Golden Gateway: Why Transatlantic Commerce Needs California as Its New Arbitration Hub

Written by Alexandra Schieferer

Introduction

The latest Arbitration Statistics from the International Chamber of Commerce (ICC) reveal a rapidly shifting global landscape—while the United States remains a top-five destination for major commercial disputes, arbitral hubs like the UAE have surged onto the world stage, signaling that the old order is being challenged.¹ As transatlantic businesses seek reliable and future-proof dispute resolution, parties are increasingly shopping for venues that promise digital agility and procedural certainty.² For the U.S., this is a wake-up call.³ Innovation is the only way American venues can keep pace with the arbitral hubs of Asia and the Middle East.⁴ If transatlantic commerce is to enjoy predictable and efficient dispute resolution, American arbitration must innovate—and California leads that charge.⁵

Global Competition Intensifies

With 72 ICC cases in 2024, the U.S. remains behind London, Paris, and Geneva but now faces fast-rising competition from the UAE, which has entered the top tier for the first time.⁶ This shift highlights that liberal, tech-friendly venues are increasingly attractive—and if the U.S. fails to innovate, its share of global arbitration risks falling.⁷ Further, parties pragmatically select legal environments that promise efficiency, with English, U.S., Swiss, Brazilian, French law, and others preferred across diverse cases.⁸

California’s Progressive Arbitration Reforms

The U.S. has a comeback card to play: California’s reforms have the potential to set the state apart from most competitors in arbitration.⁹ By adopting the California International Arbitration and Conciliation Act (CIACA)¹⁰ in 1988, California became the first U.S. state to implement the United Nations Commission on International Trade Law (UNCITRAL) Model Law¹¹ on International Commercial Arbitration—internationalizing its arbitration framework in line with global standards.¹² With the passage of Assembly Bill (AB 1903)¹³ in 2018, California became one of just two US states to fully incorporate the 2006 Model Law amendments, including modern provisions for electronic agreements.¹⁴ Consequently, international parties receive global best practices in California, relying on the same framework used in major arbitration centres like London and Paris, which creates a pattern of familiarity.¹⁵ Compare this to New York—the U.S.’s leading arbitration hub—which still relies primarily on its own procedural code instead of the internationally recognized Model Law framework.¹⁶

This was followed by the 2018 enactment of California Senate Bill 766¹⁷ which eliminated the Birbrower¹⁸ decision’s restrictive effects on foreign attorney representation, allowing non-California lawyers to represent parties in international arbitrations without pro hac vice admission.¹⁹ In practice, this means that California has extremely liberal “fly-in, fly-out” provisions: foreign and out-of-state attorneys can appear in international arbitrations without formal local admission or regulatory hurdles.²⁰

Appeal for Transatlantic Parties

Notably, California’s innovative sectors create appealing advantages for transatlantic disputes.²¹ First, Silicon Valley’s global dominance means many EU–U.S. tech licenses, research and development deals, know-how transfers, and venture investments include California-based entities.²² Technology disputes greatly benefit from California’s specialized arbitration resources, including the Silicon Valley Arbitration & Mediation Centre (SVAMC), which works with leading technology companies, law firms, and alternative dispute resolution (ADR) institutions around the globe.²³ Second, California’s substantial life sciences sectors engage in transatlantic partnerships, as demonstrated by initiatives fostering new transatlantic collaborations in the biotech and healthtech sectors.²⁴ Additionally, Hollywood’s entertainment industry faces evolving cross-border challenges, including recent trade tensions and the growth of transatlantic partnerships—such as co-productions and content deals with European broadcasters—that may increase demand for international arbitration services to resolve disputes involving European parties.²⁵

World Class Economy but Bad for Business?

California is the world’s fourth-largest economy with outstanding infrastructure, expertise, and global reach—which would seem to make it a natural choice for arbitration.²⁶ The state hosts 58 Fortune 500 headquarters, moves eleven percent of US exports through the busiest port in the Western hemisphere, and ties a quarter of its entire economy to international commerce.²⁷ Yet, despite these advantages, parties remain hesitant to choose the West Coast for arbitration—begging the question: what is holding California back?²⁸ The Golden State’s reputation in international arbitration has long been clouded by its historically restrictive laws, which fostered a sense of institutional bias.²⁹ Even the ICC Secretariat declined to seat arbitrations in California, citing the state’s former prohibition on foreign attorneys and its notoriously complex arbitration framework.³⁰ Thus, while California has modernized its legislation to align with international best practices, the state now faces an uphill battle to break into the competitive international arbitration marketplace because it must overcome long-standing negative perceptions.³¹

Recommendation

To cement its role as a global arbitration hub, California should actively promote its modernized legal framework by leveraging its technological leadership to pioneer digital-first arbitration practices. By strengthening partnerships with institutions like the SVAMC, the state can create a unique competitive advantage. Equally important is addressing lingering reputational concerns by showcasing success stories and positioning California as the natural venue for disputes in technology, life sciences, and entertainment. Through focused innovation and sector-specific branding, California can translate its legal reforms into genuine transatlantic influence.

Conclusion

California’s emergence as an international arbitration centre offers not only legal advancement, but strategic significance. By positioning itself as an innovative, technology-driven, and business-sensitive venue, California can counterbalance rising global competitors and foster renewed trust in transatlantic dispute resolution. Ultimately, this shift in perception—supported by modern reforms and persistent advocacy—will strengthen transatlantic economic ties, enhance predictability for global contracts, and bolster geopolitical stability for the world’s leading markets.

Posted in Blog

Written by Alexandra Schieferer

Share this post

Contact Us

Join Our Mailing List