding, how notice must be given to those persons, and what sort of procedures must be used to protect the rights of all interested parties, regardless of whether they are present or not. (405)

The first task--identifying who should be given notice of a trust dispute--requires a careful reading of the trust document, as well as a detailed knowledge of the context in which the trust operates. For example, some beneficiaries may not be identified in the trust by name. Although this practice may seem unusual to nonspecialists, it has long been condoned by trust law for several reasons. For example, a trust may endure for a very long period of time, which means that settlors may need to identify beneficiaries by class so as to ensure that all relevant persons are captured within the trust provisions. (406) Alternatively, a settlor may want to give the trustee the discretion to determine who a beneficiary should be or whether a disbursement under the trust is even proper. (407) Requiring all these elements to be outlined in the trust itself would mean that the trust would have to be constantly amended to take changing circumstances into account. In some cases, it would be impossible to provide the requisite amount of detail. (408) Either way, one of the major benefits of the trust--flexibility--would be severely limited or destroyed.

It is also possible that potential parties to a trust dispute are not apparent from the face of the trust instrument. Instead, these persons' interests in the dispute arise as a matter of law, typically either marital or succession law. (409) Although this issue may be considered most often in the context of private family trusts, marital and succession rights can also affect commercial trusts. (410)

In either case, a court may be able to identify these potential parties by relationship but may not be able to bring any actual, living persons into the dispute because these persons are unascertained, unborn, or legally incompetent at the time the trust dispute arises. (411) In litigated disputes, the issue has been resolved by allowing the court "to appoint a person to represent the interests of such beneficiaries," although "even then, any compromise of the litigation has to be approved by the court." (412) In England, the person named to protect the beneficiaries' claims, called a "special representative," cannot have any independent interest in the dispute itself. (413) Other jurisdictions, such as the United States, either appoint an independent representative, similar to a special representative, or allow an existing beneficiary who shares the absent beneficiary's interests to protect the absent beneficiary's claims in a practice known as "virtual representation." (414) Minors and other legally incompetent persons (such as the mentally incapacitated) may have legal representatives, typically referred to as guardians, already in place. (415) The question therefore becomes whether these sorts of representative mechanisms can be used in arbitration.

The answer may depend on whether the trust instrument specifically describes the representative mechanism that is to be used. For example, it has been said that:
   There appears to be no reason why the court would not grant a stay
   [of litigation] to the trustee on the sole ground that the
   beneficiary is not properly represented in the arbitration. If the
   arbitration provision is properly drawn to provide for adequate
   representation, then the child [or other beneficiary] should be
   bound to take the benefit of it. (416)


In drafting such a provision, the settlor should be sure to "provide how incapacitated, unascertained and unborn beneficiaries can come (or be brought) forward to make their claims.... The arbitral tribunal could determine who should be served with notice of the arbitration, in the same way as, in court proceedings, a judge can." (417) Furthermore, "[t]o avoid problems the trust deed should provide for payment of ... [special or virtual representatives] out of the trust fund." (418)

Trustees who are not given explicit powers to appoint special or virtual representatives could attempt to do so based on their residual discretionary powers to resolve trust disputes. This approach has not been frequently discussed by commentators and may therefore be more open to debate. However, any efforts by trustees to create their own mechanisms for appointing special or virtual representatives would likely be bolstered by any statutory provisions allowing trustees to pursue nonjudicial means of dispute resolution. (419)

Although the use of special or virtual representatives in mandatory arbitration appears relatively straightforward, some problems may nevertheless arise. For example, there are those in the trust community who take the view that self-help on the part of either the settlor or trustee is inappropriate and that "legislation would have to be enacted to enable arbitration to deal with the problem of incapacitated, unborn and unascertained beneficiaries." (420) While this view is by no means universally held, (421) it is certainly true that states retain a public policy interest in the protection of certain vulnerable parties in both litigation and arbitration. (422) However, most jurisdictions also retain the ability to vacate an arbitral award or refuse enforcement if the award violates procedural due process or the public policy of the state. (423) The interests of any unascertained, unborn, or legally incompetent parties would therefore likely be sufficiently protected through standard procedures relating to judicial review of arbitral awards. (424)

Concerns also exist with respect to questions as to whether the court--as opposed to the arbitral tribunal--must approve any settlement or compromise of a trust dispute involving an unascertained, unborn, or legally incompetent party. (425) While arbitrators are entirely competent to enter an award on an agreed settlement as a matter of arbitration law, (426) some jurisdictions may oppose similar actions in the trust context because the judicial duty to approve voluntary disposition of a trust dispute is considered nonderogable. (427) Other jurisdictions may see no problems with permitting an arbitral tribunal to step into the shoes of the court in this regard. (428) Notably, if this issue turns on the proper interpretation of a statute providing the court with exclusive jurisdiction over a particular matter, then it might be better analyzed as a type of arbitrability concern. (429)

Challenges could also arise as to the competency of a particular representative. However, this appears to be less of a problem, since it has been said that "[o]ne can leave it to the good sense of the arbitrator to provide for due process and a fair hearing by appointing appropriate skilled independent persons to represent minors and unborn and unascertained beneficiaries." (430)

Finally, questions could also arise as to whether a representative needs to be appointed in any particular set of circumstances. For example, it has been suggested that a representative need not be appointed for a minor beneficiary if the minor is receiving a benefit under the trust, since consent to receiving a benefit is not necessary in some jurisdictions. (431) However, a representative would be necessary in cases where a conflict of interest existed between a minor and his or her natural guardian (i.e., the parent), (432)

e. Subject Matter Arbitrable

Finally, for a mandatory arbitration provision in a trust to be enforceable, "the subject matter of the dispute [must be] arbitrable." (433) Arbitrability "determines which disputes can be submitted to arbitration" and which are reserved to the exclusive purview of the courts. (434)

Although national and international laws on arbitration contemplate the possibility that certain issues are nonarbitrable, seldom are the parameters of arbitrability firmly and clearly drawn. (435) Cross-border disputes, including those involving several U.S. states, are often particularly difficult as a result of the need for potentially complicated conflict of laws analyses. (436)

It might initially appear as if the various statutes allowing for the arbitration of certain matters relating to trusts would be useful in this analysis. Certainly the provisions are helpful in some regards, most particularly by suggesting that certain rights relating to trusts are freely disposable and thus not inherently nonarbitrable. (437) However, most of the legislation is written in such a way that it is not clear whether the language covers mandatory arbitration provisions found in trusts. (438) Therefore, courts could limit application of the legislation solely to arbitration agreements entered into by the trustee after the creation of the trust. In so doing, courts could frame the trustee's entering into an arbitration agreement as analogous to a post-dispute arbitration agreement and a provision contained in the trust as analogous to a pre-dispute arbitration agreement. While the analogy would not be entirely apt, in that trustees' arbitration agreements would likely also be made pre- rather than postdispute, (439) courts might nevertheless attempt to make this sort of distinction because it might allow them to rely on practices adopted in other areas of arbitration, wherein states have declared that certain rights may be made subject to a post-dispute arbitration agreement but not a pre-dispute agreement. (440)

However, this sort of broad-brush analysis is somewhat crude, and there are better ways to analyze the issue. For example, at its core, arbitrability focuses on whether the rights in question are freely disposable by the parties. (441) Because "the freedom to dispose of one's rights ... implies the possibility to renounce such rights," (442) it is appropriate to ask whether beneficiaries can dispose of all or some of their rights under a trust. As it turns out, beneficiaries can disclaim any benefits they receive, which would suggest that beneficiaries' rights are freely disposable and thus arbitrable. (443) While some difficulties could arise to the extent that trust law limits beneficiaries' ability to terminate a trust created for their benefit or to alter its terms, arbitration of trust disputes would not be challenging the terms of the trust in any way but would instead be upholding them. (444)

As illuminating as these analyses are, they are just a start. More detailed guidance must be sought from general criteria regarding arbitrability. (445)

When considering whether a claim is arbitrable, courts and arbitrators typically look at a number of factors including the extent to which public interests are at stake, whether the dispute involves significant inequalities in bargaining power, the effect of the decision on third-party rights, the ability of arbitrators to grant legislatively required remedies, and whether arbitral procedures (as opposed to judicial procedures) are adequate to resolve the dispute. (446) Notably, "the existence of a possibility for parties to express their will is an important factor" in favor of arbitrability, a point which may be of particular interest in trust disputes, given trust law's traditional emphasis on settlor intent and the broad recognition of party autonomy in instruments such as the Hague Convention on Trusts. (447)

Legislative intent is also central to the analysis. (448) England and the United States do not include language on arbitrability in their arbitration statutes, meaning that "questions whether or not a particular dispute is arbitrable ... turn almost entirely on judicial interpretation of other statutes" or on general case law. (449) Other jurisdictions address questions of arbitrability in their arbitration statute, although the language is often quite general. (450) Nevertheless, it is clear that several of these statutes' definitions of arbitrability are so broad that few, if any, problems will arise regarding the arbitration of most trust disputes. (451) Thus, for example:
      Switzerland has adopted an independent substantive rule for
   the determination of arbitrability, according to which any dispute
   involving an economic/financial interest may be settled by
   arbitration, without any need to consider the possible stricter
   rules of the law applicable to the merits of the dispute or the
   national law of one of the parties. Apart from purely non-financial
   matters, arbitrability can only be denied in an international
   arbitration with its seat in Switzerland for claims which have
   exclusively been reserved for the state courts pursuant to foreign
   mandatory provisions which have to be taken into account under
   public policy considerations.

      As nearly all types of trust disputes ultimately concern the
   distribution of private wealth, the majority of such disputes can
   be arbitrated given the liberal definition of arbitrability under
   Swiss law. (452)


Notably, this does not mean that every trust-related dispute is arbitrable under Swiss law. For example, issues regarding the provision of information to a beneficiary might not involve the kind of financial or economic interests necessary for the matter to be considered arbitrable in Switzerland. (453)

A number of other states also focus on commercial or economic interests when considering the arbitrability of a particular issue and might therefore come to similar conclusions as Switzerland regarding the arbitrability of trust disputes. (454) For example, "[i]n the Scandinavian countries, particularly in Denmark, it has been asserted that a specific provision in the will calling for a certain ADR procedure is likely to be recognized." (455) Arbitration provisions in testamentary and other noncontractual documents will be upheld in Germany and Austria. (456)

However, even those countries that discuss arbitrability in their arbitration statute might need to look to other legislation on occasion. For example, Swiss courts might prohibit the arbitration of trust disputes in cases involving forced heirship, based on various statutes giving courts exclusive jurisdiction over matters involving succession law. (457)

Regardless of whether a state defines arbitrability statutorily or through the common law, the central question is whether a certain category of claims should be reserved to the courts. (458) Traditionally, the analysis was conducted on the basis of entire subject matter areas: for example, the court would ask whether all intellectual property claims were considered arbitrable, or all consumer claims, or all securities claims. (459) As the general scope of arbitrability has expanded, the practice has changed somewhat, with courts now making more nuanced distinctions regarding the arbitrability of certain subsets of claims that fall within a field that is generally considered arbitrable. (460)

For example, agency, franchise, and exclusive distributor disputes are typically considered as amenable to arbitration. (461) However, some courts have refused to enforce pre-dispute arbitration agreements in cases involving the termination of the rights of agents, franchisees, or exclusive distributors, based on specific concerns about the economic vulnerability of those parties. (462) Notably, this limitation on arbitrability only affects specific types of claims, creating a subclass of nonarbitrable issues within a subject matter that is generally considered arbitrable.

This type of analysis is relevant to mandatory trust arbitration for two reasons. First, these other inquiries focus on the protection of vulnerable parties, which is also an issue in trust disputes involving unborn, unascertained, or legally incompetent beneficiaries. (463) Interestingly, however, this may be one time when an emphasis on the donative nature of trusts may work to the benefit of mandatory arbitration since concerns about the arbitrability of issues involving agents, franchisees, and exclusive distributors typically focus on economic vulnerability arising from an inequality of bargaining power. (464) Since there can be no inequality of bargaining power in a donative relationship, trust arbitration cannot be problematic in this sense.

Second, limitations on the arbitrability of certain types of agency, franchise, or distribution claims are typically based on statutes that appear to grant courts exclusive jurisdiction over a particular type of claim. (465) Trust law is full of similar types of legislation that ostensibly gives exclusive jurisdiction over certain matters to the courts. (466)

This latter issue is extremely important. Essentially, the question is whether exclusive jurisdiction provisions should be interpreted as a prohibition on forum-selection clauses (meaning that if the claim is heard in court, it must be heard in that particular court, which would leave open the possibility of arbitration of that claim) or whether exclusive jurisdiction provisions should be read as barring resolution of the claim in all other fora, arbitral or judicial. (487)

When the matter is discussed in the context of agency, franchise, and distribution claims, the analysis concentrates primarily on international disputes, where the choice-of-court analysis involves judicial venues in two different countries. (468) In this context, the issues primarily revolve around choice of law and whether a mandatory provision of law will be applied extraterritorially. (469) This obviously has relevance to international or interstate trust disputes, which can involve similar choice of law concerns. (470)

However, this issue can also be considered from a purely domestic perspective, at least when trusts are involved. Trust law has historically operated as a field apart, not only in terms of its procedural and substantive law but also in terms of the venue in which these matters are heard. (471) Many states require claims regarding the administration and interpretation of trusts to be heard in probate or chancery courts, a result that is achieved through exclusive jurisdiction clauses. (472) Therefore, it may be that this sort of legislation should be more properly interpreted as a type of internal sorting mechanism within a national judicial system rather than a method of denying the availability of alternative means of dispute resolution. This conclusion is strengthened not only by the fact that arbitration was relatively uncommon at the time that these specialty courts first developed in medieval England but also by the fact that many of the rationales supporting the creation of specialty courts (i.e., taking the dispute away from the jury and giving it to a decision maker with specialized substantive and procedural expertise) would be met equally well by arbitration. (473) As such, it seems inappropriate to conclude that these statutes were meant to exclude arbitration, at least without more in-depth analysis.

In considering this issue, it is also important to be aware of the ramifications of a rule of limited nonarbitrability. First, allowing these sorts of carve-outs diminishes predictability, since parties will often be surprised by claim-specific limitations in an area of law that is known to be generally arbitrable. (474) Second, this sort of protective behavior is typically unnecessary. States enact exclusive jurisdiction statutes because of the desire to protect vulnerable parties through the application of certain substantive or procedural laws. (475) However, arbitration of trust disputes does not infringe on any necessary procedural protections, (476) nor does it allow the erosion of any necessary substantive principles of law. (477) This is particularly true given the type of judicial review that is available at the end of an arbitration. (478) Thus, commentators have concluded that:
   [T]he fact that a legal provision gives express, or even exclusive,
   authority to a state court does not prevent arbitration. These
   rules merely regulate the distribution of disputes among the
   different courts of the State. They only indicate which court has
   the authority when parties want to go to state courts. The rules
   say nothing about the possibility to bring the dispute in a
   completely different arena. (479)


Although a detailed analysis of the question of limited nonarbitrability is beyond the scope of the current Article, it is an issue that courts and commentators will need to consider in more depth. Several factors may be relevant to that discussion. For example, because many of these exclusive jurisdiction provisions have as their purpose the protection of certain principles of substantive law, analysts may wish to consider the ability of parties to choose the law that applies to trust disputes. (480) The Hague Convention on Trusts may be a useful starting point for this type of inquiry since it reflects international consensus on a variety of relevant issues, including the application of mandatory rules of foreign law. (481) While the Hague Convention on Trusts does not provide answers to all possible concerns (such as which rules of law are to be considered nonderogable or are to be given extraterritorial application), it does usefully describe the factors that are to be used in determining which law is most closely connected with the trust. (482)

Courts and commentators will also need to determine whether judicial review of arbitral awards adequately protects a state's interest in the application of certain substantive laws. (483) This analysis may focus on the extent to which an arbitral tribunal may or must apply mandatory provisions of substantive law of a state other than that whose law is said to govern the dispute. (484) Typically, arbitrators are seen as having more freedom (or inclination) in this regard than state courts. (485) It may also be appropriate to consider the propriety of early intervention in a trust dispute (as would occur if the dispute were determined to be nonarbitrable in the context of a motion to compel arbitration) versus late intervention (as would occur if the propriety of the dispute resolution process were only considered in the context of a motion to vacate an arbitral award or oppose enforcement thereof). (486) Commentators appear to conclude that late intervention is the more appropriate approach, for a variety of reasons. (487)

As complicated as the arbitrability analysis may appear to be, most commentators have nevertheless concluded that internal trust disputes are or should be arbitrable, at least as a general proposition, (488) an approach that is consistent with the general trend toward increased arbitrability in other areas of law. (489) Although courts and commentators need to consider whether certain discrete disputes can or should be carved out of the realm of generally arbitrable matters, those discussions are best left until another day. (490)

IV. CONCLUSION

As the preceding analysis suggests, mandatory arbitration of trust disputes gives rise to a number of complicated jurisprudential questions. This Article has focused on the potential for the impermissible ouster of the courts, the operability and effectiveness of the arbitration provision, the extent to which an arbitration provision can be said to be binding on the party against whom the arbitration provision is sought to be enforced, proper representation of parties, and arbitrability. (491) However, this Article has concluded that none of these matters gives rise to any insurmountable obstacles, since viable solutions to potential problems can be identified as a matter of either trust or arbitration law.

This is not to say that every jurisdiction considers mandatory arbitration of trust disputes in the same light. There are some U.S. states, most prominently California and Texas, that have denied the enforceability

of mandatory arbitration provisions found in trusts, although the decisions in question have been appealed to higher courts. (492) However, other U.S. states have taken a different approach. For example, Arizona and Florida have both embraced mandatory trust arbitration legislatively, while Michigan and New York have abrogated negative case law through judicial means. (493) Further development of mandatory trust arbitration may occur through pro-arbitration provisions of the UTC and similar state legislation, even though there are some questions about whether and to what extent the relevant language will apply to mandatory arbitration provisions found in trust instruments. (494)

Advances have also been made in other countries. Among the common law jurisdictions, Guernsey is perhaps the most notable, having adopted legislation allowing mandatory arbitration of various kinds of internal trust disputes, although the Bahamas may soon become the most welcoming offshore jurisdiction in this regard. (495) England's stance on this issue is less clear, with most of the recent developments coming as a result of commentary rather than judicial or legislative means. Nevertheless, the stage appears set for potential developments in England in this regard. (496)

Given the trust's origins as a common law device, it is not surprising that the debate about mandatory trust arbitration has been much less pronounced in civil law jurisdictions. Nevertheless, a pro-arbitration approach appears to exist in a number of countries, including Germany, Austria, Switzerland, and Liechtenstein. (497)

Despite these advancements, the law regarding the enforceability of arbitration provisions found in trusts remains somewhat "thin and underdeveloped." (498) The lack of clear precedent or legislation may slow the further development of trust arbitration in some jurisdictions, at least if lawyers responsible for drafting trust instruments continue to hesitate about recommending arbitration. However, settlors may not be as powerless as some people believe. Indeed, this Article has identified a variety of ways that settlors can improve the enforceability of a mandatory arbitration provision through proper drafting techniques. (499)

Although this Article has attempted to undertake a relatively comprehensive study of the potential problems and solutions in this area of law, using an international and comparative approach so as to assist courts, commentators, and counsel working with both domestic and offshore trusts, more work remains to be done. For example, the trust bench and bar would both benefit from a detailed discussion of the concept of limited nonarbitrability and the way in which exclusive jurisdiction provisions should be interpreted. (500) Additional research into the differences between commercial and other types of trusts would also be useful, particularly if those distinctions were found to affect the arbitration analysis.

Further consideration should also be given to the types of procedures that might be appropriate in a trust arbitration. Courts are often more inclined to enforce arbitration agreements and awards if the proceedings are governed by arbitral rules promulgated by a reputable arbitral institution, (501) so the trust and arbitral communities should work together to ensure that trust-appropriate procedures are in place. Both the AAA and the International Chamber of Commerce (ICC) have begun to address this issue, with the ICC focusing primarily on the creation of a model arbitration clause (although that provision also includes several items affecting arbitral procedure) and the AAA focusing on actual rules of procedure. (502) However, initial inquiries suggest that both the AAA's trust arbitration rules and the ICC's model clause could be improved in a variety of ways, so there is more work to be done in this regard. (503)

While additional research in this field should be encouraged, it appears clear that further development of mandatory trust arbitration is inevitable, given recent events in the United States and elsewhere. Not only are parties in favor of dispute resolution procedures that promote speed, efficiency, confidentiality, personal autonomy, cost-effectiveness, and (in international disputes) an increased likelihood of an internationally enforceable award, but so, too, are many commentators and legislatures. While some courts continue to reflect a more conservative approach to the issue, many of the older, more problematic precedents have been abrogated in recent years, (504) thus opening the door to a more pro-arbitration policy. Trust law will also undoubtedly benefit from the significant advances made in arbitration law and practice over the last two to three decades. Given that "there seem to be no good current policy grounds for permitting the inclusion of arbitration clauses in contracts but not trust deeds," (505) the trust and arbitral communities should therefore move forward jointly to promote the continued development of this area of law.

(1.) Although trusts developed historically as a common law device, civil law jurisdictions are becoming increasingly involved in this field, either through the development of their own domestic forms of trusts or the recognition of trusts formed in common law countries. See Henry Christensen III, Foreign Trusts and Alternative Vehicles, 1902 PLI/CORP. 323, [section] 4 (Aug. 18-19, 2011); Adair Dyer, International Recognition and Adaptation of Trusts: The Influence of the Hague Convention, 32 VAND. J. TRANSNAT'L L. 989, 1013-18 (1999) (describing attempts in some civil law countries to adopt trusts or similar devices); Dante Figueroa, Civil Law Trusts in Latin America: Is the Lack of Trusts an Impediment for Expanding Business Opportunities in Latin America?, 24 ARIZ. J. INT'L & COMP. L. 701, 703-07, 721-51 (2007) (comparing the Anglo-American and the Latin-American inter vivos trust); Frances H. Foster, American Trust Law in a Chinese Mirror, 94 MINN. L. REV. 602, 637-50 (2010) (describing the Chinese interpretation of American trust law); Henry Hansmann & Ugo Mattei, The Functions of Trust Law: A Comparative Legal and Economic Analysis, 73 N.Y.U.L. REV. 434, 437-45 (1998) (contrasting the common law and civil law approaches to "trust-like relationships"); Michael Hwang, Arbitration for Trust Disputes, in GUIDE TO THE WORLD'S LEADING EXPERTS IN COMMERCIAL ARBITRATION 83, 84 (Legal Media Group ed., 2009) (discussing a model arbitration clause developed by the International Chamber of Commerce (ICC) for use in trust disputes); John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 YALE L.J. 625, 629, 63243, 669-71 (1995) [hereinafter Langbein, Contractarian] (describing how civil law jurisdictions confront the types of issues handled in common law jurisdictions by trusts); John H. Langbein, The Secret Life of the Trust: The Trust as an Instrument of Commerce, 107 YALE L.J. 165, 186 (1997) [hereinafter Langbein, Commercial Trusts] ("The Japanese have built a trust industry with assets amounting to $2 trillion."); Maurizio Luponi, The Civil Law Trust, 32 VAND. J. TRANSNAT'L L. 967, 970 73 (1999) (describing the essential elements of a trust and how these elements have been adapted in civil law countries); Julien Perrin, The Recognition of Trusts and Their Use in Estate Planning Under Continental Laws, 10 Y.B. PRIVATE INT'L L. 629, 630 (2008) C[T]he increasing mobility of persons and assets fuelled the use of trusts in circumstances connected to civil law countries."); Steven L. Schwarcz, Commercial Trusts as Business Organizations: An Invitation to Comparatists, 13 DUKE J. COMP. & INT'L L. 321, 322 (2003) C[T]rusts or variations on the trust form are beginning to be embraced worldwide."); Tina Wfistemann, Arbitration of Trust Disputes, in NEW DEVELOPMENTS IN INTERNATIONAL COMMERCIAL ARBITRATION 2007, at 33, 33-35 (Christoph Milller ed., 2007) ("With increasing mobility of individuals in a shrinking world, trusts are no longer confined to the Anglo-saxon world but are also often used in civil law jurisdictions."). For ease of discussion, the term "trust" will be used to refer to both civil law and common law devices, unless otherwise indicated.

(2.) See David Horton, The Federal Arbitration Act and Testamentary Instruments, 90 N.C.L. REV. 1027, 1070 (2012) (noting irrevocable trusts in the United States "generated $142.5 billion in income and $3.7 billion in trustees' fees" in 2007 alone); Langbein, Commercial Trusts, supra note 1, at 177-78 (estimating in 1997 that commercial trusts held assets in the range of $11.6 trillion, with noncommercial trusts holding an additional $672 billion).

(3.) See Wfistemann, supra note 1, at 33-34 (noting the extent to which trust litigation has become internationalized in recent years). The expanded use of international trusts has been facilitated by the enactment of the Hague Convention on the Law Applicable to Trusts and on Their Recognition (Hague Convention on Trusts). See Convention on the Law Applicable to Trusts and on Their Recognition, July 1, 1985, 23 I.L.M. 1389, 1389-92 (1984) [hereinafter Hague Convention on Trusts]. The Hague Convention on Trusts has been ratified or acceded to by Australia, Canada, Italy, Liechtenstein, Luxembourg, Malta, Monaco, the Netherlands, San Marino, Switzerland, and the United Kingdom. See HCCH Status Table, HcCH, http://www.hcch.net/index_en.php?act=conventions.status&cid=59 (last updated Aug. 17, 2010). It has been signed but not ratified by Cyprus, France, and the United States. See id.

(4.) See Langbein, Commercial Trusts, supra note 1, at 166 C[W]ell over 90% of the money held in trust in the United States is in commercial trusts as opposed to personal trusts.").

(5.) See GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 68-71 (2009) (presenting statistics that demonstrate the growing caseload of arbitral institutions and increasing popularity of international commercial arbitration).

(6.) Evidence of trust-related arbitration can be found in various judicial opinions. See Laughton v. CGI Tech. & Sol'ns, Inc., 602 F. Supp. 2d 262, 263-64 (D. Mass. 2009) (concerning the enforceability of an arbitration clause in an agreement involving a trust); U.S. Trust Co., N.A.v. Cavalieri, No. HHDCV075013653S, 2008 WL 1822721, at *1-2 (Conn. Super. Ct. Apr. 1, 2008) (concerning the arbitrability of an employment dispute involving a trust); Delaney Elec. Co. v. Schiessle, 601 N.E.2d 978, 980 (Ill. App. Ct. 1992) (concerning a dispute involving the trustee of a land trust); Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Pakistan, [2010] UKSC 46, [1]-[2], [7] (appeal taken from Eng.) (concerning the enforceability of an arbitration clause in an agreement involving a trust); Premium Nafta Prods. Ltd. v. Fili Shipping Co., [2007] UKHL 40, [3]-[5], on appeal from Fiona Trust & Holding Corp. v. Privalov, [2007] EWCA Civ 20, [2007] 1 All E.R. (Comm.) 891; Trustees of the Edmond Stern Settlement v. Levy, [2009] EWHC (TCC) 14, [1]-[2] (Eng.) (adjudicating an appeal from a trust arbitration).

(7.) Such proceedings are largely uncontroversial, particularly in jurisdictions with legislation giving trustees the explicit power to enter into nonjudicial means of dispute resolution. This type of legislation has long been available, but is becoming increasingly popular. See infra notes 154-77 and accompanying text.

(8.) Hwang, supra note 1, at 83. Different commentators define internal and external trust disputes differently. See Paul Buckle & Carey Olsen, Trust Disputes and ADR, 14 TR. & TRUSTEES 649, 651 (2008); Wustemann, supra note 1, at 38.

(9.) See Hague Convention on Trusts, supra note 3, art. 2 (describing the legal relationships that make up a trust); UNDERHILL AND HAYTON: LAW RELATING TO TRUSTS AND TRUSTEES [paragraph][paragraph] 8.157-8.167 (David Hayton et al. eds., 18th ed. 2010) [hereinafter UNDERHILL AND HAYTON] (discussing the enforceability of trusts by and against trustees, beneficiaries, and third parties); Langbein, Contractarian, supra note 1, at 664 (discussing which parties have standing to enforce a trust); Wustemann, supra note 1, at 36 (distinguishing parties to an internal dispute, namely trustees, settlors, protectors, and beneficiaries, from parties who are external to the trust, including creditors and unnamed spouses and heirs).

(10.) Parties to an internal trust dispute could also enter into an arbitration agreement after the dispute has arisen (i.e., a submission agreement or compromis), but it is usually easier to obtain an arbitration agreement before legal controversies arise rather than afterward, regardless of whether the matter is related to a trust or not. See GARY B. BORN, INTERNATIONAL ARBITRATION AND FORUM SELECTION AGREEMENTS: DRAFTING AND ENFORCING 37 (2010) ("It is difficult to negotiate a submission agreement once a concrete dispute has arisen and litigation tactics have been explored.").

(11.) Although the current interest in mandatory arbitration of trust disputes makes it seem as if the procedure is relatively new, these issues have been discussed at various times in the past. See, e.g., Arnold M. Zack, Arbitration: Step-Child of Wills and Estates, 11 ARB. J. 179 (1956) (discussing historical takes on the interplay between arbitration and wills and trusts law); Blaine Covington Janin, Comment, The Validity of Arbitration Provisions in Trust Instruments, 55 CAL. L. REV. 521 (1967) (describing the increase in interest toward arbitrating trust disputes in the mid-1960s).

(12.) See Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 614 15 (Ct. App. 2011) (holding that the arbitration clause of a trust agreement was unenforceable against a third-party beneficiary), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal v. Reitz, 347 S.W.3d 305, 310 (Tex. App. 2011) (holding that the type of trust at issue was not a contract and thus its arbitration clause was unenforceable), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012).

(13.) Lawrence Cohen & Marcus Staff, The Arbitration of Trust Disputes, 7 J. INT'L TR. & CORP. PLAN. 203, 203 (1999); see also AM. COLL. OF TRUST & ESTATE COUNSEL, ARBITRATION TASK FORCE REPORT 22 23 (Sept. 18, 2006) [hereinafter ACTEC], available at http://www.mnbar.org/sections/probate-trust/ACTEC%20 Arbitration%20Task%20Force%20Report-2006.pdf (proposing alternatives to trust litigation); Georg von Segesser, Arbitrability in Estate and Trust Litigation, in PAPERS OF THE INTERNATIONAL ACADEMY OF ESTATE AND TRUST LAW-2000, at 21, 21 (Rosalind F. Atherton ed., 2001) (proposing arbitration as a possible solution to increased "hostile litigation in estate and trust matters"); Wustemann, supra note 1, at 33-34 (discussing contemporary interest in arbitration of trust disputes).

(14.) See Wustemann, supra note 1, at 41 ("Arbitration clauses in trust deeds still appear to be rare."); see also Erin Katzen, Arbitration Clauses in Wills and Trusts: Defining the Parameters for Mandatory Arbitration of Wills and Trusts, 24 QUINNIPIAC PROB. L.J. 118, 119 (2011) (suggesting that the current law on the enforceability of arbitration clauses in trust disputes is "thin and underdeveloped").

(15.) See Michael P. Bruyere & Meghan D. Marino, Mandatory Arbitration Provisions: A Powerful Tool to Prevent Contentious and Costly Trust Litigation, but Are They Enforceable?, 42 REAL PROP. PROB. & TR. J. 351, 352-53 (2007) (discussing deficiencies of resolving trust disputes through litigation and noting alternative solutions, including arbitration); Horton, supra note 2, at 1029 ("Recently ... there has been a surge of interest in arbitration in a different field: wills and trusts."); Katzen, supra note 14, at 118-19 (noting increased commentary on trust arbitration and an increase in legislative and judicial discussion of related issues); Wustemann, supra note 1, at 41 (stating that Switzerland has taken a leading role regarding the arbitration of trust-related disputes).

(16.) See ACTEC, supra note 13, at 5 (discussing the "blinding prejudice" to arbitration in contemporary trusts and estates practice).

(17.) See Gerardo J. Bosques-Hernandez, Arbitration Clauses in Trusts: The U.S. Developments and a Comparative Perspective, INDRET, no. 3, 2008 at 1, 5, 15, available at http://www.indret.com/pdf/559_en.pdf (describing the hostility of nineteenth century judges toward arbitration); E. Gary Spitko, Gone but Not Conforming: Protecting the Abhorrent Testator from Majoritarian Cultural Norms Through Minority-Culture Arbitration, 49 CASE W. RES. L. REV. 275, 307-14 (1999) (detailing concerns regarding the potential bias of the arbitrator); Wustemann, supra note 1, at 40-41 (addressing concerns regarding whether arbitrators have enough expertise to handle complex trust law).

(18.) See BORN, supra note 5, at 775 (discussing the erosion of skepticism over the ability of arbitration to adequately resolve disputes); Horton, supra note 2, at 1039-40, 1042-44 (explaining that the nonarbitrability doctrine has been scaled back in many areas of law as the court has adopted a broad policy in favor of arbitration).

(19.) Cohen & Staff, supra note 13, at 206.

(20.) This isolation arises as a result of the specialized nature of trust law and procedure. See James W. Martin, Ten Tips for Handling Complex Probate, 84 FLA. B.J. 45 (2010) (identifying many of the elements that make trust law so complex). Some jurisdictions even require trust disputes to be brought in specialized probate or chancery courts. See WILLIAM M. McGOVERN ET AL., WILLS, TRUSTS AND ESTATES: INCLUDING TAXATION AND FUTURE INTERESTS 626 (4th ed. 2010) (discussing the delays inherent in the probate and administration process).

(21.) See Katzen, supra note 14, at 118-19 (stating that few courts or legislatures have addressed the enforceability of arbitration clauses in wills and trusts); Wustemann, supra note 1, at 34, 49 ("IT]he enforceability of arbitration clauses in trust deeds is still largely unchartered territory.").

(22.) See Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 614-15 (Ct. App. 2011) (holding that the arbitration clause of a trust agreement was unenforceable against a third-party beneficiary), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal v. Reitz, 347 S.W.3d 305, 310 (Tex. App. 2011) (holding that the type of trust at issue was not a contract and thus its arbitration clause was unenforceable), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012).

(23.) See infra notes 154-77 and accompanying text.

(24.) Compare In re Estate of Jacobovitz, 295 N.Y.S.2d 527, 531 (Sur. Ct. Nassau Cnty. 1968) (holding that probate cases cannot be arbitrated), with In re Blumenkrantz, 824 N.Y.S.2d 884, 887 (Sur. Ct. Nassau Cnty. 2006) (holding that a trustee is bound by an arbitration clause in the trust agreement).

(25.) Compare Campbell v. Detroit Trust Co. (In re Meredith's Estate), 266 N.W. 351, 357 (Mich. 1936) (holding that the jurisdiction of the probate court cannot be ousted by a stipulation to arbitrate), with In re Nestorovski Estate, 769 N.W.2d 720, 732 (Mich. Ct. App. 2009) (explicitly abrogating In re Meredith's Estate and holding that will contests may be resolved by arbitration).

(26.) See Schoneberger v. Oelze, 96 P.3d 1078, 1082-83 (Ariz. Ct. App. 2004) (holding that arbitration clauses are only enforceable when part of a valid contract and not as part of a trust agreement), superseded by statute, ARIZ. REV. STAT. ANN. section 14-10205 (2012) ("A trust instrument may provide mandatory, exclusive and reasonable procedures to resolve issues between the trustee and interested persons with regard to the administration or distribution of the trust."), as recognized in Jones v. Fink, No. 1 CA-SA 10-0262, 2011 WL 601598, [paragraph][paragraph] 9-10 (Ariz. Ct. App. Feb. 22, 2011).

(27.) Katzen, supra note 14, at 118 19. These newly discovered decisions are introduced and discussed throughout this Article.

(28.) Cohen & Staff, supra note 13, at 211.

(29.) For example, the leading database on international arbitration, kluwerarbitration.com, does not appear to include any articles focusing on the arbitration of trust disputes. See KLUWER ARBITRATION, kluwerarbitration.com (last visited Sept. 29, 2012) (searching for the word "trust" as a title of any piece of commentary).

(30.) Christensen, supra note 1, [section] 2.

(31.) See Robert Flannigan, Business Applications of the Express Trust, 36 ALBERTA L. REV. 630, 631 (1998) (identifying the types of commercial trusts that can arise).

(32.) Numerous similarities exist between commercial trusts and other types of business associations. See Christensen, supra note 1, [section] 2; Hansmann & Mattei, supra note 1, at 479 (discussing the similarities between private trust law and corporate law); Langbein, Contractarian, supra note 1, at 650 (highlighting the similar traits of trusts and contracts); Paul B. Miller, The Future for Business Trusts: A Comparative Analysis of Canadian and American Uniform Legislation, 36 QUEEN'S L.J. 443, 452-55, 474-78, 482, 499 (2011) (discussing similarities between commercial uses of trusts in Canada and the United States); A. Joseph Warburton, Trusts Versus Corporations: An Empirical Analysis of Competing Organizational Forms, 36 J. CORP. L. 183, 188 (2010) (comparing trust and company law in the United Kingdom).

(33.) Although two leading arbitral institutions--the International Chamber of Commerce (ICC) and the American Arbitration Association (AAA)--have both taken steps to address the special needs of parties involved in the arbitration of trust disputes, these efforts appear to be isolated events. See AAA WILLS AND TRUSTS ARBITRATION RULES (2009), available at http://www.adr.org/cs/idcplg?IdcService=GET_ FILE&dDocName=ADRSTG_004135&RevisionSelectionMethod=LatestReleased; see also ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink). Indeed, neither the AAA Wills and Trusts Arbitration Rules nor the ICC Model Trust Clause have yet been mentioned in any judicial opinion. Furthermore, these initiatives have been largely ignored in commentary generated by the trust bar, with the AAA and ICC's recent efforts only being discussed in passing. See Horton, supra note 2, at 1031 (citing, without further discussion, the ICC Model Trust Clause); Katzen, supra note 14, at 130-32 (discussing briefly the AAA's wills and trusts reference procedures). But see Christopher P. Koch, A Tale of Two Cities!--Arbitrating Trust Disputes and the ICC's Arbitration Clause for Trust Disputes, 2 Y.B. INT'L ARB. 178, 199 (2012) (discussing ICC Model Trust Clause). However, the author analyzes the AAA and ICC initiatives in detail in two forthcoming articles. See S.I. Strong, Empowering Settlors: How Proper Language Can Increase the Enforceability of a Mandatory Arbitration Provision in a Trust, 47 REAL PROP. TR. & EST. L.J. (forthcoming 2012) [hereinafter Strong, Enforceability] (comparing AAA and ICC model trust clauses); S.I. Strong, Mandatory Arbitration of Internal Trust Disputes: Improving Arbitrability and Enforceability Through Proper Procedural Choices, 28 ARB. INT'L (forthcoming 2012) [hereinafter Strong, Procedures] (analyzing the effectiveness of AAA Trust Arbitration Rules). The AAA is currently in the process of revising its rules, although the scope of those changes was not known at the time this Article went to press.

(34.) See infra notes 281 320, 322-378, 433-90 and accompanying text.

(35.) See Cohen & Staff, supra note 13, at 209 (discussing necessary requirements for arbitrating future trust disputes).

(36.) For example, there is a large body of law concerning the rights of creditors to attach or attack a trust, and eventually it would be useful to consider whether those issues are amenable to mandatory arbitration. See McGOVERN ET AL., supra note 20, at 413-25 (discussing spendthrift provisions and other mechanisms that insulate trust assets from creditor claims); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 7.1, 16.1-19.2 (discussing how parties can collaterally attack trusts).

(37.) See David Fox, Non-Excludable Trustee Duties, 17 TR. & TRUSTEES 17, 26 (2011) (commenting on how commercial and traditional private trusts differ); Steven L. Schwarcz, Fiduciaries with Conflicting Obligations, 94 MINN. L. REV. 1867, 1870, 1877-78 (2010) (discussing how underlying nature of commercial and noncommercial relationships affect fiduciary obligations). But see Flannigan, supra note 31, at 630-31 (addressing only commercial trusts).

(38.) See Christensen, supra note 1, [section] 2 (noting that U.S. "[b]usiness trusts, although trusts for property law purposes, are taxed as corporations because they conduct a business"); see also UNDERHILL AND HAYTON, supra note 9, [paragraph] 1.133 (noting that beneficiaries of commercial trusts in England may be treated differently than beneficiaries of private family trusts).

(39.) Analogies in this regard could be drawn to mandatory arbitration of internal corporate disputes as a result of arbitration provisions found in the company's corporate charter or bylaws. See Christian Borris, Arbitrability of Corporate Law Disputes in Germany, in ONDERNEMING EN ADR 55, 57 (C.J.M. Klaassen et al. eds., 2011) (describing arbitrability of German corporate disputes); Olivier Caprasse, Objective Arbitrability of Corporate Disputes--Belgium and France, in ONDERNEMING EN ADR, supra, at 79 (discussing arbitrability of Belgian and French corporate disputes); Gerard Meijer & Josefina Guzman, The International Recognition of an Arbitration Clause in the Articles of Association of a Company, in ONDERNEMING EN ADR, supra, at 130 (discussing the arbitrability of corporate law disputes under international law). Another issue that may be particularly important in commercial trusts involves the strong pro-arbitration policy reflected in the Federal Arbitration Act (FAA). See 9 U.S.C. [section][section] 1-307 (2006); Horton, supra note 2, at 1032, 1040-44. One commentator has taken the view that most, if not all, trusts could or should be governed by the FAA. See Horton, supra note 2, at 1070-73 (focusing particularly on commercial trusts). This raises the question of whether the U.S. Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (invalidating a California state law that was said to hinder arbitration under the FAA), might require any state-law limitation on the arbitration of trust disputes to be struck. Although some state courts apparently take the view that the FAA does not preempt state law in at least some regards, see Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 9197 (Tex. 2011), numerous state statutes have been abrogated in the wake of AT&T Mobility. See AT&T Mobility, 131 S. Ct. 1740; Coneff v. AT&T Corp., 673 F.3d 1155, 1159-61 (9th Cir. 2012); Quilloin v. Tenet HealthSystem Phila., Inc., 673 F.3d 221,233 (3d Cir. 2012); Kilgore v. KeyBank, Nat'l Ass'n, 673 F.3d 947, 959-61 (9th Cir.), reh'g granted, 2012 WL 4327662 (9th Cir. Sept. 21, 2012); Green v. SuperShuttle Int'l, Inc., 653 F.3d 766, 769 (8th Cir. 2011); Litman v. Cellco P'ship, 655 F.3d 225, 230-31 (3d Cir. 2011), cert. denied, 132 S. Ct. 1046 (2012); Cruz v. Cingular Wireless, LLC, 648 F.3d 1205, 1206-07 (llth Cir. 2011); S.I. STRONG, CLASS, MASS AND COLLECTIVE ARBITRATION IN NATIONAL AND INTERNATIONAL LAW (forthcoming 2013). While this issue would be most likely to affect commercial trusts, noncommercial trusts would also be affected to the extent they were governed by the FAA.

(40.) These two countries have been chosen for several reasons. First, England and the United States are leaders in both trust and arbitration law. As such, the principles developed in those nations have persuasive effect elsewhere in the world. See Miller, supra note 32, at 447 (discussing importance of North American trust law); see also Wharburton, supra note 32 (discussing importance of trust law in England). Second, much of the most probing analysis of mandatory trust arbitration comes from England, although some of the concepts need to be adapted for use in the U.S. legal arena. Third, the author is qualified as an English solicitor as well as a U.S. attorney and has firsthand experience practicing in London, New York, and Chicago.

(41.) However, commercial lawyers may have experience litigating or arbitrating an external trust dispute. See supra note 6 and accompanying text.

(42.) See Langbein, Commercial Trusts, supra note 1, at 165 (explaining that trusts are primarily taught as will substitutes in U.S. law schools).

(43.) See Hansmann & Mattei, supra note 1, at 435 (contrasting the role of trusts in civil law and common law jurisdictions).

(44.) More detailed reading on trusts and their civil law equivalents exists elsewhere. See generally WILLIAM M. McGOVERN ET AL., WILLS, TRUSTS AND ESTATES: INCLUDING TAXATION AND FUTURE INTERESTS (2010) (discussing U.S. trust law); UNDERHILL AND HAYTON: LAW RELATING TO TRUSTS AND TRUSTEES (David Hayton et al. eds., 18th ed. 2010) (discussing English trust law); Henry Christensen III, Foreign Trusts and Alternative Vehicles, 1902 PLI/CoRP. 323 (Aug. 18 19, 2011) (discussing civil law equivalents to the trust).

(45.) See Langbein, Contractarian, supra note 1, at 632-43 (providing the historical evolution of the trust).

(46.) See id. at 632-43, 669-71; see also McGOVERN ET AL., supra note 20, at 369 (describing U.S. trusts and noting that "[t]he word 'trust' is used for many property arrangements that have little in common with each other apart from the fact that they were historically enforced.., in the Court of Equity"); UNDERHILL AND HAYTON, supra note 9, [paragraph] 1.95 (describing English trusts).

(47.) See Hague Convention on Trusts, supra note 3.

(48.) Id. art. 2; see also McGOVERN ET AL., supra note 20, at 374-81 (describing the creation of trusts); UNDERHILL AND HAYTON, supra note 9, [paragraph] 8.1 (outlining the language that is sufficient to create a trust).

(49.) See McGOVERN ET AL., supra note 20, at 370 (describing the elements required to create a trust); Langbein, Contractarian, supra note 1, at 632 ("The ordinary trust ... entails a three-party relationship, in which the donor (settlor) arranges with the trustee to divide the donee's interest between trustee and beneficiary."). Protectors (called "enforcers" in England) may also be appointed, though typically only in situations where the settlor wishes to establish an extra layer of protection regarding the administration of the trust. See UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 8.157-8.167.

(50.) See Langbein, Contractarian, supra note 1, at 640 43 (describing how trusts developed to safeguard property from creditors).

(51.) See McGOVERN ET AL., supra note 20, at 389, 417 20 (describing the use of trusts to protect assets for minors and those who suffer from "improvidence, or incapacity for self-protection"); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 11.1, 11.77-11.78 (discussing protective trusts).

(52.) Trusts created by operation of law include resulting trusts, constructive trusts, and trusts created through bankruptcy. See McGOVERN ET AL., supra note 20, at 369-70; UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 3.1-3.11. These trusts are not addressed in this Article, since these devices do not involve a written instrument that can include an arbitration provision.

(53.) A living or inter vivos trust comes into effect during the lifetime of the settlor, whereas a testamentary trust comes into effect only after the death of the settlor. Revocable trusts may be changed or terminated by the settlor, whereas irrevocable trusts may not. This of course means that only living trusts may be revocable. See McGOVERN ET AL., supra note 20, at 369, 381.

(54.) See id. at 369-70 (discussing common reasons for using trusts); Langbein, Commercial Trusts, supra note 1, at 178 (describing the use of trusts in family wealth transfers).

(55.) Charitable trusts are often subject to slightly different rules than private trusts. See McGOVERN ET AL., supra note 20, at 436-50 (discussing the rules governing charitable trusts). One distinctive aspect of charitable trusts is that they are typically enforceable by the attorney general, since there are no identifiable beneficiaries who can undertake that task. See UNDERHILL AND HAYTON, supra note 9, 8.158; Langbein, Contractarian, supra note 1, at 631 (describing the distinct character of charitable trusts). While this "public" aspect of charitable trusts may suggest that such trusts may not be amenable to arbitration, some governmental entities such as the U.S. Department of Justice and various state attorney general offices are embracing arbitration and other forms of alternative dispute resolution (ADR). See Interagency Alternative Dispute Resolution Working Group, ADR.GOV, http://www.adr.gov/(focusing on increasing use of ADR in federal government). Therefore, it may be that charitable trusts could nevertheless be made subject to mandatory arbitration.

(56.) See McGOVERN ET AL., supra note 20, at 369-70 (describing spendthrift and other asset-protection trusts).

(57.) Langbein, Commercial Trusts, supra note 1, at 166-67, 178 (citing figures from the mid- to late-1990s).

(58.) See, e.g., Robert Flannigan, Business Applications of the Express Trust, 36 ALBERTA L. REV. 630 (1998) (discussing the importance of commercial trusts in Canada); Langbein, Commercial Trusts, supra note 1, at 166 (arguing the extensive use of commercial trusts in the United States). 59. Christensen, supra note 1, [section] 1.

(60.) See Miller, supra note 32, at 452 (explaining the inattention generally paid to business trusts).

(61.) Langbein, Commercial Trusts, supra note 1, at 16-67 (contrasting commercial and noncommercial trusts).

(62.) See, e.g., UNIF. STATUTORY TRUST ENTITY ACT prefatory note (2009), available at http://www.law.upenn.edu/bll/archives/ulc/ubta/2009final.htm (representing an example of a commercial trust created by statute).

(63.) There is some debate in the trust community as to the extent to which the two kinds of trusts are or should be treated similarly. For example, the Restatement of Trusts excludes business trusts from its consideration and focuses solely on trusts as donative devices, stating that "[a]lthough many of the rules applicable to trusts are applied to business trusts, yet many of the rules are not applied.... The business trust is a special kind of business association and can best be dealt with in connection with other business associations." RESTATEMENT (SECOND) OF TRUSTS, [section] 1 cmt. B (1959); see also Thomas P. Gallanis, The New Direction of American Trust Law, 97 IOWA L. REV. 215, 217 (2011) (citing RESTATEMENT (THIRD) OF TRUSTS ch. 1, intro, note (2003)). However, John Langbein states that "In]either the text of the Restatement's official comment, nor the reporter's note, supplies any authority for Scott's claim that 'many of the rules' of trust law do not apply to business uses of the trust." Langbein, Commercial Trusts, supra note 1, at 166 n.6. Other authorities take no position on this issue. See David M. English, Representing Trust and Estate Beneficiaries and Fiduciaries: The Uniform Trust Code, SK089 ALI-ABA 191, sec. IV (2005) (noting the Uniform Trust Code (UTC) is not directed at commercial trusts but does not exclude them from consideration, either). This kind of differential treatment is somewhat disturbing, given the importance of commercial trusts to the trust industry, see Christensen, supra note 1, at [section] 1, and may inappropriately skew the analysis regarding the arbitrability of trust disputes by diminishing the emphasis on the commercial and contractual nature of the majority of trusts in use today.

(64.) See Langbein, Commercial Trusts, supra note 1, at 179-83, 189 (describing why trusts are useful in the commercial context).

(65.) Id. at 183 (explaining usefulness of trusts in the commercial context); see also UNDERHILL AND HAYTON, supra note 9, [paragraph] 1.99.

(66.) Langbein, Commercial Trusts, supra note 1, at 183 (citation omitted). "A tranche is simply a slice of a deal, a payment stream whose expected return increases with its riskiness." Id. at 183 n. 109.

(67.) See UNIF. STATUTORY TRUST ENTITY ACT (concerning liberalizing moves by individual U.S. states); Langbein, Commercial Trusts, supra note 1, at 187-88 (noting liberalization of legislation regarding business trusts).

(68.) Miller, supra note 32, at 444. For more information on these trusts, see UNDERHILL AND HAYTON, supra note 9, 1.135, 1.138; Langbein, Commercial Trusts, supra note 1, at 168-76; Miller, supra note 32, at 447.

(69.) For a list of the various types of trusts recognized by the U.S. Internal Revenue Code, see Christensen, supra note 1, [section] 2.

(70.) See Langbein, Commercial Trusts, supra note 1, at 168-76 (describing various types of commercial trusts in the United States).

(71.) See Hastings v. Wilson, 516 F.3d 1055, 1059 (8th Cir. 2008) (discussing use of arbitration in context of a pension trust); Bortrager v. Cent. States, Se. & Sw. Areas Pension Fund, 425 F.3d 1087, 1089 (8th Cir. 2005) (discussing arbitration of dispute regarding withdrawal liability under a pension benefit trust); Contract Servs. Emp. Trust v. Davis, 55 F.3d 533, 535 (10th Cir. 1995) (discussing use of arbitration in a case involving an employee benefit trust fund); Reeves v. Tarvizian, 351 F.2d 889, 890 92 (1st Cir. 1965) (involving arbitration of claims relating to pension trust); Stender v. Cardwell, No. 07-CV-02503-REB-MJW, 2009 WL 3416904, at *2 (D. Colo. Oct. 20, 2009) (involving arbitration of an umbrella partnership REIT (UPREIT)); see also Law Debenture Trust Corp. v. Elektrim Fin. [2005] EWHC. 1412, [38]-[47] (Ch.) (Eng.) (involving dispute relating to a trust).

(72.) See Langbein, Commercial Trusts, supra note 1, at 185-86 (describing debate about whether commercial trusts should be framed as donative or contractual).

(73.) UNDERHILL AND HAYTON, supra note 9, [paragraph] 11.83.

(74.) See id. [paragraph][paragraph] 11.1, 11.79.

(75.) See Arbitration Act 1996, c. 23, [section] 69 (Eng.), available at http://www.legislation.gov.utdukpga/1996/23/contents (detailing the process for appealing an arbitral award to court); see also UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 11.79.

(76.) See Langbein, Commercial Trusts, supra note 1, at 166 (citing the Restatement as characterizing trusts as "a branch of the law of gratuitous transfers").

(77.) See Langbein, Contractarian, supra note 1, at 627, 644-65 (describing the debate involving the contractarian and donative theories of trust).

(78.) See ACTEC, supra note 13, at 13 (noting early courts that found agreements to arbitrate future disputes enforceable).

(79.) Interestingly, the first Restatement is said to have adopted the donative approach to trusts not because that theory prevailed as a matter of jurisprudential discourse (indeed, the contractarian approach had numerous supporters at that time, including Frederic W. Maitland), but simply because that was the model favored by Scott. See Langbein, Contractarian, supra note 1, at 627, 644 45 (noting Scott had long favored the donative approach to trusts).

(80.) See id. at 648-50 (noting that Scott's fear did not come to pass).

(81.) Id. at 648.

(82.) Id. at 649.

(83.) See infra notes 137-41 and accompanying text (considering benefits of arbitration of trust disputes).

(84.) See 96 P.3d 1078 (Ariz. Ct. App. 2004) (holding that trusts were not written contracts requiring arbitration), superseded by statute, ARIZ. REV. STAT. ANN. [section] 1410205 (2012), as recognized in Jones v. Fink, No. 1 CA-SA 10-0262, 2011 WL 601598 (Ariz. Ct. App. Feb. 22, 2011) (confirming that Schoneberger was superseded by statute to the extent that the case required consent as a precondition to arbitration).

(85.) Several other U.S. courts have adopted the Schoneberger analysis, but most of those decisions have been subject to vigorous dissents or have been appealed to higher courts. See Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 614-15 (Ct. App. 2011) (citing Shoneberger), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal v. Reitz, 347 S.W.3d 305, 310-11 (Tex. App. 2011) (discussing Schoneberger), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012); see also In re Calomiris, 894 A.2d 408, 409-10 (D.C. 2006) (adopting Schoneberger analysis in the context of wills); Robsham v. Lattuca, 797 N.E.2d 502 (Mass. App. Ct. 2003) (unpublished table decision) (holding that the trusts at issue were not enforceable as contracts).

(86.) Schoneberger, 96 P.3d at 1079-80.

(87.) Id. at 1080.

(88.) Id.

(89.) Id. at 1080-81.

(90.) Id. at 1082 (citations omitted).

(91.) Id. at 1083 (citation omitted). Interestingly, the Arizona court was influenced as much by the precise language of the state statute on arbitration as it was by judicial precedent characterizing trusts as donative instruments. The statute indicates that:
      A written agreement to submit any existing controversy to
   arbitration or a provision in a written contract to submit to
   arbitration any controversy thereafter arising between the parties
   is valid, enforceable and irrevocable, save upon such grounds as
   exist at law or in equity for the revocation of any contract.


ARIZ. REV. STAT. [section] 12-1501 (2003); see also Schoneberger, 96 P.3d at 1083 (focusing on the word "contract"). Some judges have noted that arbitration statutes contemplating arbitration "agreements" rather than "contracts" may yield different results. See Rachal v. Reitz, 347 S.W.3d 305, 312-13 (Tex. App. 2011) (Murphy, J., dissenting) (explaining that an "agreement" is broader than a "contract"), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012). This suggests that parties may be able to determine whether a particular jurisdiction has adopted a contractual or donative approach to trusts by considering whether claims against a trustee must be framed in terms of breaches of trust or fiduciary duty or whether they may be classified as breaches of contract. Compare Schoneberger, 96 P.3d at 1082-83 (stating "[a] trustee who fails to perform his duties.., is not liable to the beneficiary for breach of contract" (citations omitted)), with Stender v. Cardwell, No. 07-cv-02503, 2009 WL 3416904, at *2 (D. Colo. Oct. 20, 2009) (involving breach of contract of an UPREIT).

(92.) Langbein, Commercial Trusts, supra note 1, at 185 (citation omitted).

(93.) Langbein, Contractarian, supra note 1, at 627.

(94.) Langbein, Commercial Trusts, supra note 1, at 186.

(95.) Langbein, Contractarian, supra note 1, at 631.

(96.) Indeed, several courts have already done so. See San Juan v. Corporacion para el Fomento EconSmico de la Ciudad Capital, 597 F. Supp. 2d 247, 248-49 (D. P.R. 2008) (holding the parties to their agreement to abide by certain arbitration rules); Robin v. Doran, No. 392456, 2010 WL 728558, at *1 (Mass. Land Ct. Mar. 3, 2010) (enforcing mandatory arbitration provision in bylaws of condominium trust); see also supra note 71 (listing cases in which internal trust disputes related to commercial trusts were subject to arbitration).

(97.) Bruyere & Marino, supra note 15, at 362; see also Langbein, Contractarian, supra note 1, at 627, 645 (describing trusts in contractual terms). The two-party declaration trust, also known as a self-declarative trust, arises when a settlor declares him or herself to be the trustee of certain identified property for the benefit of another person rather than naming another person to act as trustee. See McGOVERN ET AL., supra note 20, at 374; UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 12.7-12.13. Notably, self-declarative trusts are never used in the commercial context and are rare in the noncommercial realm. See McGOVERN ET AL., supra note 20, at 374-75; Langbein, Contractarian, supra note 1, at 672 (suggesting self-declarative trusts to be "little used" because they eliminate the management services of third-party trustees, which is what most modern settlors want from a trust).

(98.) See infra notes 260-320 and accompanying text (considering contract theory of trusts as a matter of arbitration law).

(99.) ACTEC, supra note 13, at 13.

(100.) See Stender v. Cardwell, No. 07-cv-02503, 2009 WL 3416904, at *2 (D. Colo. Oct. 20, 2009) (holding that plaintiffs' claim for breach of a contract remained subject to arbitration despite plaintiffs' amended complaint mentioning claims for breach of other contracts).

(101.) See id. ("Plaintiffs in this putative class action lawsuit assert, inter alia, that defendants breached a contract--to wit, a declaration of trust.").

(102.) See San Juan v. Corporacion para el Fomento Econdmico de la Ciudad Capital, 597 F. Supp. 2d 247, 248-49 (D. P.R. 2008) (deferring to arbitrator to decide procedural disputes in arbitration on the basis that the parties' contract to settle dispute through arbitration was enforceable).

(103.) In re Ismailoff, No. 342207, 2007 N.Y. Slip Op. 50211(U), at *1 (Sur. Ct. Nassau Cnty. Feb. 1, 2007).

(104.) Id. at *2.

(105.) See Strong, Enforceability, supra note 33 (discussing drafting techniques to assist in overcoming problems associated with the need for a contract); see also infra notes 260-320 and accompanying text (describing and evaluating the interpretation of trusts based on their contractual qualities).

(106.) Further reading is available on how best to draft an enforceable arbitration provision in a trust. See infra note 499 (providing a list of sources regarding "best practices" in drafting of trust arbitration provisions).

(107.) UNDERHILL AND HAYTON, supra note 9, [paragraph] 11.84.

(108.) This is just one of the ways a settlor can increase the enforceability of a mandatory arbitration provision through appropriate language in the trust. See Strong, Enforceability, supra note 33 (discussing various ways to improve the enforceability of an arbitration provision through proper drafting).

(109.) See infra notes 162-69 and accompanying text (weighing the pros and cons of the UTC's suggestions for which disputes could go to arbitration).

(110.) See Figueroa, supra note 1, at 704-05 (describing Latin American jurisdictions that view arbitration from a contractual perspective); see also FRANZ T. SCHWARZ & CHRISTIAN W. KONRAD, Austria, in THE VIENNA RULES: A COMMENTARY ON INTERNATIONAL ARBITRATION IN AUSTRIA 1, 19-20 (2009); Christian Duve, Arbitration of Corporate Law Disputes in Germany, in ARBITRATION IN GERMANY: THE MODEL LAW IN PRACTICE 957, 1002 (Karl-Heinz Bockstiegel et al. eds., 2007) (discussing German views regarding the contractual nature of arbitration agreements); Koch, supra note 33, at 195-96 (discussing Germany, Spain, Bolivia, Honduras, Peru, and Malta).

(111.) Bosques-Hernandez, supra note 17, at 8; see also Stephen Wills Murphy, Enforceable Arbitration Clauses in Wills and Trusts: A Critique, 26 OHIO ST. J. ON DISP. RESOL. 627, 652-57 (2011).

(112.) Spitko, supra note 17, at 299.

(113.) Bosques-Hernandez, supra note 17, at 11; see also Charles Lloyd & Jonathan Pratt, Trust in Arbitration, 12 TR. & TRUSTEES 4, 18 (2006) (describing how arbitration is no longer subject to certain policy-based criticisms).

(114.) Bosques-Hernandez, supra note 17, at 8.

(115.) See infra notes 270-80, 299-304 and accompanying text (analogizing deemed acquiescence and conditional transfer to estoppel).

(116.) See Zisman v. Lesner, No. 6:08-cv-1448, 2008 WL 4459029, at *3-4 (M.D. Fla. Sept. 29, 2008) (holding that equitable estoppel would allow an arbitration provision to bind a nonparty to the arbitration agreement).

(117.) Other commentators and working groups have also considered these matters. See ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9, explanatory notes 1-2 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink) (suggesting that advantages of arbitration are as relevant in trust disputes as they are in other kinds of disputes); ACTEC, supra 13, at 5 (considering whether informal means of dispute resolution would be superior to litigation of trust disputes); Bosques-Hernandez, supra note 17, at 6 (considering the advantages of arbitration in estate planning compared to litigation); Buckle & Olsen, supra note 8, at 649 (discussing reasons that arbitration might not be the best mechanism for addressing certain types of trust disputes).

(118.) See BORN, supra note 10, at 13-15 (warning against making blanket choices in favor of either arbitration or litigation, since both mechanisms have strengths and weaknesses depending on the circumstances).

(119.) See JULIAN D.M. LEW ET AL., COMPARATIVE INTERNATIONAL COMMERCIAL ARBITRATION [paragraph][paragraph] 1-28 to -30 (2003) (agreeing with the assumption that arbitration is generally quicker than litigation in national courts, but noting that arbitration is not necessarily more cost-effective than court proceedings).

(120.) See Cohen & Staff, supra note 13, at 203-04 (discussing size and scope of hostile trust litigation).

(121.) See Wustemann, supra note 1, at 40 (explaining causes of discovery expenses in offshore trust litigation). The Judicial Committee of the Privy Council hears appeals from Crown dependencies, such as Jersey, Guernsey, and the Isle of Man, as well as various Commonwealth nations and overseas territories, including popular jurisdictions for offshore trusts such as the Bahamas, Bermuda, the Cayman Islands, and the British Virgin Islands. See Role of the JCPC, JUDICIAL COMM. OF THE PRIVY COUNCIL, http://www.jcpc.gov.uk/about/role-of-the-jcpc.html (last visited Sept. 2, 2012).

(122.) See BORN, supra note 5, at 1876-78 (noting that the scope of disclosure is less than the scope of discovery); LEW ET AL., supra note 119, [paragraph] 1-20 (explaining that arbitral awards are subject to limited grounds of review).

(123.) See LEW ET AL., supra note 119, [paragraph][paragraph] 1-26 to -27 (recognizing that one of the advantages of arbitration is its confidential process). Notably, privacy and confidentiality are not guaranteed as a matter of national or international arbitration law, which means the parties must make specific provision for these attributes in their arbitration agreement. See BORN, supra note 5, at 2253.

(124.) See McGOVERN ET AL., supra note 20, at 370 (noting that settlors choose trusts because of their private and confidential nature); Frances S. Foster, Trust Privacy, 93 CORNELL L. REV. 555, 563, 610-11, 615 (2008) (describing scope, nature, and reason for privacy of trusts).

(125.) See Cohen & Staff, supra note 13, at 204-05 (explaining that publicly litigated claims can negatively affect the reputations of both trust professionals and the trust industry).

(126.) See Horton, supra note 2, at 1036 (explaining that "all affected individuals" must be given "a chance to be heard" in resolution of probate matters).

(127.) See Strong, Procedures, supra note 33 (manuscript at 60-63) (discussing ways of addressing various challenges associated with multiparty arbitration).

(128.) Notably, confidentiality, privacy, and bilateral proceedings are not required elements of arbitration. See generally Gary B. Born & Claudio Salas, The U.S. Supreme Court and Class Arbitration: A Tragedy of Errors, 2012 J. DISP. RESOL. 21, 41-42 (2012) (noting arbitration need not be bipartite); S.I. Strong, Does Class Arbitration "Change the Nature" of Arbitration? Stolt-Nielsen, AT&T, and a Return to First Principles, 17 HARV. NEGOT. L. REV. 201, 246 n.220 (2012).

(129.) See LEW ET AL., supra note 119, [paragraph] 1-11 (noting that "[p]arty autonomy is the ultimate power determining the form, structure, system and other details of the arbitration").

(130.) See Langbein, Contractarian, supra note 1, at 650, 662 (explaining that party autonomy "is not wholly unrestrained" in trust law).

(131.) See Wustemann, supra note 1, at 41-42 (explaining that settlors, beneficiaries, and trust companies typically prefer an arbitration-friendly jurisdiction to an unfamiliar jurisdiction's dispute resolution process).

(132.) This is something of a misconception, since many arbitrations, especially those in the international realm, reflect a high degree of procedural formality. See BORN, supra note 5, at 1744, 1746 (describing how international arbitration procedures can closely resemble commercial court proceedings in major matters).

(133.) See In re Revocation of Revocable Trust of Fellman, 604 A.2d 263, 265-67 (Pa. Super. Ct. 1992) (concluding that arbitration may not be appropriate to determine the competency of a settlor); Horton, supra note 2, at 1076 (suggesting some claims may not be appropriate for arbitration).

(134.) See infra notes 399-432 and accompanying text.

(135.) See BORN, supra note 5, at 1763-64 (describing range of procedural protections in arbitration).

(136.) Some arbitral institutions take the view that their existing rules are sufficiently flexible to address any trust-related issues, while other organizations have created special rules dedicated to trust arbitrations. See AAA WILLS AND TRUSTS ARBITRATION RULES (2009), available at http://www.adr.org/cs/idcplg?IdcService=GET_ FILE&dDocName=ADRSTG_004135&RevisionSelectionMethod=LatestReleased (providing model rules for trust arbitrations); ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9, explanatory notes 4-6 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink) (noting that the ICC's Rules of Arbitration are sufficiently flexible for trust disputes); Strong, Procedures, supra note 33 (manuscript at 5) (discussing AAA's specialized rules of trust arbitration).

(137.) See BORN, supra note 5, at 78-81, 1364-65 (noting that parties to an arbitration typically choose experts in specific disciplines to serve on the arbitral tribunal).

(138.) See Spitko, supra note 17, at 296-97 (discussing how settlors and testators may value a decision maker with particular expertise).

(139.) See id.; Wustemann, supra note 1, at 35, 40-41. Other concerns relate to whether the appointment mechanism will guarantee the absence of any bias or procedural unfairness and whether arbitrators are bound to apply the law. See Wustemann, supra note 1, at 40-41.

(140.) See ACTEC, supra note 13, at 4-7 (discussing the "blinding prejudice" to arbitration in contemporary trust and estates practice); BORN, supra note 5, at 78-81, 1364-65 (outlining the types of arguments made against arbitration in the early days of the procedure);.

(141.) See BORN, supra note 5, at 78-81, 1364-65 (noting that a party's ability to choose the arbitrators ensures the decision makers are "competent, experienced and available").

(142.) See id. at 91-101 (discussing the relative ease with which arbitral awards may be enforced internationally).

(143.) See Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2518, 330 U.N.T.S. 3 [hereinafter New York Convention]. The New York Convention, which currently has 147 state parties, revolutionized global commerce by creating a neutral, reputable, predictable, and effective means of resolving international legal disputes. See Status: 1958-Convention on the Recognition and Enforcement of Foreign Arbitral Awards, UNCITRAL, http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention-status.ht ml (last visited Sept. 29, 2012) [hereinafter New York Convention Status].

(144.) See BORN, supra note 5, at 91-101 (noting pro-enforcement bias of the New York Convention).

(145.) See New York Convention Status, supra note 143 (listing the 147 state parties to the New York Convention).

(146.) See New York Convention, supra note 143, art. I (describing the scope of application of the New York Convention).

(147.) See id. arts. I(3), II(1), V(2)(a) (noting the applicability of the New York Convention to commercial disputes and to disputes that are "capable of settlement by arbitration").

(148.) Notably, this requirement only applies in cases where the state party has made an express declaration limiting its obligations under the New York Convention to cases involving commercial disputes. See id. art. I(3) (declaring that any state may "apply the Convention only to differences arising out of legal relationship, whether contractual or not, which are considered as commercial under the national law of the State making such declaration"). Approximately one-third of the state parties to the New York Convention have made a declaration limiting their obligations under the Convention to commercial disputes. See id.; BORN, supra note 5, at 261 n.295.

(149.) See supra notes 69-70 and accompanying text.

(150.) See Horton, supra note 2, at 1068-73 (concluding that almost all wills and trusts involve interstate commerce).

(151.) See Stefan Michael Kroll, The "Arbitrability" of Disputes Arising from Commercial Representation, in ARBITRABILITY: INTERNATIONAL AND COMPARATIVE PERSPECTIVES 317, [paragraph] 16-7 (Loukas A. Mistelis & Stavros L. Brekoulakis eds., 2009) (defining arbitrability as those disputes amenable to arbitration). The term is used in this Article in its international sense. In the United States, arbitrability refers not only to the question of what issues are reserved to the courts as a matter of law but also to matters relating to the scope of the arbitration agreement as a matter of party intent. See BORN, supra note 5, at 767 (describing the nonarbitrability doctrine).

(152.) See New York Convention, supra note 143, arts. II(1), V(2)(a) (limiting applicability of the New York Convention to disputes involving matters "capable of settlement by arbitration"); see also infra notes 434-90 and accompanying text.

(153.) See von Segesser, supra note 13, at 21 (describing the privacy and confidentiality of arbitration as a major advantage over litigation); Wustemann, supra note 1, at 33-34 (noting disagreement as to whether arbitration is appropriate for trust disputes under English law).

(154.) See Horton, supra note 2, at 1033-38 (describing the history of testamentary arbitration); see also Bruyere & Marino, supra note 15, at 355-56, 362 (discussing trustees' power to resolve trust disputes through mediation and arbitration); David J. Hayton, Problems in Attaining Binding Determinations of Trust Issues by Alternative Dispute Resolution, in PAPERS OF THE INTERNATIONAL ACADEMY OF ESTATE AND TRUST LAW-2000, supra note 13, at 11, 11 (discussing trust disputes that "involve the beneficiaries, whether such disputes concern the internal trustee-beneficiary relationship or the claims of third parties to impeach the trust"); Gail E. Mautner & Heidi L.G. Orr, A Brave New World: Nonjudicial Dispute Resolution Procedures Under the Uniform Trust Code and Washington's and Idaho's Trust and Estate Dispute Resolution Acts, 35 AM. C. TR. & EST. COUNS. J. 159, 159 (2009) (discussing the UTC's nonjudicial dispute resolution procedures).

(155.) For example, arbitration of an external trust dispute under an arbitration agreement with a third party could permit or require arbitration with a beneficiary in cases where the trustee has a conflict of interest that might affect the trustee's ability or inclination to proceed with an arbitration against the third party. See In re Blumenkrantz, 824 N.Y.S.2d 884, 888-89 (Sur. Ct. Nassau Cnty. 2006) (allowing a beneficiary to represent the trust in an arbitration when a conflict of interest arose with the trustee). Arbitration of internal trust matters may also result in cases where (1) a side agreement that includes an arbitration provision has been explicitly incorporated by reference into a trust or (2) a side agreement that includes an arbitration provision explicitly refers to disputes arising out of an associated trust. See Decker v. Bookstaver, No. 4:09-CV-1361, 2010 WL 2132284, at *1-2 (E.D. Mo. May 26, 2010) (enforcing an arbitration provision found in an account agreement); New S. Fed. Sav. Bank v. Anding, 414 F. Supp. 2d 636, 639 (S.D. Miss. 2005) (granting plaintiffs motion to compel arbitration where a home loan was accompanied by a deed of trust rider); Meijer & Guzman, supra note 39, at 148 (discussing incorporation by reference in the context of arbitration provisions found in a company's articles of association).

(156.) See infra notes 163-68 and accompanying text.

(157.) See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 633 (1985) (noting that courts cannot claim that certain matters are "inherently insusceptible to resolution by arbitration, as these same courts have agreed that an undertaking to arbitrate ... [such] claims entered into after the dispute arises is acceptable").

(158.) See infra notes 434-90 and accompanying text.

(159.) See UNIF. TRUST CODE (amended 2010), available at http://www.uniformlaws.org/shared/docs/trust_code/utc_final_rev2010.pdf (providing a "national codification of the law of trusts"). The UTC has been adopted by twenty-four U.S. states in whole or in part. See Trust Code, UNIF. LAW COMM'N, http://uniformlaws.org/Act.aspx?title=Trust Code (last visited Sept. 29, 20120) (listing the states that have enacted the UTC).

(160.) UNIF. TRUST CODE [section] 111(b).

(161.) Id. [section] 111(c); id., cmt.

(162.) Id. [section] 111(d); see also id., cmt.; Mautner & Orr, supra note 154, at 161 (discussing [section] 111 of the UTC as it relates to nonjudicial dispute resolution).

(163.) See UNIF. TRUST CODE [section] 111, cmt. (failing to define an "interested person" with specificity).

(164.) Id. [section] 111(a).

(165.) The UTC contains a second provision regarding the arbitration of trust disputes, but that language is also ambiguous with regard to mandatory trust arbitration. The reference appears in the section describing the trustee's specific powers and states that the trustee has the ability to "resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution." Id. [section] 816(23). However, the powers listed in [section] 816 are not necessarily exclusive to the trustee and were included merely as a convenience to parties, who were understood to want a single section compiling specific powers found elsewhere in the UTC. See id. [section] 816 cmt. (concluding that "the demand of third parties to see language expressly authorizing specific transactions justified retention of a detailed list").

(166.) See id. [section] 111(e) (declaring that "[a]ny interested person may request the court to approve a nonjudicial settlement agreement"); see also id. [section] 105(b)(13)-(14) (discussing the court's power to take action "in the interests of justice").

(167.) See infra notes 434-90 and accompanying text.

(168.) UNIF. TRUST CODE [section] 816(23) cmt.; see also AAA WILLS AND TRUSTS ARBITRATION RULES (2009), available at http://www.adr.org/cs/idcplg?IdcService=GET_ FILE&dDocName=ADRSTG_004135&RevisionSelectionMethod=LatestReleased (providing specialized rules for arbitration of trust disputes). The author has analyzed the AAA Wills and Trusts Arbitration Rules and the AAA's proposed model arbitration clause elsewhere. See Strong, Enforceability, supra note 33 (analyzing the AAA Wills and Trusts Arbitration Rules); Strong, Procedures, supra note 33 (discussing the AAA Model Trust Clause). The AAA is in the process of revising its rules, which may affect the model clause as well.

(169.) Mautner & Orr, supra note 154, at 163; see also IDAHO CODE ANN. [section][section] 15-8-101, 15-8-103 (2009); WASH. REV. CODE ANN. [section][section] 11.96A.010, 11.96A.030 (West 2006).

(170.) These two statutes also speak merely of the types of issues that may be arbitrable, not how arbitration can arise. See IDAHO CODE ANN. [section][section] 15-8-101, 15-8-103 (discussing resolution of trust-related disputes through nonjudicial means); WASH. REV. CODE ANN. [section][section] 11.96A.010, 11.96A.030 (same).

(171.) Trustee Act, 1925, [section] 15(f) (U.K.), amended by Trustee Act, 2000 (U.K.), available at http://www.legislation.gov.uk/ukpga/Geo5/15-16/19.

(172.) Id. [section] 15.

(173.) See supra notes 75, 212-13 and accompanying text.

(174.) One practice that has not apparently been tested is whether the trustee could, immediately upon taking office, attempt to obtain a stand-alone pre-dispute arbitration agreement involving all of the beneficiaries and covering some or all of the types of internal trust disputes that could arise. This technique would appear to comply with principles of trust law that allow arbitration of trust disputes that are subject to an arbitration agreement that exists outside of the trust itself. While various difficulties could arise, including whether and to what extent such an agreement could reflect the consent of unborn, unascertained, or legally incompetent beneficiaries, there may be ways to bind such persons to the agreement through use of special or virtual representatives or legal guardians. See infra notes 399-432 and accompanying text. If trustees could be held to this sort of duty, it might be one way to give effect to the settlor's intent regarding the use of arbitration. See Masonry & Tile Contractors Ass'n of S. Nev. v. Jolley, Urga & Wirth, Ltd., 941 P.2d 486, 491 (Nev. 1997) (construing a clause to impose a nonmandatory duty of arbitration on trustees).

(175.) See UNDERHILL AND HAYTON, supra note 9, [paragraph] 43.1 (describing the duty of a trustee to obey the directions of the settlor unless deviation is sanctioned by an appropriate authority).

(176.) See McGOVERN ET AL., supra note 20, at 565 (explaining that the UTC grants broad powers to trustees); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 57.1-63.10 (describing the nature and limits of a trustee's power, discretion, and duties).

(177.) See McGOVERN ET AL., supra note 20, at 385 ("The UTC tries to effectuate the settlor's intent to the maximum extent possible."); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 43.1-43.2 (describing the trustee's duty to follow the settlor's directions and detailing the narrow circumstances in which a trustee may deviate from those terms); Bosques-Hernandez, supra note 17, at 10 (quoting the Restatement (Third) of Property: Wills and Other Donative Transfers to establish the primacy of the settlor's intent); see also supra notes 111-16 and accompanying text (elaborating on the concept of the intent of the settlor being the most important guidepost in trust law). Notably, even if courts did take the view that trustees could be bound by an explicit direction in the trust requiring a trustee to attempt to arbitrate any disputes relating to the trust, that would still provide no guarantee that arbitration would result in any particular case, since the settlor's instructions would not bind anyone other than the trustee. Therefore, the settlor's desire for arbitration could be thwarted if any party opposed arbitration. This is precisely opposite to the result that would be obtained under mandatory arbitration, where arbitration proceeds unless all parties agree otherwise. See In re Ismailoff, No. 342207, 2007 WL 431024, at *1 (Sur. Ct. Nassau Cnty. Feb. 1, 2007) (noting that a mandatory arbitration clause in a trust was enforceable at the election of any one of the parties).

(178.) ARIZ. REV. STAT. ANN. [section] 14-10205 (2012).

(179.) See Schoneberger v. Oelze, 96 P.3d 1078, 1083 (Ariz. Ct. App. 2004) (holding that the arbitration clauses contained in the documents establishing trusts did not bind the beneficiaries of those trusts because the beneficiaries never agreed to the arbitration clauses, since trusts, unlike contracts, are not based upon the exchange of promises), superseded by statute, ARIZ. REV. STAT. ANN. [section] 14-10205 (2012), as recognized in Jones v. Fink, No. 1 CA-SA 10-0262, 2011 WL 601598, at *2 (Ariz. Ct. App. Feb. 22, 2011) (holding that [section] 14-10205 superseded Schoneberger and requires all parties interested in a trust to abide by any reasonable mandatory arbitration provision in that trust).

(180.) Jones, 2011 WL 601598, at *3 (emphasis omitted) (citing [section] 14-10201 of the Arizona Revised Statutes to support a broad interpretation of the word "administration" in [section] 14-10205); see also infra note 193 and accompanying text (describing the contours of judicial involvement in trust administration).

(181.) FLA. STAT. ANN. [section] 731.401 (West 2010). See generally FLA. STAT. ANN. [section] 44.104 (West 2012) (regarding arbitration).

(182.) Several civil law nations have enacted legislation that appears to permit arbitration of trust disputes. For example:
      Austrian arbitration law recognizes ... ways of granting
   arbitrators the authority to decide a dispute by arbitration.
   Section 581(2) ZPO [Zivilprozessordung or Code of Civil Procedure]
   grants such an authority to arbitral tribunals that are set up in a
   manner permitted by law, either by testamentary disposition or by
   other legal transactions that are not based on the agreement of the
   parties. Authority is also granted to tribunals provided for by
   articles of incorporation.


SCHWARZ & KONRAD, supra note 110 (citations omitted). Germany takes a similar approach, in that:
   [Section] 1066 ZPO [Zivilprozessordung or Code of Civil Procedure]
   requires arbitral tribunals to be legitimized by a testamentary
   disposition or other non-contractual dispositions. Thus,
   [[section]] 1066 ZPO encompasses situations in which an arbitration
   clause has a binding effect on an individual who is not a signatory
   of an arbitration agreement and did not agree to a contractual
   arbitration agreement.


Duve, supra note 110, at 1003.

(183.) See The Trusts (Guernsey) Law, 2007, c. 2, [section] 63, available at http://www.guernseylegalresources.gg/article/97619/Trusts-Guernsey-Law-2007 (detailing the arbitrability of trust disputes); see also Buckle & Olsen, supra note 8, at 652-55 (discussing Guernsey legislation regarding arbitration and mediation of trust disputes).

(184.) The Trusts (Guernsey) Law, 2007, c. 2, [section] 63.

(185.) See id. (allowing use of arbitration provision in trusts).

(186.) See id. (detailing conditions in which the results of ADR will bind trust beneficiaries).

(187.) See Nell Hartnell, Trustee Act's Reform 'Bold, Innovative," TRIB. (Bah.), Oct. 25, 2011, at 1B, available at http://ufdc.ufl.edu/UF00084249/03124 (discussing pending amendments to Bahamian trust law designed to make Bahamian trusts more appealing); see also Nadia J. Taylor & David Brownbill, Arbitration of Trust Disputes: The New Statutory Regime in the Bahamas, 18 TR. & TRUSTEES 358, 358-62 (2012) (discussing new statutory scheme in the Bahamas).

(188.) See Trustee (Amendment) Bill 2011, [section] 18, available at http://www.bacobahamas.com/PDF/Trustee%20(Amendment)%20Bill%202011%20-% 2015%20April%202011.pdf; see also Hartnell, supra note 187 (discussing pending amendments to Bahamian trust law, including an amendment that would allow arbitration of trust disputes); Taylor & Brownbill, supra note 187 (discussing statutory scheme in the Bahamas).

(189.) See supra notes 154-77 and accompanying text (discussing statutes that govern arbitration of trust disputes).

(190.) See Cohen & Staff, supra note 13, at 209 (outlining factors for determining whether an arbitration provision in a trust should be enforceable).

(191.) See id. (listing the factors and noting that they are intertwined with each other).

(192.) See McGOVERN ET AL., supra note 20, at 552-55 (discussing scope of judicial authority over trust administration); Langbein, Contractarian, supra note 1, at 662 (detailing the role of the judiciary in trust administration).

(193.) Langbein, Contractarian, supra note 1, at 662 (citation omitted); see also UNIF. TRUST CODE [section] 202 (amended 2010), available at http://www.uniformlaws.org/ shared/docs/trust_code/utc_final_rev2010.pdf (describing judicial jurisdiction over trustees and beneficiaries); McGOVERN ET AL., supra note 20, at 552-55 (describing courts' involvement in trust administration).

(194.) See Cohen & Staff, supra note 13, at 215-17 (discussing an instance in which an arbitration provision that purported to remove statutorily granted jurisdiction of the courts was held to be invalid); Kroll, supra note 151, [paragraph][paragraph] 16-5, 16-8 to -65 (discussing how mandatory statutory protections affect the arbitrability of disputes in various jurisdictions).

(195.) John H. Langbein, Mandatory Rules in the Law of Trusts, 98 Nw. U. L. REV. 1105, 1126-27 (2004). Some concerns exist about whether and to what extent arbitration can be used to eliminate the trustee's fiduciary obligations. These issues are considered at length in Strong, Procedures, supra note 33.

(196.) See Langbein, supra note 195, at 1110 n.33 (discussing rationales for anti-dead-hand rules, including the desire to account for the desires of the beneficiaries of the trust).

(197.) Indeed, some commentators have noted that the requirement for clarity is higher with respect to arbitration agreements than with respect to other types of agreements. See BORN, supra note 5, at 585 (discussing rationales for the requirement that arbitration agreements be in writing).

(198.) See UNDERHILL AND HAYTON, supra note 9, [paragraph] 43.1(1) (describing the trustee's duty to fulfill the terms of the trust and the very limited circumstances in which a trustee or a court may deviate from those terms); Janin, supra note 11, at 528 (discussing the tension that arises when a testator includes an arbitration provision in a will).

(199.) Fox, supra note 37, at 22.

(200.) The definition of the irreducible core duties of a trustee varies by jurisdiction. See id. at 26 (noting that different jurisdictions apply different mandatory rules to trusts).

(201.) See UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 51.1-51.42 (describing the limitations on a trustee's power to delegate responsibility and the duties of care that accompany such delegations). This may be more of an English law concept, since U.S. law typically adopts a relatively liberal stance toward the delegation of trustee duties. See McGOVERN ET AL., supra note 20, at 561 (discussing the contours of a trustee's power to delegate and the changes in that power as the law has evolved).

(202.) Interestingly, this concern may be related to the fact that historically, trustees often acted as arbiters of certain types of disputes, such as those arising between beneficiaries. See Cohen & Staff, supra note 13, at 211-15 (discussing cases in which executors or trustees attempted to act as arbitrators); Fox, supra note 37, at 24 (discussing nondelegable trustee duties). Therefore, some of the early hostility toward arbitration of internal trust disputes may have been based on the fact that when trustees acted as arbitrators, they were either (1) acting as judges in their own cause and/or (2) limiting or eliminating the court's ability to review the propriety of the trustee's decisions and actions, since arbitral awards are subject to only limited forms of review. See infra notes 223-24 and accompanying text (discussing the boundaries of judicial review of arbitral awards). Most, if not all, of these concerns disappear in contemporary forms of arbitration because a trustee would never be permitted to act as an arbitrator in a dispute arising out of the trust in question. Instead, arbitrators must be entirely independent of both the parties and the dispute. See INT'L BAR ASS'N [IBA], GUIDELINES ON CONFLICTS OF INTEREST IN INTERNATIONAL ARBITRATION explanation to general standard 2(d) (2004) (stating that the requirement that an arbitrator be disinterested in the outcome of the arbitration proceeding is nonwaivable), available at http://www.ibanet.org/Publications/publications_IBA_guides and free materials.aspx #conflictsofinterest (follow "English" hyperlink); BORN, supra note 5, at 1465-92 (discussing concepts of arbitrator neutrality and independence).

(203.) Fox, supra note 37, at 24.

(204.) Id. at 25; see also ACTEC, supra note 13, at 13-14 (discussing situations in which courts have deemed arbitration of trust-related disputes to be contrary to public policy, including situations involving trustees who have an interest in the outcome).

(205.) See Schoneberger v. Oelze, 96 P.3d 1078, 1083-84 (Ariz. Ct. App. 2004) (noting a settlor "may not unilaterally strip trust beneficiaries of their right to access the courts absent their agreement"), superseded by statute, ARIZ. REV. STAT. ANN. [section] 14-10205 (2012), as recognized in Jones v. Fink, No. 1 CA-SA 10-0262, 2011 WL 601598, at *2 (Ariz. Ct. App. Feb. 22, 2011).

(206.) Fox, supra note 37, at 23 (footnote omitted).

(207.) See infra notes 433-90 and accompanying text (discussing arbitrability issues in trust arbitration); see also Schoneberger, 96 P.3d at 1083-84 (holding that a settlor cannot bind beneficiaries to arbitration without their agreement).

(208.) UNDERHILL AND HAYTON, supra note 9, [paragraph] 48.1(3).

(209.) See Cohen & Staff, supra note 13, at 215-17 (discussing exclusive jurisdiction of probate courts); see also infra notes 433-90 and accompanying text (discussing arbitrability of trust disputes).

(210.) See UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 11.1, 11.79 (suggesting some trust-related disputes can be decided pursuant to an arbitration statute).

(211.) Arbitration Act 1996, c. 23, [section] 69 (Eng.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents; see also BORN, supra note 5, at 2646-47 (explaining the limitations on the power of English courts to review arbitral awards); BRUCE HARRIS ET AL., THE ARBITRATION ACT 1996: A COMMENTARY 332-42 (3d ed. 2003) (discussing [section] 69 of the Arbitration Act 1996).

(212.) See Arbitration Act 1996, c. 23, [section] 69 (allowing parties to opt out of their statutory right to appeal an arbitral award).

(213.) See UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 11.1, 11.79 (offering the Arbitration Act 1996 as an example of a statute that permits institutions other than the courts to decide questions of law in a trust dispute); see also Arbitration Act 1996, c. 23, [section] 69 (allowing parties to contract out of the arbitration appeals process).

(214.) See BORN, supra note 5, at 2638-55, 2865-70 (discussing widespread limitations on judicial review of arbitral awards under national and international law).

(215.) See New York Convention, supra note 143, art. V (enumerating the situations in which a court may decline to enforce an international arbitration award).

(216.) See UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION, U.N. Comm'n on Int'l Trade Law, 18th Sess., Annex I, U.N. Doc. A/40/17 (June 21, 1985), revised by Rep. of the U.N. Comm'n on Int'l Trade Law, 39th Sess., June 17-July 7, 2006, Annex I, art. 34, U.N. Doc. A/61/17, U.N. GAOR, 61st Sess., Supp. No. 17 (2006) [hereinafter MODEL ARBITRATION LAW] (enumerating the situations in which a court may refuse to enforce a domestic arbitral award); BORN, supra note 5, at 2562-64, 2865-69 (discussing the narrowly construed, specifically enumerated grounds for annulling an arbitral award under the Model Arbitration Law and the New York Convention).

(217.) See 9 U.S.C. [section][section] 1-307 (2006); see also BORN, supra note 5, at 2639-46 (noting FAA's silence regarding review on a question of law). Very few U.S. state statutes address this issue, either. See LARRY E. EDMONSON, DOMKE ON COMMERCIAL ARBITRATION [section][section] 39:13, 39:16 (2011) (discussing U.S. state law regarding vacatur of an arbitral award).

(218.) See BORN, supra note 5, at 64-65 (noting that a key benefit of international arbitration is the ability to obtain a final decision from the arbitral panel).

(219.) See Telenor Mobile Commc'ns AS v. Storm LLC, 584 F.3d 396, 407 (2d Cir. 2009) (discussing the contours of the doctrine of "manifest disregard" in U.S. arbitration law); BORN, supra note 5, at 2639-46 (explaining the doctrine of manifest disregard and the uncertainty surrounding its continued validity).

(220.) See Stolt-Nielsen S.A.v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758, 1768 n.3 (2010) (explicitly refusing to rule on whether the manifest disregard standard remains valid); Hall St. Assocs., L.L.C.v. Mattel, Inc., 552 U.S. 576, 590 (2008) (indicating that the grounds for vacatur enumerated in the FAA constitute the only means of vacating an arbitral award under federal law).

(221.) See BORN, supra note 5, at 2639-46 (discussing the case law concerning manifest disregard and noting the standard is extremely high).

(222.) While parties in England must specifically contract out of that right, the principle remains the same. See Arbitration Act 1996, c. 23, [section] 69 (Eng.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents (providing that parties can seek judicial review of arbitral awards on questions of law unless the arbitration agreement indicates otherwise).

(223.) See BORN, supra note 5, at 2638-55 (explaining the scope of judicial review in arbitration).

(224.) See 9 U.S.C. [section] 10 (2006) (detailing when an arbitral award may be vacated); Arbitration Act 1996, c. 23, [section][section] 67 68 (describing the grounds for judicial review of arbitral awards); New York Convention, supra note 143, art. V (detailing the circumstances in which a court may refuse to enforce an arbitral award); BORN, supra note 5, at 2649-55, 2865-70 (discussing the scope of judicial review of arbitral awards).

(225.) See Fox, supra note 37, at 25 (discussing the modern policy of allowing courts to review arbitration and trust administration decisions to ensure that the arbitrators and trustees acted in good faith, regardless of the content of the documents empowering the arbitrators and trustees).

(226.) See id. at 24 (explaining that trustees must be accountable to an outside party to ensure that trustees do not use trust assets for their own benefit).

(227.) See Langbein, supra note 195, at 1126-27 (explaining that the main purpose of trust law is to ensure that the settlor's wishes are clearly expressed so that they may be properly carried out, almost regardless of what those wishes might be).

(228.) See supra notes 223-24 and accompanying text (discussing scope of judicial review of arbitral awards).

(229.) Lloyd & Pratt, supra note 113, at 18.

(230.) Langbein, Contractarian, supra note 1, at 662 (footnotes omitted).

(231.) Estate of Proceeding for the Appointment of a Guardian for Charlotte Radcliffe, N.Y.L.J., July 20, 2007, at 36 (Sur. Ct. N.Y. Cnty. July 13, 2007).

(232.) See Radian Ins., Inc. v. Deutsche Bank Nat'l Trust Co., 638 F. Supp. 2d 443, 458 (E.D. Pa. 2009) (involving a commercial trust with a split-jurisdiction clause).

(233.) Not all jurisdictions require continuing supervision from the courts, although some do. See UNIF. STATUTORY TRUST ENTITY ACT [section] 201(b), cmt. (2009), available at http://www.law.upenn.edu/bll/archives/ulc/ubta/2009final.htm ("Contrary to the trust statutes in some States, the Uniform Trust Code does not create a system of routine or mandatory court supervision.").

(234.) See id. [section] 201(b) (stating that "[a] trust is not subject to continuing judicial supervision unless ordered by the court").

(235.) See UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 56.1, 87.2-87.6 (noting that trustees may be ordered by the court to provide the amount and status of trust property at the beneficiary's request). Duties of accounting exist with respect to commercial as well as other types of trusts. See id. [paragraph] 56.65 (noting scope of duty to account).

(236.) See Rebecca Golbert, The Global Dimension of the Current Economic Crisis and the Benefits of Alternative Dispute Resolution, 11 NEV. L.J. 502, 517-18 (2011) (noting that dispute resolution boards are widespread in the construction field).

(237.) See Standard ICC Dispute Boards Clauses, INT'L CHAMBER OF COMMERCE, http://www.iccwbo.org/Products-and-Services/Arbitration-and-ADR/DisputeBoards/Standard-ICC-Dispute-Boards-Clauses/(last visited Oct. 6, 2012) (offering clauses for both binding and nonbinding decisions).

(238.) See Langbein, Contractarian, supra note 1, at 631, 654 (stating that "[m]ost trusts are well understood as relational contracts" that "contemplate[] long duration").

(239.) See Michael A. Marra, The Construction Industry Guide to Dispute Avoidance and Resolution, 567 PLI/REAL 525, 541-42 (2009) (noting neutrality of dispute resolution board members and outlining selection process); see also supra notes 199-204 and accompanying text (discussing trustee accountability in arbitration).

(240.) See BORN, supra note 5, at 247 (stating that arbitrators resolve actual, not hypothetical, disputes).

(241.) See Arbitration Act 1996, c. 23, [section] 45 (Eng.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents (noting scope of judicial power to address a preliminary point of law).

(242.) See BORN, supra note 5, at 2478-79 (noting that arbitrators have broad remedial powers).

(243.) If the parties contemplate a series of related disputes over the lifetime of the trust, it may be beneficial to consider whether and to what extent a later tribunal can consider arguments or facts presented in the first arbitration, lest problems arise with respect to confidentiality and the preclusive value of that earlier proceeding or any combination thereof. See infra notes 249-56 and accompanying text (discussing ability of an arbitrator to resolve discrete matters in ongoing arbitration).

(244.) Partial final awards are permitted as a matter of arbitration law and are subject to immediate enforcement. See Arbitration Act 1996, c. 23, [section] 47(2)(b) (stating the tribunal may make an award as to part of the claims submitted to it for decision); BORN, supra note 5, at 2430-33 (distinguishing partial final awards from other types of interim or interlocutory awards).

(245.) See BORN, supra note 5, at 1946-61 (describing the modern trend confirming the power of arbitrators to issue provisional relief); see also Arbitration Act 1996, c. 23, [section] 39 (noting the arbitral tribunal's power to order relief on a provisional basis).

(246.) See BORN, supra note 5, at 1972-73, 2050 ("[A] request for provisional measures ... may properly be directed to a national court, as well as to an arbitral tribunal.").

(247.) See id. (noting that many institutional rules allow applications for provisional relief from national courts prior to the formation of the arbitral tribunal and in "appropriate circumstances" or "exceptional cases").

(248.) The arbitral community has recently developed a variety of procedures by which parties can obtain expedited arbitral relief on matters that must be addressed prior to the constitution of the full tribunal, thus offering additional alternatives to parties seeking immediate provisional relief. See id. at 1971-72 (discussing the procedures for obtaining urgent provisional relief adopted by the ICC, the Netherlands Arbitration Institute, and the London Court of International Arbitration).

(249.) See Roehl v. Ritchie, 54 Cal. Rptr. 3d 185, 190 (Ct. App. 2007) (noting scope of arbitrator's duties), declined to extend by Diaz v. Bukey, 125 Cal. Rptr. 3d 610 (Cal. Ct. App. 2011), rev. granted, 257 P.3d 1129 (Cal. 2011); see also Zisman v. Lesner, No. 6:08cv1448Or131DAB, 2008 WL 4459029, *3-4 (M.D. Fla. Sept. 29, 2008) (involving a request for accounting); In re Blumenkrantz, 824 N.Y.S.2d 884, 887-88 (Sur. Ct. Nassau Cnty. 2006) (same).

(250.) See Roehl, 54 Cal. Rptr. 3d at 190-98 (discussing series of arbitral awards).

(251.) See id. (noting that arbitration awards may contemplate future proceedings).

(252.) Id. at 194 (emphasis omitted) (citation omitted).

(253.) Id. at 195; see also Arbitration Act 1996, c. 23, [section] 48 (Eng.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents (noting tribunal's power to create remedies).

(254.) Fox, supra note 37, at 26.

(255.) See ACTEC, supra note 13, at 15 (discussing constitutional issues in arbitration).

(256.) See supra notes 223-24 and accompanying text (discussing scope of judicial review of arbitral awards).

(257.) Cohen & Staff, supra note 13, at 209.

(258.) Id.

(259.) See BORN, supra note 5, at 852-83 (discussing doctrine of competence-competence).

(260.) See Thomas J. Stipanowich, Arbitration and the Multiparty Dispute: The Search for Workable Solutions, 72 IOWA L. REV. 473, 476 (1987) (discussing the consensual nature of arbitration).

(261.) See BORN, supra note 5, at 640-42 (noting contractual elements of arbitration). This approach is not universal. Some states, such as Spain, have been said to have "abandon[ed] the traditional strictly contractual or bilateral approach of the arbitration." Bosques-Hernandez, supra note 17, at 10; see also Koch, supra note 33, at 196 (noting extent of adherence to contractual notion of arbitration).

(262.) See BORN, supra note 5, at 661-64 (discussing contractual elements of arbitration). Interestingly, the analysis could turn on whether the arbitration statute in question requires an "arbitration contract" or an "arbitration agreement," which ostensibly encompasses a broader range of relationships. See Rachal v. Reitz, 347 S.W.3d 305, 313-14 (Tex. App. 2011) (Murphy, J., dissenting) (describing the differences between an "agreement" and a "contract"), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012).

(263.) Oral trusts are permitted in some cases, but are increasingly rare. See UNDERHILL AND HAYTON, supra note 9, [paragraph] 12.1 (noting that an oral declaration is sufficient to create a trust in certain situations).

(264.) Schoneberger v. Oelze, 96 P.3d 1078, 1083 (Ariz. Ct. App. 2004), superseded by statute, ARIZ. REV. STAT. ANN. [section] 14-10205 (2012), as recognized in Jones v. Fink, No. 1 CA-SA 10-0262, 2011 WL 601598 (Ariz. Ct. App. Feb. 22, 2011).

(265.) See Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 612-13 (Ct. App. 2011) (holding a trust was not a contract and therefore could not give rise to an enforceable arbitration agreement), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal, 347 S.W.3d at 309 (Tex. App. 2011) (holding that proof of agreement to arbitrate was insufficient due to lack of a signature and that consideration is a fundamental element of every valid contract);.

(266.) The trustee then can be required to sign the document in question. See Strong, Enforceability, supra note 33 (manuscript at 19) (describing how to draft an enforceable arbitration provision in a trust). One U.S. case involves the situation where the trustee--who was also a beneficiary--signed a deed of trust that included an arbitration provision. See Lo v. Aetna Int'l Inc., No. 3:99CV195, 2000 WL 565465, *1-2 (D. Conn. Mar. 29, 2000) (holding Lo could not be bound to the arbitration agreement in her capacity as as a beneficiary). However, the case was governed by Hong Kong law, and no Hong Kong authority was submitted suggesting "that by signing in her capacity as Trustee, [Lo] legally bound her and all other beneficiaries to arbitration. In the absence of any legal authority, the Court decline[d] to conclude that Ms. Lo's signature as Trustee reflected her agreement to arbitrate this dispute" as beneficiary. Id. at *4.

(267.) See UNDERHILL AND HAYTON, supra note 9, [paragraph] 54.1 (describing instances in which a trustee may charge for his or her time); Langbein, Contractarian, supra note 1, at 639 (discussing the historical need for legislation to ensure trustee compensation).

(268.) See ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink) (declaring that trustees shall be deemed to have agreed to provisions of an arbitration clause by accepting to act under the trust); UNDERHILL AND HAYTON, supra note 9, [paragraph] 11.83; Cohen & Staff, supra note 13, at 218 (noting that accepting the office of trustee leads to certain corresponding rights and burdens); Wustemann, supra note 1, at 44 (noting that if an arbitration agreement in a trust states that, by accepting office, the trustees and protectors are deemed to have agreed to an arbitration agreement, the agreement will likely cover any future trustees or protectors).

(269.) See New S. Fed. Say. Bank v. Anding, 414 F. Supp. 2d 636, 643 (S.D. Miss. 2006) (noting that "[m]utuality of obligations is not required for a contract to be enforceable under Mississippi law. Accordingly, this court is not persuaded that the agreement to arbitrate contained in the Deed of Trust is deficient"); Horton, supra note 2, at 1050 (suggesting that the U.S. Supreme Court has described the FAA "as facilitating goals that do not require an arbitration clause to be moored within a 'contract' or to be a 'contract' itself').

(270.) Wustemann, supra note 1, at 45. This approach has been embraced by the ICC. See ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink) ("As a condition for ... receiving any benefit ... under the trust, any person ... shall be deemed to have agreed to settle all disputes arising out of or in connection with the trust in accordance with this arbitration clause.").

(271.) Buckle & Olsen, supra note 8, at 655-56; see also David Hayton, Future Trends in International Trust Planning, 13 JORDANS J. INT'L TR. & CORP. PLAN. 55, 72 (2006) (explaining how deemed acquiescence allows unborn or unascertained beneficiaries to enter an agreement). This approach relies in part on language found in the Arbitration Act 1996 stating that an arbitration agreement binds any person claiming "through or under" a party to the agreement. Arbitration Act 1996, c. 23, [section] 58(1), available at http://www.legislation.gov.uk/ukpga/1996/23/contents; see also id. [section] 82(2) (defining a party to an arbitration agreement as including "any person claiming under or through a party to the agreement"); Lawrence Cohen & Joanna Poole, Trust Arbitration--Is It Desirable and Does It Work? 18 TR. & TRUSTEES 324, 328 (2012) (arguing that [section] 82(2) of the Arbitration Act 1996 includes a beneficiary of a trust). Thus it has been said that:
   A trust beneficiary may only claim under or through the settlor,
   who is himself party to and bound by the arbitration clause. As the
   beneficiary can have no better title to the trust property than the
   settlor, he must be equally bound by the arbitration clause and
   taken to have acquiesced to the arbitration agreement.


Hwang, supra note 1, at 84.

(272.) Buckle & Olsen, supra note 8, at 655-56.

(273.) Am. Cancer Soc'y, St. Louis Div. v. Hammerstein, 631 S.W.2d 858, 864 (Mo. Ct. App. 1981) (noting "a beneficiary takes only by benevolence of the testator, who may attach lawful conditions to the receipt of the gift"); Tennant v. Satterfield, 216 S.E.2d 229, 232 (W. Va. 1975) (stating the general rule that a beneficiary who accepts benefits under a will is bound to adopt the whole content of the will).

(274.) Spitko, supra note 17, at 300.

(275.) See id. (discussing derivative or contingent rights).

(276.) See Wustemann, supra note 1, at 45-46 (noting that under Swiss law, a beneficiary may be required to accept benefits subject to certain conditions, such as an arbitration provision).

(277.) See Horton, supra note 2, at 1073-74 (noting that the scope of an arbitration provision is limited to parties who have agreed (or can be deemed to have agreed) to be bound by its terms).

(278.) See infra notes 329-78 and accompanying text.

(279.) BORN, supra note 5, at 1137; see also Thomson-CSF, S.A.v. Am. Arbitration Ass'n, 64 F.3d 773, 776 (2d Cir. 1995) ("[W]e have recognized five theories for binding nonsignatories to arbitration agreements: 1) incorporation by reference; 2) assumption; 3) agency; 4) veil-piercing/alter ego; and 5) estoppel.").

(280.) Compare Zisman v. Lesner, No. 6:08-cv-1448-Orl-31DAB, 2008 WL 4459029, at *3-4 (M.D. Fla. Sept. 29, 2008) (discussing exceptions allowing nonsignatories to compel arbitration), with Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 613 (Ct. App. 2011) (holding an arbitration provision in a trust was unenforceable because beneficiaries did not consent to its terms), rev. granted, 257 P.3d 1129 (Cal. 2011).

(281.) BORN, supra note 5, at 581.

(282.) New York Convention, supra note 143, art. II(1).

(283.) Id. art. II(2).

(284.) See id. (defining the term agreement in writing to include an arbitral clause and an arbitration agreement).

(285.) See supra notes 92-110, 260-69 and accompanying text.

(286.) See U.N. Comm. on Int'l Trade Law, Settlement of Commercial Disputes: Preparation of Uniform Provisions on Written Form for Arbitration Agreements, [paragraph][paragraph] 11-14, U.N. Doc. A/CN.9/WG.II/WP.139 (Dec. 14, 2005) [hereinafter UNCITRAL Note] (noting differing levels of adherence to the New York Convention's form requirements); S.I. Strong, What Constitutes an "Agreement in Writing" in International Commercial Arbitration? Conflicts Between the New York Convention and the Federal Arbitration Act, 48 SWAN. J. INT'L L. 47, 72-74 (2012) (discussing signature requirement under domestic and international law). One U.S. court has decided that a trust does not fall under the New York Convention because of problems relating to the absence of signatures. See Lo v. Aetna Int'l Inc., No. 3:99CV195 JBA, 2000 WL 565465, at *4 (D. Conn. Mar. 29, 2000) (holding a party who had signed a trust including an arbitration agreement in her capacity as a trustee could not be held to have agreed to arbitrate in her capacity as beneficiary).

(287.) See New York Convention, supra note 143, art. II.

(288.) U.N. Secretary-General, Settlement of Commercial Disputes: Possible Uniform Rules on Certain Issues Concerning Settlement of Commercial Disputes: Conciliation, Interim Measures of Protection, Written Form for Arbitration Agreement, [paragraph] 7, U.N. Doc. A/CN.9/WG.II/WP.108/Add.1 (Jan. 26, 2000) [hereinafter UN SG Report]; see also UNCITRAL Note, supra note 286, [paragraph] 17 (highlighting diverse national approaches to form requirement).

(289.) UN SG Report, supra note 288, at [paragraph] 7; see also Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 614-15 (Ct. App. 2011) (holding a trust was not a contract and therefore the arbitration provision contained in the trust was unenforceable), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal v. Reitz, 347 S.W.3d 305, 310 (Tex. App. 2011) (describing the distinctions between a trust and a contract under Texas law), rev. granted, 2012 Tex. LEXIS 487 (Tex. June 8, 2012).

(290.) See UNCITRAL, Rep. on its 39th Sess., June 19-July 7, 2006, Annex II, U.N. Doc. A/6/17 [hereinafter UNCITRAL Recommendation].

(291.) Id. [paragraph] 1; see also New York Convention, supra note 143, art. II(2) (defining an "agreement in writing").

(292.) New York Convention, supra note 143, art. II(2) (defining an "an agreement in writing").

(293.) See infra notes 305-20 and accompanying text.

(294.) However, early reports suggest that the UNICTRAL Recommendation has been well-received in a number of countries. See Strong, supra note 286, at 78-79 ("The UNCITRAL Recommendation has been well-received by a variety of countries, either resulting in affirmative reforms or the reinforcement of existing approaches to article II(2).").

(295.) Vienna Convention on the Law of Treaties, art. 31(3)(a), adopted and opened for signature May 23, 1969, 1155 U.N.T.S. 331 (discussing the relevance of "any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions"); see also Medellin v. Texas, 552 U.S. 491, 507 (2008); UNCITRAL Recommendation, supra note 290 (recommending proper means of interpreting the New York Convention's writing requirement).

(296.) Of course, the arbitration would have to take place in a New York Convention contracting state for the Convention to apply, but with 147 state parties, that is very likely. See New York Convention, supra note 143, art. I(1), II(1) (designating the scope of application of arbitration agreements under the Convention); New York Convention Status, supra note 143 (listing states that have ratified or acceded to the New York Convention).

(297.) See New York Convention, supra note 143, art. I(1), II(1) (noting points at which the "agreement in writing" definition applies).

(298.) Id. art. II(1); see also UNCITRAL Recommendation, supra note 290 ("[I]n interpreting the Convention, regard is to be had to the need to promote recognition and enforcement of arbitral awards....").

(299.) New York Convention, supra note 143, art. II(2); UNCITRAL Recommendation, supra note 290.

(300.) See UNCITRAL Note, supra note 286.

(301.) See id. [paragrapn][paragraph] 16-21.

(302.) See New York Convention, supra note 143, art. II (describing form requirements under the New York Convention); UNCITRAL Recommendation, supra note 290 (recommending that the form requirements of the New York Convention be considered "not exhaustive").

(303.) See Zisman v. Lesner, No. 6:08-cv-1448-Orl-31DAB, 2008 WL 4459029, at *3-4 (M.D. Fla. Sept. 29, 2008) (discussing nonsignatories' use of equitable estoppel as a means of compelling arbitration under a trust).

(304.) Decker v. Bookstaver, No. 4:09-CV-1361, 2010 WL 2132284, at *3-4 (E.D. Mo. May 26, 2010) (compelling arbitration of a trust dispute based on an arbitration provision found in a side agreement).

(305.) See generally MODEL ARBITRATION LAW, supra note 216.

(306.) See G.A. Res. 61/33, U.N. GAOR, 61st Sess., Supp. No. 17, U.N. Doc. A/61/453 (Dec. 18, 2006) (noting that the similarities between the revised Model Arbitration Law and the UNCITRAL Recommendation help promote uniformity in international commercial arbitration).

(307.) See UNCITRAL Note, supra note 286, [paragrapn][paragraph] 8-9, 35-37 (discussing the objectives of the New York Convention and Article 7 of the Model Arbitration Law).

(308.) See New York Convention, supra note 143, art. II(2) (defining an "agreement in writing"); UNCITRAL Note, supra note 186, [paragrapn] 8 (discussing efforts made by the Working Group to reconcile the provisions of the Model Arbitration Law and the New York Convention); MODEL ARBITRATION LAW, supra note 216, art. 7 (defining "arbitration agreement").

(309.) See MODEL ARBITRATION LAW, supra note 216, art. 7 (defining "arbitration agreement").

(310.) See UNCITRAL Note, supra note 286, [paragrapn][paragraph] 11-12 ("By requiring either a signature or an exchange of documents, the form requirement ensures that the parties' assent to arbitration is expressly recorded."); MODEL ARBITRATION LAW, supra note 216, art. 7 (defining "arbitration agreement"); Meijer & Guzman, supra note 39, at 143-45 (describing the effect of the two versions of the Model Arbitration Law on the writing requirement).

(311.) See supra notes 260-65 and accompanying text.

(312.) MODEL ARBITRATION LAW, supra note 216, art. 7, option II.

(313.) The Model Arbitration Law has been adopted, in whole or in part, by sixty-six countries, not including a number of territories and dependencies. See Status: 1985--UNCITRAL Model Law on International Commercial Arbitration, with Amendments as Adopted in 2006, UNCITRAL, http://www.uncitral.org/uncitral/en/ uncitral_texts/arbitration/1985Model_arbitration_status.html. (last visited Oct. 17, 2012). Seventeen of the sixty-six countries have adopted the 2006 version of the Model Arbitration Law. See id.

(314.) See id. (referring to the 1985 version of the Model Arbitration Law). One U.S. state, Florida, has adopted the 2006 version of the Model Arbitration Law. See id.

(315.) See MODEL ARBITRATION LAW, supra note 216, art. 35 (discussing the scope of the "recognition and enforcement" of the Model Arbitration Law).

(316.) See New York Convention, supra note 143, art. VII(l) ("The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States...."). In fact, the second paragraph of the UNCITRAL Recommendation reinforces the importance of this provision, stating that UNCITRAL
   [r]ecommends also that article VII, paragraph 1, of the [New York
   Convention] should be applied to allow any interested party to
   avail itself of rights it may have, under the law or treaties of
   the country where an arbitration agreement is sought to be relied
   upon, to seek recognition of the validity of such an arbitration
   agreement.


UNCITRAL Recommendation, supra note 290.

(317.) See UNCITRAL Note, supra note 286, [paragrapn][paragraph] 24-36 (discussing national laws regarding form requirements).

(318.) See New York Convention, supra note 143, art. VII(l) (allowing parties to rely on national law to enforce an arbitration agreement or award); MODEL ARBITRATION LAW, supra note 216, art. 7 (defining arbitration agreements).

(319.) See SCHWARZ & KONRAD, supra note 110 (describing form requirements under Austrian law); Duve, supra note 110, at 1002 (describing form requirements under German law). See generally UNCITRAL Recommendation, supra note 290; MODEL ARBITRATION LAW, supra note 216.

(320.) Hwang, supra note 1, at 84; see also Meijer & Guzman, supra note 14, at 125 (discussing choice of law concerns relating to validity of arbitration agreements). It is also wise to consider the law of the state where enforcement of the award will likely take place. See Martin Platte, An Arbitrator's Duty to Render Enforceable Awards, 20 J. INT'L ARB. 307, 313 (2003) ("If and when the parties draw the tribunal's attention to a specific jurisdiction as a likely place of enforcement, the tribunal should consider the law of this place as well.").

(321.) See Cohen & Staff, supra note 13, at 209 (listing requirements for courts to consider in deciding if an arbitration provision in a trust is enforceable).

(322.) See Horton, supra note 2, at 1040, 1060 (discussing questions relating to settlor competence); Katzen, supra note 14, at 123 ("[W]hen the consent of the donor is uncertain, as is typically the case in will contests, the validity of the will or trust document becomes an issue.").

(323.) See Horton, supra note 2, at 1063-64 (comparing a trust with an arbitration clause with a gift that can either be given up entirely or accepted with "strings attached").

(324.) See id. at 1074-75 (stating that a person should not be able to bring a claim under a trust while simultaneously attempting to invalidate its arbitration clause).

(325.) Spitko, supra note 17, at 303; see also Katzen, supra note 14, at 123-24 ("Courts dealing with this issue in the context of contracts have presumed the validity and enforceability of an arbitration clause, despite challenges to the contract in its entirety, unless the arbitration clause is specifically contested.").

(326.) See Katzen, supra note 14, at 123-24 (claiming that "courts often void entire testamentary instruments, or, at a minimum, the dispositive sections" when it is too difficult to separate clauses that were created through improper means from those that were not).

(327.) Flores v. Transamerica HomeFirst, Inc., 113 Cal. Rptr. 2d 376, 385 (Ct. App. 2001).

(328.) See id. ("We do not believe justice would be served by an effort to save the arbitration agreement by removing post hoc offending provisions...."). Notably, the precedential value of this decision is somewhat dubious, since the dispute involved a loan secured by a deed of trust on real property, an arrangement which some jurisdictions consider to be akin to a mortgage. See AMY MORRIS HESS ET AL., THE LAW OF TRUSTS AND TRUSTEES: A TREATISE COVERING THE LAW RELATING TO TRUSTS AND ALLIED SUBJECTS AFFECTING TRUST CREATION AND ADMINISTRATION: WITH FORMS [section] 29 (3d ed. 2007). However, it has been said that "[m]ost of the rules that apply to ordinary trusts also apply to deeds of trust." Id.

(329.) See LEW ET AL., supra note 119, [paragraph][paragraph] 6-9 to -22, 9-68 to -74 ("Separability protects the integrity of the agreement to arbitrate and plays an important role in ensuring that the parties' intention to submit disputes is not easily defeated.").

(330.) See id. [paragraph] 6-9 ("The essence of the doctrine is that the validity of an arbitration clause is not bound to that of the main contract and vice versa.").

(331.) See id. [paragraph][paragraph] 6-9 to -22.

(332.) See BORN, supra note 5, at 322-43, 359-91 (discussing international adherence to the doctrine of separability).

(333.) One way in which the United States differs from other countries is in the way it intermingles the analysis of separability and jurisdictional competence. See id. (discussing the difference between "issues of substantive validity" of the arbitration agreement and "issues of competence-competence," and the allocation of jurisdictional authority between arbitrators and U.S. courts.).

(334.) 388 U.S. 395 (1967).

(335.) 546 U.S. 440 (2006).

(336.) BORN, supra note 5, at 363.

(337.) Id.; see also Buckeye Check Cashing, 546 U.S. at 440 (holding that an arbitrator may decide the overall illegality of a contract containing an arbitration clause).

(338.) Buckeye Check Cashing, 546 U.S. at 449. This holding applies "regardless of whether the challenge is brought in state or federal court." Id.

(339.) BORN, supra note 5, at 365.

(340.) Id. at 367-69.

(341.) See id. at 365-69 (discussing procedural aspects of arbitrability determination).

(342.) See id. (discussing jurisdictional competence).

(343.) See id. (explaining that challenges to validity of a contract as a whole must be heard by an arbitrator when there is an arbitration clause).

(344.) See id. at 370-71 (discussing Buckeye Check Cashing).

(345.) Id. at 372.

(346.) See id. at 372-73 (discussing jurisdictional issues).

(347.) See id. at 374, 379-80 (considering pros and cons of having a court decide the issue, as opposed to the arbitral tribunal).

(348.) See id. at 378-80 (discussing problems associated with the lack of a predictable approach).

(349.) See Horton, supra note 2, at 1082-86 (considering separability issues in the context of trust arbitration).

(350.) The arbitration provision in question was in an external agreement rather than the trust itself, but the decision is instructive as to how capacity issues may be addressed in internal disputes. See Spahr v. Secco, 330 F.3d 1266, 1268-69 (10th Cir. 2003).

(351.) Id. at 1273 (citations omitted).

(352.) Id.

(353.) See Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (2006) (considering the parameters of the separability analysis); Spahr, 330 F.3d at 1273.

(354.) See Spahr, 330 F.3d at 1273 (holding that the court, not the arbitrator, has the authority to determine the capacity of the settlor).

(355.) Challenges to the validity of the arbitration agreement based on mistake and fraud would appear to fall into the category of challenges that could be heard by the arbitrator in the first instance. See BORN, supra note 5, at 365-69 (noting a large body of U.S. decisions requiring arbitration of challenges involving "fraudulent inducement, fraud, lack of consideration, illegality, adhesion or unconscionability, the failure of a condition precedent, mistake and expiration or termination" (footnotes omitted)).

(356.) See Regions Bank v. Britt, No. 4:09CV61TSL-LRA, 2009 WL 3766490, at *2 & n.2 (S.D. Miss. Nov. 10, 2009). In this case, a husband argued that an arbitration agreement found in a deed of trust signed by his wife was invalid because it encumbered marital property without his consent. Id. While some distinctions could be drawn on the grounds that the dispute involved a deed of trust on real property, an arrangement which some jurisdictions consider to be akin to mortgages, commentators have indicated that "[m]ost of the rules that apply to ordinary trusts also apply to deeds of trust." HESS ET AL., supra note 328, [section] 29.

(357.) Regions Bank, 2009 WL 3766490, at *2 & n.2.

(358.) See id. at *2 n.2 (discussing Prima Paint). A Michigan state court also recently concluded in the context of a will dispute that parties may "conduct[ ] binding common-law arbitration of probate disputes, including the question of testamentary capacity." In re Nestorovski Estate, 769 N.W.2d 720, 732 (Mich. Ct. App. 2009). While this Article focuses on arbitration of trust disputes rather than arbitration of wills, some courts may approach the two types of disputes in a similar manner. See id. at 723-32 (considering precedents involving both trusts and wills); see also In re Calomiris, 894 A.2d 408, 409-10 (D.C. 2006) (considering authority discussing both trusts and wills).

(359.) See Regions Bank, 2009 WL 3766490, at *2 n. 2 (discussing arbitrability issues).

(360.) See 421 F. Supp. 2d 654, 674-83 (S.D.N.Y. 2005) (examining preclusive effect of Liechtenstein arbitral judgment). At the time of the decision, Liechtenstein was not a state party to the New York Convention, although that has since changed. See id. at 674-75; New York Convention Status, supra note 143.

(361.) See Weizmann, 421 F. Supp. 2d at 665 (discussing circumstances underlying arbitration).

(362.) See id. at 664, 667-68 (discussing charter).

(363.) See id. at 676-83 (holding that the issue of the settlor's mental capacity was barred from relitigation because it was already decided by the arbitral tribunal).

(364.) See id. (holding parties were collaterally estopped from relitigating arbitrators' decision regarding the settlor's mental capacity); see also Spahr v. Secco, 330 F.3d 1266, 1273 (10th Cir. 2003) (holding that the court, not the arbitrator, had authority to determine mental capacity of the settlor).

(365.) Arbitration Act 1996, c. 23, [section] 7 (Eng.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents (outlining English approach to separability); see also id. [section] 5.

(366.) See HARRIS ET AL., supra note 211, at 56-58 (discussing contractual elements of arbitration under the Arbitration Act 1996).

(367.) See History--The Supreme Court, THE SUPREME COURT, http://www.supremecourt.gov.uk/about/history.html (last visited Sept. 30, 2012) (explaining that the Supreme Court replaced the House of Lords as the highest court in the United Kingdom on Oct. 1, 2009).

(368.) Premium Nafta Prods. Ltd. v. Fili Shipping Co., [2007] UKHL 40, [13] (Lord Hoffman), on appeal from Fiona Trust & Holding Corp. v. Privalov, [2007] EWCA Civ 20, [2007] 1 All E.R. (Comm.) 891.

(369.) Id. at [26] (Lord Hope of Craighead).

(370.) See BORN, supra note 5, at 380-84 (discussing evolution of the English view of separability).

(371.) See Law Debenture Trust Corp. v. Elektrim Fin. B.V., [2005] EWHC 1412, [2]-[3], [39]-[47] (Ch) (analyzing business trust deed in light of commercial principles to hold that trust provided for arbitration of disputes even though one party was allowed to opt for litigation).

(372.) See Premium Nafta, [2007] UKHL [14] (noting similarities between English and German approaches to separability).

(373.) See Weizmann Inst. of Sci. v. Neschis, 421 F. Supp. 2d 654, 678-79 (S.D.N.Y. 2005) (upholding principle of separability).

(374.) Although internal trust disputes may be bilateral, they often involve more than two parties. See supra notes 17, 127-29, 139 and accompanying text (discussing multiparty issues).

(375.) See BORN, supra note 5, at 351 (discussing separability in bilateral and multilateral contexts).

(376.) See supra notes 69-70 and accompanying text.

(377.) See Langbein, Contractarian, supra note 1, at 630-31 (stating that "[t]he flexibility of the trust ... has encouraged transaction planners to use the trust in a wide variety of commercial settings" and that "the contractarian character of the trust is transparent" in such situations).

(378.) See supra notes 368-69 and accompanying text.

(379.) See, e.g., Wustemann, supra note 1, at 36 (discussing whether arbitration provisions in trusts can bind beneficiaries without their consent).

(380.) See Cohen & Staff, supra note 13, at 209 (listing factors relevant to whether an arbitration provision in a trust will be considered enforceable).

(381.) See Wustemann, supra note 1, at 44 (stating that "[t]rustees and protectors assume their responsibilities," including those relating to arbitration, "under the terms of the trust deed").

(382.) See id. at 45-46 (stating that invoking rights or receiving benefits of the trust could serve as an agreement to abide by the arbitration agreement).

(383.) See Strong, supra note 128, at 219-20 (discussing means of bringing nonsignatories into an arbitration).

(384.) See Buckle & Olsen, supra note 3, at 655-56.

(385.) See Strong, Enforceability, supra note 33 (manuscript at 25-26) (stating how settlors can bolster the effectiveness of conditional transfers).

(386.) See Jonathan G. Blattmachr, Reducing Estate and Trust Litigation Through Disclosure, In Terrorem Clauses, Mediation and Arbitration, 9 CARDOZO J. CONFLICT RESOL. 237, 245-47, 259-61 (2008) (discussing the use of in terrorem clauses to prevent disputes among heirs); Katzen, supra note 14, at 125-27 (explaining how in terrorem or no contest clauses can be used to encourage arbitration of disputes among beneficiaries); Wustemann, supra note 1, at 46-47 (stating that trustees may be given the power through forfeiture or in terrorem clauses to exclude beneficiaries who refuse to submit to arbitration).

(387.) See Blattmachr, supra note 386, at 259-61 (explaining that use of a mandatory arbitration clause could result in an interested party forfeiting any benefits under the trust if the party neglected or refused to engage in arbitration).

(388.) See id. at 245-48, 259-61 (identifying various problems with in terrorem clauses); Katzen, supra note 14, at 125-27 (stating that no contest clauses do not bind parties when consent to arbitration is an issue).

(389.) See UNIF. PROBATE CODE [section][section] 2-517, 3-905 (2006), available at http://www.law.upenn.edu/b11/archives/ulc/upc/final2005.htm (denying enforceability of no contest clauses if the challenger has probable cause); RESTATEMENT (THIRD) OF PROP.: WILLS & OTHER DONATIVE TRANSFERS [section] 8.5 (2003) (stating that no contest clauses are enforceable unless the challenger has probable cause).

(390.) Cohen & Staff, supra note 13, at 221.

(391.) See UNDERHILL AND HAYTON, supra note 9, [paragraph] 11.1 (stating that a trust is void under English law if created for the illegal purpose of "ousting the jurisdiction of the courts or operating in terrorem to induce the beneficiary not to apply to the courts" (footnote omitted)).

(392.) Spitko, supra note 17, at 298.

(393.) See UNDERHILL AND HAYTON, supra note 9, [paragraph] 11.1 (suggesting in terrorem provisions should be avoided).

(394.) Nevertheless, some actual or potential parties could decline to enter into the agreement, even with the incentive payment. 395. See supra notes 260-320 and accompanying text.

(396.) See Cohen & Staff, supra note 13, at 221 (noting in terrorem clauses could be seen to "vitiate the freedom of will required to contract").

(397.) See supra notes 175 77 and accompanying text.

(398.) Judicial application of deemed acquiescence and conditional transfer may be strengthened by language in the trust referring to those doctrines. See Strong, Enforceability, supra note 33 (providing draft language).

(399.) See Cohen & Staff, supra note 13, at 209 (identifying factors to be considered when determining whether an arbitration provision in a trust is enforceable).

(400.) See id. at 222 (discussing the procedural requirements of representation in an arbitration clause for incapacitated persons, minors, and persons who are unascertained or unborn).

(401.) See Strong, supra note 128, at 213-19 (discussing the nature of representative relief in arbitration). A new large-scale procedure known as mass arbitration has recently developed in the investment realm and uses more of an agency model than a representative model. See S.I. Strong, Mass Procedures as a Form of "Regulatory Arbitration"--Abaclat v. Argentine Republic and the International Investment Regime, 38 J. CORP. L. (forthcoming 2013) (discussing arbitration involving 60,000 claimants).

(402.) For example, trust disputes could grow to rival class suits with respect to size, particularly in cases involving commercial trusts. See Strong, supra note 128, at 212 (comparing the criteria for numerosity in class arbitration to the rules governing class actions).

(403.) This is not to say that a trust dispute could not result in a class claim, including possibly a class arbitration. For example, in Doctor's Associates, Inc. v. Hollingsworth, a number of Subway franchisees brought a class action in state court against various Subway franchising entities, including the trustees of the Subway Franchisee Advertising Fund Trust (SFAFT), alleging "various breaches of fiduciary duty and conspiracy claims relating to the alleged mismanagement and misappropriation of contributions to the SFAFT." Doctor's Assocs., Inc. v. Hollingsworth, 949 F. Supp. 77, 79 (D. Conn. 1996). The various franchise agreements included a provision requiring arbitration of "[a]ny controversy or claim arising out of or relating to this contract or the breach thereof." Id. Although the SFAFT did not have an arbitration provision itself, the court considered the claims against the SFAFT to have arisen out of or be related to the franchise agreement and concluded that the trust claims were arbitrable. See id. at 84-85. As a result, the dispute was ordered into arbitration. See id. at 86. The claims were most likely heard on a bilateral basis, since the dispute arose in 1996, prior to the expansion of class arbitration in the mid- to late 2000s. See Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 459-60 (2003) (plurality opinion) (remanding a class arbitration action to allow an arbitrator to determine if a contract silent on the issue of class arbitration allowed for such arbitration); Strong, supra note 128, at 205-11 (discussing the expansion of class arbitration as a result of Bazzle). Had the dispute arisen today, it might have been heard as a class arbitration. See id. at 269-70 (noting class arbitration has survived recent U.S. Supreme Court decisions); S.I. Strong, The Sounds of Silence: Are U.S. Arbitrators Creating Internationally Enforceable Awards When Ordering Class Arbitration in Cases of Contractual Silence or Ambiguity?, 30 MICH. J. INT'L L. 1017, 1055-83 (2009) (discussing how class arbitrations can arise even in cases where the contract is silent as to class treatment).

(404.) Janin, supra note 11, at 529.

(405.) See Strong, Procedures, supra note 33 (manuscript at 48-49) (discussing various means of providing notice in in rem-type arbitrations).

(406.) An example might be a trust for the benefit of "my grandchildren," not all of whom may be born at the time the trust is created. See Strong, Procedures, supra note 33 (manuscript at 50 n.208).

(407.) An example of the first type of provision might be a trust for the benefit of "any student in the town of Littleton who needs financial assistance to attend university." An example of the second type of provision might be a trust indicating disbursements to "any of my grandchildren, if they need financial assistance." See id. (manuscript at 51 n.211) (providing examples of trust provisions).

(408.) For example, a trust that requires disbursement "to those of my grandchildren who are alive ten years after my death" could not reliably name all such persons, since beneficiaries could enter the class (through birth) or depart from the class (through death) after the settlor has passed away but before the disbursement was made. There might also be grandchildren who are living at the time the trust is created but who may not be known to the settlor. See id. (manuscript at 50 n.208).

(409.) Many legislatures have limited a decedent's ability to pass on his or her estate. In some jurisdictions, these laws involve "forced heirs" and can include children and other relatives. See McGOVERN, supra note 20, at 30 (discussing forced heir statutes); Bosques-Hernandez, supra note 17, at 23 (discussing "forced heirship," which does not allow testators to deviate from statutory schemes regarding succession "as a matter of public policy"); Perrin, supra note 1, at 657-59 (discussing the ability of heirs to assert their "forced heirship" rights in inter vivos trusts and testamentary trusts); Wustemann, supra note 1, at 45-46 (comparing forced heirship under U.S. and Swiss law). In other countries, the primary concern is for the settlor or decedent's surviving spouse, who is entitled to what is often called an "elective share" of the settlor's estate if the amount passing under a will or broader testamentary scheme is insufficient. See McGOVERN, supra note 20, at 160-71 (comparing the policies and procedures for allocating assets of surviving spouses in different countries and states).

(410.) See Regions Bank v. Britt, No. 4:09CV61TSL-LRA, 2009 WL 3766490, at *2 n.2 (S.D. Miss. Nov. 10, 2009) (involving marital rights allegedly affected by a deed of trust).

(411.) For example, a trust provision benefitting "those of my grandchildren who are alive ten years after my death" will be known to affect all of the settlor's grandchildren who are alive ten years after the settlor's death. However, if a dispute involving the trust arises three years after the settlor's death, there may be some potential beneficiaries who are yet unborn or who are minors. Strong, Procedures, supra note 33 (manuscript at 50 n.208). Alternatively, a trust that provides a $500 cash award to the valedictorian of Littleton High School for the next twenty years will involve identifiable beneficiaries (since there will be one such person a year for the remainder of the term of the trust), even though future beneficiaries cannot be specifically ascertained at the time a particular dispute arises. See id. at 51 n.211 (providing examples of instances where unascertained persons were and were not able to benefit from a trust).

(412.) Buckle & Olsen, supra note 8, at 649-50 (quoting David Hayton, Major Trends in the Trust World: Part 2, 2 PCB 122, 125 (2007)).

(413.) See Hayton, supra note 271, at 71 (discussing how in England, representatives must not have any independent interests in the dispute and must be appointed and approved by the court).

(414.) See McGOVERN ET AL., supra note 20, at 613 14 (describing the concept of virtual representation).

(415.) See id. at 660-63 (describing the concept of guardianship).

(416.) Cohen & Staff, supra note 13, at 222-23.

(417.) Id. at 223.

(418.) Hayton, supra note 271, at 72.

(419.) See supra notes 154-73 and accompanying text.

(420.) Cohen & Staff, supra note 13, at 223.

(421.) See ACTEC, supra note 13, at 32, 37-38 (proposing legislative reform to address issues relating to incapacitated, unborn, and unascertained beneficiaries in arbitration); Bruyere & Marino, supra note 15, at 364-66 (discussing legislation proposed in Hawai'i concerning trust arbitration).

(422.) See Kroll, supra note 151, [paragraph] 16-9 (describing statutes enacted to protect parties with unequal bargaining power in the commercial agency context).

(423.) See New York Convention, supra note 143, art. V (discussing grounds upon which a foreign arbitral award may be refused recognition); BORN, supra note 5, at 2620-33, 2827-63 (noting grounds for objection to enforcement under the Model Arbitration Law and the New York Convention).

(424.) See supra notes 192-256 and accompanying text.

(425.) See Hayton, supra note 154, at 13-15 (discussing judicial role in protecting particularly vulnerable parties).

(426.) See BORN, supra note 5, at 2437-38 ("[T]he terms of most national laws and institutional rules leave the arbitrators with the choice whether or not to make a consent award.").

(427.) See Hayton, supra note 154, at 15 (discussing English courts' oversight capacity regarding voluntary compromises of probate disputes).

(428.) See id. ("In the United States ... virtual representatives bind the interests of those whom they represent without the need for any court approval."); Mautner & Orr, supra note 154, at 166 ("The extension of the doctrine of virtual representation to nonjudicial dispute resolution procedures has simplified the settlement process and made it possible to finalize nonjudicial dispute resolution agreements without having to seek court approval.").

(429.) See infra notes 433 70 and accompanying text.

(430.) Hayton, supra note 271, at 72.

(431.) See Wustemann, supra note 1, at 52 ("The consent of the parents is not needed where the minor child only benefits from a transaction.").

(432.) See id. (discussing the potential involvement of the Swiss authorities in a situation involving a conflict of interest).

(433.) Cohen & Staff, supra note 13, at 209.

(434.) Kroll, supra note 151, [paragraph] 16-7.

(435.) See LEW ET AL., supra note 119, [paragraph][paragraph] 9-19 to -41 (discussing various jurisdictions' approaches to arbitrability); Kroll, supra note 151, [paragraph][paragraph] 16-7 to -8 (noting that the uncertainty regarding arbitrability stems from the broad, substantive nature of arbitration provisions that are not "explicitly regulated").

(436.) See Wustemann, supra note 1, at 47 (noting potential difficulties associated with international trust disputes); In re Revocation of Revocable Trust of Fellman, 604 A.2d 263, 268-69 (Pa. Super. Ct. 1992) (Johnson, J., dissenting) (addressing interstate probate dispute).

(437.) See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 633 (1985) (noting that disputes that are arbitrable in one context cannot be held to be inherently nonarbitrable in others).

(438.) See supra notes 178-88 and accompanying text.

(439.) This would most likely include agreements made with external third parties but could also include agreements made with beneficiaries regarding internal disputes. See supra note 10 and accompanying text; see also supra note 174 and accompanying text.

(440.) See Caprasse, supra note 39, at 84 (discussing Belgian droits imperatifs); see also BORN, supra note 5, at 820-21 (discussing European prohibition on pre-dispute arbitration agreements in consumer context).

(441.) Thus, some jurisdictions define their concept of arbitrability by stating that "[a]nyone can 'compromise' on rights which are free to be disposed of." Caprasse, supra note 39, at 83 (quoting CODE CIVIL [C. CIV.] art. 2059 (Fr.)). Other countries indicate that "[a]ny dispute already existing or that may arise from a given legal situation, and which can be the object of a settlement, may by agreement be submitted to arbitration." Id. at 83 (quoting Code Judiciaire [Judicial Code] of May 19, 1998, art. 1676 (Belg.), available at vsites.unb.br/fd/gt/conteudo/Lei_arb_belgica_ing.doc).

(442.) Id. at 84.

(443.) See McGOVERN ET AL., supra note 20, at 88-96 (discussing the ability to disclaim benefits in inheritance); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 65.1-65.5 ("A person to whom a property interest is purportedly transferred is not obliged to accept it.").

(444.) See McGOVERN ET AL., supra note 20, at 425-36 (explaining limitations on amendments of trusts); UNDERHILL AND HAYTON, supra note 9, [paragraph][paragraph] 66.1-66.26 (discussing limitations on the ability to terminate or modify a trust).

(445.) See Caprasse, supra note 39, at 80 (giving general criteria for objective arbitrability).

(446.) See BORN, supra note 5, at 788-90 (stating the analytical considerations used to identify "implied legislative intent" regarding arbitrability when national legislation is silent on the issue).

(447.) Caprasse, supra note 39, at 88; see also Hague Convention on Trusts, supra note 3, arts. 6-10, 15-18 (discussing the priority of settlor intent in procedures governed by the Hague Convention on Trusts).

(448.) See BORN, supra note 5, at 788-89 (noting legislative intent regarding arbitrability may be explicit or implicit).

(449.) Id. at 781, 786. The Model Arbitration Law is also silent regarding arbitrability. See id. at 776 (stating the Model Arbitration Law leaves nonarbitrability provisions to individual legislatures and judiciaries).

(450.) See id. at 775-88 (explaining the varying degrees of breadth of both domestic and international arbitration statutes in different jurisdictions); Caprasse, supra note 39, at 82-83.

(451.) See BORN, supra note 5, at 777-79 (discussing Swiss and German statutes, which allow arbitration of any claim regarding an economic interest).

(452.) Wustemann, supra note 1, at 49 (emphasis omitted); see also von Segesser, supra note 13, at 23 (discussing the meaning of "economic interest").

(453.) See Wustemann, supra note 1, at 50 51 (explaining that except for cases involving a financial interest, a beneficiary's request for information would not be arbitrable under Swiss law).

(454.) See Caprasse, supra note 39, at 81-82 (summarizing a French statute that prohibited arbitration except in cases involving commercial activities and transactional disputes).

(455.) Bosques-Hernandez, supra note 17, at 22.

(456.) See SCHWARZ & KONRAD, supra note 110 (discussing how Austrian arbitration law permits arbitration set up by "testamentary disposition or by other legal transactions that are not based on the agreement of the parties" (footnotes omitted)); Duve, supra note 110, [paragraph] 88 (discussing German statutory provisions allowing binding arbitration clauses in testamentary and other noncontractual dispositions).

(457.) See Wustemann, supra note 1, at 45 46 (explaining that Swiss law may prohibit arbitration of disputes involving forced heirs). Other jurisdictions that recognize forced heirship appear to adopt a similar approach. See Bosques-Hernandez, supra note 17, at 23 (discussing Spain, Bolivia, Peru, and Honduras); Perrin, supra note 1, at 657-58 (discussing clawback possibilities involving inter vivos trusts and testamentary trusts).

(458.) See Kroll, supra note 151, [paragraph] 16-7 ("[A]rbitrability ... determines which disputes can be submitted to arbitration.").

(459.) See BORN, supra note 5, at 767-69 (discussing laws that treat entire classes of disputes as nonarbitrable): Kroll, supra note 151, [paragraph] 16-7 (discussing objective arbitrability).

(460.) See Kroll, supra note 151, [paragraph] 16-7 (describing narrow restrictions on objective arbitrability in Europe).

(461.) See id. [paragraph] 16-4 (describing how arbitration is commonly used in cases involving commercial representation).

(462.) See id. [paragraph][paragraph] 16-5, 16-8 to -23 (describing the substantive and procedural rules preventing some commercial representation cases from proceeding to arbitration).

(463.) See id. [paragraph] 16-9 (explaining that many jurisdictions enact provisions to protect agents, distributors, and franchisees because they are considered to be weaker than the commercial entities whose interests they represent); supra notes 399-432 and accompanying text (discussing the issue of proper representation in trust arbitrations).

(464.) See Kroll, supra note 151, [paragraph] 16-9 (linking protection of commercial representatives to the perception of their having less bargaining power); supra notes 73-91 and accompanying text.

(465.) See Kroll, supra note 151, [paragraph] 16-16 ("[S]ome national laws on commercial agency explicitly stipulate that the courts at the agent's place of business ... have exclusive jurisdiction."). But see id. [paragraph] 16-8 (explaining that in general, national statutes do not explicitly address the arbitrability of disputes relating to commercial representation).

(466.) See Cohen & Staff, supra note 13, at 215-17 (discussing exclusive jurisdiction provisions in trust-related concerns).

(467.) See Kroll, supra note 151, [paragraph][paragraph] 16-20 to -22 (comparing exclusion of jurisdiction in arbitration versus litigation).

(468.) See id. [paragraph][paragraph] 16-24 to -74 (citing examples).

(469.) See id. [paragraph][paragraph] 16-18 to -20 (discussing the effect of mandatory laws on arbitrability determinations).

(470.) See Wustemann, supra note 1, at 47 (discussing choice of law issues in international trust disputes); see also In re Revocation of Revocable Trust of Fellman, 604 A.2d 263, 269 (Pa. Super. Ct. 1992) (Johnson, J., dissenting) (discussing choice of law issues in interstate disputes); von Segesser, supra note 13, at 22-23 (comparing the Swiss rule for arbitrability to that of other jurisdictions).

(471.) See supra note 20 and accompanying text (discussing the isolation of the trust bar due to the "specialized nature of trust law and procedure").

(472.) See McGOVERN ET AL., supra note 20, at 626 (describing the probate process).

(473.) See supra notes 45, 81-83 and accompanying text.

(474.) See Cohen & Staff, supra note 13, at 206 (noting potential pockets of nonarbitrability in trust arbitration); Kroll, supra note 151, [paragraph][paragraph] 16-79 to -80 (discussing the advantages and disadvantages of a case-specific approach to arbitrability).

(475.) Cf. Kroll, supra note 151, [paragraph] 16-9 (explaining that states enact exclusive jurisdiction provisions in cases involving commercial representation disputes because of concern for the representatives' weaker bargaining position relative to their principals).

(476.) See supra notes 194-224 and accompanying text.

(477.) See Kroll, supra note 151, [paragraph][paragraph] 16-21 to -22 (noting that arbitral tribunals can apply principles of mandatory law even in cases where the parties have not necessarily chosen that law); see also supra notes 132-36 and accompanying text (responding to the criticism that arbitration's procedural flexibility leads to violations of procedural and substantive rights).

(478.) Although judicial review of arbitral awards is primarily procedural, commentators have noted that the second look doctrine provides courts with an opportunity to scrutinize an award to see if it has disregarded any important mandatory public policies of the enforcing state. See Kroll, supra note 151, [paragraph][paragraph] 16-66 to -67 (describing the second look doctrine); see also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n.19 (1985) (establishing the second look doctrine).

(479.) Caprasse, supra note 39, at 88.

(480.) See Kroll, supra note 151, [paragraph] 16-20 ("The underlying rationale of [exclusive jurisdiction] provisions is to ensure that the mandatory and protective provisions of the national law on commercial agency are applied.").

(481.) See Hague Convention on Trusts, supra note 3, arts. 6-10, 15-18 (establishing choice-of-law rules for trusts).

(482.) See id. arts. 7, 15-16 (describing the factors that are to be used in determining which law is most closely connected with the trust).

(483.) See Kroll, supra note 151, [paragraph][paragraph] 16-80 to -84 (suggesting post-award judicial review protects this interest sufficiently). While this issue was originally raised as a conflict of laws concern in the context of cross-border disputes, see id. [paragraph] 16-69 (discussing Mitsubishi Motors Corp., which involved the enforcement of an international arbitration award), similar questions could arise in domestic trust arbitration, given that some people in the trust industry have wondered whether arbitrators in such cases actually apply the law to the matter at hand. See Spitko, supra note 17, at 295-96 (suggesting that informal dispute resolution processes may run the risk of increased bias or prejudice); Wustemann, supra note 1, at 34, 49, 50-51, 52-53 (describing some specific instances in which the potential nonapplication of mandatory national law may be problematic from a Swiss perspective). Notably, contemporary practice is for arbitrators to apply the law chosen by the parties or, in the absence of party choice, the law that the arbitrators determine to be most relevant to the dispute, which answers questions about whether trust arbitration would operate outside the purview of the law. See BORN, supra note 5, at 2111, 2153 (explaining interaction between party autonomy and arbitrator discretion).

(484.) See Kroll, supra note 151, [paragraph] 16-82 (discussing extent to which arbitrators may choose to apply law that is neither the law of the seat of arbitration nor the substantive law chosen by the parties to govern the merits of a dispute).

(485.) See id. [paragraph] 16-20 (discussing arbitrator discretion).

(486.) See id. [paragraph][paragraph] 16-75 to -85 (comparing benefits of judicial review before and after rendering of final award).

(487.) See id. (favoring judicial review post-award rather than pre-award).

(488.) See Cohen & Staff, supra note 13, at 203-06, 226 (discussing the advantages of arbitration and generally concluding that arbitration should be used to resolve a wide range of trust disputes); Lloyd & Pratt, supra note 113, at 18-20 (arguing in favor of the enforceability of arbitration clauses in trusts); Wustemann, supra note 1, at 55-56 ("Arbitration is an ideal method for resolving trust disputes.").

(489.) See BORN, supra note 5, at 837-41 (commenting favorably upon the retreat from the nonarbitrability doctrine in most jurisdictions).

(490.) Concerns have already been raised about the arbitrability of claims arising under marital or succession law, as well as challenges based on the alleged incapacity of the settlor. See supra notes 322-78, 409 and accompanying text. Interestingly, some of those issues could be framed in terms other than arbitrability. For example, concerns about forced heirs could be analyzed as a nonsignatory matter rather than a question of arbitrability, since forced heirs would not be taking "under or through" the trust like other beneficiaries. See supra notes 271, 409 and accompanying text.

(491.) Cohen and Staff have outlined these factors as conditions with which the court must be satisfied before arbitration is a viable option. See Cohen & Staff, supra note 13, at 209.

(492.) See Diaz v. Bukey, 125 Cal. Rptr. 3d 610, 614-15 (Ct. App. 2011) (holding a mandatory arbitration provision in a trust unenforceable), rev. granted, 257 P.3d 1129 (Cal. 2011); Rachal v. Reitz, 347 S.W.3d 305, 311 (Tex. App. 2011) (holding a mandatory arbitration clause in a trust unenforceable), rev. granted, 2012 Tex. LEXIS 487 (2012).

(493.) See ARIZ. REV. STAT. ANN. [section] 14-10205 (2012) ("A trust instrument may provide mandatory, exclusive and reasonable procedures to resolve issues between the trustee and interested persons or among interested persons with regard to the administration or distribution of the trust."); FLA. STAT. ANN. [section] 731.401 (2010) ("A provision in a will or trust requiring the arbitration of disputes, other than disputes of the validity of all or a part of a will or trust, between or among the beneficiaries and a fiduciary under the will or trust, or any combination of such persons or entities, is enforceable"). Compare In re Estate of Jacobovitz, 295 N.Y.S.2d 527, 531 (Sur. Ct. Nassau Cnty. 1968) (holding that the probate of a will cannot be the subject of arbitration), with In re Blumenkrantz, 824 N.Y.S.2d 884, 887 (Sur. Ct. Nassau Cnty. 2006) (holding a trustee bound by an agreement to arbitrate); compare also In re Meredith's Estate, 266 N.W. 351, 356 (Mich. 1936) ("No agreement [to submit trust disputes to arbitration] under any circumstances could bind the estate unless all persons interested therein were parties thereto."), with In re Nestorovski Estate, 769 N.W.2d 720, 732 (Mich. Ct. App. 2009) (holding that In re Meredith's Estate "lacks continued viability because it has been superseded by more recent legislative developments and intervening changes in the court rules").

(494.) See IDAHO CODE ANN. [section][section] 15-8-101, 15-8-103 (2009) (stating the provisions' pro-arbitration purpose and defining key terms); WASH. REV. CODE ANN. [section][section] 11.96A.010, 11.96A.030 (West 2006) (stating the provisions' pro-arbitration purpose and defining key terms); UNIF. TRUST CODE [section][section] 111, 816(23) (amended 2010), available at http://www.uniformlaws.org/shared/docs/trust_code/utc_final_rev2010.pdf (discussing nonjudicial dispute resolution and empowering a trustee to "resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution").

(495.) See The Trusts (Guernsey) Law, 2007, c. 2 [section] 63 (providing permissive rules under which arbitration awards in trust disputes will be binding); Trustee (Amendment) Bill, 2011, [section] 18 (Bah.) (establishing pro-arbitration rules for the resolution of trust disputes); Hartnell, supra note 187 (discussing the Trustee Act amendments).

(496.) See Premium Nafta Prods. Ltd. v. Fill Shipping Co. Ltd., [2007] UKHL 40 [13] (explaining that the interpretation of an arbitration agreement between two "rational businessmen" should defer to the parties' intentions), on appeal from Fiona Trust & Holding Corp. v. Privalov, [2007] EWCA Civ 20, [2007] 1 All E.R. (Comm.) 891; UNDERHILL AND HAYTON, supra note 9, [section] 11.80 (establishing trustee as the final arbiter on questions of fact).

(497.) See SCHWARZ & KONRAD, supra note 110 (describing ways in which Austrian law grants arbitrators the authority to decide disputes by arbitration); Bosques-Hernandez, supra note 17, at 23 (describing Liechtenstein's pro-arbitration rules allowing for compulsory arbitration provisions in trust deeds); Duve, supra note 110, [paragraph] 88 (discussing German statutory provisions that allow binding arbitration clauses in testamentary or other noncontractual dispositions); Koch, supra note 33, at 187 ("Switzerland, Germany and Austria consider that any dispute involving a financial or economic interest is arbitrable."); Wustemann, supra note 1, at 49 (describing Switzerland's pro-arbitration rule for arbitrability).

(498.) Katzen, supra note 14, at 19.

(499.) A growing amount of commentary is available on the subject of "best practices" in drafting. See UNIF. TRUST CODE [section] 816(23) cmt. (offering practitioners suggestions for best practices); AAA WILLS AND TRUSTS ARBITRATION RULES (2009), available at http://www.adr.org/cs/idcplg?IdcService=GET_ FILE&dDocName=ADRSTG_004135&RevisionSelectionMethod=LatestReleased (offering a model arbitration clause); ICC ARBITRATION CLAUSE FOR TRUST DISPUTES, 19 ICC INT'L CT. OF ARB. BULL. 9 (2008), available at http://www.iccdrl.com (search "ICC Arbitration Clause for Trust Disputes" and follow "Commission Report" hyperlink) (providing a model arbitration clause and accompanying commentary); ACTEC, supra note 13, at 34-42 (providing sample arbitration-related clauses for trusts and wills); Bosques-Hernandez, supra note 17, at 8-12 (discussing the theories under which an arbitration clause in a trust deed can be enforced); Hayton, supra note 271, at 71-72 (identifying and attempting to resolve obstacles to the enforceability of arbitration clauses in trust deeds); Hayton, supra note 154, at 17 (suggesting tips for drafting effective virtual representation clauses in trust instruments); Hwang, supra note 1, at 84 (describing the ICC model arbitration clause for trusts); Bridget A. Logstrom, Arbitration in Estate and Trust Disputes: Friend or Foe?, 30 ACTEC J. 266, app. B, 289-90 (2005) (providing sample arbitration clauses); Bridget A. Logstrom et al., Resolving Disputes with Ease and Grace, 31 ACTEC J. 235, 241-44 (2005) (providing sample arbitration clauses); Timothy P. O'Sullivan, Family Harmony: An All Too Frequent Casualty of the Estate Planning Process, 8 MARQ. ELDER'S ADVISOR 253, 315-16 (2007) (offering suggestions to practitioners on how to ensure the enforceability of arbitration clauses); Wustemann, supra note 1, at 45-47 (describing the English theory of deemed acquiescence, a similar Swiss theory, and forfeiture clauses). See generally Strong, Enforceability, supra note 33 (advising practitioners on how to ensure enforceability of arbitration clauses in trust deeds through proper drafting).

(500.) See supra notes 433-90 and accompanying text. This issue is taken up in detail in Strong, Procedures, supra note 33 (discussing the propriety of arbitration procedures in trust disputes).

(501.) See BORN, supra note 5, at 150 ("[A]n arbitral institution lends its standing to any award that is rendered, which may enhance the likelihood of voluntary compliance and judicial enforcement.").

(502.) See generally AAA WILLS AND TRUSTS ARBITRATION RULES (focusing on rules of procedure in trust arbitrations); ICC ARBITRATION CLAUSE FOR TRUST DISPUTES (providing a model trust arbitration clause and commentary thereon).

(503.) See Strong, Procedures, supra note 33 (manuscript at 54-85) (analyzing the effectiveness of the AAA Trust Arbitration Rules).

(504.) See supra notes 24-26 and accompanying text.

(505.) Lloyd & Pratt, supra note 113, at 18.

S.I. Strong, D. Phil., University of Oxford (UK); Ph.D., University of Cambridge (UK); J.D., Duke University; M.P.W., University of Southern California; B.A., University of California, Davis. The author, who is admitted to practice as an attorney in New York and Illinois and as a solicitor in England and Wales, is the Henry G. Schermers Fellow at the Hague Institute for the Internationalisation of Law and Associate Professor of Law at the University of Missouri. The author is a member of the American Law Institute (ALI) Consultative Groups for both the Restatement (Third) of Trusts and the Restatement (Third) of the U.S. Law of International Commercial Arbitration. Many thanks are due David Horton and John H. Langbein for comments and insights provided on earlier drafts of this Article. All errors of course remain the author's own.
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Title Annotation:III. Arbitration of Trust Disputes to C. Settlors' Powers to Compel Mandatory Trust Arbitration, 2. Elements Required for Mandatory Trust Arbitration Under Common Law Principles b. An Arbitration Clause That Is Operable, Effective, and Capable of Performance through IV. Conclusion, with footnotes, p.1208-1248
Author:Strong, S.I.
Publication:Vanderbilt Journal of Transnational Law
Date:Oct 1, 2012
Words:33708
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