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GAR 100 - 12th Edition

DLA Piper

05 April 2019

Triumphed for Kenya at ICSID and settled a US$5 billion case for Guinea

People in Who's Who Legal 4
People in Future Leaders 3
Pending cases as counsel 152
Value of pending counsel work US$105 billion
Treaty cases 12
Third-party funded cases 2
Current arbitrator appointments 17 (5 as chair or sole)
Lawyers sitting as arbitrator 10

DLA Piper has had various guises over the years, dating back to 1821. The DLA brand was created at the turn of the millennium in the UK, while the incarnation of the firm we know today is the product of various mergers with US law firms in the second part of the 2000s.

The result of these mergers – and a seemingly relentless expansion – is one of the world’s largest law firms by revenue, with lawyers nearly everywhere and financial results that are the envy of many.

That kind of business model generates plenty of scope for cross-border disputes work, and the firm has developed sizeable arbitration teams in London, New York and Hong Kong, among other places.

The current global practice group began to take shape in 2001 with the arrival of Matthew Saunders, who was hired to develop a wider group in the area. He became co-chair of the international arbitration practice in 2006 alongside Claudia Salomon, who joined the New York office in that year from Squire Sanders. (Both have since left the firm – Salomon to Latham & Watkins in 2013 and Saunders to Ashurst in 2016.)

The team expanded as it took over new operations and made lateral hires aimed at gaps in its coverage. One of those was former Debevoise & Plimpton high-flyer Michael Ostrove in Paris, to help deal with an increase in work under ICC rules.

The group also enjoyed a whole new level of visibility in 2010 when it became adviser to the Russian side in arbitrations that flowed from the Russia–Ukraine gas wars of 2008 and 2009. It has recently followed this up with a stream of cases for Gazprom against Ukraine’s Naftogaz.

Ostrove now co-chairs the global practice alongside Kate Brown de Vejar in Mexico City and New York, who joined in 2019 from Curtis Mallet-Prevost Colt & Mosle. Ernest Yang coordinates the practice in Asia, while partner Henry Quinlan in Dubai handles the Middle East. Cedric Chao in San Francisco leads the Americas practice and Philip Chong covers Europe from the London office.

Network

Almost too big to cover here. In arbitration terms, the more important offices are London, Paris, New York, Dubai and Hong Kong – but it’s in a whole lot of other places too.

There are team members in Spain, Italy, the Netherlands, Germany, Austria, Finland, Denmark, Sweden, Norway, the Czech Republic, Slovakia, Poland, Romania, Hungary, Ukraine and Russia.

Various tie-ups in the Americas have added arbitration-literate partners in Buenos Aires, Lima, Santiago (Chile), São Paulo, Rio de Janeiro, Mexico City, Toronto and Vancouver. There are also people in Riyadh, Shanghai and Singapore, and an Australian team in Perth, Sydney and Melbourne.

The wider firm has continued to forge alliances with firms in Africa and now operates in 20 countries on the continent, including most recently Nigeria, Tunisia, Senegal and Zimbabwe.

Who uses it?

As mentioned, the firm has had regular business from Russian gas suppliers – especially Gazprom, for whom it has been acting in cases worth tens of billions of dollars. Other energy clients of note include Sinopec, Chevron and Unión Fenosa Gas (a joint venture between Spain’s Naturgy and Italy’s Eni).

It has a lot of clients in construction and infrastructure, an example being France’s Technip in relation to a project in Algeria. A significant amount of that work is done from the Dubai office, with the Lima office also distinguished in that field.

The firm is now Hungary’s go-to firm for ICSID matters. Other governments that have used it for public international law or investor-state disputes include East Timor, Guinea, Kenya, Zambia, Ghana, Oman, Kyrgyzstan, Moldova, Georgia and the Czech Republic.

It is less often seen acting for investors in claims against states, but one example was Turkish telecoms company Turkcell in a US$2 billion claim against Iran. It also acts for Belgian investors in an ICSID claim against Madagascar.

The firm is generally popular with any client that prefers its lawyers to be locally based rather than “fly in, fly out”. Energy and telecoms firms can be particularly hot on this.

Track record

The firm has done particularly impressive work for East Timor, helping it to sign a treaty with Australia in 2018 to end a bitter dispute over their maritime boundary in an area estimated to contain US$40 billion worth of oil and gas reserves. That followed a rare “compulsory conciliation” proceeding in The Hague that DLA lawyers brought under the UN Convention on the Law of the Sea.  

A DLA team in Brisbane also helped East Timor to defeat an ICSID claim brought by an Australian energy company – in which the state alleged that the claimant had relied on “fabricated” emails to establish jurisdiction.

Indeed, the firm has a good track record when it comes to defending states. It defeated the first-ever investment treaty case against Oman –a US$273 million claim over a limestone concession. It also helped the Russian city of St Petersburg defeat a US$460 million UNCITRAL claim and defended the award in the Swedish courts.

In the commercial arbitration arena, it has won two substantial payouts for Gazprom subsidiary RosUkrEnergo. The first award against Ukrainian state entity Naftogaz, worth US$2.6 billion, concerned ownership of gas that was held in storage in Ukraine and allegedly acquired by the Tymoshenko regime. The other award, worth US$500 million, was against Hungarian gas distributor Emfesz. DLA fielded lawyers from offices across Europe on both cases.

In 2013, the firm won a large gas-pricing dispute for Italian utility Edison in an ICC arbitration in Paris, worth €300 million to the client. It also achieved a favourable settlement for Albania’s former state-owned telecoms operator following a €120 million ICC claim involving issues of Albanian, Greek and German law.

It helped Indian billionaire Niranjan Hiranandani defeat a £450 million LCIA claim by two real estate companies that accused him of fraudulently inducing them to make failed investments in four Indian township projects. It also advised Hiranandani and his son Darshan in a separate LCIA case brought by his daughter Priya Hiranandani-Vandrevala, which led to a US$60 million award in her favour.

A Paris team helped Technip settle a US$1.5 billion arbitration against Algerian state entity Sonatrach relating to a refinery upgrade on confidential terms

Recent events

In 2018, DLA persuaded an ICSID tribunal to decline jurisdiction over a claim against Kenya brought by subsidiaries of Canadian mining company Pacific Wildcat Resources. The tribunal found that one of the mining licences in dispute had been issued in violation of local laws to protect the environment. The companies are now trying to annul the award, which they call a “black swan” for its finding that an investment treaty implicitly requires that investments comply with domestic law.

The firm also helped Guinea see an end to a US$5 billion ICSID case brought by BSGR, the mining company founded by Israeli diamond tycoon Beny Steinmetz. The parties reached a settlement in early 2019 after negotiations that were reportedly brokered by France’s former president Nicolas Sarkozy. The deal supposedly paves the way for Steinmetz and BSGR to lead the development of Guinea’s valuable iron ore reserves. It was a remarkable end to a highly publicised dispute that saw Guinea accuse BSGR of paying bribes to procure its mining concessions. The ICSID hearings were streamed live on the internet.

DLA continues to act for Gazprom in its long-running battle with Ukraine’s Naftogaz concerning long-term contracts for the supply and transit of gas. A set of Stockholm Chamber of Commerce cases ended in February 2018 with a net award of US$2.56 billion in Naftogaz’s favour (though Gazprom prevailed on a large proportion of its claims). The firm is now helping Gazprom to resist Naftogaz’s enforcement efforts in the UK. The Russian company is also challenging the award in the Swedish courts, arguing that key parts of it were drafted by a tribunal secretary.

Gazprom has since instructed DLA for a new set of SCC proceedings against Naftogaz, with the Russian company seeking amendment or termination of the contracts and the Ukrainian company requesting a US$11.6 billion transit tariff revision along with damages for Gazprom’s refusal to supply it with gas.

The Paris office has been advising the Democratic Republic of the Congo in its efforts to resist enforcement of awards in favour of FG Hemisphere in the French courts. 

Hungary has been using the firm on six ICSID matters, including three disputes with French voucher services providers affected by reforms to the state’s employee fringe benefits system. The firm is fighting to annul two awards worth a combined €96 million, and recently failed to persuade a tribunal that one of the awards should be revised in light of the Achmea ruling on intra-EU BITs.

As mentioned, Kate Brown de Vejar joined as co-chair of the global practice after nine years at Curtis Mallet-Prevost Colt & Mosle. She will divide her time between Mexico City and New York. Partner Cecilia Azar left DLA’s Mexico team for local firm Galicia Abogados.

Borja de Obeso joined to lead the firm’s disputes team in Spain after 12 years with Gomez-Acebo & Pombo. In São Paulo, partner Maysa Verzola joined from Souza Cescon, while Marco Schnabl joined in Buenos Aires from Skadden Arps Slate Meagher & Flom. Johan Englund joined as special counsel in Stockholm.

The firm promoted new partners Christina Lawrence in London, Théobald Naud in Paris, Michiel Coenraads in Amsterdam, Davide Rossetti in Milan and Phillip Kelly in Birmingham. Wouter de Clerck was also promoted to counsel in Amsterdam.

Client comment

Abdoulaye Magassouba from the Guinean ministry of mines says that Scott Horton and Michael Ostrove have shown “an outstanding level of professional commitments and effectiveness” in their work for the state.

A client who instructed DLA Piper in a dispute of maximum importance to his company says it was the team’s dedication that impressed him the most: “No stones were left unturned until they had found the angles and issues that made the case what it ended up being, giving us the leverage we were looking for in a complicated dispute against very experienced opponents.”

DLA Piper’s fees are still below those of their competitors, with the lead partner providing “an impressive billing discipline”, the same client points out.

Another client was grateful to have London partner Kate Cervantes-Knox on side: “She had to do some difficult oral arguments before a very difficult arbitrator and she killed it, aggressively staying on top of the issue and arguing the points effectively.”

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