California may soon become a major international commercial arbitration center if SB 766 passes as expected later this year and becomes law in January 2019. The legislation passed the California Senate without opposition and is awaiting a June hearing in the Assembly. Despite its acclaim as a global business destination, the state has been a disfavored jurisdiction for international arbitration since a 1998 California Supreme Court case known as Birbower established that lawyers from foreign nations could not appear in international arbitrations in California. SB 766 provides a remedy that allows foreign lawyers to seat hearings in California and be able to appear and represent their clients in such proceedings.
One of the fastest growing areas of legal practice, international arbitration is already big business in New York and Miami. California stands to reap huge benefits as well, with the potential for millions of dollars in annual fees to law firms and support services plus ancillary revenue for hotels, restaurants and other businesses. Importers, exporters and international ventures based in California also will be able to have their arbitrations heard locally without having to travel to other jurisdictions. This development has the potential to be great news for the international arbitration community in California and worldwide.
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