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GAR 100 - 11th Edition

Aequo

04 April 2018

Advising on high-profile Ukrainian energy disputes

Pending cases as counsel 18
Value of pending counsel work US$75.6 billion*
Treaty cases 3
Current arbitrator appointments 2 (of which 0 are as sole or chair)
Lawyers sitting as arbitrator  1

* Includes one gas dispute worth over US$60 billion

Aequo entered Ukraine’s market in 2014, the transformative year that saw the Euromaidan demonstrations and Russia’s annexation of Crimea. The firm was established by managing partner Denis Lysenko and a team of five partners who broke away from another Ukrainian firm Vasil Kisil & Partners.

Four years on, the practice has been dominated by disputes between Ukrainian and Russian parties, including some that spun out of the events of 2014. In the process Aequo has gained a name for itself as a reliable go-to Ukrainian firm for high-value oil and gas disputes.

The international arbitration group is led by counsel Pavlo Byelousov and includes Lysenko and partner Oleksandr Mamunya. Since the firm was established it has acted in over 20 arbitrations, including disputes at the ICC, LCIA, Stockholm Chamber of Commerce and American Arbitration Association, as well as the arbitration courts at the Russian and Ukrainian chambers of commerce.

The firm says it is currently handling a portfolio of counsel work worth an astonishing US$74 billion, though admittedly most of that figure consists of one mega-case at the SCC between the state-owned gas companies of Russia and Ukraine, which appears close to an end at the time of writing. Aequo has been providing Ukrainian law advice as part of a co-counsel team including Norwegian firm Wikborg Rein (also in the GAR 100) and Swedish firm Gernandt & Danielsson.

Aequo is also acting on at least three other major oil and gas matters. It recently settled eight related LCIA arbitrations worth US$102 million and has two pending cases at the SCC and LCIA relating to the gas industry.

The firm acts in media disputes too. In 2016, it helped US magazine publisher Forbes win an ICDR arbitration against its local Ukrainian licensee UMH. The firm convinced the tribunal that UMH’s censorship and interference with Forbes’ editorial independence gave valid grounds to terminate a licence agreement for the Ukrainian edition of the magazine.

Recent events

As mentioned, Aequo is part of a co-counsel team representing Ukraine’s Naftogaz in a pair of SCC cases against Russia’s Gazprom that has been valued in the tens of billions. In May 2017, the tribunal issued a partial award on liability that granted part of Naftogaz’s claim for a downward price revision for gas supplies from Russia to Ukraine, rejecting a counterclaim by Gazprom.

A final award followed in December that dismissed Gazprom’s US$56 billion claim for breach of a “take or pay” obligation and ruled that certain provisions in the contract should be struck out. Naftogaz contends that the total positive financial effect of the arbitration over the lifetime of the contract is over US$75 billion. The tribunal is due to rule in February 2018 on Naftogaz’s US$16 billion claim under a gas transit agreement between the same parties.

Client comment

Wikborg Rein partner Dag Mjaaland, co-counsel on the Naftogaz case, says the Aequo team “have provided valuable advice on Ukrainian law and energy policy”.

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