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A handful of powerful transnational private institutions provide the bulk of cross-border or international commercial arbitration (“ICA”). The conventional thinking is that these institutions have significant autonomy and principally operate global contract dispute resolution outside the influence of state institutions. This Article argues to the contrary. Its study of the birth of transnational arbitral institutions in the 1910s sheds new light on the inherent and critical dependency of arbitral institutions on judicial enforceability. The institutional power dynamics reveal that the public institutions of states, especially courts, have the ultimate control over the condition and development of ICA. Any potential weaknesses or failures of institutional arbitration are thus ultimately a matter of public governance. This conclusion prompts either a reconsideration of the courts’ hands-off approach in enforcing arbitration or a reassessment of the policy principle underlying the broad allocation of adjudicatory jurisdiction to arbitration.
