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GAR 100 - 12th Edition

Curtis Mallet-Prevost Colt & Mosle

05 April 2019

There were victories for Cyprus, Libya and Indonesia, while some long-serving members of the practice moved on

People in Who's Who Legal 5
People in Future Leaders 2
Pending cases as counsel 110
Value of pending counsel work US$125 billion
Treaty cases 44
Third-party funded cases 0
Current arbitrator appointments 8 (6 as chair or sole)
Lawyers sitting as arbitrator 5

This New York-based firm has made a name for itself as a knight in shining armour for governments facing serious claims under investment treaties.

That is partly down to a deliberate policy of only representing sovereigns in such claims, never investors. According to the inter­national arbitration group co-chair, George Kahale III, it is not feasible for the same practice to represent both claimants and states because of the recurring legal issues. He thinks that governments now believe this too. The firm’s ever-expanding roster of state clients suggests he may be right. Members of the firm are also forbidden from acting as arbitrators in investor-state cases.

Kahale, who is also the firm’s chairman and former managing partner, began as a transactional attorney and built his reputation representing state oil companies of Kazakhstan, Mexico and Venezuela. These days, he’s an increasingly vocal critic of the investment arbitration system, which he regards as “seriously flawed” and biased in favour of investors.

Although strongly identified with BIT work, the firm takes its commercial arbitration offering equally seriously. It has a presence in Paris, where the other practice co-chair, Peter Wolrich, resides. Wolrich has strong links with the ICC, having formerly chaired its commission on arbitration and ADR for 11 years and overseen the latest revisions to the ICC arbitration rules.

Ben Preziosi heads the practice in London, having relocated from New York in 2017.

Some long-serving partners have left the practice in the past couple of years but Curtis still fields an impressive team including Mark O’Donoghue in New York, Charles Buderi in London, Geoffroy Lyonnet in Paris, Galileo Pozzoli in Milan, Gabriela Alvarez-Avila in Mexico City and Claudia Frutos-Peterson (head of the practice in Washington, DC). The latter two are former ICSID counsel.

Network

The practice is concentrated in Paris, London, Milan, Mexico City, New York and Washington, DC, though it also has boots on the ground in Almaty, Astana, Geneva and Buenos Aires. It has around a dozen disputes lawyers in Dubai and Muscat, and one counsel based in Beijing. A team in Ashgabat left for another firm in 2019.

Who uses it?

States, states and more states – over 20 different countries have now instructed the firm. It has acted for Venezuela and its national oil and gas company PDVSA in nearly 25 arbitrations, some worth many billions of dollars. Kazakhstan has instructed the firm at least 15 times, while Libya has used it in at least nine cases. It’s acting for India in several major telecoms-related treaty cases with a combined value in the billions. Indonesia retained it for a pair of ICSID claims over mining licences, with happy results.

Uganda and Ghana have turned to the firm for disputes in the extractive industries, while in recent years, instructions have come from Albania, Algeria, Cameroon, Cyprus, Kuwait, Laos, Macedonia, Nigeria, Russia, Spain, Tanzania and Vietnam.

State entities such as PDVSA, Sonatrach, Pemex, KazMunayGas and the Nigerian National Petroleum Corporation use the firm.

Track record

The firm has notched up some significant defence wins. In 2016, it helped Indonesia to knock out a pair of ICSID claims worth US$1.3 billion by persuading the tribunal that the mining licences under­pinning the investment of London-listed claimant Churchill Mining had likely been forged by a local business partner. The state was awarded US$9 million in costs. An annulment committee upheld the award in 2019.

Another satisfied client is Uganda. The firm helped it to defeat a US$400 million tax-related claim brought by Canada’s Heritage Oil in 2015 (and obtain US$4 million in costs) and settle another tax dispute with Tullow Oil that saw the company agree to pay over US$250 million to the state. Meanwhile the firm has helped Ghana see off a US$200 million ICC claim by a mining investor.

In 2012, it helped Kazakhstan to defeat a billion-dollar ICSID claim by oil company Caratube for lack of jurisdiction. When Caratube refiled its claim and won second time around, the state was only ordered to pay US$39 million.

Indeed, the firm has proved adept at significantly lowering the amount of money at stake in certain cases even where it loses on liability. When Venezuela faced a US$16 billion ICSID claim from ExxonMobil, Curtis knocked out a sizeable chunk of the damages claim that related to events preceding a corporate restructuring. A final award in 2014 ordered Venezuela to pay US$1.6 billion, but this figure was dramatically reduced by US$1.4 billion in annulment proceedings.

In the same vein, Curtis reduced a US$250 million ICSID claim by US-based oil services company Tidewater against Venezuela to an award of US$56 million, with the panel ruling that the state had committed a lawful expropriation. An annulment committee shaved a further US$10 million from the award.

It has also secured more clear-cut wins for Venezuela, knocking out a series of ICSID claims brought under the country’s 1999 law on foreign investment.

The firm’s high profile in investor-state cases sometimes overshadows their successes in commercial arbitration. One example of the latter was helping French chemicals producer Arkema to defeat a €310 million ICC claim brought by Swiss chemicals group Klesch and prevail on a €74 million counterclaim.

It has also helped a real estate client have a US$266 million DIAC award set aside by the Dubai courts on jurisdictional grounds.

Recent events

There was a shock in early 2019 when partner Miriam Harwood in New York left after more than 25 years with Curtis to become co-head of investment arbitration at Squire Patton Boggs. Soon after, eight other lawyers followed her over to the same firm, including partner Ali Gursel and the entire Curtis team in Ashgabat. A number of active cases for Turkmenistan have gone over with them to the new firm.

Various other partners have moved on in the past couple of years. Partner Kate Brown de Vejar in Mexico City left in 2019 after nine years with the firm to become DLA Piper’s new global practice co-chair. The year before, the Paris office saw the departures of Nadia Darwazeh for Clyde & Co, and Sabrina Aïnouz and Jérôme Lehucher for DWF. Thomas Geuther in Dubai left after a year with the firm to take up a position at the UK Financial Conduct Authority in London.

Simon Batifort, Robert Garcia and Arianna Sánchez were promoted to the partnership in New York. Marat Umerov in Washington, DC, Irene Petrelli in Milan and Nurlan Mukhitdinov in New York, Almaty and Astana were promoted to counsel.

There have been a series of good results for Cyprus. In 2019, Curtis helped the state defeat a US$1.4 billion treaty claim brought at the ICC by the Lebanese owners of a bank that was shut down after US authorities declared it was involved in money laundering and financing terrorism.

This followed the dismissal in 2017 of one of various treaty claims filed against Cyprus over its debt crisis, with a Stockholm tribunal concluding that a haircut imposed on deposits in a Cypriot bank did not amount to an unlawful expropriation.

Curtis helped Libya’s National Oil Corporation (NOC) prevail in a pair of ICC arbitrations valued at over US$1.4 billion. The cases were brought by the Emirati owner-operators of the country’s biggest refinery. One of the cases saw the state entity win a US$116 million counterclaim. The firm is also defending an NOC subsidiary against a €182 million ICC claim brought by an Indian construction company over a pipe-laying project disrupted by the country’s civil war.

Another case for Libya saw the firm defeat a €562 million ICC claim over the construction of a new passenger terminal at Tripoli International Airport. The tribunal ruled that the state is not liable for delays to the project caused by the civil war.

Long-term clients Venezuela and its national oil and gas company PDVSA saw an end to some long-running cases. A fraught 12-year ICSID claim over the expropriation of three oil projects ended in March 2019 with the state being ordered to pay a record-breaking US$8.7 billion to ConocoPhillips (the claim had originally been for US$30 billion). The year before, Conoco obtained a US$2 billion ICC award against PDVSA over two of the same projects (the claim was for US$20 billion). PDVSA agreed to settle that award after Conoco targeted its assets in the Caribbean.

Curtis has also been defending PDVSA in various US enforcement actions, including those targeting the state entity’s valuable US refinery business Citgo. It is pursuing an appeal against a Delaware court’s ruling that PDVSA should be considered an alter ego of the state.

In another US court action, Curtis is helping Spain to resist enforcement of a €128 million Energy Charter Treaty award in favour of British investment fund Eiser. The European Commission has intervened in the case to argue the treaty doesn’t protect intra-EU investments. Curtis is also representing the state in its bid to annul the award at ICSID. It is the first of several awards to hold Spain liable for reforms to its renewable energy sector.

Meanwhile Nigeria has retained it for US and UK court proceedings relating to a mammoth US$9 billion award in favour of a British Virgin Islands entity. Noting the major impact the award could have for Nigerian taxpayers, the English courts have allowed the state to present late-filed arguments for why enforcement should be denied.

A new instruction has come from Kuwait to defend against an UNCITRAL claim by a Swiss entity relating to an investment in the health services sector. The firm is already defending the Gulf state against a claim by an Egyptian construction company at ICSID.

The Dominican Republic has retained it for an UNCITRAL case brought by a Jamaican billionaire over the alleged seizure of a landfill site.

Tullio Treves in Milan has been representing Russia in an arbitration under the UN Convention on the Law of the Sea. Ukraine brought the case over coastal rights in the Black Sea, the Sea of Azov and the Kerch Strait, in the wake of Russia’s annexation of Crimea in 2014. Ukraine has accused Russia of aggravating the dispute by firing on and seizing its vessels.

Client comment

A former adviser to a state oil company client says the firm’s “superior knowledge of the industry has been a clear advantage”. He says Curtis “goes all the way up to eleven” in terms of response times, service and legal knowledge.

The operations director at an engineering consultancy says Curtis is the only firm where “every single lawyer you meet, from the most junior to the most senior, is always one of the best you have encountered in their field.” He points out that they appreciate the wider social and economic effects of their cases, and blend this understanding with the most appropriate and thorough defence.

He singles out Ben Preziosi as “one of the very best advocates in formal proceedings I have seen.”

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