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GAR 100 - 11th Edition

Hughes Hubbard & Reed

05 April 2018

Bringing a new claim against Armenia as groundbreaking cases over Crimea proceed to the merits

People in Who’s Who Legal 4
People in Future Leaders 2
Pending cases as counsel 17
Value of pending counsel work US$6.1 billion
Treaty cases 9
Current arbitrator appointments
21 (of which 6 are 
as sole or chair)
Lawyers sitting as arbitrator  7

While it has in the past seemed more of a domestic litigation shop, Hughes Hubbard & Reed in fact stands out from the crowd by its early embrace of international arbitration. The firm was founded in 1888 by Charles Evan Hughes, a future Chief Justice of the United States who became a member of the Permanent Court of Arbitration at The Hague and served as a US delegate to the Pan American Conference on Conciliation and Arbitration in 1928.

The modern arbitration practice was started by Paris partner Axel Baum and Washington, DC partner John Townsend nearly 40 years ago, when they filed their first ICC case. Under Baum’s tutelage, lawyers in Europe and the US have had the time and space to develop true credentials in the field and are now recognised figures in their own right who sit as arbitrators as well as conducting counsel work.

Townsend leads the international arbitration practice with New York-based partner John Fellas. He also co-chairs the investment treaty arbitration practice with partner Steven Hammond, following the departure of former co-chair Alexander Yanos, who moved to Alston & Bird in 2017.

A former chairman of the board of the American Arbitration Association, Townsend has been a vice president of the LCIA Court since 2014. He’s been on the ICSID panel of arbitrators since 2008. Other members of the team are visible in the wider arbitration community. Fellas sits on the executive committee of the Swedish Arbitration Association, while Hagit Elul chairs the arbitration committee of the CPR Institute and sits on the ICC’s task force on financial institutions. Marc Henry in the Paris office chairs the French Arbitration Association.

Network

The New York, Paris and Washington, DC offices house the majority of the firm’s 60 arbitration lawyers, with a few in Los Angeles and Miami.

Who uses it?

Recent clients include Ukrainian oligarch Igor Kolomoisky, Areva, US military shipbuilder Huntington Ingalls, private equity group Tenor Capital, London-listed Hardy Oil & Gas, the US arm of Australian financial services group Macquarie, LG Electronics, Swedish telecoms operator Tele2 Sverige, Indian wind power provider Suzlon Energy and cosmetics producer Roche.

State clients have included Hungary, Lithuania and Canada (one of the firm’s partners, Joanne Osendarp, is a former trade lawyer for the government) and it has also advised the central bank of a South American country.

Turkish state oil and gas company Türkiye Petrolleri AO used the firm for an ICSID claim against Kazakhstan.

Track record

The firm has secured jurisdictional wins in five groundbreaking investment treaty claims against Russia worth a combined US$1.5 billon. The claims, brought on behalf of Ukrainian oligarch Igor Kolomoisky, or companies linked to him, all relate to Russia’s seizure of Crimea in 2014. Final awards are pending in the five cases, in which Russia has refused to participate.

Hughes Hubbard won an ICSID claim against Serbia over the privatisation of a fertiliser factory on behalf of Lithuanian clients Arbi and Sanitex.

It helped Lithuania defeat a €206 million claim brought by an Italian investor in the sparkling wine industry in 2013. Although the UNCITRAL panel found the state in breach of a bilateral investment treaty, it refused to award any damages.

The year before, Osendarp and Townsend helped Canada prevail in an LCIA arbitration brought by the United States concerning the under-pricing of softwood lumber from forests in British Columbia killed by a mountain pine beetle infestation.

In 2010, a Hughes Hubbard team helped a UK subsidiary of US hedge fund Elliott Associates win an SCC award against Russia over the expropriation of its shares in Yukos Oil Company. Although the award wasn’t huge (US$3.5 million), it was the first time the state had been held liable under an investment treaty over the Yukos affair and paved the way for bigger claims. The award was later overturned.

Recent events

Partner and investment treaty practice co-chair Alex Yanos, who joined from Freshfields in 2014, left for Alston & Bird in New York along with a counsel and two associates.

However, Hughes Hubbard continues to co-counsel with Yanos on certain cases, including an ICSID claim brought on behalf of plastics company Saint Gobain against Venezuela, which ended in a US$29.4 million award in the client’s favour in late 2017.

US businessman Edmond Khudyan instructed the firm for a US$15 million ICSID claim against Armenia over the state’s failure to act on allegations that he was defrauded by his business partner in a real estate venture that went bankrupt.

Hughes Hubbard continues to defend Hungary against an US$800 million ICSID claim lodged by Engie under the Energy Charter Treaty. A hearing on jurisdiction took place in July 2017.

It is helping Hardy Oil & Gas in efforts to enforce a US$74 million UNCITRAL award against India in the US courts. The award relates to rights to an offshore hydrocarbons reserve.

Sena Agbayissah in the Paris office helped Areva defeat a €150 million ICC claim brought by a Belgian businessman over a failed joint venture to mine uranium in the Central African Republic.

Client comment

Canadian government trade adviser Colin Bird says Hughes Hubbard & Reed “dominated” in written and oral submissions in the softwood lumber disputes, which he said had direct tax implications of over half a billion dollars to Canada. “These were highly complex arbitrations involving high stakes, multiple stakeholders, extensive economic data and novel legal issues,” he says.

Of Townsend, Bird says: “His ability to develop a rapport with the bench has no peer and he is a master at presenting complex economic evidence in a clear and compelling way.” Others in the team “demonstrated an unparalleled command of the economics and context.”

Another client’s former legal director praises the firm’s “intelligence, tenacity and conviviality” in a multi-jurisdictional insurance dispute, adding that Townsend “knows international arbitration inside and out.”

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