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GAR 100 - 10th Edition

Baker McKenzie

01 March 2017

Helped Peru triumph at ICSID again

People in Who’s Who Legal 12
Pending cases as counsel 300
Value of pending counsel work US$76.5 billion 
Treaty cases 14
Current arbitrator appointments

68* (of which 23 are as sole or chair)

Lawyers sitting as arbitrator 29

*Excludes sports cases

In the 1980s and 1990s, Baker McKenzie acted for US companies in a large number of claims against Iran at the Iran–United States Claims Tribunal in The Hague, becoming one of the first US law firms to acquire international arbitration expertise in the days before NAFTA and BIT claims. It went on to advise more than a dozen claimants against Iraq at the United Nations Compensation Commission after the first Gulf War. Since then, the firm has developed a thriving investment treaty arbitration practice alongside its commercial arbitration work.

Increasingly the firm is turning its attention to Asia. Partner Leng Sun Chan SC in Singapore took over as global head of the international arbitration practice in 2015, replacing Grant Hanessian in New York and Guenter Pickrahn in Frankfurt, who had shared the role for six years.

Hanessian remains head of the North America arbitration practice, and is alternate US member of the ICC Court. Various partners in other offices play an active role in the arbitration community. CIS disputes head Vladimir Khvalei in Moscow is a vice president of the ICC Court, chair of the Russian Arbitration Association, and former vice chair of the IBA arbitration committee. Habib Al Mulla in the UAE is vice chairman of the board of the Dubai International Arbitration Centre.

Network

Few practices have the same global reach as Baker McKenzie. The firm says it has around 200 lawyers working on international arbitration in more than 50 jurisdictions – though the number spending more than half their time in the field is closer to 70. Collectively, the group is fluent in more than 20 languages, including Haitian, Creole, Kazakh and Vietnamese.

Alongside the traditional centres, the arbitration practice has acquired outposts in Almaty, Caracas, Dubai, Ho Chi Minh City, Istanbul, Johannesburg, Kuala Lumpur, Lima, Manila and Mexico City, and it is often the first port of call for clients with cross-border disputes in emerging jurisdictions. The firm’s Latin American network is particularly impressive, and appears to be bringing in more investment treaty work.

Who uses it?

Air Liquide, Bombardier, Czech bank CSOB, Dow Chemical, FedEx, GlaxoSmithKline, Hyundai, Lukoil, KPMG, Samsung, Siemens, Toshiba and Verizon have all used the firm. More recent clients include the British Olympic Association, FC Barcelona and Texan drilling contractor Weatherford International. In addition, Papua New Guinea and state-controlled entities such as Mexico’s Pemex and Brazil’s Petrobras have turned to the firm for commercial matters.

At ICSID, the firm’s clients on the investor side include mining group Anglo American and Dutch coffee investor Longreef in claims against Venezuela; Kazakh private equity group Visor Capital in a recently settled claim against Kyrgyzstan; Turkish energy company Karkey Karadeniz in a claim against Pakistan; and meat processing group Gavrilovic in a claim against Croatia.

On the state side, it’s defended Hungary in one ICSID matter and Mongolia in a US$600 million UNCITRAL claim brought by three Chinese entities. In 2015, China also listed Baker McKenzie on a panel of 15 international firms that will advise it on investment treaty matters. Kazakhstan’s state-owned gas company KazTransGaz has turned to the firm for a potential Energy Charter Treaty claim against Georgia worth at least US$126 million.

Track record

In 2011, a team led by Hanessian helped Brazil’s state oil and gas company Petrobras obtain a US$200 million award in a dispute with former Halliburton subsidiary KBR over faulty oil platforms. The parties settled in 2012, bringing an end to enforcement proceedings in New York.

Baker McKenzie brought in a great result for Weatherford in 2014, winning a US$45 million award against Dubai’s Gulf Oil and Gas in an ICC dispute over the development of a gas field in Turkmenistan.

In Prague, Martin Hrodek led a team that achieved an US$85 million award for Czech bank CSOB in 2011 in an ICC claim against the Czech Republic. It was one of the first arbitrations to consider the application of state aid laws to a bank bailout.

The firm has also had success defending states. Baker McKenzie’s associated Peruvian firm, Estudio Echecopar, helped the government of Peru bring an end to a dispute with two Spanish power companies that had spawned three ICSID cases. The investors paid US$40 million to the state as part of the settlement. White & Case was co-counsel in that matter.

For Uzbekistan, Baker McKenzie secured a precedent-setting award in favour of Uzbekistan in 2009 when a case brought by Swiss wheat trader Romak was dismissed at the jurisdictional stage, with the tribunal drawing a distinction between “investments” in a country and one-off transactions.

The firm has also successfully defended Turkey in two arbitrations under the Poland–Turkey BIT, and Papua New Guinea in an ICDR arbitration seated in New York.

In 2015, the firm helped Visor Capital settle a US$700 million ICSID claim against Kyrgyzstan over the country’s second-largest gold deposit.

Recent events

The Lima office brought in another ICSID win for Peru as co-counsel with White & Case, helping to knock out an US$800 million claim by the US’s Renco Group concerning liability for an environmental clean-up at a smelting facility. Peru’s counsel were able to show that the claimant hadn’t complied with a treaty requirement to waive its right to pursue court litigation over the same dispute. A new ICSID claim may yet be filed, however.

In another ICSID case, the firm failed to prevent Hungary from being ordered to compensate a French corporate services provider, Edenred, but did succeed in reducing the damages to one-quarter of what had been claimed.

The Miami office represented US real estate developer IBT Group in three cases against Panama (two at the ICC and one at ICSID) relating to various hospitals, medical centres and asphalt plants in the country. The disputes were settled, with the client recovering everything it sought without jeopardising its relationship with the state.

The team in Frankfurt continued its representation of Siemens in a €5.8 billion ICC case against Finnish utility TVO over the construction of a nuclear power plant in Finland. A Stockholm-seated tribunal issued a partial award in late 2016 that TVO says went mostly in its favour, but that interpretation is disputed and the case still has some way to run before a final award.

The Frankfurt office also acted for an energy consortium made up of Germany’s STEAG and Austria’s EVN in a €1.2 billion ICC case against members of Japan’s Hitachi group concerning delays in the construction of a power plant on the Rhine. The consortium announced in late 2016 that it had won an award worth €200 million though the actual value is contested by the other side. Baker McKenzie is advising the same client in a parallel ICC case concerning alleged technical shortcomings at the plant, which has yet to see an award.

Members of the firm’s West Coast practice persuaded a California court to freeze the assets of a Russian former politician in support of efforts to enforce an LCIA award issued in favour of Russian businessman Vitaly Smagin in a dispute over a Moscow mall.

The practice announced five partner hires in 2016, the most significant being US-born energy disputes specialist Andy Moody, who joined the London office after five years at Eversheds. Former K&L Gates partner JP Duffy joined in New York while Charlotte Biljani joined the Dubai office after six years at Norton Rose Fulbright. The Johannesburg office welcomed Sonia de Vries and Adine Abro from South African firm Cliffe Dekker Hofmeyr.

It also made up several new partners: Teresa Michaud in San Francisco, Kate Corby in London, Tiago Zapater in São Paulo, Itse Oosterhoof in Amsterdam, and Elaine Yap and Arief Emran Arifin in Kuala Lumpur.

In Chile, José Joaquín Ugarte and Santiago Ried left the firm to set up their own boutique with another former Baker McKenzie partner, Pablo Correa.

Client comment

“Their dedication to the case is what we appreciate the most,” says Laura Anguera Armengol, director of legal services at football team FC Barcelona, which used the firm for an arbitration worth almost €40 million. She also praises “their dedication to the preparation of the witnesses and the hearing”.

Michael McNicholas, general counsel at Visor, says the firm was “very responsive” in its work on the Kyrgyzstan case mentioned above. They gave “solid legal advice” and “put together a strong cross-border litigation team”, he adds.