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GAR 100 - 11th Edition

Vinson & Elkins

04 April 2018

There was a win for the Panama Canal Authority

People in Who’s Who Legal 2
People in Future Leaders 3
Pending cases as counsel 60
Value of pending counsel work US$12 billion
Treaty cases 7
Current arbitrator appointments
27 (of which 10 are as sole or chair)
Lawyers sitting as arbitrator 3

Founded in Houston in 1917, Vinson & Elkins is arguably one of the leading firms when it comes to energy work. Its US oil clients have tended to take the firm wherever they go in the world, calling on it to draw up contracts and turning to it the minute a dispute arises.

In the 1990s, commercial litigation lawyers handled most of the firm’s international disputes, but an increasing demand for arbitration, particularly investment treaty claims, led the firm to start building a practice in 2000 with the recruitment of James Loftis.

Loftis – who now leads the disputes practice – joined in London after working at the United Nations Compensation Commission (the body set up to deal with claims against Iraq arising from the first Gulf War). The practice expanded to the United Kingdom in 2001, followed by Beijing and Hong Kong, with the recruitment of partner Christopher Walker from Linklaters in 2008.

By that time, the group had turned into a free-standing international dispute resolution team, reporting to the firm’s head of commercial litigation.

While the focus remains on the energy sector, big strides have been made in developing the construction side of the practice. Led by partners Amir Ghaffari in Dubai (formerly of Shearman & Sterling) and Nick Henchie in London, the firm has been instructed on some of the largest construction disputes in the world, including those related to the expansion of the Panama Canal; the terminated South Stream project to build a pipeline between Russia and southern Europe via the Black Sea; and the Marmaray rail project to develop a link between Europe and Asia under the Bosphorus Strait.

Vinson & Elkins is proud of the fact that its lawyers are always in the thick of the action – but this has sometimes led to a spot of bother. In recent years, the firm has seen two of its attorneys arrested by the police in a state against which the firm was bringing a treaty claim, and one came under small-arms fire, also in the course of duty.

Network

The firm’s core business is such that it opened in China before New York. The arbitration team is small but covers a lot of ground. There is a regular arbitration presence in Houston, Beijing, Hong Kong, London, Riyadh and Washington, DC.

After spending a significant amount of time in the Dubai office, building up relationships in the Middle East, Loftis is now based in Houston. Ghaffari relocated from London to Dubai in 2017 to lead the firm’s dispute resolution practice in the region.

Who uses it?

In upstream oil and gas, the firm represents the majors as well as a number of national oil companies.

Big-name clients include Cairn Energy, Noble Energy, Statoil and El Paso Corporation, while newer ones include the Iraqi state-owned oil trading company SOMO. It represents Iraq in a claim against Turkey and its state-owned pipeline operator Botas¸ over the purchase of crude oil from the semiautonomous region of Iraqi Kurdistan.

Lower down the value chain it has been connected with arbitration work for an Omani power company and Essar Oilfield Services.

Outside the energy sphere, the firm has acted for Dubai’s Alamar Foods in a US arbitration concerning a fast food franchise, Dubai Mercantile Exchange in shareholder disputes and Emirate Aluminium Company in a claim brought by a subcontractor.

In the investment treaty field, it has advised investors bringing claims against India, Ecuador and Armenia. The firm has also featured on a list of 15 international firms that China prefers to use for such matters.

Resource contractors have also instructed the firm to represent them in a number of maritime boundary disputes, including between Nicaragua and Colombia, Cyprus and Turkey, and Lebanon and Israel.

In the Panama Canal case, it’s acting for the Panama Canal Authority against a European consortium; meanwhile, in the South Stream pipeline case, it’s acting for Eni Saipem, which was contracted by Gazprom entity South Stream to lay the submarine sections of the pipeline.

Track record

The firm helped Spectra Energy defeat a US$170 million claim by ExxonMobil. It also won a US$20 million award for Niska Energy during a disagreement about the final purchase price of gas storage facilities in North America.

Partner Christopher Walker was behind one of the first successful retroactive applications of an arbitration clause in the United Kingdom. In Norscot Rig Management v Essar Oilfield Services, the court agreed that an arbitration clause could be applied to a dispute from a contract that pre-dated the arbitration clause, but was related to it.

For more than a decade, the firm has been representing Cairn Energy, Ravva Oil and Videocon Petroleum against the government of India in three UNCITRAL arbitrations and related court claims in India and Malaysia. The disputes arose out of a joint venture to develop an oilfield in the Bay of Bengal.

In 2011, one of the arbitral tribunals made a ruling in favour of the firm’s clients to the tune of around US$500 million. The award was later upheld in the Malaysian courts at two instances. Vinson & Elkins and local co-counsel HM Ooi & Associates defended the award.

Recent events

Vinson & Elkins helped the Panama Canal Authority defeat a US$192 million ICC claim brought by the Spanish-Italian consortium over­seeing the canal’s expansion. The firm teamed up with Mayer Brown and other counsel on the case. The team continues to represent the authority in further ICC claims in which the total amount in dispute is more than US$5 billion.

In other Latin American work, the firm is acting for ExxonMobil in ICSID annulment proceedings where it is defending an award against Argentina; and a group of investors in a DR-CAFTA claim against Costa Rica concerning a construction project.

A previous victory before the English Court of Appeal for Iraq’s SOMO was overturned by the UK Supreme Court in 2017. The court ruled by majority that third-party debt can be used to enforce an award, in this case letters of credit issued in favour of the Iraqi award debtor and the Central Bank of Iraq.

The firm wrapped up its four-year representation of Lithuanian energy company E Energija, helping it win an ICSID claim against Latvia over the nationalisation of a heating and hot water supply system.

Along with Sidley Austin, the firm has taken on the defence of PetroChina and five other Chinese state-owned companies in an arbitration based in Texas. The dispute centres on interests in oil and gas fields in Chad.

London-based partner George Burn, a specialist in investment arbitration, left to head the arbitration practice at Berwin Leighton Paisner.

Vinson & Elkin’s China practice head Xiao Yong in Hong Kong and its principal arbitration practitioner in Beijing, Nicholas Song, were part of a team of five energy specialists that moved to Dechert.

James Loftis was appointed a vice president of the LCIA and London-based senior associate Louise Woods was appointed to the board of ArbitralWomen. In 2017, the firm also celebrated its centennial.

Client comment

Laith Al-Shaher, the Iraq oil ministry’s director general, says describes the firm’s performance as “excellent” and says that as well as Loftis, partners Ahmed Al Gaili in Dubai and Christopher Strong in London are “highly qualified, smart, professional, experienced, honest and clever.”

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