When negotiating international agreements, in-house counsel of multinational corporations routinely insert provisions requiring that disputes between the parties be settled through arbitration rather than litigation. For in-house counsel, the predictability offered by established arbitration forums far outweighs any potential negatives. Historically, arbitration clauses call for arbitration proceedings to take place in cities such as New York, London, Paris, Hong Kong and Singapore. With the recent establishment of the Atlanta International Arbitration Society (ATLAS), however, Atlanta’s standing as a compelling site for international arbitration proceedings is strengthened, and counsel should consider the city when drafting commercial arbitration provisions.
Advantages of international arbitration
For an in-house attorney working on international transactions, the choice of law and forum clauses are critical, especially when performance occurs in an unfamiliar jurisdiction, a jurisdiction where litigation results are particularly unpredictable, or a jurisdiction where there is reason to believe the other party will be favored. International arbitration allows in-house counsel to require contractual partners to pursue any disagreements that arise through arbitration procedures that will be fair to both parties.
Additionally, by agreeing to arbitration, the parties afford themselves maximum flexibility in selecting both the place where the dispute will be resolved and the law that will be applied. For example, an in-house counsel negotiating a contract with a telecommunications company in the United Arab Emirates may agree to the application of UAE law, but only if the telecom company agrees to have a tribunal in Paris (or Atlanta) hear the case under the auspices of an internationally recognized arbitration forum. Through the selection of both the site of the arbitration and the law to be applied, the parties can design a process that adequately protects each party’s interests.
Another important advantage of using arbitration is that under the United Nations Convention on the Recognition of and Enforcement of Foreign Arbitral Awards of 1958 (known as the New York Convention), enforcing the judgment of an arbitration panel is much easier than attempting to enforce a court judgment from one country to another. More than 140 counties have ratified the New York Convention. Applying the example in the previous paragraph, because France and the United States were two of the original signatories in 1958 and the UAE is the most recent as of 2006, an arbitration award issued in a Paris arbitration is likely to be enforced in both the UAE and the U.S.
As highlighted on the ATLAS website, arbitration in Atlanta provides additional certainty for in-house counsel. For example, the 11th Circuit, a federal appellate court with jurisdiction over a number of U.S. states, including Georgia, has issued influential rulings creating an environment in which arbitration ruling awards will be upheld and not subject to appeal. Thus, in-house counsel who choose Atlanta as the site for their arbitration proceedings can define and customize the arbitration rules that will be enforced in the resolution of their disputes, with relative certainty that they will not be subject to an effective legal attack, and focus their energies on other critical provisions of the transaction being negotiated.
Additionally, Georgia has a relatively long history of being an attractive home for international arbitration. In 1988, it enacted legislation that reflected the 1985 United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. The 1988 law was updated in 2012 with the influence of ATLAS, securing Georgia’s position as a world-class site for arbitration proceedings.
Atlanta is the home to the third-largest aggregation of Fortune 500 companies in the U.S. and is the U.S. headquarters of many international companies. Additionally, it offers a relatively low cost of doing business and the world’s busiest airport, which makes it easy to bring global parties together in a conducive yet sophisticated environment. For all of these reasons, Atlanta should be on the short list of preferred venues for international arbitration.