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GAR 100 - 11th Edition

Arnold & Porter Kaye Scholer

04 April 2018

Better known as a defender of states, the firm secured a big win for an investor at ICSID

People in Who’s Who Legal 1
People in Future Leaders 4
Pending cases as counsel 28
Value of pending counsel work US$11.7 billion
Treaty cases 19
Current arbitrator appointments 5 (of which 2 are as sole or chair)
Lawyers sitting as arbitrator 5

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 Labat in London and Gaela Gehring Flores in Washington, DC.

An unusually large number of the firm’s team have been designated to ICSID’s panels of arbitrators and conciliators, including Di Rosa, Debevoise, and Evseev.

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 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, Kyrgyzstan, the Philippines, Slovakia and Thailand. 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, Peru and Venezuela have turned to the firm. The Caribbean Community has also used 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.

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.

Another great result came in 2016, when the firm helped Costa Rica to defeat a US$350 million ICSID claim brought by a provider of vehicle inspection services. The case was declared inadmissible because of the claimant’s failure to discontinue related litigation in the Costa Rican courts.

It also knocked out a US mining company’s US$100 million claim against the Dominican Republic, persuading a tribunal that the claim was time-barred under DR-CAFTA.

It has won twice for Panama at ICSID, securing the dismissal of a claim over a hydropower concession as “abusive”; and a US$62 million tax-related claim.

For Slovakia, it secured the withdrawal of a US$300 million treaty claim 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

The firm added to its successes on behalf of investors in 2017 when it helped Turkish group Karkey Karadeniz win an US$800 million ICSID award against Pakistan in compensation for the detention of its power generation vessels during an energy crisis in Karachi. The state has since applied to annul the award.

Another great result was on behalf of a major Turkish company in an ICC arbitration arising out of the sale of banking interests to a Dutch buyer.

It helped the Czech Republic defeat a treaty claim by German investors Jürgen and Stefan Wirtgenover over the state’s reforms to its solar power industry. The case is one of seven investment treaty claims brought by solar power investors where the firm represents the state, worth a combined US$130 million.

Arnold & Porter continues to act for Chile after it defeated a US$340 million claim by centenarian Spanish publisher Victor Pey Casado – ICSID’s longest-running case. The claimant has since started a new UNCITRAL claim against the state and has applied to annul the ICSID award over the tribunal’s use of a Latin maxim.

There were a number of new instructions from states. Thailand retained the firm to defend it against a treaty claim by Australia’s Kingsgate over the suspension of its gold mining operations.

It’s advising Colombia as the state faces arbitration with a US salvage company as part of a long fight for a share of treasure in the wreck of a Spanish galleon, the San José, which sunk off the country’s coast over 300 years ago.

Peru has also instructed the firm over a threatened claim by Odebrecht over measures taken in the wake of a corruption scandal that saw the Brazilian construction group admit to paying hundreds of millions in bribes to win projects in 12 countries.

The firm will also defend Panama in the state’s fifth claim at ICSID – brought by the Dutch founder of an investment firm.

A former deputy general counsel at the US Environmental Protection Agency (EPA), Ethan Shenkman joined the partnership in Washington, DC. Shenkman had been a partner at WilmerHale where he specialised in investment arbitration, and was a member of the US negotiating teams for a number of investment agreements during his time at the EPA.

Client comment

Sandra Alturo García of Fenoco says Arnold & Porter has done “an outstanding job” in the case so far, showing a special knowledge and experience in the field.

She praises Washington, DC-based partner Gaela Gehring Flores for her “persistent and creative” arguments, while associates Csaba Rusznak, Amy Endicott and Natalia Giraldo-Carrillo were “dedicated and analytical” in the work on the case.

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.

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