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GAR 100 - 10th Edition

Baker Botts

01 March 2017

Helped Chevron defeat a billion-dollar lawsuit in favour of arbitration

People in Who’s Who Legal 6
Pending cases as counsel 32
Value of pending counsel work US$20 billion 
Treaty cases 2
Current arbitrator appointments 7 (of which 6 are as sole or chair)
Lawyers sitting as arbitrator 4

Traditionally pre-eminent in oil and gas, the Houston firm with roots dating back to 1840 has been involved in overseas disputes for many decades but only launched a dedicated international arbitration practice group in 2001. Since then, Baker Botts has appeared regularly on the bigger international disputes, including a case against Yemen that was the most valuable ICC matter of its day.

More recently, Russia asked it to be the strategic coordinator for all Yukos-related arbitrations and enforcement proceedings – including the claim by the bankrupt oil company’s majority shareholders that resulted in a record-breaking US$50 billion award against the state in 2014.

Since 2010, the group has been co-chaired by Jay Alexander in London and Michael Goldberg in Houston. Other names to know include Philip Punwar and Jonathan Sutcliffe in Dubai; Chilean Alejandro Escobar, a former ICSID senior counsel who is active in Latin America-related investment treaty work, and Johannes Koepp, a German who featured in GAR’s “45 under 45” ranking of leading younger practitioners in 2011. Both Escobar and Koepp are based in London.

Network

The most important office for the international arbitration group is London, which fields partners with civil and common law backgrounds. But there are also personnel in Dubai, Houston, New York and Washington, DC. The wider firm has offices in 14 cities, including Beijing, Brussels, Moscow and Hong Kong.

Who uses it?

The firm’s work for Russia in the Yukos cases has been well documented. It also acts for Russian state oil and gas companies Rosneft and Gazprom and a number of leading financial institutions in that country (including VTB Capital).

Other energy clients include ExxonMobil, Total, Hunt Oil Company and the group has also represented Rio Tinto, PT Bumi Resources, Kia Motors Corporation, chemicals maker Saudi Basic Industries Corporation and China’s Huawei Technologies.

State clients for investment treaty matters include Ecuador and Costa Rica.

Track record

In the ICC case against Yemen mentioned above, the firm helped its clients Hunt Oil and ExxonMobil to win costs, some damages and, most importantly, the dismissal of an US$8 billion counterclaim.

Another big win has been against Ghana – US$87 million.

On the defence side, the firm helped Ecuador defeat a US$55 million investment treaty claim brought by an affiliate of US hedge fund manager Elliott Associates in 2012. Baker Botts also won a costs award in the state’s favour that was successfully enforced.

The Yukos case resulted in a high-profile loss for Russia but not an unmitigated one. Although the US$50 billion arbitral award was the biggest of all time, it is to be noted that the firm with co-counsel Cleary Gottlieb Steen & Hamilton won a US$80 billion reduction on the original amount sought. The award has since been set aside in the Dutch courts.

Another Yukos-related claim, brought by a group of Spanish investment funds that had a minority stake in the oil company, also brought a nuanced result. Defending Russia, the firm lost on liability but managed to cut down the size of the damages awarded to US$2 million. That award has also been set aside (see ‘Recent events’).

Baker Botts is also known to have won US$200 million for Kia Motors in a dispute over a joint venture in Brazil; helped a general contracting company recover around US$25 million in a DIAC arbitration; and fended off a US$95 million claim in an arbitration over a heavy oil project in Latin America.

It touts expertise in fast-track arbitrations: for instance, in a dispute in which it won a US$100 million award for a French-Saudi Arabian client 120 days after filing a claim, and a sports sponsorship dispute in which it gained a favourable award for a US sports team within 90 days.

Recent events

The firm achieved success for Russia in persuading a Swedish appeal court to set aside the US$2 million award in favour of Spanish minority shareholders in Yukos on jurisdictional grounds (Swedish firm Lindahl was co-counsel).  It also helped airport operator Newco enforce an LCIA award worth US$4 million against Belize in the US courts, defeating an appeal by the Caribbean state in the DC Circuit.

In Houston, the group successfully defended Chevron against a US$1 billion lawsuit filed by a Nigerian company in a Texas state court, which was dismissed in favour of arbitration. It also secured a final award for an oil and gas client over its claims for breach of fiduciary duty involving allegations of vendor kickbacks, disclosure of confidential information and fraud.  

Baker Botts lawyers in London defended a global plastics company in an UNCITRAL case that raised issues of English, Polish and Belgian law. The team won final awards in two LCIA cases against Russian guarantors of a loan for the purchase of a superyacht.

The Hong Kong team won an ICC case for a green energy client in Japan over the termination of a sale and purchase agreement for carbon credits under the Kyoto protocol.

In Dubai, the firm successfully defended a government entity in a US$110 million DIAC dispute, winning costs. Ongoing work there includes real estate disputes worth up to US$44 billion.

Other pending work includes representing a South American state entity in a US$500 million dispute; a multilateral organisation in an US$85 million UNCITRAL case concerning procurement; and a UK consortium operator in a US$100 million Paris-seated ICC case against a Middle Eastern government.

The firm says it is advising various clients on China-related disputes worth billions and has been instructed for a potential US$1 billion claim against an African government and state owned energy company.

It has a number of commodity price review arbitrations on its books, including one under a long-term sales contract that saw a favourable interim award. It is also representing a LNG seller in a price review case at the ICC, and two other LNG clients in a multibillion-dollar dispute over take-or-pay obligations under a long-term contract.

Dubai-based practitioner Stephen Burke was promoted to partner in 2016.

Client comment

Mariano Gomezperalta of aircraft finance provider Robert Wray worked with Baker Botts on the Newco enforcement matter against Belize mentioned above and had nothing but good things to say. The Baker Botts team “distinguished itself for its effectiveness and focus” and “did an excellent job at explaining the key points”, he said.

A biopharma client that used the firm says it was impressed with the “extremely professional and competent” Baker Botts team, particularly partner Johannes Koepp, who became an expert in the scientific aspects of the diseases at the heart of the dispute. “In Johannes I felt that I had a true partner, who could speak to me knowledgeably and efficiently about all aspects of my business.”