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GAR 100 - 10th Edition

Sidley Austin

10 March 2017

Won a payout for Russia’s Atomstroyexport in a nuclear dispute with Bulgaria

People in Who’s Who Legal 4
Pending cases as counsel 130
Value of pending counsel work US$124 billion
Treaty cases 11
Current arbitrator appointments 26 (of which 6 are as sole or chair)
Lawyers sitting as arbitrator 5

Sidley Austin earned its international arbitration stripes around 2002. In that year, it absorbed a trade and investment disputes boutique in Washington, DC, and Geneva. The new members of the firm, in particular Dan Price, were among the first to evangelise the use of bilateral investment treaties.

Price has since left to become a noteworthy independent arbitrator, but the Sidley practice goes from strength to strength.

Early on, the practice scooped a number of BIT arbitrations, in addition to major World Trade Organization disputes work. It won one of the longest and most procedurally complex arbitrations against Argentina of the time ($200 million, for Vivendi) and became a bigger and bigger name in the area.

Its commercial arbitration practice was kickstarted by the arrival in Geneva of two partners (US-trained Marc Palay from Winston & Strawn, and David Roney from Schellenberg Wittmer, both long-time residents in Switzerland). That side of the practice has expanded considerably since their arrival.

In recent years, the team has grown in New York and London. In 2013, Benno Kimmelman and Dana MacGrath – commercial arbitration specialists known for Latin American and energy work – joined the New York office from Allen & Overy. And in London, the team was joined by Matthew Shankland from Weil Gotshal & Manges, who has acted on high profile disputes arising from the collapse of Lehman Brothers, including financially complex derivatives arbitrations.

The recent hire of Friven Yeoh and his team in Hong Kong from O’Melveny & Myers has given the firm an additional boost in Asia.

The international arbitration practice is co-led by Stanimir Alexandrov, Benno Kimmelman and Marc Palay.

Alexandrov is an increasingly prolific ICSID arbitrator and is currently hearing 12 cases at the centre – including claims against Mauritius, Croatia, Spain, Serbia, Austria, the Czech Republic, Ukraine, Pakistan and Guatemala.

Network

The important offices for international arbitration are New York, Geneva, London and Washington, DC. There’s also a Dallas office, staffed by ex-Weil lawyers, with a high turnover of oil and gas-related work. But the firm stresses that it will cover any dispute anywhere, irrespective of the location of its offices.

Who uses it?

Sidley Austin is the kind of place that blue-chip companies – such as Philip Morris and Airbus – go to when they have “global” trade issues that require a multi-pronged attack. It also does a lot of work for governments, particularly in Latin America, and investors in the BIT area. On top of that it’s becoming popular for CIS-related commercial cases, in Europe.

Clients include Atomstroyexport (a subsidiary of Russia’s state-owned nuclear power company Rosatom), Berkeley HeartLab, Formosa Plastics, GATX Corporation and Rusal. It’s acting for US private equity group LoneStar in a US$2.5 billion claim against South Korea; and for France’s Veolia in a €100 million claim against Lithuania over renewable energy services.

On the state side, it’s acted for Costa Rica, Peru, Turkey and China (which recently added it to the panels of law firms it will instruct in investment and trade matters).

Notably it’s also acted for arbitral institutions such as the ICC and ICSID (representing the latter in US court proceedings when it was sued by US oil investor Jack Grynberg).

Track record

Eye-catching commercial results have included a hat-trick of wins for Russian aluminium producer Rusal in a long-running feud with Tajikistan’s state-owned aluminium company, Talco. The most significant of these was a US$275 million award for Rusal subsidiary Hamer Investment against Talco in 2013, a case heard under the Swiss Rules.

The same team helped another Rusal entity, Albaco, win US$71 million in an ICC case against a Talco shell company, CDH, defeating a mirror case brought against it at the SCC.

The New York office has also had good wins for Trinidad and Tobago’s national oil company Petrotrin, including defeating a US$228 million LCIA claim by US investor World GTL in 2014.

In the investment treaty arena, the firm helped Turkey to defeat a US$100 million Energy Charter Treaty claim by Dutch investor Alapli Elektrik in 2012 and persuaded an ICSID annulment committee to uphold the award two years later.

It has also helped Peru put an end to a pair of mammoth ICSID claims by French national Renée Levy. A US$7 billion claim over her family’s investments in a liquidated bank was rejected in 2014 when a tribunal held the bank’s failure was a result of its own mismanagement. A year later, her claim for US$41 billion over real estate investments was thrown out a year later as an abuse of process (the panel said a corporate restructuring had sought to internationalise what was essentially a domestic dispute).   

In another ICSID case in 2015, it obtained a US$65 million award for Peruvian state agency Perupetro in a contractual dispute with the Camisea consortium over royalties on gas exports from Peru’s largest natural gas project. Sidley Austin is now acting for Peru LNG – a consortium led by the US’s Hunt Oil – in a related ICC claim against the Camisea consortium.  

Recent events

A team in Geneva and DC helped Russian state-owned Atomstroyexport win €600 million in an ICC claim against Bulgaria’s national electricity company NEK – a politically sensitive dispute over a nuclear power plant that also gave rise to the threat of a treaty claim. NEK (represented by White & Case) paid the award in late 2016.

There was a partial win for Costa Rica in a DR-CAFTA case brought by a group of US real estate investors affected by measures to protect endangered turtles. An UNCITRAL panel refused to hear 15 out of 26 claims as they were either time-barred or concerned matters pre-dating the treaty’s entry into force. The investors have since applied to the US courts to set aside that award.

The New York team persuaded the US Supreme Court to deny Belize leave to appeal the enforcement of two LCIA awards worth a combined US$40 million in favour of BCB Holdings (an entity linked to UK peer Lord Ashcroft) and Belize Social Development Limited. Belize subsequently passed a law criminalising attempts to enforce awards against the Central American state in foreign courts.

A controversial ICSID claim against Uruguay that the firm (together with Lalive) had been handling for Philip Morris ran aground in 2016, with a tribunal ruling that measures requiring the display of graphic health warnings on cigarette packaging were a legitimate exercise of the state’s police powers. It follows the dismissal in late 2015 of a similar claim by Philip Morris against Australia over plain packaging measures, which the same co-counsel team had been instructed on.

Sidley Austin received a mega-instruction in mid-2016 from Calgary-based energy company TransCanada for a US$15 billion NAFTA claim against the United States – over the Obama administration’s refusal to approve the expansion of the controversial Keystone pipeline. However, the case has been paused after President Donald Trump invited the company to resubmit its application for the project.   

Away from the coalface, the firm helped Mongolia to draft its new arbitration law, which designates a single court to consider challenges to awards.

In Hong Kong, Charles Allen left the firm after 14 years to join Orrick Herrington & Sutcliffe. Friven Yeoh joined in October 2016 from O’Melveny & Myers, bringing with him counsel Desmond Ang and Yan Zhang.

In London, Andrew Fox was promoted to the partnership.

Client comment

William Spiegelberger, head of the international practice unit at Rusal in Moscow, commends Sidley’s performance on the Tajikistan cases. “Cross-examination at the hearing was particularly accomplished, and stood in marked contrast to what opposing counsel was able to do.”

He describes the team as “cost-effective” compared to the opponents and praises Marc Palay, Dorothee Schramm and their team for their affability and ability to work together.

Kevin Fillip, associate general counsel of STMicroelectronics, similarly notes the firm’s skill in cross-examination and says that Palay’s leadership was “superb”.

Natalia Artamonova of Atomstroyexport calls Palay “brilliant”.

Konstantin Kryazhevskikh, general counsel at Rosatom, says that the firm was efficient in preparing for the proceedings and its fees much less than those charged by lawyers to the other side, White & Case.

Efraín Laureano, senior development expert at Mongolia Business Plus Initiative (part of the United States Agency for International Development) says: “We value Sidley Austin’s professionalism, effectiveness and commitment to support Mongolia in the drafting of the new arbitration law.”