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GAR 100 - 10th Edition

Lalive

10 March 2017

Achieved good results for Turkey in a pair of multibillion-dollar cases

People in Who’s Who Legal 10
Pending cases as counsel 37
Value of pending counsel work US$40 billion+
Treaty cases 10
Current arbitrator appointments 89 (of which 51 are as sole or chair)
Lawyers sitting as arbitrator 13

Lalive is one of the oldest international arbitration practices in the world, having operated in Geneva since the 1950s. The firm takes its name from two brothers: the late Jean-Flavien and Pierre Lalive. Its reputation in the field is mostly down to Pierre, who was described in Dealing in Virtue (Yves Delazay and Bryant Garth’s sociological study of private justice in the commercial sphere) as the “grand old man of Swiss arbitration”. He died in 2014 aged 91.

Under the brothers’ leadership, members of the firm participated in some of the first major international arbitrations that followed nationalisations by petrol-states, including Sapphire International Petroleum v National Iranian Oil Company, Texaco v Libya and Kuwait v Aminoil. It also acted in early ICSID cases and state-to-state disputes before the International Court of Justice.

The firm relaunched in 1994, bringing on board partners Michael E Schneider and Teresa Giovannini. Schneider, a former president of the Swiss Arbitration Association who now serves as vice president of UNCITRAL, is arguably the firm’s figurehead today. Under him, Lalive continues to rule the roost in Switzerland, with arguably the largest team of full-time arbitration specialists of any Swiss firm – including such well-respected figures as Veijo Heiskanen, Matthias Scherer, Domitille Baizeau and Bernd Ehle.

Long-based in Geneva, the firm is these days increasingly active in Zurich, where it recruited a well-known commercial arbitration duo, Philipp Habegger and Marc Veit, from Walder Wyss in 2014.

Today, the firm has a reputation in the field to rival that of major international law firms (as its continued presence in the GAR 30 attests). The firm prioritises global commercial and investment cases: that is, work with no strong nexus to Switzerland. It has assembled a multinational, multilingual team of lawyers, similar to those found at Shearman & Sterling and Freshfields Bruckhaus Deringer, where many Lalive lawyers trained. It seeks very little co-counsel work of the type other Swiss firms regularly undertake. It also has a strong focus on public international law, in which Heiskanen has particular expertise.

Network

As well as offices in Geneva and Zurich, the firm has had a presence in the Qatari capital of Doha since 2006.

Who uses it?

Like most Swiss firms, Lalive is reserved about naming clients, but the governments of Switzerland, Mauritius, Ecuador, Romania and Turkey are known to have used the firm for investment treaty work. Turkish state pipeline company BOTAŞ is one of many clients to have used the firm in gas price review cases (see ‘Recent events’).

Other clients on the public record include Polish mobile operator PTC; Swiss energy trader EFT; Hong Kong oil and gas company Petrotrans (for a claim against Ethiopia); and US tobacco group Philip Morris.

Track record

One of Lalive’s biggest recent successes was helping Turkey to defeat a US$3.5 billion Energy Charter Treaty claim – part of the state’s long-running feud with the family of Turkish businessman Cem Uzan over the cancellation of hydropower concessions 15 years ago.

An SCC tribunal threw out Uzan’s latest claim at the jurisdictional stage in April 2016 after finding that he had made a “domestic” investment and was therefore not protected by the treaty despite his later residence in the UK and France. (Lalive declined to provide any details about the case but GAR has independently confirmed its involvement.)

In an earlier phase of the feud, Lalive acted for Turkey in ICSID annulment proceedings, defending an award that had dismissed a US$10 billion claim by Uzan’s company Libananco over the same assets. (Freshfields acted in the underlying arbitration, one of ICSID’s most expensive cases.)

An unrelated ICSID case against Turkey saw Lalive win the dismissal of a real estate investor’s claims in 2014 on the grounds that the actions of majority state-owned entity weren’t attributable to the state itself. The award was upheld in annulment proceedings.

The firm has also helped Romania avoid substantial payouts on more than one occasion. In 2015, it knocked out the bulk of a €440 million ICSID claim brought against the state by a US investor in a hotel and press distribution business. The claimant received just €8 million plus interest.

In another long-running case for Romania that ended in 2013, an ICSID tribunal refused to award any damages to oil investor Rompetrol despite holding the state liable for irregularities in a criminal investigation.

Among its successes in court, the firm was on the winning side in Swiss court proceedings arising from the bitter Elektrim v Vivendi case. It has managed the rare feat in Swiss practice of obtaining stays of enforcement on more than one occasion.

Recent events

Besides its victory for Turkey in the latest Uzan matter (see above), Lalive helped Turkish state pipeline company BOTAŞ win an award worth several billion dollars in a gas price review arbitration with the National Iranian Gas Company.

In November 2016, an ICC panel in Geneva granted BOTAŞ a price cut of of 13.3% on gas supplied from Iran (it had originally demanded as much as 37.5%). The cut applies retroactively, meaning Lalive’s client received a reimbursement of US$1.9 billion for overpayments it had made for deliveries since 2012.

Lalive previously helped BOTAŞ win a price cut on Iranian gas supplies worth a reported US$760 million in 2009, and is acting for the same client in a gas price review case against Russia’s Gazprom.

A couple of cases brought on behalf of investors didn’t go so well. In early 2016, an ICC tribunal threw out a US$1.4 billion claim brought by Lalive’s client PetroTrans against the Ethiopian Ministry of Mines over the termination of a gas exploration agreement – though counterclaims against the investor were also dismissed.

Meanwhile a controversial ICSID claim by client Philip Morris against Uruguay foundered in July 2016, when a tribunal held that regulations on cigarette packaging were a legitimate exercise of the state’s police powers. Sidley Austin co-counselled on the case, which saw Philip Morris ordered to pay US$7.7 million in costs.

Lalive’s work for Romania continued at ICSID. It is defending the state against a US$4 billion claim by Canada’s Gabriel Resources; and a claim by brothers Ioan and Viorel Micula relating to the Romanian black market for alcohol. 

Mauritius instructed the firm for the state’s second-ever investment treaty arbitration – brought by UK real estate investors ove rchanges to planning policy linked to the nomination of a new UNESCO World Heritage Site. The firm is already defending the state against a US$1 billion claim by Mauritian-French national Dawood Rawat.

Members of the firm were also kept busy as ICSID arbitrators. Heiskanen is sitting as chair or party appointee on tribunals hearing claims against Greece, Ghana, Oman and Uganda, and is reviewing an award against Zimbabwe as chair of an annulment committee. Schneider is meanwhile chairing a long-running dispute between Canada’s Niko Resources and two Bangladeshi state entities over liability for a pair of gas-field blowouts.   

In the Geneva office, Thomas Brown joined as counsel from Allen & Overy in Hong Kong and Jaime Gallego was promoted to counsel.

Client comment

Matt Milcher of Proton Holdings describes Lalive as “impeccable” – praising the “work and cohesion” among team members as a unique selling point over other firms. Noradèle Radjai is “brilliant and relentless” and a “lawyer of the highest calibre”.

An anonymous state client described Veijo Heiskanen as “a master in international investment disputes”. Matthias Scherer “calmly handles the hardest issues”, while counsel Laura Halonen is a “perfect lawyer – definitely one for the future”.