New council pitches Boston as hub for international arbitration.

Byline: Kris Olson

It's not often that U.S. District Court Judge William G. Young has a kind word for alternative dispute resolution.

But Boston attorney Jared L. Hubbard says even the vocal champion of the jury system recently acknowledged in a conversation with him that international arbitration "is a different story."

Hubbard, of Fitch Law Partners, is president of the Boston International Arbitration Council, which after a soft launch is now ramping up its efforts to promote Boston as a destination for international arbitration.

A total of 158 countries have signed onto the now 61-year-old Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention. Generally speaking, the convention stands for the proposition that an arbitration decision granted in any one of those countries will be honored in all.

Sophisticated global businesses will put an international arbitration clause into their contracts because they want to make sure they are not giving away the "home court advantage" in any dispute, Hubbard says.

"You don't want to get hauled into Lebanese court because you are selling goods in Lebanon," he says.

Nor do foreign companies want to get sued in the American courts, given their expansive discovery rules, Hubbard says.

"For a lot of foreign companies, discovery is a frightening prospect," he says, noting that discovery is "a lot more focused" in international arbitration.

International arbitration can also be tailored so that the parties know that a dispute will be resolved in, say, 90 days, avoiding a prolonged period of uncertainty with litigation.

Absent an international arbitration clause, if a local company is dealing with a company in Western Europe, "it's really a rush to the courthouse" when a dispute arises, Hubbard says.

Moreover, Hubbard is aware of only one instance in the last 20 years that a damage award granted in an American courtroom has been enforced in a Chinese court, while an international arbitration award has a much better chance of being respected in China.

According to the New York Convention's website, China requires reciprocity and will apply the convention "only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the People's Republic of China." Still, that is a better situation than the courts provide.

But if international arbitration proceedings can be held...