FAQs on California International Arbitration Law and Practice
1. Why arbitrate in California?
California, one of the fastest growing international arbitration venues in the world, is home to many of the world’s largest and most innovative companies. It’s a gateway to the Pacific Rim and the Americas, a fair and neutral forum, and it has adopted the UNCITRAL Model Law on International Commercial Arbitration. California supports international arbitration and is welcoming to all.
California is the fifth largest economy in the world and a global leader in technology, life sciences, entertainment, energy, finance, agriculture, manufacturing, and shipping. California’s geographic positioning and powerhouse economy make it a strategically located venue with industry-specific expertise and cutting-edge resources.
California is also diverse and welcoming. California is a global destination with one of the world’s most diverse populations. Californians have strong cultural and commercial ties around the world. California is forward-thinking and innovative, and is widely recognized for its diversity, equity, and inclusion. All visitors will feel welcome, regardless of their race, national origin, ethnicity, sexual orientation, or gender.
California’s legal system is experienced and fair. The United States offers a reliable, predictable, and impartial legal system. The U.S. legal system adheres to the rule of law and provides for due process for all. Our courts are independent, free of undue influence, and well versed in the California state and U.S. federal laws that support international business, contract rights, and fair and impartial dispute resolution. With the benefit of this legal framework, California offers an ideal venue for the international arbitration of disputes for all parties..
California is an arbitration-friendly forum. Both U.S. federal law and California state law reflect a strong policy in favor of the arbitration of international commercial disputes. Our courts have a robust record in confirming and enforcing international arbitration agreements and awards. And parties have autonomy in tailoring procedures to fit their requirements.
In addition to the U.S. Federal Arbitration Act, California has an international commercial arbitration statute based on the UNCITRAL Model Law on International Commercial Arbitration, which provides an internationally recognized system for arbitrations. See Cal. Code Civ. Proc., § 1297.11 et seq. This statute also broadly authorizes foreign and out-of-state attorneys to represent their clients in international commercial arbitrations in California, under most circumstances, without registering or paying a fee. See Cal. Code Civ. Proc. §§ 1297.185-1297.186 for more information.
California’s legal sector is knowledgeable and supportive. California is a vibrant business locale and the home to many of the world’s leading law schools, law firms, and arbitration practitioners. Our community is experienced and knowledgeable about the practice of international dispute resolution and can readily provide any local support needed as and when disputes subject to arbitration arise. California practitioners also have substantial industry-focused expertise in key sectors.
Arbitral institutions from around the world administer cases in California. California welcomes arbitral institutions from around the world to administer cases in California. Several leading institutions maintain offices in California. Arbitral institutions in California operate independently and do not depend on government support.
California offers world-class facilities for international arbitration. Our leading metropolitan centers, including San Francisco, Los Angeles, and San Diego, offer world-class facilities for international arbitration, including global transportation access, leading hotels and restaurants, and conference centers that feature hearing rooms with cutting-edge technology.
And did we mention the weather and sights? Last but not least, California is one of the most beautiful places in the world, with unparallelled cultural attractions and a temperate climate throughout the year. When your work is done, enjoy our cities, beaches, wineries, mountain retreats, and all that the Golden State has to offer.
2. I’m new to the field. What are the benefits of international arbitration?
There are many, but most importantly, international arbitration allows for neutral decision-making for parties from different countries and legal systems, and equally important, it allows for international enforcement of those decisions. International arbitration avoids bias that might occur when one party or the other becomes subject to decision-making in a foreign court, under unfamiliar foreign laws and procedures, and often in a foreign language. It also allows the parties to select their decisionmakers, thus limiting concern over bias and corruption and allowing for the selection of decisionmakers with industry expertise. International arbitration offers a fair process known and acceptable to parties from different jurisdictions and legal systems. It also allows the parties to select the governing law and procedures. Importantly, unlike court judgments, which often have limited enforceability outside of the country in which they are rendered, international arbitration awards are enforceable in virtually every country as a result of several international treaties.
3. What statutes govern arbitration in California?
This summary of California’s legal framework for conducting an international commercial arbitration is not intended to, and does not, constitute legal advice. Readers should consult with a legal professional for advice.
Federal Arbitration Act (“FAA”). The FAA, enacted in 1925, is the cornerstone of arbitration law in the United States. It applies to both domestic and international arbitration. The FAA’s first chapter addresses the enforcement of agreements to arbitrate, as well as such issues as the appointment of arbitrators, securing the testimony of witnesses, and the recognition and enforcement of arbitral awards within the United States. The FAA applies throughout the United States and tracks many UNCITRAL Model Law principles.
New York Convention and Chapter 2 of the FAA. The United States is a party to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Chapter 2 of the FAA incorporates the provisions of the New York Convention and establishes a streamlined process for the recognition and enforcement of international arbitral awards in the United States.
Inter-American Convention and Chapter 3 of the FAA. The United States is also a party to the Inter-American Convention on International Commercial Arbitration (the Panama Convention), which facilitates the recognition and enforcement of arbitral awards between parties in the Americas. Chapter 3 of the FAA implements the Panama Convention in the United States.
California’s International Arbitration Act. In 1988, California enacted the first international arbitration statute in the United States, the “California International Arbitration and Conciliation Act,”(“CIACA”). It enacted this pioneering legislation to promote international arbitration in California by basing CIACA on the UNCITRAL Model Law on International Commercial Arbitration, thus ensuring a familiar and fair procedural arrangement for international practitioners. California is one of the few U.S. states that has adopted the UNCITRAL Model Law.
Practitioners should note that California has two separate arbitration statutes: one domestic, one international. The domestic statute is the California Arbitration Act, which can be found at Cal. Code Civ. Proc. §§1280 et seq. The international statute, CIACA, is at Cal. Code Civ. Proc. §§1297.11 et seq.
California’s legislature amended CIACA in 2018 to welcome foreign and out-of-state attorneys in good standing in their home jurisdictions to appear before arbitral tribunals seated in California without registering with the State or paying a fee. Accordingly, California is one of the few, if only, jurisdictions in the world to provide a statutory right for foreign counsel to appear in international arbitrations. (The only requirement is that the attorney must meet at least one of five conditions, such as that the “services arise out of or are reasonably related to the attorney’s practice in the jurisdiction in which the attorney is admitted to practice.” See Cal. Code Civ. Proc., §1297.186.)
In 2024, the California legislature enacted Assembly Bill No. 1903, which updates CIACA to incorporate most of the 2006 amendments to the UNCITRAL Model Law. This law, which will take effect on January 1, 2025, broadens what constitutes an arbitration agreement and revises (and strengthens) procedures for seeking, granting, and enforcing interim measures of protection in accordance with the UNCITRAL Model Law. This amendment modernizes California law and brings it into alignment with the laws of most leading arbitral jurisdictions.
4. Can a non-U.S. lawyer appear in an international arbitration in California?
Yes, non-U.S. lawyers can appear in an international arbitration without any need to register. In 2018, the California legislature amended California’s international arbitration statute, CIACA, to provide that non-U.S. and out-of-state lawyers are welcome to appear in international commercial arbitrations seated in California without the necessity of registering with the State Bar or paying a fee as long as foreign counsel satisfy any of five conditions, such as the services arise out of a matter that has a substantial connection with the jurisdiction in which the attorney is admitted to practice, or the services are performed for a client that has an office in the jurisdiction in which the attorney is authorized to practice. See Cal. Code Civ. Proc., § 1297.185 et seq. This legislative amendment erased any doubt created by the decision in Birbrower v. Superior Court, 17 Cal. 4th 124 (1998) about the ability of foreign or out-of-state lawyers to appear in California-based international arbitrations. (Out-of-state lawyers are required to comply with a simple registration process to handle domestic arbitrations taking place in the state. That requirement does not apply to international arbitration matters venued in California.)
5. Are California courts friendly to international arbitration? Will they enforce arbitration agreements and awards?
Yes, California courts are friendly to international arbitration. Both federal and state courts in California apply a strong policy of enforcement of arbitration agreements and arbitral awards. Courts, both federal and state, follow the law with respect both to the validity of arbitration agreements and the exceedingly narrow grounds upon which arbitral awards can be vacated.
The U.S. Supreme Court and the Ninth Circuit Court of Appeals (the federal appeals court covering California), as well as California state courts, have consistently upheld the finality and enforceability of international arbitration awards, construing the limited grounds for vacatur (found in the pertinent provisions of the New York and Panama Conventions and, where applicable, Section 10 of the Federal Arbitration Act) narrowly, consistent with modern international practice. The grounds for challenging foreign arbitration awards in the United States are set out in the governing treaties, i.e., Article V of the New York Convention and Article 5 of the Panama Convention.
Federal judges are more likely to preside over international cases, including the enforcement of awards, and an international arbitration case is likely to be subject to removal to federal court (absent explicit waiver) under Section 206 of the FAA.
Although California courts are protective of employee and consumer rights, they have a robust record of enforcing international arbitration awards. Further, the FAA generally preempts any state law that might interfere with the obligation to arbitrate that is required by a contract evidencing a transaction involving interstate or international commerce.
6. Do California arbitrators comply with international norms?
Yes. California has a deep bench of specialist international arbitrators who can ensure that international arbitral norms are adhered to and that all parties to the dispute are treated fairly. Care should be taken to select arbitrators who are trained and experienced in international arbitration. Parties may select the method for appointing the arbitrators to preside over their dispute, including through their choice of arbitration rules. Parties also have the opportunity to interview prospective arbitrators before appointing them.
7. Do California arbitrators apply the law?
Yes, as is standard practice in international arbitration, the substantive law agreed to by the parties is applied. If the parties have not agreed to the applicable substantive law, the Tribunal will apply the most appropriate law consistent with governing choice of law principles, as is also standard practice. California arbitrators rarely act as amiable compositeurs or ex aequo et bono and would only do so if expressly requested by the parties.
8. Am I limited to selecting arbitrators from California?
No, the parties are free to select arbitrators from outside of California. Arbitrators may come from other jurisdictions. However, as with any arbitration, it is often beneficial to have arbitrators and counsel who are knowledgeable of governing substantive and procedural laws and practices.
9. Are party-appointed arbitrators expected to be neutral?
Yes. Unless the arbitration agreement provides for non-neutral party-appointed arbitrators, party-appointed arbitrators must be neutral. That has been the rule in the United States since 2004.
10. What about arbitrator disclosures?
California’s international arbitration disclosure requirements are consistent with those throughout the United States. U.S. law and the rules of most international arbitration providers support full disclosure by arbitrators to protect parties and the integrity of the arbitration process. U.S. law thus exceeds the IBA Guidelines on Conflict of Interest in International Arbitration (2024) requirements. Likewise, California strongly favors arbitrator independence and impartiality. California’s international arbitration statute provides a list of circumstances that “might cause [a potential arbitrator’s] impartiality to be questioned.” See Cal. Code Civ. Proc. §1297.121. Such an allegiance to due process and disclosure ensures protection for parties from every part of the globe. However, please note that although California also has rigorous disclosure standards for consumer, employment and other domestic cases, those standards do not apply to international commercial arbitrations.
11. Is interim relief available in California?
Yes, parties may apply to the arbitral tribunal or courts for interim relief. The rules of most international arbitration institutions also empower the Tribunal to grant preliminary injunctions and other interim measures. California’s international arbitration code also provides for interim measures of protection. Some international arbitration rules also allow for appointment of an emergency arbitrator to issue interim relief. Interim awards are also enforceable under California’s international arbitration law.
12. Can arbitrators rule on their own jurisdiction? Does Kompetenz-Kompetenz apply?
Yes, in the United States and California, Tribunals have the power to rule on their own jurisdiction where the parties have delegated arbitral jurisdiction questions to the Tribunal. U.S. and California courts have determined that parties intend to delegate authority on jurisdictional questions to the Tribunal where the parties’ arbitration agreement incorporates arbitration rules that provide that the Tribunal has the power to determine its own jurisdiction. The rules of all the leading arbitration institutions provide for this delegation. When questions are raised in court regarding the existence of an arbitration agreement between the parties, the court will rule on that issue, leaving delegated jurisdictional issues to the Tribunal.
13. Can any arbitral institution administer cases in California?
Yes. All institutions are welcome to administer arbitrations seated in California and to administer evidentiary hearings venued in California.
14. Are ad hoc arbitrations allowed?
Yes. There are no restrictions on ad hoc arbitrations. However, most practitioners recommend reliance on a reputable arbitration institution to administer or support international arbitrations.
15. Does California allow choice of law provisions?
Yes, choice of law provisions are fully honored in commercial transactions in California. Parties are free to choose the substantive law governing the contract.
16. Is contract law different in California?
No, California contract law is based on well-understood common law principles, which are codified in California’s Civil Code and further developed by case law. Where California law substantively governs the dispute, its Civil Code applies, including its well-established rules for contract interpretation. As in other common law jurisdictions, California contract interpretation law looks first to the terms of the written contract to ascertain the intent of the parties; extrinsic evidence will not be admitted unless the contract language is ambiguous.
17. Will the parties be subject to U.S. discovery procedures?
No. In the absence of the parties’ agreement to the contrary, information exchange in international arbitrations in California follows international norms, such as those provided by the IBA Rules on the Taking of Evidence in International Arbitration. Choosing California as the venue for an international arbitration does not mean the parties will face U.S. discovery techniques, such as depositions, interrogatories, requests for admission, or burdensome e-discovery. Rather, the parties are free to allow, limit, or completely eliminate U.S.-style discovery in arbitration. Selection of international arbitration rules implies that international norms will be followed. Care should be taken to engage counsel and arbitrators who are experienced in international arbitration practice.
18. Are punitive damages awarded in international arbitration in California?
No, punitive damages awards are exceedingly rare in international arbitration and are precluded by most international arbitration rules. California does not compel the award of punitive damages in international arbitration. While arbitrators in the United States do, in principle, have the authority to award punitive damages on certain claims depending upon the contractual terms, such awards are exceedingly rare in domestic cases, and even rarer in international cases. Parties routinely deprive arbitrators of the authority to award punitive damages in their contract, including through their choice of arbitration rules. Many international arbitration rules, such as the AAA-ICDR International Arbitration Rules and the JAMS International Arbitration Rules, prohibit arbitrators from awarding punitive damages unless the parties expressly agree to such damages or required by law.
19. Does the U.S. Federal Arbitration Act or the California International Arbitration Act apply?
In the United States, the FAA applies to cases in federal and state courts where the proceeding is based on agreements to arbitrate evidencing a transaction involving commerce. In California state court, the CIACA, the California international arbitration statute, will also apply to supplement the provisions of the FAA (i.e., to fill gaps in the FAA, such as arbitrator disclosure requirements). In addition, the CIACA governs procedures in the California state courts to the extent they are set forth in the statute.
20. Is arbitration in California under the jurisdiction of the U.S. federal courts or the California state courts?
International arbitrations seated in California will be subject to the jurisdiction of the U.S. federal courts. Chapter Two of the FAA contains a jurisdictional provision, 9 U.S.C. § 203, that provides federal district courts with subject matter jurisdiction over actions or proceedings falling under the New York Convention. The Ninth Circuit Court of Appeals (the federal appeals court covering California) has explained that if the underlying arbitration agreement or award falls under the Convention and the action or proceeding relates to that agreement or award, then a federal district court has subject matter jurisdiction over the action or proceeding. FAA Chapter 3, 9 U.S.C. § 302 expressly incorporates the jurisdictional grant in 9 U.S.C. § 203 and applies it to actions and proceedings falling under the Panama Convention. Federal courts therefore have subject matter jurisdiction under both Conventions to enforce international arbitration agreements and to recognize and enforce international arbitration awards. If an action is initiated in state court that relates to an arbitration agreement or award falling under either Convention, it may be removed to federal court under the broad removal provisions of FAA Chapter 2 or 3, as applicable.
21. Is an arbitration hearing in California conducted under U.S. and California arbitration law?
Not necessarily. Arbitrations are subject to the jurisdiction of the seat. Accordingly, arbitrations seated in California are subject to U.S. arbitration law and the California international commercial arbitration code. But evidentiary hearings for arbitrations seated and administered outside California may be conducted in California for convenience. Such foreign-seated arbitrations remain subject to the arbitration law of the seat of the arbitration. (Applicable U.S. laws still apply to conduct undertaken by participants while in the United States.) Regardless of where the arbitration is seated, the parties are generally free to apply the substantive law of their choosing.
22. Are arbitrations in California private and confidential?
Private, yes; confidential by agreement. In the United States, arbitrations are private. Unless the parties agree otherwise, only the parties, their counsel, and witnesses may attend hearings before the arbitral tribunal and those, such as court reporters and translators, who are supporting the hearing. Arbitrations may also be confidential by party agreement or when provided for by the applicable rules. Most arbitration rules empower a Tribunal to issue a Confidentiality Order to protect proprietary or confidential information.
23. Does international arbitration in California cost more than going to court?
Typically not. International arbitration in California is known for being time and cost efficient. International arbitration offers the opportunity to avoid extensive discovery, motion practice, juries and substantive appeals, and can provide a more practical and economical dispute resolution process than litigation in U.S. courts. Many California international arbitrators and counsel have industry-focused expertise that can help add to the savings. Although parties advance arbitration costs (subject to cost allocation), arbitration of a dispute can result in substantially lower legal fees than litigation of that dispute in state or federal court. It’s important, however, to engage experienced and international arbitration counsel and arbitrators to achieve this benefit.
24. Is international arbitration in California compatible with mediation?
Yes, international arbitration is distinct from, but compatible with, mediation and other ADR processes. Parties should consider the benefits of settlement prior to, but also during, the arbitration. There are many experienced international mediators in California who can assist parties and their counsel in the settlement process. Dispute resolution professionals in California are attuned to the benefits of early, business-friendly dispute resolution. Experienced international arbitrators in California routinely provide opportunities for parties to pursue settlement directly, or with a party-selected mediator, if both sides so desire.
25. What about the logistics of a hearing in California?
Facilities. California has ample hearing rooms, at competitive prices, with sophisticated technology, remote and hybrid hearing capabilities, court reporting, language interpretation, breakout rooms, and more. Hearings may be held at arbitral institutions, conference facilities, hotels, private law firms, reporting services, and some law schools.
Reporting and Transcription Services. California has reliable and speedy transcription and court reporter services that also serve its extensive state and federal court systems.
Interpretation and Translation Services. California has translation and interpretation services for virtually all languages used in modern commerce and society, with a wide range of service providers.
Hotels and Accommodations. All major cities have hotels and accommodations at every price point. For more information, visit these official sites for venues in San Francisco, Los Angeles, and San Diego:
San Francisco: https://www.sftravel.com/
Los Angeles: https://www.discoverlosangeles.com/
San Diego: https://www.sandiego.org/
Visas. Under the U.S. Visa Waiver Program, visitors from 41 countries can travel to the United States for stays of 90 days or less without obtaining a visa. Business visitors from other countries can travel with a Business Visa.
Proximity and Availability of Academic Institutions. California has nineteen ABA-accredited law schools—more than any other U.S. state, located in all the major California cities. The outstanding law faculties and law students at these law schools often are available to assist in various ways.
More information and Other Resources. California Arbitration (CalArb.org) is a non-profit foundation supporting international arbitration and ADR in California. CalArb offers ongoing educational programming and other resources to support U.S. and foreign companies and their counsel.
CalArb website: https://calarb.org
Email: info@calarb.org