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GAR 100 - 11th Edition

Luther

05 April 2018

Triumphed for E.ON in a row over a nuclear tax in Belgium

People in Who’s Who Legal 1
People in Future Leaders 1
Pending cases as counsel 6
Value of pending counsel work US$7.7 billion
Treaty cases 3
Current arbitrator appointments 6 (of which 4 are as sole or chair)
Lawyers sitting as arbitrator 4

One of the founding fathers of the German Institution of Arbitration, Martin Luther, established this firm in Hamburg in 1950. Originally a boutique corporate firm, it began to receive international arbitration work after a merger with Arthur Andersen’s local legal division.

After the implosion of Arthur Andersen, Luther formed an association with Ernst & Young. The firm ended that relationship in 2006 but retained an international focus. Its reputation developed in investment arbitration after it became one of the first firms in the country to be instructed on a treaty claim (Inmaris v Ukraine).

Luther represented Swedish state-owned energy company Vattenfall in the first-ever ICSID case against Germany – a €1.6 billion claim under the Energy Charter Treaty that eventually settled. The same client instructed it for a second ICSID claim worth €4.7 billion over Germany’s decision to phase out nuclear power in the wake of Japan’s Fukushima crisis. An award in the second case is pending.

Hamburg-based Ulrich Theune established the arbitration practice but retired as a partner in 2012 to focus on arbitrator work, though he continues to support the firm on selected cases. The practice is now chaired by Richard Happ in Hamburg, who has been at the forefront of much of the investment treaty work.

Jutta Wittler in Cologne specialises in construction, while Christoph von Burgsdorff in Hamburg, who became a partner in 2012, focuses on corporate transactional and joint venture-related disputes. Karl von Hase in Düsseldorf specialises in Italian-German commercial disputes.

The firm is one of the founding members of the European Federation for Investment Law and Arbitration (EFILA), a Brussels-based lobby group set up to promote the benefits of investor-state dispute settlement and counter the negative press it has received in the past few years.

Who uses it?

A mixture of German and international clients, particularly from the energy and infrastructure sectors. Besides Vattenfall, it is acting for E.ON in a €300 million claim against Spain – one of numerous Energy Charter Treaty claims relating to the state’s renewable energy reforms.

It has also acted for Greek petroleum company Mamidoil, Norway’s Statkraft, Italian engineering company Ansaldo Energia, Molinari and PreussenElektra.

Network

The core of the team is in Hamburg, with others in Cologne and Düsseldorf. But the wider firm has seven other German offices as well as outposts in Brussels, London, Luxembourg, Shanghai, Singapore and Yangon in Myanmar.

Track record

While it is more visible in investor-state cases, several of the firm’s big victories been in commercial arbitrations. In early 2018, Luther helped E.ON and its subsidiary PreussenElektra largely prevail in an ICC case against Belgium’s Electrabel, a subsidiary of French energy group Engie. A Geneva-seated tribunal held E.ON was not obliged to pay a €321 million tax on nuclear power in Belgium and ordered Electrabel to pay around €11 million.

As part of a co-counsel team that included Allen & Overy and Bär & Karrer, Luther helped Italian client Ansaldo prevail in an ICC arbitration with Siemens over the use of heavy-duty gas turbine technology. The tribunal upheld Ansaldo’s right to use the technology under a winding-up agreement and rejected Siemens’ US$436 million claim.

The firm successfully represented a German automotive supplier in a VIAC arbitration against a Chinese joint venture; and achieved wins in two CIETAC arbitrations between a German electrical components supplier and a Chinese listed company in the solar sector.

In the investor-state arena, besides the settlement for Vattenfall, Luther helped Hamburg sailing-tours group Inmaris win a €3 million ICSID award against Ukraine in 2012 over an impounded vessel.

Recent events

An investment treaty case that Luther brought on behalf of German renewable energy investors against the Czech Republic came to a disappointing end in October 2017, with the majority of an ad hoc tribunal ruling that a tax on electricity generated by solar power plants and other measures did not violate their legitimate expectations.

Another Swiss-seated case saw Luther help a client defeat 90% of the claims brought against it by a Korean university.

It was instructed for an ICC case regarding the use of technology for power plants, potentially worth €1 billion.

It also advised a client in a DIS arbitration over an offshore windfarm project; and a Swiss-Austrian rail company in two consolidated SIAC cases. In the latter dispute, the tribunal made two awards in the client’s favour in early 2017.

Client comment

The head of a multinational who used lawyers from the firm’s Stuttgart and Shanghai offices was impressed by their professionalism and knowledge, as well as their level of preparation. The client, who wished to stay anonymous, also praised how the lawyers developed their relationship with the COO and his company.

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