Jose Ferrer (J. Albert Diaz)
The South Florida legal community for years, even decades, talked about Miami becoming a hub for international arbitration.
The future appears to be now.
More than 1,000 lawyers attended the International Council for Commercial Arbitration Congress, which chose downtown Miami to host last month’s biennial conference. Miami is already the second most frequently selected city in the U.S. for International Chamber of Commerce arbitration.
In December, Miami-Dade Circuit Court established the International Arbitration Court to handle international commercial arbitration matters. The only similar program in the country is in New York.
Then in February, the parties in a $1.6 billion dispute over cost overruns on the expansion of the Panama Canal choose Miami as the venue. A three-member ICC panel will hear the case.
“Miami has come of age, and it’s still very, very young. You are going to start seeing significant international arbitration seated in Miami,” said Jose M. Ferrer, a partner with Miami-based Bilzin Sumberg Baena Price & Axelrod. He has extensive experience in Latin America litigation.
The International Centre for Dispute Resolution has a permanent staff in Miami, reporting 128 hearings in 2013 compared to 49 in 2010.
“There are benefits, and there are extreme costs, and it is the way of the world. Our court system is just so crowded it’s very difficult to get swift justice,” said attorney Jeffrey Schneider, a partner at Levine Kellogg Lehman Schneider + Grossman in Miami. “But there’s a big sacrifice, and that’s your appellate rights.”
Parties that agree to arbitration give up their right to appeal in exchange they hope for expedited justice.
Schneider has some misgivings about waiving appeals but isn’t watching the international arbitration train pass him by.
He said about 75 percent of his practice involves international arbitration. “Five years ago, it was about 15 percent,” he said.
And while Latin America is the buzzword in Miami-based international arbitration, he said it’s Russian disputes he is finding himself increasingly hired to litigate.
“There is a huge Russian population in Sunny Isles, and right now I have been dealing with a number of arbitrations dealing with Russian companies,” he said.
While Spanish and even Portuguese speakers at the firm are plentiful, attorneys who can speak and read Russian are not.
“I’m personally receiving documents and emails in Russian that are literally foreign to me,” Schneider said.
But when it comes to international arbitration, most of Miami’s legal community is looking toward Latin America.
“Miami has finally become the Latin American hub you and I have been talking about for 10 years,” Schneider said.
Arbitration is sold to corporate litigants as cheaper and speedier than trial court, and this is especially so for Latin American companies looking to resolve disputes, Ferrer said.
Proceedings in Miami can be up to 60 percent less expensive than in New York, London, Paris, Dubai or The Hague, proponents of the Miami solution say.
“If you are in Latin America, what choice do you really have?” he asked. “A case can languish there years, if not decades.”
Arbitration allows the parties to choose their own arbitrator.
“They have control over the dispute,” Ferrer said. “In my experience, what drives clients crazy is not knowing what is going to happen in court, what the process is going to be.”
He said in some ways the economic downturn hastened Miami’s surge as an arbitration hub.
“It’s been a large influx of Latin Americans who have buoyed our economy. Brazilians, Mexicans and Venezuelans,” Ferrer said. “They come here to invest, they bring their money, they bring their families, they bring their businesses, and they bring their business disputes.”
Plaintiffs attorney Ervin Gonzalez, a partner at Colson Hicks Eidson in Coral Gables, said arbitration appears to be great for the Miami legal market, especially those who speak multiple languages.
But he said it’s a different story when it comes to international companies forcing arbitration on employees, such as those who work on cruise ships.
“Arbitration can be a very good way to resolve disputes in commercial settings, but at the same time what we are seeing is consumers who are not in a position of having equal bargaining power with these giant corporations and getting the short end of the stick,” Gonzalez said.
He is asking the U.S. Supreme Court to review Carnival Corp.’s effort to do an end run around the federal Jones Act by requiring cruise workers to agree to international arbitration to resolve personal injury claims.
A few cruise arbitration claims have been filed in Miami, but most of the time Gonzalez said they are funneled to places like the Philippines where workers can expect small recoveries at best.
The U.S. Court of Appeals for the Eleventh Circuit in October upheld a Fort Lauderdale district court ruling that Mahaveer Singh must arbitrate his personal injury claim in the Philippines.
“This flies in the face of legislative intent and hundred of years of jurisprudence,” Gonzalez said.