BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 907|
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THIRD READING
Bill No: SB 907
Author: Monning (D)
Amended: 4/8/14
Vote: 21
SENATE JUDICIARY COMMITTEE : 7-0, 4/1/14
AYES: Jackson, Anderson, Corbett, Lara, Leno, Monning, Vidak
SUBJECT : International commercial disputes: representation
and assistance
SOURCE : Author
DIGEST : This bill provides that in any proceeding or
procedure conducted pursuant to the statutes governing the
arbitration or conciliation of international commercial
disputes, the parties may appear in person or be represented or
assisted by any person of their choice.
ANALYSIS :
Existing law:
1. Existing rule of court provides that, at the discretion of
the court upon written application, as specified, an
out-of-state attorney may appear before a court as counsel
pro hac vice provided that an active member of the State Bar
of California is associated as attorney of record.
2. Provides that no person shall practice law in California
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unless they are an active member of the State Bar.
3. Governs (domestic) arbitrations, including enforcement of
arbitration agreements and conduct of arbitration
proceedings, among other things.
4. Provides that a party to an arbitration has the right to be
represented by an attorney at any arbitration proceeding or
hearing, as specified. Authorizes an out-of-state attorney
to appear on behalf of a client in arbitration as long as the
out-of-state attorney files a certificate with specified
information, approved by the arbitrator, filed with the State
Bar of California, and served on all parties to the
arbitration.
5. Provides that an out-of-state attorney participating in an
arbitration is subject to the disciplinary jurisdiction of
the State Bar of California.
6. Title 9.3 of the Code of Civil Procedure (CCP), governs the
arbitration and conciliation of international commercial
disputes, if the arbitration or conciliation is in
California, subject to any agreement which is in force
between the United States and any other state(s). Existing
law specifies the circumstances under which an arbitration or
conciliation agreement is "international."
7. Provides that the title governing the arbitration and
conciliation of international commercial disputes not affect
any other law in force in California by virtue of which
certain disputes may not be submitted to arbitration or may
be submitted to arbitration only in accordance with
provisions other than those of the title.
8. Provides that the parties may appear in person or be
represented or assisted by any person of their choice, and
that a person assisting or representing a party need not be a
member of the legal profession or licensed to practice law in
California.
This bill:
1. Repeals provisions relating to representation and assistance
of parties and instead provides that, in any proceeding or
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procedure conducted pursuant to the title governing the
arbitration and conciliation of international commercial
disputes, the parties may appear in person or be represented
or assisted by any person of their choice. It also provides
that a person representing or assisting a party need not be a
member of the legal profession or licensed to practice law in
California.
2. Makes various findings and declarations.
Background
In 1985, the United Nations Commission on International Trade
Law adopted a model law on International Commercial Arbitration
(UNCITRAL model law) to provide a framework for the resolution
of commercial disputes involving multiple nations from varying
legal traditions. Three years later, with the passage of AB
2667 (Killea, Chapter 23, Statutes of 1988), California enacted
specific statutes governing the arbitration and conciliation of
international commercial disputes according to the standards of
that UNCITRAL model law. As described in the Senate Judiciary
Committee's analysis, the legislation sought "to permit the
arbitration [and conciliation] of international commercial
disputes in California according to accepted international
standards, thereby rendering foreign nationals more amenable to
negotiating their disputes in this State."
In Title 9.3 of the CCP, these statutes specify the form of the
arbitration agreement, delineate judicial involvement in aid of
arbitration, provide for the composition and jurisdiction of
arbitral tribunals, establish the manner and conduct of
arbitrations, govern the making of awards and termination of
proceedings, and specify the conduct and effect of conciliation
procedures. Among these provisions, under the chapter
pertaining to conciliations, Section 1297.351 of the CCP
provides that "the parties may appear in person or be
represented or assisted by any person of their choice. A person
assisting or representing a party need not be a member of the
legal profession or licensed to practice law in California."
Comments
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According to the author:
In 1988, the California Legislature enacted [AB 2667
(Killea, Ch. 23, Stats. 1988)], to recognize, support and
promote the benefits of international commercial arbitration
and conciliation. The Act is contained in Title 9.3 of the
Code of Civil Procedure. Code of Civil Procedure Section
1297.351 is part of the Act, and provides: "The parties may
appear in person or be represented or assisted by any person
of their choice. A person assisting or representing a party
need not be a member of the legal profession or licensed to
practice law in California." Although that language is not
limited to international conciliation on its face, it
appears in Chapter 7 of Title 9.3, a Chapter within the Act
dealing with international conciliation. This has resulted
in ambiguity, leading some to conclude that this same
language does not apply to international commercial
arbitration. [ . . . ]
[As a result of this ambiguity,] California has not been
able to become a center for international commercial
arbitration, which is one of the fastest growing areas of
law practice . . . .
The lack of international arbitrations in California works
to the disadvantage of all California stakeholders, imposing
needless costs on California companies, depriving
California's legal, business and tourism industries of
commercial opportunities, and depriving the State of tax
revenues. California's robust, internationally oriented
economy and concentration of large companies occupying
positions of global leadership make California an ideal
venue for international commercial arbitration. The
economic benefits of being a center for international
commercial arbitration are substantial, broad-based, and
distributed across both the state and municipal levels. The
advantages range from an increase in business for California
international lawyers (and supporting experts, translators,
stenographers, and other professionals and staff) to an
increase in business for hotels, restaurants, and the
business sector in general.
California should and could become a major center for
international commercial arbitration. California laws
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should promote that policy, consistent with the original
intent of the Act. This bill would fix an ambiguity in the
law that has prevented that from happening. (Emphases in
original.)
Prior Legislation
SB 624 (Steinberg, 2013) would have, among other things,
provided that a person representing or assisting a party in an
international commercial dispute proceeding need not be a member
of the legal profession or licensed to practice law in
California. This bill died in the Senate Rules Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 4/9/14)
California Dispute Resolution Council
Conference of California Bar Associations
Girardi/Keese Lawyers
AL:d 4/9/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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