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GAR 100 - 10th Edition

King & Spalding

09 March 2017

Concluded a pair of long-running cases against Ecuador

People in Who’s Who Legal 15
Pending cases as counsel 91
Value of pending counsel work US$73.9 billion
Treaty cases 34
Current arbitrator appointments 72 (of which 29 are as sole or chair)
Lawyers sitting as arbitrator 15

In 1995, King & Spalding – one of Atlanta’s oldest law firms – decided to open in Houston. The step paved the way for one of the success stories of the modern arbitration era.

Things got properly moving in 2000 with the hire of Doak Bishop (who joined with a single arbitration case). Bishop hired young lawyer Craig Miles – now a well-known partner in his own right – and from that acorn has grown one of the largest and most active practices operating today.

A series of wins in BIT matters against Argentina (relating to its 2001-2002 financial crisis) brought the team to wider attention and fuelled its expansion.

The practice’s gravity pulled in partners from the firm’s other offices. From 2004, Ed Kehoe from the New York office began to participate regularly, as did partners in Atlanta (Kehoe is today a co-chair of the practice).

Since then, lateral hires have broadened its reach further in Europe, the US, Asia and the Middle East. A former ICSID senior counsel, Margrete Stevens, joined as a consultant, and a Paris group formed around a pair of hires from Dewey & LeBoeuf – former ICC Court secretary general Eric Schwartz (now retired) and James Castello.

It opened a new office in Singapore in 2010 with the hire of John Savage from Shearman & Sterling, arguably the region’s best-known arbitration practitioner, and made other impressive hires from the likes of Weil Gotshal & Manges, Salans and Crowell & Moring, strengthening its investment treaty practice. Wade Coriell now leads the Asia disputes practice after relocating from Houston to Singapore.

The London practice has grown considerably in recent years and is headed by Australian Thomas Sprange QC, who joined from Steptoe & Johnson in 2011 and was one of only five solicitor-advocates to take silk in 2015.

Doak Bishop, meanwhile, has emerged as an authority on international oil and gas law – thanks to a treatise analysing the most important major oil and gas arbitrations and their results.

Seventeen years on, the one-person practice has become an 80-strong enterprise that is now regularly found in the top tier of arbitration rankings.

Network

The most important offices for arbitration are Houston, New York, London, Paris and Singapore but the group also has a presence in Frankfurt, Moscow, Dubai, Abu Dhabi, Tokyo, Atlanta, San Francisco and Washington, DC.

Who uses it?

International corporations, particularly in the energy sector. A few names that are on the public record as using the firm are Chevron (in its long-running dispute with Ecuador over liability for environmental pollution in the Amazon), ConocoPhillips, Dow Chemical, El Paso, ExxonMobil, Salini Impregilo, Kellogg Brown & Root (KBR), Murphy Oil, Sempra Energy, Spain’s Marsans Group, the US’s Renco Group, India’s Reliance Industries, Malaysian media group Astro, French waste management group Veolia and Russian oligarch Oleg Deripaska’s En+ Group.

As the practice has evolved, the client list has become more diverse, now even including the occasional government. Turkey’s state-owned oil and gas company has been an ICSID client.

Track record

King & Spalding built its name on results. Between 2003 and 2008 it had a series of wins against Argentina at ICSID (US$185 million for Azurix; US$175 million for Sempra; and US$106 million for the creditors of Enron). It also won US$133 million for a hotel investor against Egypt.

And things haven’t slowed. In recent years, it has obtained US$8 billion for Anadarko, Maersk and Eni in a dispute with Algeria, and US$2 billion for Dow Chemicals from a Kuwaiti state-owned petrochemicals company (on that case, it teamed up with Shearman & Sterling).

In 2013, the firm won a US$500 million award against Kazakhstan for Moldovan investors Anatolie and Gabriel Stati – the second-largest award ever issued under the Energy Charter Treaty.

Another triumph came in 2012 in a long-running ICSID case against Romania. Once again teaming with Shearman, King & Spalding helped Swedish businessmen Ioan and Viorel Micula win around US$250 million in a claim over Romania’s withdrawal of economic incentives. Romania is now seeking to have the award annulled, while the European Commission has declared the award in breach of EU state aid rules.

US engineering firm KBR relied on the firm for an enforcement battle with Mexico’s state oil company Pemex. King & Spalding persuaded a New York district court to recognise a US$465 million award even though it had been set aside by the courts in Mexico – upending more than a decade of US case law that has given primacy to the courts at the seat of the arbitration. The Second Circuit affirmed the decision in August 2016.

Recent events

The firm brought a pair of long-running investment treaty claims against Ecuador to a close in February 2017, both relating to the Latin American state’s imposition of a 99% levy on the windfall profits of foreign oil companies. In one of the cases, it paired with Freshfields to help ConocoPhillips subsidiary Burlington Resources win nearly US$380 million in damages – though Ecuador also prevailed on a US$42 million environmental counterclaim.

The second case saw an UNCITRAL tribunal decline to grant client Murphy Oil’s additional claim for US$187 million for losses arising from the sale of its Ecuadorean assets. The panel already awarded Murphy US$20 million plus interest and costs last year in compensation for the 99% levy.

King & Spalding persuaded another UNCITRAL tribunal to take jurisdiction over a claim by US oil and gas company Anadarko against Venezuela by means of an investment treaty’s most-favoured nation clause.

On the commercial side, King & Spalding helped obtain a US$79 million award for ConocoPhillips and PetroChina against an Indonesian state-owned gas transportation company, which has since been upheld by the English courts.

With the assistance of Swedish counsel Lindahl, it helped the Stati family fend off a challenge to their US$500 million Energy Charter Treaty award against Kazakhstan before a Swedish court – with the court rejecting allegations that the award was tainted by fraud. 

Partner Egishe Dzhazoyan helped a Russian client obtain interim relief against Moldova via the SCC’s emergency arbitrator procedure, requiring the state to refrain from cancelling the investor’s shares in a bank before a treaty claim got under way. (Moldova went ahead and cancelled the shares anyway.)

The year also brought some successful settlements and payouts for the firm’s clients. Ecuador finally paid Chevron US$112 million to honour an investment treaty award that King & Spalding obtained five years ago – compensating the US oil company for delays in the Ecuadorean court system. Chevron’s US$9 billion environmental dispute with Ecuador continues, however.

Argentina meanwhile issued US-dollar bonds to settle an ICSID award worth US$74 million in favour of King & Spalding’s client, El Paso Corporation – though the payout was collected by a third party that purchased the rights to the award.

In another case, the firm helped a subsidiary of Russia’s VTB Bank settle a €30 million LCIA dispute with Montenegro-based aluminium smelting company KAP.

There were setbacks in other cases. The firm saw a €600 million ICSID claim against Montenegro tossed out at the jurisdictional stage, with a panel ruling that the claimant – an aluminium company in Oleg Deripaska’s En+ Group – didn’t have a seat or registered office in Cyprus.

Renco Group’s US$800 million treaty claim against Peru was also thrown out after a tribunal found that King & Spalding’s client hadn’t waived its right to pursue litigation over the same dispute. However, the panel indicated that it may be possible for Renco to refile its case – and refused to award Peru any costs in light of the state’s delay in formulating its waiver objection.

The firm scooped up new instructions from Colombian state refinery company Reficar in a US$2 billion ICC case against a US contractor; and Shell for an ICSID claim against the Philippines over a billion-dollar tax bill. It’s also acting for Malaysia’s Astro group in a dispute with India; and a number of investors affected by reforms to the renewable energy subsidy regimes in Italy and Spain.

Three new partners were made up in early 2016 – Sajid Ahmed in London, Amy Frey in Paris and Elizabeth Silbert in Atlanta. Isabel Fernandez de la Cuesta was promoted to counsel in New York.

In New York, Eric Schwartz announced his retirement from the firm after eight years to practice as an independent arbitrator.

The Singapore office welcomed construction disputes specialist Emerson Holmes from Jones Day; and David Kiefer in New York from Dentons. Sarah Vasani was promoted to counsel in London but left the firm soon after to join the partnership at Addleshaw Goddard.

Client comment

Union Fenosa Gas’s secretary-general Javier Gerboles de Galdiz describes partners Doak Bishop and James Castello as “the very best the company has ever worked with.”

Duke Energy’s deputy general counsel Martin Lythgoe praises the firm’s “outstanding” work in an arbitration against a Peruvian state entity. He says the team was “cost-effective” with an impressive knowledge of the oil and gas industry.

He commends partner Silvia Marchili in Houston, whose “dynamic style and strong leadership skills were essential in bringing together the strategy of the case as well as achieving a final work product that meets the highest standards.”