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GAR 100 - 11th Edition

King & Wood Mallesons

05 April 2018

Defending Kyrgyzstan and Ukraine in high-profile matters

People in Who’s Who Legal 4
People in Future Leaders 2
Pending cases as counsel 86
Value of pending counsel work US$8.7 billion
Treaty cases 8
Current arbitrator appointments
2 (of which 1 is 
as sole or chair)
Lawyers sitting as arbitrator  1

King & Wood Mallesons, or KWM, was the product of two tie-ups that saw Mallesons Stephen Jaques in Australia and King & Wood in China join forces with UK-headquartered SJ Berwin, creating a mega-firm with a footing in Asia, Australasia, Europe and the Middle East.

KWM’s European arm (the legacy SJ Berwin) was put into administration in 2017 with £35 million in debt, with more than 90 partners having already left the firm amid reports of its financial troubles. Several arbitration partners were among those who left, including the London-based global head of dispute resolution, Craig Pollack, who went to Covington & Burling.

It hasn’t meant the dissolution of the arbitration team, however, as the firm’s Chinese and Australian arms launched a new outfit that allows the remaining members of the practice in Europe and the Middle East to continue trading as King & Wood Mallesons.

That means KWM retains an arbitration team in London headed by Ukrainian Andrei Yakovlev, and a group in Dubai overseen by Tim Taylor QC (founder of the legacy SJ Berwin practice), as well as partners in Madrid and Brussels.

All three legacy firms have a strong track record in international arbitration. Mallesons was one of Australia’s “Big Six” commercial law firms, with offices in all the major cities and in Beijing and Hong Kong.

Its international arbitration work grew out of the construction practice established by David Bateson and Paul Starr in Hong Kong in the early 1980s. The firm later added the likes of Max Bonnell (until his retirement in 2017) and Alex Baykitch in Sydney, who is president of the Australian Centre for International Commercial Arbitration.

King & Wood was one of the first law firms established in China in the modern era, with founding partners who had been working at the state-sponsored China Council for the Promotion of International Trade when the government permitted private ownership of law firms. The firm was famous for representing China’s leading beverage manufacturer Hangzhou Wahaha Group in eight parallel arbitrations brought by its French former joint venture partner, Danone, before the Stockholm Chamber of Commerce.

SJ Berwin’s international arbitration practice was founded by Taylor in London in 2005. The practice made a name for itself in some high-profile Russia and CIS-related disputes, including the US$2 billion battle for control of telecoms operator Megafon.

Network

Despite the collapse of KWM in Europe in early 2017, the arbitration practice still has members in London, Dubai, Riyadh, Madrid and Brussels.

The rest of the team is concentrated in Sydney, Hong Kong and Beijing, though it also has members in Singapore, Perth, Brisbane, Melbourne, Shenzhen and Guangzhou.

Who uses it?

King & Wood Mallesons appears on the Chinese government’s list of preferred counsel for investment treaty work. Kyrgyzstan and Ukraine have repeatedly sought the firm’s counsel in treaty cases and related enforcement proceedings, while Panama and Malta have used it on law of the sea matters.

State-backed entities turn to the firm too. Chinese insurer Sinosure is using the firm for an investment dispute with Bulgaria, while KWM is defending Ukrainian state energy company Naftogaz in a high-stakes LCIA claim brought by companies linked to oligarch Igor Kolomoisky.

Past clients include BHP Billiton and Glencore, among other energy and mining outfits, as well as the Carlyle Group, Walmart, GE Healthcare and the UAE’s Meydan Group.

The London office carries on the SJ Berwin tradition of acting for companies and high net worth individuals in Russia and the CIS.

Track record

Kyrgyzstan turned to KWM after finding itself hit with a US$118 million award under a little known regional treaty, the Moscow Convention for the Protection of Investors’ Rights. A team led by Andrei Yakovlev succeeded in obtaining an authoritative ruling from a CIS economic court in Belarus that the treaty didn’t contain a free-standing consent to arbitration – leading to the set-aside of the award in the Russian courts.

On the back of that result, KWM won a tender to represent Kyrgyzstan in all its investment arbitration matters. It went on to secure an eye-catching result for the state in the French courts, overturning a US$16 million treaty award in favour of Latvian businessman Vale¯rijs Belokon¸s after raising evidence of alleged money laundering.

For Ukraine, it helped to reduce a US$250 million claim by London-listed oil and gas company JKX concerning royalties on gas production to an award of just US$12 million.

Mallesons also had a significant victory for Australian mining company White Industries in an investment treaty claim against India, which concluded in 2011. It was the first-known victory for an Australian firm in a BIT claim and the first-known BIT award against India.

The Wahaha dispute handled by King & Wood pre-merger was the biggest Sino–Western arbitration to date, with total claims exceeding €1.8 billion. Following hearings on liability in 2009, the parties reached an amicable settlement.

The teams in London and Dubai are known for helping Mobile TeleSystems resist enforcement of a US$200 million LCIA award in favour of Nomihold Securities in three jurisdictions as part of a convoluted dispute over control of Kyrgyz telecoms company Bitel.

Recent events

Sydney partner Max Bonnell, who had been with KWM and its legacy firm Mallesons for 22 years, left for White & Case. Mark Darian-Smith in Perth retired from the partnership while there were other departures at partner level in Beijing, Shenzhen, Paris, Frankfurt and Dubai.

Newly promoted partners include Daisy Mallett in Sydney, Gu Shining in Shenzhen, Li Ronghui in Shanghai and Wang Yue and Xu Xianhong in Beijing. Katherine Newman and James Wilkinson in Hong Kong were promoted to counsel.

In Shanghai, partner Yu Feng joined after working many years in-house and on the Chinese bench. Donovan Ferguson rejoined the firm as partner in Hong Kong after six years at Ashurst. Singapore partner Chau Ee Lee moved to the Beijing office. In Dubai, counsel Daniel Xu joined from DLA Piper.

Besides its work for Naftogaz, the firm continues to act for Ukraine in an ICSID claim brought by a property developer.

It received a new mandate from Kyrgyzstan to defend a US$200 million UNCITRAL claim by Russian investor Penwell over the loss of its stake in a nationalised mobile operator.

Kyrgyzstan continues to use it in disputes with Stans Energy and Centerra Gold (the latter case is reportedly close to a settlement). KWM also helped to see off an attempt by various of the state’s arbitral creditors to attach Canadian shares belonging to Kyrgyz state mining company Kyrgyzaltyn.

The Hong Kong office is acting for British Virgin Islands real estate company Bateson Investment in an arbitration with its Hong Kong joint venture partner concerning a commercial development in Nanjing. It acts for the subsidiary of one of Vietnam’s largest private-sector natural resources companies in a US$170 million SIAC case.

Chinese state-owned enterprises are using the firm in a variety of matters, including an LCIA case related to the Ebola outbreak in Sierra Leone; a US$25 million ICC case over a construction project in Fiji; and a set of cases for a coal import and export business. It won complete dismissal of an ICC claim over a research and development agreement, one of the few cases to be conducted in Chinese at SIAC.

KWM also won a CIETAC arbitration for a US sports company in a licence dispute, with the award then enforced in the Chinese courts.

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