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GAR 100 - 10th Edition

Skadden Arps Slate Meagher & Flom

02 March 2017

Won a billion-dollar award against India’s Tata

People in Who’s Who Legal 5

A partner at a Russian law firm once confided that the second-most feared name among his clients was “Skadden” (the most feared being “Putin”). As that remark suggests, the firm has earned itself a reputation as a formidable opponent, with particular skill in fast-paced global litigation and arbitration “wars” that involve numerous parallel proceedings. It was Skadden that helped the Alfa-Access-Renova (AAR) consortium scupper BP’s plans for an alliance with Russia’s Rosneft – a US$16 billion case that made international headlines.

The firm was one of the first US names to establish a specialist international arbitration practice, which grew out of the New York litigation department in the 1990s with partners Barry Garfinkel and Dana Freyer at its helm. In 2001, the firm recruited Paul Mitchard QC in London as a lateral partner, followed soon by Australian Karyl Nairn QC. Since then, the London team has continued to expand with a series of lateral hires at the expense of firms such as Shearman & Sterling and Norton Rose Fulbright.

There has also been expansion in Asia, spearheaded by Mitchard (who retired from the partnership in 2015).

In 2014, Nairn and another London partner, David Kavanagh (now also a QC), were named as global co-heads of the firm’s international litigation and arbitration practice, alongside New York partner John Gardiner. Other names to know in the group are Daniel Gal in London, who joined in 2014 from Dechert, and Anke Sessler in Frankfurt, a former head of litigation at Siemens.

The team was early into the area of investment law and has worked on some seminal matters, including one of the few arbitrations started under the ASEAN treaty.

Network

The most important offices are New York and London, though there are also arbitration lawyers on the ground in Hong Kong, Paris, Singapore and Houston. The firm has 23 offices worldwide.

Who uses it?

Lots of high-net-worth Russian individuals, including Chelsea Football Club owner Roman Abramovich. As mentioned, the firm has represented AAR, the Russian consortium owned by Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and German Khan; it has also acted for Ukrainian billionaire Gennadiy Bogolyubov.

Corporate clients include the UAE’s Dana Gas and Crescent Petroleum, Vivendi, Egypt’s Global Telecom, Altimo (part of Russia’s Alfa Group), Cemex, Anheuser-Busch, Pfizer, AspenTech, Japanese insurer Mitsui Sumitomo, NTT Docomo, Renaissance Capital, Florida’s NextEra Energy and Brazil’s largest privately held company, Votorantim.

It’s acting for Vodafone in a US$4.3 billion investment treaty claim against India over tax. On the state side, Slovakia is a regular customer in BIT matters; and Cyprus is using the firm to defend a billion-euro ICSID claim brought by Greek banking investors affected by the Cypriot bailout deal.

South Sudan has used the firm on various matters following its secession from the north. Skadden helped the state recover oil cargoes on ships seized by Sudan in 2012, and defended South Sudan in its first ever ICSID claim.

Track record

One of the firm’s biggest results to date came in 2016 when it won a US$1.17 billion award for Japanese mobile operator NTT Docomo in a claim against India’s Tata Group over the latter’s exit from a telecoms venture. It’s among the largest LCIA awards of recent times and is now the subject of Indian, UK and US court proceedings. 

In 2015, Skadden obtained a US$672 million award for Devas Multimedia in an ICC claim against Indian government-owned satellite company Antrix; and a year later won an award on liability against India in a related investment treaty claim (an award on damages is pending.)

Another of the team’s high points was a string of positive results for oil investors Ron Fuchs and Ioannis Kardassopoulos in their battle with Georgia. The case saw a landmark jurisdictional victory by Skadden relating to the provisional application of the Energy Charter Treaty, followed by a US$100 million award (pretty much the whole of the claim) plus a greater than usual rate of interest.

When things hit a speed bump late in the day – with Fuchs’ arrest and imprisonment on bribery charges in Georgia while visiting to discuss settlement terms – Skadden lawyers mounted swift enforcement actions in 10 jurisdictions, obtaining attachments over significant Georgian assets. Eventually the case settled and Fuchs was pardoned, with Georgia paying US$37 million of what was owed. The case (along with some other successes along the way) earned Skadden a GAR award in 2012 for “large international arbitration practice that most impressed”.

Skadden has done just as well for Slovakia, getting a billion-euro claim by a Dutch health insurance investor knocked out at the jurisdictional stage in 2011.

There have been some good settlements too. In 2014, the firm helped Egypt’s Global Telecom (formerly known as Orascom) obtain a US$4 billion cash settlement of an UNCITRAL claim against Algeria over the country’s largest mobile operator (Gibson Dunn was co-counsel).

For Mexican cement group Cemex, Skadden negotiated a US$600 million settlement with the government of Venezuela in 2011, ending an ICSID case that had already cleared the jurisdictional phase.

The firm also obtained the emergency injunction for AAR that prevented BP from proceeding with a much-publicised US$16 billion deal with Rosneft, going on to win expedited arbitration in Stockholm that killed the deal for good. One publication named David Kavanagh “Global Lawyer of the Year” for his work on the case. The parties later reached a US$325 million settlement, not long after Rosneft agreed to buy out the sparring shareholders’ stakes in TNK-BP in two deals worth US$55 billion.

In another case for the Alfa Group, Skadden helped to stop Telenor from scuppering the US$23.5 billion merger between Vimpelcom and Orascom Telecom/Wind Telecom. After defeating Telenor’s application for a High Court injunction that would have halted the merger, Skadden successfully defended Alfa subsidiary Altimo in an UNCITRAL arbitration brought by Telenor. The Norwegian company abandoned its claims within weeks of an evidentiary hearing, and Skadden’s client received costs.

Recent events

Besides the victory for NTT Docomo mentioned above, the firm helped Alfa subsidiary LetterOne prevail in the latest phase of an 11-year tussle for control of Turkish mobile operator Turkcell. An LCIA tribual upheld the client’s right to launch a buyout procedure against Turkcell’s other shareholders, including Turkish conglomerate Çukurova.

Skadden client South Sudan also saw the conclusion of its first ICSID case, brought by Sudanese national oil company Sudapet – in what was effectively a state-to-state battle over ownership of oil resources translated to the investor-state arena. A confidential award was issued in September 2016. While both sides’ counsel have declined to say anything about the outcome, it’s rumoured that South Sudan prevailed.

The firm is also acting for Shenzhen-based BYD in an ICC case against Apple over a supplier’s use of patented technology.

David Kavanagh took silk in early 2017. Nicholas Lawn in London and Gregory Litt in New York were promoted to the partnership. There were two new counsel hires: Chiann Bao, the HKIAC’s former secretary general, in Hong Kong; and Jennifer Permesly in New York, who joined from GAR 100 boutique Chaffetz Lindsey.

Client comment

Fernando Bergón from US energy company NextEra says the Skadden team was “very thorough, always delivering accurate and precise advice. They are service-oriented, keep to deadlines and are able to manage an incredible amount of work.”

Bergón singled out David Herhily, praising him as “very knowledgeable with a great strategic mind.”