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GAR 100 - 12th Edition

Arnold & Porter Kaye Scholer

05 April 2019

Representing Venezuela’s self-declared interim president Juan Guaidó as he seeks to preserve his country’s US assets

People in Who's Who Legal 1
People in Future Leaders 7
Pending cases as counsel 34
Value of pending counsel work US$12 billion
Treaty cases 22
Third-party funded cases 0
Current arbitrator appointments 9 (5 as chair or sole)
Lawyers sitting as arbitrator 6

Arnold & Porter’s merger with New York firm Kaye Scholer took effect in 2017, resulting in a change of name. Of the two legacy firms, only Arnold & Porter had a significant profile in international arbitration terms, though Kaye Scholer is highly regarded for its litigation work in the fields of antitrust, IP and product liability.

As a defender of states, Arnold & Porter has arguably had a longer winning streak at ICSID than any other firm in this book. It picked up a GAR Award in 2013 as the most impressive large practice of the year.

The international arbitration practice grew from the firm’s reputation in trade and sovereign debt work, which led it to represent several states in the public international law arena in the 1980s. Initially the work was led by Bill Rogers, a former undersecretary of state in the Ford administration, then by Eli Whitney Debevoise and ultimately Paolo Di Rosa, one of a group of eight lawyers who joined in 2007 from Winston & Strawn.

A former assistant legal adviser at the US State Department, Di Rosa has overseen the group’s expansion, including a number of senior lateral hires. In 2010, Debevoise rejoined after three years as US executive director at the World Bank. Other key partners in London are Dmitri Evseev and Patricio Grané Labat in London, and Gaela Gehring Flores in Washington, DC.

An unusually large number of the firm’s team have been designated to ICSID’s panels of arbitrators and conciliators, including Di Rosa, Debevoise and Evseev.

Although investment arbitration makes up the bulk of its work, the practice has been broadening its commercial arbitration offering in recent years. Partner David Reed joined the London office in 2012 from Shearman & Sterling, where he helped Dow Chemical secure a record-breaking US$2 billion award against a Kuwaiti state-owned entity.

Network

The anchor of the practice is Washington, DC, with other members in London, Los Angeles and San Francisco. Some lateral hires from Hogan Lovells in 2014 gave it a presence in Houston.

As for the wider firm, the tie-up with Kaye Scholer has broadened its US reach and given it a foothold in Germany.

Who uses it?

Large numbers of sovereign states use the firm for disputes work. For instance, it’s advising South Korea in a US$4.4 billion ICSID claim by private equity fund Lone Star, thought to be the largest investment treaty claim ever filed against an Asian state.

Recent state clients include Bosnia and Herzegovina, the Czech Republic, Hungary, Israel, Kyrgyzstan, the Philippines, Slovakia, and Thailand. The firm is also on the preferred provider lists of the governments of China, Romania and Bulgaria.

Latin American state clients including Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Panama, Peru and Venezuela have turned to the firm. The Caribbean Community has also used it for advice on free trade agreements and investment treaties. The European Commission is another client.

Unlike some firms that have made their name in the investor-state field, however, Arnold & Porter is happy to work both sides of the street. The firm has acted for Électricité de France (EDF) in two ICSID claims against Argentina; and US forestry companies AbitibiBowater and Mercer in NAFTA claims against Canada.

Track record

The firm has notched up some impressive results for claimants in investor-state cases. In 2017, it helped Turkey’s Karkey Karadeniz win US$800 million in an ICSID claim against Pakistan relating to the detention of power ships. Pakistan is now fighting to annul or revise the award, saying it has new evidence to support corruption allegations that were dismissed by the tribunal. Meanwhile Karkey is trying to enforce the award in the US and UK. 

Going further back, it helped EDF and its affiliates win more than US$200 million in an ICSID claim against Argentina –one of the largest awards to arise from the state’s financial crisis of nearly two decades ago. Arnold & Porter also helped AbitibiBowater obtain a US$130 million settlement in a NAFTA dispute with Canada.

The firm is justly known for a stellar run of defence wins at ICSID, not least on behalf of Hungary. For instance, it helped the state defeat a US$700 million Energy Charter Treaty claim brought by Belgian power company Electrabel that concerned compliance with EU law on state aid.

It also helped Hungary knock out a similar claim worth US$30 million brought by US power company AES in 2010 – memorable as the first ICSID case to receive an amicus curiae submission from the European Commission.

Another great result came in 2016, when the firm helped Costa Rica to defeat a US$350 million ICSID claim brought by a provider of vehicle inspection services.

It defeated a US mining company’s US$100 million claim against the Dominican Republic, persuading a tribunal that the claim was time-barred under DR-CAFTA.

It has won twice for Panama at ICSID, securing the dismissal of a claim over a hydropower concession as “abusive”; and a US$62 million tax-related claim. The state continues to use it in other pending claims.

For Slovakia, it secured the withdrawal of a US$300 million treaty claim brought by Pennsylvania-based steelmaker US Steel – only three weeks before the final hearing. The firm has also helped Kyrgyzstan settle a US$550 million ICSID case over the country’s second-largest gold deposit.

Recent events

A headline-grabbing instruction came in early 2019 from Juan Guaidó, the president of Venezuela’s National Assembly who has been recognised by US President Donald Trump as the country’s acting president. Guaidó has retained Arnold & Porter partner Whitney Debevoise to advise on economic sanctions, corporate and banking law, US litigation and international arbitration.

The firm is also assisting Guaidó as he seeks to preserve Venezuela’s US assets and intervene in various US enforcement proceedings brought by the country’s arbitral creditors. In some of those proceedings, Arnold & Porter had previously acted for the government of Nicolás Maduro, who maintains he is the country’s rightful leader.

There was another success for the Czech Republic, as it knocked out a a US$14.5 million Energy Charter Treaty claim by German renewable energy investor Antaris Solar. It follows the defeat of a claim by German investors Jürgen and Stefan Wirtgenover in 2017. The firm is acting in five similar cases relating to reforms to the Czech renewable energy sector.

The Czech Republic also instructed Arnold & Porter to defend a new billion-dollar investment treaty claim filed by Josef Šťáva, the owner of blood plasma supplier Diag Human. The dispute concerns Diag’s thwarted efforts to collect on a US$650 million award against the state. 

There was a disappointing result for the firm’s client Mercer International, the US operator of a pulp mill and power generation plant. It lost a US$180 million NAFTA claim against Canada over alleged discriminatory treatment by provincial energy authorities.

The European Commission instructed the firm to represent it as amicus curiae in the US courts in support of Spain’s efforts to resist enforcement of various Energy Charter Treaty awards in favour of European renewable energy investors. The commission argues that the ECT does not protect intra-EU investments as a result of the Achmea decision.

Arnold & Porter continues to act for Chile after it defeated a US$340 million claim by Spanish publisher Victor Pey Casado – ICSID’s longest-running case. While Pey Casado died in 2018 aged 103, his daughter and a foundation in his name are pursuing a new UNCITRAL claim against the state.

It’s also advising the Philippines in an ICSID claim brought by the Royal Dutch Shell over tax bills of US$1.1 billion that were retrospectively imposed on the country’s only natural gas project. A hearing on jurisdiction was held in October 2018.

On the commercial side, the firm says it successfully represented a pharmaceutical company against claims concerning infringement of patent licences in an expedited arbitration held under JAMS rules.

After more than three years as head of Baker McKenzie’s California arbitration practice, former Arnold & Porter special counsel Maria Chedid returned to the firm as a partner in the San Francisco office. The firm also hired Jane Wessel, a partner from UK firm Shepherd & Wedderburn.

Mallory Silberman was promoted to the partnership in Washington, DC.

Client comment

Sandra Alturo García of Colombian rail company Fenoco says Arnold & Porter did “an outstanding job”, showing a special knowledge and experience in the field. She praises Washington, DC-based partner Gaela Gehring Flores for her “persistent and creative” arguments.

Arnold & Porter’s defence of Slovakia in the US Steel case draws praise from Andrea Holíková of the Slovak Ministry of Finance, who says Dmitri Evseev “had full control over the case and a strong personal commitment”. Di Rosa also made a “crucial” contribution and impressed with his knowledge of the “nuances” of the case.

Insight

Reviews

Regional analysis from arbitrators around the globe, focussing on key developments in specific industry areas and jurisdictions.

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The Middle Eastern and African Arbitration Review 2019

Highlights

CRCICA Overview

Ismail Selim and Dalia Hussein

The Cairo Regional Centre for International Commercial Arbitration (CRCICA)

DIFC-LCIA Arbitration Overview

Alec Emmerson

DIFC Arbitration Institute (DAI)

Robert Stephen, Matthew Harley and Katy Hacking

DIFC-LCIA Arbitration Centre