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GAR 100 - 10th Edition

Derains & Gharavi

10 March 2017

Increasingly drawing in Middle East-related work

People in Who’s Who Legal 4
Pending cases as counsel 25
Value of pending counsel work US$6.2 billion
Treaty cases 9
Current arbitrator appointments 63(of which 30 are as sole or chair)
Lawyers sitting as arbitrator 7

Launched in 2009, this Parisian boutique originally brought together two leading French arbitrators, Yves Derains and the late Serge Lazareff, with two younger partners, Hamid Gharavi (formerly of Salans) and Bertrand Derains, the son of the co-founder.

Though Lazareff left to join another boutique not long afterwards, Derains & Gharavi has gone from strength to strength.

The partnership expanded in 2011 with the arrival of Dutch lawyer Mélanie van Leeuwen from Loyens & Loeff, followed by the hire of Eloïse Obadia, a long-term senior counsel at ICSID. Obadia launched the firm’s first overseas offices in Washington, DC, in 2014 while a new office in Beirut is run by the first partner to be promoted from its associate ranks, Nada Sader.

Yves Derains, Gharavi and van Leeuwen all sit as arbitrators, and have been appointed to the ICSID panel of arbitrators. Derains, who is a former secretary general of the ICC Court, was appointed chairman of the ICC Institute of World Business Law in 2010 and is an ICCA board member.

Gharavi has an enviable record of success as counsel in ICSID cases. He's also a thought leader in the arbitration community, having emerged as a trenchant critic of the ICSID annulment system.

Network

Paris, DC and Beirut. Opening in the latter two cities makes sense in light of its high quantity of ICSID cases, many of them brought by investors with links to Lebanon and the wider Middle East.

Who uses it?

Albania has been a returning client for investor-state work, with the governments of Sudan, Romania, Turkey and Togo also lining up to use the firm.

It acts for investors in such cases too, including the US’s Eurogas and Canada’s Belmont Resources in a €1 billion claim against Slovakia; French investor Franck Charles Arif in a claim against Moldova; and three Belgian real estate developers in a claim against Croatia. London-listed mining company Oxus Gold used it for an investment treaty claim against Uzbekistan.

Other clients in investor-state matters include two Iranian banks in a claim against Bahrain; and the owners of Iranian consumer electronics group Entekhab in a claim against South Korea. Tunisian investor Kontinental Conseil Ingénierie is using it for a €200 million claim against Gabon under the Organisation of Islamic Cooperation investment agreement.

Kazakh oil company Caratube turned to Derains & Gharavi for a resubmitted ICSID claim worth US$1 billion, as well as proceedings to annul the outcome of an earlier unsuccessful arbitration (in which the firm played no part).

Other private clients include Alcatel, Invista, Thales, Vinci, Veolia and various Greek companies in construction and M&A disputes. A more controversial client has been French businessman Bernard Tapie, who used Derains & Gharavi and Betto Seraglini to defend his arbitration award against a French government entity over the sale of his stake in German sportswear brand Adidas.

Track record

Derains & Gharavi helped Turkey knock out one of the biggest cases in ICSID’s history in 2010: a US$19 billion telecoms expropriation claim filed by Dutch–Jordanian national Saba Fakes. The tribunal dismissed the claim as frivolous at the jurisdictional phase and ordered Fakes to pay Turkey US$1.5 million in costs.

The firm also helped two Turkish telecoms companies fend off an attempt by Kazakhstan to annul a US$175 million award in their favour.

In 2011 another client, US radio investor Joseph Lemire, won almost US$9 million in an ICSID claim against Ukraine. The award survived an annulment challenge by the state.

There have been various successes for Albania, including defeating a €45 million Energy Charter Treaty claim by Greek fuel distributor Mamidoil in 2015 and thwarting a US$18 million claim by investors in the country’s scratch card market at the jurisdictional stage in 2013.

Recent events

The firm helped insolvent Montenegro-based aluminium smelting company KAP see off a €30 million LCIA case brought by an Austrian subsidiary of Russia’s VTB Bank. The case was discontinued in June 2016 after an English court held it had no purpose. 

Iranian banks Melli and Saderat instructed the firm for an investment treaty claim against Bahrain over the expropriation of their interests in a local bank. Turkish engineering firm Attila Dogan retained it for a new ICSID claim against Oman.

On the state side, it was instructed to defend Romania in an ICSID claim by the Netherlands’ Nova Group, which has been overshadowed by the recent death of the group’s chairman Dan Adamescu while serving a prison sentence for bribery. (Nova says the prosecution was politically motivated).

It is acting for a Middle Eastern state in a €200 million ICC arbitration with an Asian company over the construction of a waste management facilityand for a Middle Eastern telecoms company in an investment dispute with a South East Asian country.

Other pending cases include a €100 million dispute relating to a Belgian real estate development project.   

There were disappointing results in a couple of ICSID cases. A tribunal threw out a US$91 million claim against Guinea at the end of 2015 after concluding that the claimant was not a foreign investor under the applicable investment code. A US$32 million claim against Croatia was dismissed in late 2016, with the tribunal concluding that the firm’s clients – a Belgian family – ought to have conducted due diligence before buying land that partly fell within a protected special forest area.

On the personnel side, the firm promoted Marie-Laure Bizeau to counsel in Paris.

Client comment

A client who has used Derains & Gharavi for an investment arbitration since 2010 says the team consists of “very experienced and clever lawyers”, particularly Gharavi, who he says quickly understood and adapted to a change of situation.

Iraqi importer and distributor Albanna Group retained the firm for a pay dispute with a well-known multinational. “They really knew what they were doing.” Derains & Gharavi handled the case in such a way that “they made the opponents’ heads spin.”

Albanna calls Gharavi “professional and highly knowledgeable” and says it has gone on to recommend him to other Middle Eastern clients.