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GAR 100 - 11th Edition

King & Spalding

05 April 2018

Won a brace of awards against Ecuador, Argentina, Peru and a Mauritian state entity, while obtaining a US$22 billion freeze on Kazakh assets

People in Who’s Who Legal 13
People in Future Leaders 10
Pending cases as counsel 113
Value of pending counsel work US$102.1 billion
Treaty cases 41 
Current arbitrator appointments 60 (of which 20 are as sole or chair)
Lawyers sitting as arbitrator 16

In 1995, King & Spalding – one of Atlanta’s oldest law firms – decided to open in Houston. The step paved the way for one of the success stories of the modern arbitration era.

Things got properly moving in 2000 with the hire of Doak Bishop (who joined with a single arbitration case). Bishop hired young lawyer Craig Miles – now a well-known partner in his own right – and from that acorn has grown one of the largest and most active practices operating today.

A series of wins in BIT matters against Argentina (relating to its 2001-2002 financial crisis) brought the team to wider attention and fuelled its expansion.

The practice’s gravity pulled in partners from the firm’s other offices. From 2004, Ed Kehoe from the New York office began to participate regularly, as did partners in Atlanta (Kehoe is today a co-chair of the practice).

Since then, lateral hires have broadened its reach further in Europe, the US, Asia and the Middle East. A former ICSID senior counsel, Margrete Stevens, joined as a consultant, and a Paris group formed around a pair of hires from Dewey & LeBoeuf – former ICC Court secretary general Eric Schwartz (now retired) and James Castello.

It opened a new office in Singapore in 2010 with the hire of John Savage from Shearman & Sterling, arguably the region’s best-known arbitration practitioner, and made other impressive hires from the likes of Weil, Gotshal & Manges, Salans and Crowell & Moring, strengthening its investment treaty practice. Following Savage’s move to London, Wade Coriell now leads the Asia disputes practice after relocating from Houston to Singapore.

The London practice has grown considerably in recent years and is headed by Australian Thomas Sprange QC, who joined from Steptoe & Johnson in 2011 and was one of only five solicitor-advocates to take silk in 2015.

Doak Bishop, meanwhile, has emerged as an authority on international oil and gas law – thanks to a treatise analysing the most important major oil and gas arbitrations and their results.

Seventeen years on, the one-person practice has become an 80-strong enterprise that is now regularly found in the top tier of arbitration rankings.

Network

The most important offices for arbitration are Houston, New York, London, Paris and Singapore but the group also has a presence in Frankfurt, Moscow, Dubai, Abu Dhabi, Tokyo, Atlanta, San Francisco and Washington, DC.

Who uses it?

International corporations, particularly in the energy sector. Examples include Chevron (in its long-running dispute with Ecuador over liability for environmental pollution in the Amazon), ConocoPhillips, Dow Chemical, El Paso, ExxonMobil, Salini Impregilo, Kellogg Brown & Root (KBR), Murphy Oil, Sempra Energy, Spain’s Marsans Group, the US’s Renco Group, India’s Reliance Industries, Malaysian media group Astro, French waste management group Veolia and Russian oligarch Oleg Deripaska’s En+ Group.

As the practice has evolved, the client list has become more diverse, now even including the occasional government. Turkey’s state-owned oil and gas company has been a client.

Track record

King & Spalding built its name on results. Between 2003 and 2011 it had a series of wins against Argentina at ICSID (US$185 million for Azurix; US$175 million for Sempra; US$106 million for the creditors of Enron; and US$43 million for El Paso Corporation). It also won US$133 million for a hotel investor against Egypt.

And things haven’t slowed. It has gone on to obtain US$8 billion for Anadarko, Maersk and Eni in a dispute with Algeria; and US$2 billion for Dow Chemicals from a Kuwaiti state-owned petrochemicals company (on that case, it teamed up with Shearman & Sterling).

It has also helped US oil companies win good results against Ecuador. The state agreed to pay US$112 million to Chevron in 2016 to honour a five-year-old investment treaty award that King & Spalding obtained. A separate dispute between Chevron and Ecuador worth US$9 billion relating to environmental pollution in the Amazon continues, however.

In 2013, the firm won a US$500 million award against Kazakhstan for Moldovan investors Anatolie and Gabriel Stati – the second-largest award ever issued under the Energy Charter Treaty. More recently, efforts to enforce the award have made headlines around the world (see below).

Another triumph came in 2012 in a long-running ICSID case against Romania. Once again teaming with Shearman, King & Spalding helped Swedish businessmen Ioan and Viorel Micula win around US$250 million in a claim over Romania’s withdrawal of economic incentives. The European Commission has declared the award in breach of EU state aid rules, a finding that the Miculas are challenging before the European Court of Justice.

US engineering firm KBR relied on the firm for an enforcement battle with Mexico’s state oil company Pemex. King & Spalding persuaded a New York district court to recognise a US$465 million award even though it had been set aside by the courts in Mexico – upending more than a decade of US case law that has given primacy to the courts at the seat of the arbitration. The Second Circuit affirmed the decision in 2016 and Pemex paid US$435 million to settle the dispute in the following year.

Recent events

The firm continued its run of successes by securing a US$320 million ICSID award against Argentina, in favour of insolvent member companies of Spanish travel group Marsans. The dispute concerns the nationalisation of two airlines and led Argentine officials to lodge a criminal complaint against the claimants’ counsel and third-party funder. King & Spalding is now defending the award in annulment proceedings.

It also won US$30.4 million for Canada’s Bear Creek Mining after an ICSID tribunal held Peru liable for the expropriation of a silver mining concession. However, the tribunal only awarded the investor its sunk costs in the project, refusing to grant 90% of the damages claimed.

Pairing with Freshfields, the firm helped ConocoPhillips settle a long-running ICSID dispute with Ecuador over the imposition of a 99% levy on windfall profits of oil companies. Ecuador agreed in December 2017 to pay Conoco US$337 million to satisfy an award issued earlier in the year.

Egishe Dzhazoyan in the London office has been coordinating the Statis’ efforts to collect on their ECT award against Kazakhstan in various jurisdictions. This included persuading the Belgian and Dutch courts to grant a freeze on US$22.6 billion in assets held by the Bank of New York Mellon on behalf of Kazakhstan’s central bank. While the Dutch court later lifted the freeze, it brought unprecedented public attention to the Stati case.

Together with local co-counsel, the firm has also helped the Statis attach a Kazakh sovereign wealth fund’s US$5.2 billion stake in a Caspian Sea oilfield; as well as Kazakh property worth US$100 million in Sweden; and other receivables in Luxembourg. Meanwhile, the firm persuaded Sweden’s Supreme Court to uphold the award, which Kazakhstan alleges is the product of fraud. The English Commercial Court is scheduled to hold a trial on the state’s fraud allegations in October 2018.

Stuart Isaacs QC in London helped shipping company Betamax win a US$120 million SIAC award against Mauritius’ State Trading Corporation in a dispute over the transportation of petroleum from India. The state entity is now seeking to set aside the award in the Mauritian courts.

There were some setbacks too. The firm saw a joint SCC claim it had filed on behalf of Russian companies Evrobalt and Kompozit against Moldova tossed out, with a panel ordering the claimants to pay about €1 million in costs. It also failed to enforce an UNCITRAL award in favour of mining clients Thai-Lao Lignite and Hongsa Lignite against Laos in the US courts, after it was set aside at the seat of arbitration in Malaysia.

The firm scooped up new instructions from the Kuntur Wasi consortium in a dispute with Peru over a US$525 million contract to build an airport. It is also acting for businessman Trinh Vinh Binh in a US$1.25 billion ICC claim against Vietnam after the state failed to allegedly comply with an earlier settlement between the parties.

King & Spalding continues to act for a number of investors affected by reforms to the renewable energy subsidy regimes in Italy and Spain.

New instructions have come from Zamin Ferrous, a mining company owned by Indian magnate Pramod Agarwal, for a treaty claim against Uruguay over an iron ore project; a Mauritius-registered telecoms investor for an ICSID claim against Madagascar; and British energy company Rockhopper Exploration for an ECT claim against Italy.

Two new partners were made up – Viren Mascarenhas in New York and Jorge Mattamouros in Houston. Charlene Sun in New York and David Weiss in Houston were promoted to counsel and the firm hired Zeeshan Dhar in Dubai as counsel

Eric Schwartz in New York announced his retirement from the firm after eight years to practice as an independent arbitrator. Jane Player left the London office to set up her own practice as a mediator.

Also in New York, partner Guillermo Aguilar-Alvarez died at the age of 58 after a three-year battle with cancer. Partner Ed Kehoe described him as a “wonderful mentor to many young students and lawyers.”

Client comment

Senior legal counsel Len Briley at AT&T says the firm was unafraid to provide an assessment on the outcome of a multibillion-dollar arbitration in Mexico – which turned out to be correct. He praises partner Harry Burnett and his team for their responsiveness, noting their turnaround on work was “incredibly fast” despite the complexity of the matter and the fact that most of the documents and testimony were in Spanish.

Union Fenosa Gas’s secretary-general Javier Gerbolés de Gáldiz describes partners Doak Bishop and James Castello as “the very best the company has ever worked with.”

Duke Energy’s deputy general counsel Martin Lythgoe praises the firm’s “outstanding” work in an arbitration against a Peruvian state entity. He says the team was “cost-effective” with an impressive knowledge of the oil and gas industry.

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