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GAR 100 - 12th Edition

Cleary Gottlieb Steen & Hamilton

05 April 2019

Celebrated for its work for sovereign states, the firm has enjoyed significant wins in commercial arbitrations too

People in Who's Who Legal 2
People in Future Leaders 5
Pending cases as counsel 55
Value of pending counsel work US$75 billion
Treaty cases 11
Third-party funded cases 0
Current arbitrator appointments 15 (6 as chair or sole)
Lawyers sitting as arbitrator 4

Cleary Gottlieb Steen & Hamilton is best known for its work for Russia on the 10-year Energy Charter Treaty arbitration brought by majority shareholders in Yukos over the collapse of the oil giant, giving rise to the largest arbitration award ever. The US$50 billion award was set aside in the Dutch courts in 2016 on the basis of jurisdictional arguments Cleary had advanced in the arbitration.

Though Cleary didn’t appear for Russia in the set-aside hearing, the outcome has been a major vindication for a firm that can claim to have represented more sovereign states, in more substantial matters, than almost any of its competitors. It would be a shame if the Yukos saga continued to overshadow the group’s impressive work in other cases – not least its triumph in one of the biggest commercial arbitrations on record (for Telecom Italia).

The firm has been involved in large international arbitration matters as part of its broader transactional and disputes work since opening its first office outside the US in 1949 in Paris (where it advised the French government in connection with the Marshall Plan). It branched out across Europe in the ensuing decades and opened a Moscow office in 1991.

Partners to know at the firm include Claudia Annacker in Paris, who led work on the Yukos cases; Jonathan Blackman and Howard Zelbo in New York; Matthew Slater in Washington, DC; Christopher Moore in London; and Richard Kreindler in Frankfurt. Several partners sit as arbitrators, including Ferdinando Emanuele in Rome and Jean-Yves Garaud in Paris.

Network

The New York office has the highest number of arbitration specialists, followed by London and Paris. There are also members of the group in Frankfurt, Rome, Milan, Brussels and Washington, DC.

Who uses it?

Apart from Russia, the firm’s state clients have included Argentina (in arbitration and litigation relating to its sovereign debt default), the Republic of the Congo, Ivory Coast, Egypt, Iraq and Greece. It also defended France and Austria in their first ICSID cases.

On the investor side, it has acted for Gazprom (against Lithuania); Russian oil company Tatneft and the semiautonomous Russian republic of Tatarstan (in treaty claims against Ukraine); and UAE port operator DP World (in an ICSID case against Peru).

Other commercial clients include ArcelorMittal, Agfa-Gevaert, Del Monte International, EDF, Citigroup, Telecom Italia, Eni, Gazprom, Rosneft, Sanofi, Pluspetrol, Egyptian telecoms company Orascom and Asian corporations such POSCO Daewoo and Huawei. It has also acted for Brazil’s Vale in a high-stakes LCIA dispute with Beny Steinmetz Group Resources alleging fraud in connection with a mining deal in Guinea.

Track record

One of the firm’s biggest successes to date came in 2016 when it helped Telecom Italia win the complete dismissal of a US$15 billion ICC claim brought by former business partners in Brazil. The case (which once again pitted Cleary against Shearman & Sterling, its adversary in the Yukos saga) involved allegations of industrial espionage, coercion and bribery. The award is now being challenged in the French courts.

That year, the firm also successfully defended EDF in a high-profile ICC arbitration initiated by the German state of Baden-Württemberg, defeating claims worth more than €4.6 billion. The tribunal held that there was no state aid involved in EDF’s sale of a stake in a power company to the state. In that case, Cleary worked alongside Shearman.

In the investment treaty arena, Cleary obtained an important win for Greece in 2015 in an ICSID case initiated by Slovakian and Cypriot investors, which challenged the sovereign debt restructuring carried out in response to the Greek financial crisis that threatened the future of the eurozone. The firm persuaded a tribunal that Greek government bonds weren’t protected investments under the treaty, and saw that decision upheld by an annulment committee in the following year. The firm continues to defend Greece in two other ICSID cases.

Austria has cause to be thankful to the firm. In 2017, Cleary helped the state prevail in its first ever ICSID case: a €200 million claim by a private investment bank linked to the heir of a famous Austrian business dynasty.

In 2014, Cleary helped Russia’s Tatneft win a US$130 million investment treaty award against Ukraine for the seizure of an oil refinery and has since secured a number of court victories as part of the company’s multi-jurisdictional efforts to the enforce the award. It continues to advise the government of Tatarstan (a shareholder in Tatneft) in another treaty claim against Ukraine over the same refinery.

Another success was for Egypt in 2014 – when the firm successfully invoked the fork-in-the-road clause in an investment treaty to secure the dismissal of ICSID claims brought by a hotel investor.

Cleary also assisted Argentina in the settlement of a US$2.5 billion claim at ICSID brought by tens of thousands of Italian investors in defaulted sovereign bonds (the famous Abaclat case), clearing the way for the country’s return to the capital markets.

Recent events

Cleary lawyers secured a big win in 2018 for Belgian multinational Agfa-Gevaert – helping to defeat an ICC claim worth €410 million plus substantial interest brought by the bankruptcy receiver of its spin-off consumer imaging business. The decade-old dispute has led to parallel arbitrations and court proceedings worth over €1 billion.

Earlier in the year, it helped France settle the only ICSID claim it has ever faced, filed by Turkish investor Erbil Serter over intellectual property rights.

Less happily, an ICSID tribunal upheld claims against the firm’s client Egypt brought by a joint venture between Spain’s Naturgy and Italy’s Eni over the interruption of gas supplies to a liquefied natural gas plant. The state was ordered to pay US$2 billion. Egypt is trying to annul the award, which it alleges ignored “red flags” that indicated the investment was acquired corruptly.

The firm continues to represent DP World in a long-running ICSID case against Peru that is awaiting an award. The case was recently disrupted by the death of an arbitrator.

It is also defending Greece in a pair of ICSID claims brought by Cyprus Popular Bank and Bank of Cyprus. The first case saw a decision on jurisdiction and liability in January 2019 whose findings have not yet been made public; the second is awaiting a decision on Greece’s jurisdictional objections.

The Paris office is defending Ivory Coast against a contractual claim at ICSID brought by an investor in the waste management sector.

Cleary is providing counsel to Brazil’s Petrobras in Texas court proceedings, where it is resisting enforcement of a US$622 million award in favour of a Cayman drilling contractor. The client has also raised allegations of corruption in that dispute and has unsuccessfully tried to subpoena a dissenting arbitrator.

In the Colorado courts, the firm is helping Mexican cement group GCC to resist enforcement of a US$40 million in favour of an investment company owned by a Bolivian former presidential candidate.

In April 2018, the firm added former Herbert Smith Freehills partner James Norris-Jones to the partnership in London.

In Paris, Ariella Rosenberg was promoted to senior attorney, while Guillaume de Rancourt was promoted to counsel.

Client comment

Peter Gloushkov, a legal adviser at Tatneft, says Blackman’s passionate advocacy is “second to none”, while Annacker provides the “deepest academic support” with her “fantastic” knowledge of public international law.

A representative of one of the states using Cleary praised the firm’s “international character, deep knowledge of the international economic and financial issues and the wise choices of the people involved”. The source added that Annacker is “a born leader with team spirit, a strategy maestro with a unique and impressive presence in the courtroom”.

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