Under current California law, foreign attorneys are prohibited from participating in any meaningful way in international arbitration here in California. Thus, litigants are discouraged from arbitrating their international disputes here, resulting in unfortunate economic consequences. William Slate, the chief executive officer of the American Arbitration Association, explains that Californians host less than half the arbitrations that foreign-attorney-friendly New Yorkers do, despite our “massive economy.” The International Court of Arbitration reports significantly fewer cases held in California as opposed to New York: in 2007, three versus 15, and in 2006, two versus 17. The International Centre for Settlement of Investment Disputes — the dispute settlement arm of the World Bank — explains that, although it can administer cases anywhere, California has never been requested as a choice of venue.
California Code of Civil Procedure §1282.4 and Local Rule 9.43 govern the ability of attorneys who are not members of the State Bar of California to act as counsel in international arbitrations here. Both allow out-of-state attorneys to participate in these arbitrations, but provide no similar provisions for out-of-country attorneys. However, even out-of-state attorneys are not safe. In 2011, when §1282.4 sunsets, out-of-state attorneys will also be barred from appearing as counsel in California-based international arbitrations.
