Civil Practice Sb 383

• Jurisdiction: Georgia,United States
• Publication year: 2010
• Citation: Vol. 29 No. 1

Georgia State University Law Review

Volume 29 j 17

Issue 1 Fall 2012

4-3-2013

Civil Practice SB 383

Georgia State University Law Review

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Recommended Citation

Georgia State University Law Review (2013) "Civil Practice SB 383," Georgia State University Law Review: Vol. 29: Iss. 1, Article 17. Available at: http://digitalarchive.gsu.edu/gsulr/vol29/iss1/17

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CIVIL PRACTICE

Arbitration: Amend Article 1 of Chapter 9 of Title 9 of the Official Code of Georgia Annotated, Relating to General Provisions for Arbitration, so as to Repeal Part 2, Relating to International Transactions; Provide for a Short Title; Provide for a Statement of Purpose; Provide for Applicability; Provide for Definitions; Provide

for Procedure; Provide for Court Intervention; Provide for an Arbitration Agreement; Provide for Selection and Disqualification of Arbitrators; Provide for Challenges to Arbitrator Selection and Substitution of Arbitrators; Provide for Interim Measures; Provide for Commencement of Arbitration Proceedings and Statements of

Claims and Defenses; Provide for Default; Provide for the Appointment of Experts; Provide for Rules Applicable to Disputes; Provide for Settlements and the Form and Contents of Arbitration

Awards and Corrections to an Arbitration Award; Provide for Recourse Against an Arbitration Award; Provide for Recognition

and Enforcement of Arbitration Awards; Provide for Related Matters; Provide for an Effective Date and Applicability; Repeal Conflicting Laws; and for Other Purposes

Code Sections:

Bill Number: Act Number: Georgia Laws: Summary:

O.C.G.A. §§ 9-9-20 to -29 (new); §§ 9-9-30 to -43 (amended); §§ 9-9-44 to -59 (new) SB 383 713

2012 Ga. Laws 961

The Act repeals the previous international transactions portion of the arbitration code and establishes an entirely new framework governing international commercial arbitration. Parties to an international contract containing an arbitration agreement may now look solely to the Act for rights, remedies, and procedures relating to the international arbitral

2012] LEGISLATIVE REVIEW 335

process, rather than having to refer to the domestic code and international code in tandem. The Act is based upon the UNCITRAL Model Arbitration Law, as amended in 2006, and includes several provisions adopted from other states and countries, as well as new provisions unique to Georgia. The Act is compatible with federal law, including international treaties, and serves arbitration's goals of fairness, efficiency, and party autonomy. Effective Date : July 1, 2012

History

In an era where globalization and multinational corporations are commonplace, business partners from different countries inevitably encounter legal disputes and turn to arbitration for settlement.¹ Locations around the world compete for the opportunity to host these arbitrations by crafting a favorable legal regime.² International businesses benefit from a neutral, arbitration-friendly site in which to arbitrate, and the host location receives increased local revenues from the adverse parties, judges, and lawyers that come to the area.³ Georgia modernized its arbitration statute in 1988, addressing international arbitration in a separate part intended to supplement both the federal and state domestic statutes.⁴ Beginning with a list of

1. See generally Interview with Douglas Yarn, Professor of Law and Director, Consortium on Negotiation and Conflict Resolution, Georgia State University College of Law, in Atlanta, Ga. (Apr. 12, 2012) [hereinafter Yarn Interview] (discussing the evolution of arbitration law in Georgia).

2. Id.

3. Id. Hosting arbitrations generates revenues similar to convention business, provides the possibility of hiring local attorneys to help arbitrate, and makes the location more attractive to international commerce. Electronic Mail Interview with Sen. Bill Hamrick (R-30th) (Apr. 10, 2012) [hereinafter Hamrick Interview]; Yarn Interview, supra note 1. Florida has been a vanguard in America for international arbitration since it adopted an international arbitration provision, as it has pursued arbitrations between South American and Caribbean corporations. Yarn Interview, supra note 1 .

4. 9 U.S.C. §§ 1-16 (2011); O.C.G.A. §§ 9-9-1, -30 (2011). A "modern" arbitration statute provides for the arbitration of future disputes as well as submissions of existing disputes. Yarn Interview, supra note 1. At the time of its passage, Georgia only had a modern arbitration statute for disputes arising in the construction industry, and groups, such as the Georgia Bar, supported

exceptions, Part One of the arbitration statute covered domestic disputes.⁵ Part Two provided for international arbitrations but was not a stand-alone system.⁶ International parties that sought to arbitrate in Georgia had to operate under the general domestic arbitration statutes and then consult with the second part for additional provisions intended to fill any gaps for international arbitrations.⁷ At that time, there was a consensus that Georgia did not need an independent international arbitration statute and that the domestic statutes, augmented by these few specialized provisions, would adequately manage any procedural issues that arose.⁸

The 1988 legislation did not succeed in making Georgia a hotspot for international arbitration, as the dual provisions, coupled with the inherent shadow of federal preemption, proved too complex for parties not already familiar with Georgia law.⁹ When passed, the Georgia Arbitration Code was on the leading edge of international arbitration legislation¹⁰; however, other states and countries continued to improve their own arbitration statutes, and a new set of international norms began to evolve.¹¹ The United Nations Commission on International Trade Law (UNCITRAL) model arbitration law (MAL) emerged as a foundation for international

modernizing the entire arbitration system. Id.; see also Douglas Yarn, Proposed Changes in the Arbitration Law of Georgia, 23 Ga. St. Bus. J. 152 (1986-1987).

5. See O.C.G.A. § 9-9-2 (2011).

6. Id. § 9-9-30.

7. Id.

8. Yarn Interview, supra note 1.

9. Id. For instance, the Georgia domestic arbitration statute provided that arbitration decisions could be overturned judicially for "manifest disregard of the law." O.C.G.A § 9-9-13 (b)(5) (2011). However, federal law preempts vacatur on such grounds in international disputes. See Hall St. Assoc., L.L.C. v. Mattel, Inc., 552 U.S. 576, 578 (2008) (holding that the FAA provides exclusive grounds for vacatur); Interview with Glenn P. Hendrix, Managing Partner, Arnall Golden Gregory, LLP, Founding Member, President, AtlAS, in Atlanta, Ga. (Apr. 9, 2012) [hereinafter Hendrix Interview]; Yarn Interview, supra note 1; Video Recording of House Judiciary Committee, Mar. 15, 2012 at 1 hour, 45 min. 38 sec., (remarks by Prof. Douglas Yarn), http://www.house.ga.gov/committees/en-US/CommitteeArchives106.aspx. Only a party familiar with the American system of federalism would appreciate this distinction, and the additional complexity made Georgia less attractive as a neutral arbitration location. Yarn Interview, supra note 1.

10. Executive Summary, Douglas Yarn, Proposed Revisions to Georgia's International Commerce Arbitration Law (Jan. 26, 2012) (on file with the Georgia State Law Review) [hereinafter Executive Summary].

11. Id. International conventions emerged such as the New York Convention. Yarn Interview, supra note 1. More states began adopting international arbitration statutes, and countries like Singapore aggressively pursued the international arbitration business. Executive Summary, supra note 10; Yarn Interview, supra note 1.

2012] LEGISLATIVE REVIEW 337

arbitration statutes.¹² Although the UNCITRAL MAL had been adopted in 1987 prior to the adoption of the Georgia statute, no countries had yet adopted the MAL; thus, the MAL was not the international standard at the time, and Georgia legislators adopted only the portions that were useful at the time.¹³ The MAL has since become the standard in international arbitration, and many states use the approach for their own statutes.¹⁴ For example, Florida replaced its own international arbitration scheme with the UNCITRAL model.¹⁵ In response to these developments in international arbitration, the Atlanta International Arbitration Society (AtlAS), formed in January 2011 to promote Atlanta and Georgia as a situs of choice, created a task force of attorneys and legal scholars to analyze this issue and craft a solution for Georgia.¹⁶

Initial suggestions that the original integrated scheme could be salvaged gradually gave way to the consensus that the entire international arbitration code should conform to the UNCITRAL MAL.¹⁷ While the original Georgia provision was unique in its design, basing the Georgia code on a widely-accepted model such as the UNCITRAL MAL ensured that outside parties would more readily understand and be able to adopt the Georgia law.¹⁸ The task force adopted the UNCITRAL MAL as its foundation and began examining how to improve upon it.¹⁹ In addition to bringing the language in conformity with the laws of Georgia, the task force studied amendments to MAL introduced by other states and countries and considered additional original improvements.²⁰

The task force found ample support for their recommended arbitration overhaul. Senator Bill Hamrick (R-30th) acted as the main advocate of the Act in the legislature.²¹ Governor Nathan Deal had sponsored the original Georgia international arbitration legislation in

12. Executive Summary, supra note 10.

13. Yarn Interview, supr...