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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
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No. 94-18
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ANTONIO MASTROBUONO and DIANA G.
MASTROBUONO, PETITIONERS v. SHEARSON
LEHMAN HUTTON, INC., et al.
on writ of certiorari to the united states court
of appeals for the seventh circuit
[March 6, 1995]

  Justice Stevens delivered the opinion of the Court.
  New York law allows courts, but not arbitrators, to
award punitive damages.  In a dispute arising out of a
standard-form contract that expressly provides that it
-shall be governed by the laws of the State of New
York,- a panel of arbitrators awarded punitive damages.
The District Court and Court of Appeals disallowed that
award.  The question presented is whether the arbitra-
tors' award is consistent with the central purpose of the
Federal Arbitration Act to ensure -that private agree-
ments to arbitrate are enforced according to their
terms.-  Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U. S. 468,
479 (1989).

                      I
  In 1985 petitioners, Antonio Mastrobuono, then an
assistant professor of medieval literature, and his wife
Diana Mastrobuono, an artist, opened a securities
trading account with respondent Shearson Lehman
Hutton, Inc. (Shearson), by executing Shearson's stan-
dard-form Client's Agreement.  Respondent Nick
DiMinico, a vice president of Shearson, managed the
Mastrobuonos' account until they closed it in 1987.  In
1989, petitioners filed this action in the United States
District Court for the Northern District of Illinois,
alleging that respondents had mishandled their account
and claiming damages on a variety of state and federal
law theories.
  Paragraph 13 of the parties' agreement contains an
arbitration provision and a choice-of-law provision.
Relying on the arbitration provision and on 3 and 4 of
the Federal Arbitration Act (FAA), 9 U. S. C. 3, 4,
respondents filed a motion to stay the court proceedings
and to compel arbitration pursuant to the rules of the
National Association of Securities Dealers.  The District
Court granted that motion, and a panel of three arbitra-
tors was convened.  After conducting hearings in Illinois,
the panel ruled in favor of petitioners.
  In the arbitration proceedings, respondents argued
that the arbitrators had no authority to award punitive
damages.  Nevertheless, the panel's award included
punitive damages of $400,000, in addition to compensa-
tory damages of $159,327.  Respondents paid the
compensatory portion of the award but filed a motion in
the District Court to vacate the award of punitive
damages.  The District Court granted the motion, 812
F. Supp. 845 (ND Ill. 1993), and the Court of Appeals
for the Seventh Circuit affirmed.  20 F. 3d 713 (1994).
Both courts relied on the choice-of-law provision in
Paragraph 13 of the parties' agreement, which specifies
that the contract shall be governed by New York law.
Because the New York Court of Appeals has decided
that in New York the power to award punitive damages
is limited to judicial tribunals and may not be exercised
by arbitrators, Garrity v. Lyle Stuart, Inc., 40 N. Y. 2d
354, 353 N. E. 2d 793 (1976), the District Court and the
Seventh Circuit held that the panel of arbitrators had
no power to award punitive damages in this case.
  We granted certiorari, 513 U. S. ___ (1994), because
the Courts of Appeals have expressed differing views on
whether a contractual choice-of-law provision may
preclude an arbitral award of punitive damages that
otherwise would be proper.  Compare Barbier v.
Shearson Lehman Hutton Inc., 948 F. 2d 117 (CA2
1991), and Pierson v. Dean, Witter, Reynolds, Inc., 742
F. 2d 334 (CA7 1984), with Bonar v. Dean Witter
Reynolds, Inc., 835 F. 2d 1378, 1386-1388 (CA11 1988),
Raytheon Co. v. Automated Business Systems, Inc., 882
F. 2d 6 (CA1 1989), and Lee v. Chica, 983 F. 2d 883
(CA8 1993).  We now reverse.

                     II
  Earlier this Term, we upheld the enforceability of a
predispute arbitration agreement governed by Alabama
law, even though an Alabama statute provides that
arbitration agreements are unenforceable.  Allied-Bruce
Terminix Cos. v. Dobson, 513 U. S. ___ (1995).  Writing
for the Court, Justice Breyer observed that Congress
passed the FAA -to overcome courts' refusals to enforce
agreements to arbitrate.-  Id., at ___ (slip op., at 4).
See also Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U. S. at
474; Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213,
220 (1985).  After determining that the FAA applied to
the parties' arbitration agreement, we readily concluded
that the federal statute pre-empted Alabama's statutory
prohibition.  Allied-Bruce, 513 U. S., at ___, ___ (slip op.,
at 6, 16).
  Petitioners seek a similar disposition of the case before
us today.  Here, the Seventh Circuit interpreted the
contract to incorporate New York law, including the
Garrity rule that arbitrators may not award punitive
damages.  Petitioners ask us to hold that the FAA pre-
empts New York's prohibition against arbitral awards of
punitive damages because this state law is a vestige of
the -`-ancient-'- judicial hostility to arbitration.  See
Allied-Bruce, 513 U. S., at ___ (slip op., at 4), quoting
Bernhardt v. Polygraphic Co. of America, Inc., 350 U. S.
198, 211, n. 5 (1956) (Frankfurter, J., concurring).
Petitioners rely on Southland Corp. v. Keating, 465 U. S.
1 (1984), and Perry v. Thomas, 482 U. S. 483 (1987), in
which we held that the FAA pre-empted two California
statutes that purported to require judicial resolution of
certain disputes.  In Southland, we explained that the
FAA not only -declared a national policy favoring
arbitration,- but actually -withdrew the power of the
states to require a judicial forum for the resolution of
claims which the contracting parties agreed to resolve by
arbitration.-  465 U. S., at 10.
  Respondents answer that the choice-of-law provision in
their contract evidences the parties' express agreement
that punitive damages should not be awarded in the
arbitration of any dispute arising under their contract.
Thus, they claim, this case is distinguishable from
Southland and Perry, in which the parties presumably
desired unlimited arbitration but state law stood in their
way.  Regardless of whether the FAA pre-empts the
Garrity decision in contracts not expressly incorporating
New York law, respondents argue that the parties may
themselves agree to be bound by Garrity, just as they
may agree to forgo arbitration altogether.  In other
words, if the contract says -no punitive damages,- that
is the end of the matter, for courts are bound to inter-
pret contracts in accordance with the expressed inten-
tions of the parties-even if the effect of those intentions
is to limit arbitration.
  We have previously held that the FAA's pro-arbitration
policy does not operate without regard to the wishes of
the contracting parties.  In Volt Information Sciences,
Inc. v. Board of Trustees of Leland Stanford Junior
Univ., 489 U. S. 468 (1989), the California Court of
Appeal had construed a contractual provision to mean
that the parties intended the California rules of arbitra-
tion, rather than the FAA's rules, to govern the resolu-
tion of their dispute.  Id., at 472.  Noting that the
California rules were -manifestly designed to encourage
resort to the arbitral process,- id., at 476, and that they
-generally foster[ed] the federal policy favoring arbitra-
tion,- id., at 476, n. 5, we concluded that such an
interpretation was entirely consistent with the federal
policy -to ensure the enforceability, according to their
terms, of private agreements to arbitrate.-  Id., at 476.
After referring to the holdings in Southland and Perry,
which struck down state laws limiting agreed-upon
arbitrability, we added:
-But it does not follow that the FAA prevents the
enforcement of agreements to arbitrate under
different rules than those set forth in the Act itself.
Indeed, such a result would be quite inimical to the
FAA's primary purpose of ensuring that private
agreements to arbitrate are enforced according to
their terms.  Arbitration under the Act is a matter
of consent, not coercion, and parties are generally
free to structure their arbitration agreements as
they see fit.  Just as they may limit by contract the
issues which they will arbitrate, see Mitsubishi [v.
Soler Chrysler-Plymouth, 473 U. S. 614, 628 (1985)],
so too may they specify by contract the rules under
which that arbitration will be conducted.-  Volt, 489
U. S., at 479.
  Relying on our reasoning in Volt, respondents thus
argue that the parties to a contract may lawfully agree
to limit the issues to be arbitrated by waiving any claim
for punitive damages.  On the other hand, we think our
decisions in Allied-Bruce, Southland, and Perry make
clear that if contracting parties agree to include claims
for punitive damages within the issues to be arbitrated,
the FAA ensures that their agreement will be enforced
according to its terms even if a rule of state law would
otherwise exclude such claims from arbitration.  Thus,
the case before us comes down to what the contract has
to say about the arbitrability of petitioners' claim for
punitive damages.

                     III
  Shearson's standard-form -Client Agreement,- which
petitioners executed, contains 18 paragraphs.  The two
relevant provisions of the agreement are found in
Paragraph 13.  The first sentence of that paragraph
provides, in part, that the entire agreement -shall be
governed by the laws of the State of New York.-  App.
to Pet. for Cert. 44.  The second sentence provides that
-any controversy- arising out of the transactions between
the parties -shall be settled by arbitration- in accordance
with the rules of the National Association of Securities
Dealers (NASD), or the Boards of Directors of the New
York Stock Exchange and/or the American Stock Ex-
change.  Ibid.  The agreement contains no express
reference to claims for punitive damages.  To ascertain
whether Paragraph 13 expresses an intent to include or
exclude such claims, we first address the impact of each
of the two relevant provisions, considered separately.
We then move on to the more important inquiry: the
meaning of the two provisions taken together.  See
Restatement (Second) of Contracts 202(2) (1979) (-A
writing is interpreted as a whole-).
  The choice-of-law provision, when viewed in isolation,
may reasonably be read as merely a substitute for the
conflict-of-laws analysis that otherwise would determine
what law to apply to disputes arising out of the contrac-
tual relationship.  Thus, if a similar contract, without a
choice-of-law provision, had been signed in New York
and was to be performed in New York, presumably -the
laws of the State of New York- would apply, even
though the contract did not expressly so state.  In such
event, there would be nothing in the contract that could
possibly constitute evidence of an intent to exclude
punitive damages claims.  Accordingly, punitive damages
would be allowed because, in the absence of contractual
intent to the contrary, the FAA would pre-empt the
Garrity rule.  See supra, at 4.
  Even if the reference to -the laws of the State of New
York- is more than a substitute for ordinary conflict-of-
laws analysis and, as respondents urge, includes the
caveat, -detached from otherwise-applicable federal law,-
the provision might not preclude the award of punitive
damages because New York allows its courts, though not
its arbitrators, to enter such awards.  See Garrity, 40
N. Y. 2d, at 358, 353 N. E. 2d, at 796.  In other words,
the provision might include only New York's substantive
rights and obligations, and not the State's allocation of
power between alternative tribunals.  Respondents'
argument is persuasive only if -New York law- means
-New York decisional law, including that State's alloca-
tion of power between courts and arbitrators, notwith-
standing otherwise-applicable federal law.-  But, as we
have demonstrated, the provision need not be read so
broadly.  It is not, in itself, an unequivocal exclusion of
punitive damages claims.
  The arbitration provision (the second sentence of
Paragraph 13) does not improve respondents' argument.
On the contrary, when read separately this clause
strongly implies that an arbitral award of punitive
damages is appropriate.  It explicitly authorizes arbitra-
tion in accordance with NASD rules; the panel of
arbitrators in fact proceeded under that set of rules.
The NASD's Code of Arbitration Procedure indicates that
arbitrators may award -damages and other relief.-
NASD Code of Arbitration Procedure -3741(e) (1993).
While not a clear authorization of punitive damages, this
provision appears broad enough at least to contemplate
such a remedy.  Moreover, as the Seventh Circuit noted,
a manual provided to NASD arbitrators contains this
provision:
-B. Punitive Damages
-The issue of punitive damages may arise with great
frequency in arbitrations.  Parties to arbitration are
informed that arbitrators can consider punitive
damages as a remedy.-  20 F. 3d, at 717.
Thus, the text of the arbitration clause itself surely does
not support-indeed, it contradicts-the conclusion that
the parties agreed to foreclose claims for punitive
damages.
  Although neither the choice-of-law clause nor the
arbitration clause, separately considered, expresses an
intent to preclude an award of punitive damages,
respondents argue that a fair reading of the entire
Paragraph 13 leads to that conclusion.  On this theory,
even if -New York law- is ambiguous, and even if
-arbitration in accordance with NASD rules- indicates
that punitive damages are permissible, the juxtaposition
of the two clauses suggests that the contract incorpo-
rates -New York law relating to arbitration.-  We
disagree.  At most, the choice-of-law clause introduces an
ambiguity into an arbitration agreement that would
otherwise allow punitive damages awards.  As we
pointed out in Volt, when a court interprets such
provisions in an agreement covered by the FAA, -due
regard must be given to the federal policy favoring
arbitration, and ambiguities as to the scope of the
arbitration clause itself resolved in favor of arbitration.-
489 U. S., at 476.  See also Moses H. Cone Memorial
Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24-25
(1983).
  Moreover, respondents cannot overcome the common-
law rule of contract interpretation that a court should
construe ambiguous language against the interest of the
party that drafted it.  See, e. g., United States Fire Ins.
Co. v. Schnackenberg, 88 Ill. 2d 1, 4, 429 N. E. 2d 1203,
1205 (1981); Graff v. Billet, 64 N. Y. 2d 899, 902, 477
N. E. 2d 212, 213-214 (1984); Restatement (Second) of
Contracts 206 (1979); United States v. Seckinger, 397
U. S. 203, 210 (1970).  Respondents drafted an ambigu-
ous document, and they cannot now claim the benefit of
the doubt.  The reason for this rule is to protect the
party who did not choose the language from an unin-
tended or unfair result.  That rationale is well-suited
to the facts of this case.  As a practical matter, it seems
unlikely that petitioners were actually aware of New
York's bifurcated approach to punitive damages, or that
they had any idea that by signing a standard-form
agreement to arbitrate disputes they might be giving up
an important substantive right.  In the face of suchdoubt, we are unwilling to impute this intent to petition-
ers.
  Finally the respondents' reading of the two clauses
violates another cardinal principle of contract construc-
tion: that a document should be read to give effect to all
its provisions and to render them consistent with each
other.  See, e.g., In re Halas, 104 Ill. 2d 83, 92, 470 N.
E. 2d 960, 964 (1984); Crimmins Contracting Co. v. City
of New York, 74 N. Y. 2d 166, 172-173, 542 N. E. 2d
1097, 1100 (1989); Trump-Equitable Fifth Avenue Co. v.
H. R. H. Constr. Corp., 106 App. Div. 2d 242, 244, 485
N. Y. S. 2d 65, 67 (1985); Restatement (Second) of
Contracts 203(a) and Comment b (1979); id. 202(5).
We think the best way to harmonize the choice-of-law
provision with the arbitration provision is to read -the
laws of the State of New York- to encompass substantive
principles that New York courts would apply, but not to
include special rules limiting the authority of arbitrators.
Thus, the choice-of-law provision covers the rights and
duties of the parties, while the arbitration clause covers
arbitration; neither sentence intrudes upon the other.
In contrast, respondents' reading sets up the two clauses
in conflict with one another: one foreclosing punitive
damages, the other allowing them.  This interpretation
is untenable.
  We hold that the Court of Appeals misinterpreted the
parties' agreement.  The arbitral award should have
been enforced as within the scope of the contract.  The
judgment of the Court of Appeals is, therefore, reversed.

                            It is so ordered.