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GAR 100 - 10th Edition

Arnold & Porter Kaye Scholer

10 March 2017

Fresh from a merger, the DC-based firm continues to chalk up victories in investment disputes

Pending cases as counsel 27
Value of pending counsel work US$19.7 billion 
Treaty cases 19
Current arbitrator appointments 7 (of which 1 is as sole or chair)
Lawyers sitting as arbitrator 4

Arnold & Porter’s merger with New York firm Kaye Scholer took effect at the start of 2017, resulting in a change of name. Of the two legacy firms, only Arnold & Porter had a significant profile in international arbitration terms, though Kaye Scholer is highly regarded for its litigation work in the fields of antitrust, IP and product liability.

As a defender of states, Arnold & Porter has arguably had a longer winning streak at ICSID than any other firm in this book. It picked up a GAR Award in 2013 after our readership voted it the most impressive large practice of the year.

The international arbitration practice grew from the firm’s reputation in trade and sovereign debt work, which led it to represent several states in the public international law arena in the 1980s. Initially the work was led by Bill Rogers, a former undersecretary of state in the Ford administration, then by Eli Whitney Debevoise and ultimately Paolo Di Rosa, one of a group of eight lawyers who joined in 2007 from Winston & Strawn.

A former assistant legal adviser at the US State Department, Di Rosa has overseen the group’s expansion, including a number of senior lateral hires. In 2010, Debevoise rejoined after three years as US executive director at the World Bank. Other key partners in London are Dmitri Evseev and Patricio Grané.

An unusually large number of the firm’s team have been designated to ICSID’s panels of arbitrators and conciliators, including Di Rosa, Debevoise, Evseev and Los Angeles-based David Huebner (a former US ambassador to New Zealand and Samoa who joined the firm in 2014).

Although investment arbitration makes up the bulk of its work, the practice has been broadening its commercial arbitration offering in recent years. Partner David Reed joined the London office in 2012 from Shearman & Sterling, where he helped Dow Chemical secure a record-breaking US$2 billion award against a Kuwaiti state-owned entity.

Network

The anchor of the practice is Washington, DC, with other members in London, Los Angeles and San Francisco. Some lateral hires from Hogan Lovells in 2014 gave it a presence in Houston.

As for the wider firm, the tie-up with Kaye Scholer has broadened its US reach and given it a foothold in Germany. 

Who uses it?

Large numbers of sovereign states use the firm for disputes work. For instance, it’s advising South Korea in a US$4.4 billion ICSID claim by US-Belgian private equity fund Lone Star, thought to be the largest investment treaty claim ever filed against an Asian state. Recent state clients include Bosnia and Herzegovina, the Czech Republic, Hungary, Israel, Slovakia and Kyrgyzstan. The firm is also on the preferred provider lists of the governments of China, Romania and Bulgaria.

Latin American state clients including Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Panama and Venezuela have turned to the firm. The Caribbean Community is also using it for advice on free trade agreements and investment treaties.

Unlike some firms that have made their name in the investor-state field, however, Arnold & Porter is happy to work both sides of the street. The firm has acted for Électricité de France (EDF) in two ICSID claims against Argentina; and US forestry companies AbitibiBowater and Mercer in NAFTA claims against Canada. It’s also representing a Turkish power company in an ICSID case against Pakistan.

Track record

The firm has had a stellar run of defence wins at ICSID, not least on behalf of Hungary. For instance, it helped the state defeat a US$700 million Energy Charter Treaty claim brought by Belgian power company Electrabel that concerned compliance with EU law on state aid.

It also helped Hungary prevail in a similar claim worth US$30 million brought by US power company AES in 2010 – memorable as the first ICSID case to receive an amicus curiae submission from the European Commission.

Also for Hungary, the firm won the dismissal of a pair of ICSID claims brought by investors in the country’s radio industry that lost out in tenders for broadcasting licences. Two ICSID panels refused jurisdiction over the claims in 2014 and 2015 respectively.

Other successes for states include helping Panama defeat a US$62 million claim by US energy investors over taxation policy; and securing the withdrawal of a US$300 million treaty claim against Slovakia brought by Pennsylvania-based steelmaker US Steel – only three weeks before the final hearing.

The firm has also helped Kyrgyzstan settle a US$550 million ICSID case over the country’s second-largest gold deposit  

The firm’s wins for investors shouldn’t be overlooked. In 2012, it helped EDF and its affiliates win more than US$200 million in an ICSID claim against Argentina. The award, which survived annulment proceedings, is one of the largest arising from the state’s financial crisis of more than a decade ago. The firm also helped AbitibiBowater obtain a US$130 million settlement in a NAFTA dispute with Canada.

Recent events

Investment and trade law specialist Patricio Grané rejoined the firm as a partner in the London office, after more than three years with public international law boutique Volterra Fietta. He had previously been a counsel in Arnold & Porter’s DC office.

Partner Jean Kalicki, who had played an important role in the development of the practice under Di Rosa, left the firm in early 2016 to set up as an independent arbitrator. Another partner, John Roesser, left the New York office for Dechert; he had only been with the firm for two years.

Meanwhile the firm brought in another set of great results for states. It helped Chile defeat a US$340 million claim by 101 year-old Spanish publisher Victor Pey Casado – ICSID’s longest-running case – though the claimant has recently sought to reopen the dispute by alleging arbitrator bias.

Di Rosa and Grané defended Costa Rica at ICSID, ensuring that a US$350 million claim brought by a provider of vehicle inspection services was ruled inadmissible because of its failure to discontinue related litigation in the Costa Rican courts (the investor may yet refile its claim).

A team headed by Di Rosa also knocked out a US mining investor’s third-party-funded claim against the Dominican Republic, persuading a tribunal that the US$100 million claim was time-barred under DR-CAFTA. 

Whitney Debevoise and Gaela Gehring Flores helped Panama defeat an ICSID claim over a hydropower concession and win part of its costs, with the tribunal labelling it an “abuse” of the investment treaty system. Following on from that case, the firm helped Panama persuade ICSID to consult with member states on ways to improve the enforceability of costs awards against “judgment-proof claimants”.

Panama also instructed the firm for a new ICSID claim brought by subsidiaries of a Japanese tyre manufacturer over trademark licensing. Other new instructions have come from Bulgaria (for an Energy Charter Treaty claim brought by Czech energy company CEZ); and the Philippines (in an ICSID case brought by Shell). It continues to act for the Czech Republic in seven investment treaty claims brought by solar power investors, which are worth a combined US$130 million.

The firm’s commercial arbitration practice has seen an instruction from a UAE property developer for a case at the DIAC worth more than US$1 billion. It’s also acting for the claimant in an ICC case relating to a mining railway in Latin America; and for a refinery company in the Middle East and North Africa in a US$400 million dispute with two Asian investors over a hydrocracker plant facility. 

Client comment

Arnold & Porter’s defence of Slovakia in the US Steel case draws praise from Andrea Holíková of the Slovak ministry of finance, who says Dmitri Evseev “had full control over the case and a strong personal commitment”. Di Rosa also made a “crucial” contribution and impressed with his knowledge of the “nuances” of the case.

Karl Hennessee, a vice president at Halliburton, notes that that the firm is particularly good at using the strengths of individual team members and says the firm “has the full confidence of top management in the company”.