Tuesday, February 18, 2014

Summary: New York - A Bridge Too Far or a Place Called Home for Latin American Arbitration?

By Cara Caponi

Panelists explained their perspectives on client experiences and differences in legal systems.

Speakers:

Gabriela Alvarez-Avila, Partner, Curtis, Mallet-Prevost, Colt & Mosle LLP
Natalia Lamas, Associate Lawyer, Ferro, Castro Neves, Daltro & Gomide Advogados
Jeffrey A. Rosenthal, Partner, Cleary Gottlieb Steen & Hamilton LLP
Henry Weisburg, Partner, Shearman & Sterling LLP
Anibal Sabater, Partner, Norton Rose Fulbright (Moderator) [Download his presentation]

Summary

On February 6, AS/COA and the New York International Arbitration Center hosted a panel of legal experts to discuss the advantages and challenges of using New York City as a seat for international arbitration. Panelists explained their perspectives on client experiences and differences in legal systems.

The Importance of Location Selection Norton Rose Fulbright’s Anibal Sabater asked the panelists if the seat of arbitration is really an important factor in deciding arbitration cases. Ferro, Castro Neves, Daltro & Gomide Advogados’ Natalia Lamas said it’s important that attorneys are familiar with the law of their contracts and that it's critical to negotiate a seat of arbitration where they are also familiar with the laws. Sabater noted that there is little uniformity to “the judiciaries, to the courts, to their sophistication, and how familiar they are with complex international arbitration questions.” Attorneys and their clients sometimes disagree about where they should seek the seat of arbitration. Cleay, Gottieb, Steen & Hamilton LLP’s Jeffrey A. Rosenthal explained that instead of basing the decision on convenience, he encourages his clients to "think more about what is the law in those jurisdictions and how developed is it." He added: "Some are more favorable than others.”  The Case for New York Panelists held mostly positive views of New York City as a seat for arbitration. Shearman & Sterling LLP’s Henry Weisburg cited manifest disregard doctrine as the main deterrent for choosing the United States as a seat of arbitration but noted that it’s “almost never” a problem for international disputes. When considering New York as a seat of arbitration, Rosenthal noted that even within the United States, “the interpretation of the law and the power of the courts is different in different jurisdictions.” Weisburg added: “The single strongest thing that New York has is those two dozen [federal] judges who we know by name and they are all, to the last man and woman, they are very pro-arbitration.” Because of the high quality of the judiciary, New York remains a popular place to arbitrate. Curtis, Mallet-Prevost, Colt & Mosle LLP’s Gabriela Alvarez-Avila and  Lamas were more cautious. Lamas said that many of her Brazilian clients seek to arbitrate in Miami because it is less expensive than New York and “Latin Americans feel at home there.” Comparing New York to other international cities, Lamas remarked that her Brazilian clients prefer Paris or Geneva because they are more familiar with their civil law structures as opposed to the United States’ common law system. Alvarez-Avila said that Washington, D.C. is often chosen over New York in NAFTA-related cases because many international institutions are based in the U.S. capital. She also raised the point that coming to the United States may not be that easy for all clients, be it for political reasons or visa issues. Sabater made the final observation that because New York is the world’s financial capital, almost all international money transfers must pass through the city. Rosenthal agreed that even if the parties have no direct connection to New York, “the easiest path to enforcement” is to have the arbitration based there, as money wires can be frozen by the federal courts as they pass through the New York banking system.

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Summary: New York - A Bridge Too Far or a Place Called Home for Latin American Arbitration?

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