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MIAMI � As arbitration becomes increasingly popular throughout the world as a method of dispute resolution, international lawyers and corporate counsel are being wooed by an array of cities around the world positioning themselves to become major arbitration centers. London, New York, Paris and Geneva have traditionally been regarded as established international arbitration centers. But now, as state bar associations, cities, countries and hotels come to the realization that arbitrations are big money-makers, they’re joining forces to lobby lawyers and corporate counsel. In some cases, that includes changing state law and state bar rules to become more arbitration-friendly. Among the locations vying to become international arbitration centers are Brazil; Singapore; Vienna, Austria; Houston; Madrid, Spain; and Dubai, United Arab Emirates. Additionally, Miami, as the gateway to Latin America, has positioned itself as one of the top locales in the hemisphere, and local arbitration lawyers recently formed an association to further cement its place. “Local lawyers and clients who once saw international arbitration as something to be farmed out to specialists overseas have concluded that they can do this too,” said Jos� Astigarraga, a leading arbitrator at Miami’s Astigarraga Davis. “Additionally, local bars and city leaders have recognized that arbitration can be big business,” Astigarraga said. “By the time you count legal fees, arbitrator fees, court reporter fees, interpreter fees, hotel revenues and so on, you’re talking serious money.” A boon to the bar Arbitrations can also be a boon to the local bar, which is why bar associations are starting to lobby decision makers internationally. The idea is to get corporate counsel to put in contracts that the seat of the arbitration will be in a particular city. If a dispute arises, the dealmakers are bound to having the arbitration in that city. “It’s not a given that local lawyers will be chosen, but there’s a greater likelihood,” added Adolfo Jim�nez, head of the international litigation and arbitration section at Holland & Knight. In recent years, arbitration has exploded throughout the world as treaties like the North American Free Trade Agreement opened trade � leading to more possible disputes � and corporations now routinely include arbitration clauses in contracts. International businesses prefer arbitration to court litigation as it is often considered quicker, more cost-effective and not subject to public disclosure. More important, they view arbitration as a way to avoid corrupt or inefficient Third World courts and international treaties enable them to collect awards from foreign countries. It now appears that their choice of locale is expanding dramatically. Latin American countries, former Soviet Union countries, Middle Eastern countries and Asian countries such as China and Singapore are new to international arbitration and learning the ropes. Several years ago, Brazil, for example, barred international arbitration. Today, it ranks fourth internationally as user of the International Chamber of Commerce’s sanctioned arbitration services. There are arbitration centers in Rio de Janiero, Bras�lia and S�o Paulo. Dubai, too, has set up an international arbitration center, as has Singapore, which recently tied itself to the American Arbitration Association (AAA). In fact, Dubai is so serious about this goal it hired C. Mark Baker, chair of the International Advisory Committee of the American Arbitration Association and head of international litigation at Fulbright & Jaworski, to consult on the issue in February. And Houston is trying to capitalize on its reputation as the center of the oil industry to become an arbitration center for oil-related disputes. Venezuela opened its arbitration center in 1998. Since then it has handled 140 arbitrations, 95% of them domestic. The center is now trying to attract international arbitrations, said Diana Droulers, director of the Venezuelan Arbitration Center located at the Caracas Chamber of Commerce. The first thing the chamber did to achieve this goal was to open up the list of arbitrators, which was a closed group, and allow any foreign lawyers to handle cases. Madrid steps forward Madrid is also being “very, very aggressive” in trying to unseat Miami as the arbitration center for all of Latin America, Jim�nez noted. Representatives of the Spanish capital are hosting events and international conferences, sending out mailings to lawyers and even directly calling lawyers to sell the city. “They’ve done a great job of positioning themselves as an alternative center,” Jim�nez said. “Madrid is definitely trying to oust Miami’s position.” There’s a good reason for Madrid to target Miami. Miami is now the second most popular spot for arbitrations in the United States and the fifth most popular spot in the world, according to the AAA. The Florida Bar’s international law section helped Miami achieve that benchmark by pushing the Florida Supreme Court in 2005 to change bar rules to allow foreign lawyers to handle arbitrations in Florida. Bar leaders realized the law needed to be changed after a New York lawyer handling a Florida arbitration was prosecuted for the unlicensed practice of law. Now there’s a special exception for arbitrations. With Madrid in its rearview mirror, the local arbitration bar recently formed the Miami International Arbitration Society to promote Miami as an international arbitration venue. The group will conduct a study of arbitration costs in Miami compared to other cities, including costs of lawyers, hotels, translators and other services. But efforts by Miami, Venezuela and other countries to become arbitration centers are not impressing Jose Fernandez, co-head of the Latin American practice at Latham & Watkins from its New York office. Closeness to clients preferred Fernandez chooses the location for arbitrations based on proximity to the clients. If the clients are in separate countries, he finds a location in between. He prefers countries with courts he can rely on, such as the United States and England. Fernandez does not look at cost factors and would not necessarily be swayed by a study showing that Miami is cheaper. For example, Fernandez would also never hold an arbitration in Venezuela, no matter how cheap it was. He recently handled an arbitration involving a Venezuelan company and chose Miami as the arbitration locale. “I don’t know that I’d get the court support in Venezuela,” he said. The decision of where an arbitration takes place is usually made by corporate counsel or lawyers involved in transactional deals. Their decision rests on a variety of factors, such as where courts � which might have to enforce an award � are considered neutral. However, sometimes it is left up to the arbitrator or the practitioners to jointly decide where to hold arbitration hearings. And that is where the competition is heating up. John Beechey of Clifford Chance in London, a prominent arbitration attorney, looks for three factors when choosing a site: good travel links, sophisticated hotels and modernized laws. Secondary to those factors are things like “Are we going to be able to get photocopies made immediately and are we going to have a room that is not bugged?” he said.

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