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GAR 100 - 12th Edition

Hogan Lovells

05 April 2019

The firm that took down intra-EU investment arbitration

People in Who's Who Legal 6
People in Future Leaders 7
Pending cases as counsel 156
Value of pending counsel work US$31.7 billion
Treaty cases 16
Third-party funded cases 3
Current arbitrator appointments 29 (14 as chair or sole)
Lawyers sitting as arbitrator 15

Few law firms in this book can claim to have fundamentally altered the landscape of international arbitration. But this is exactly what Hogan Lovells has done through its representation of Slovakia in a decade-long dispute with Dutch health insurer Achmea. After a tribunal upheld the insurer’s claims under the Netherlands-Slovakia bilateral investment treaty, the state obtained a landmark ruling from the European Court of Justice in March 2018 that BITs between EU member states are incompatible with EU law.

Practitioners, clients and policymakers are still coming to terms with the far-ranging implications of that ruling, which affects not just the many pending cases under intra-EU BITs but potentially also intra-EU cases under the Energy Charter Treaty and even commercial arbitration in Europe. While the Achmea ruling remains controversial within the international arbitration community, it is a vindication for Hogan Lovells after 10 years in which the “intra-EU objection” was given short shrift by arbitrators. Achmea won the award for most important decision at the GAR Awards in 2018.

Hogan Lovells was born of a 2010 merger between Hogan & Hartson and Lovells, which brought together two big international arbitration practices with complementary geographical footprints. The merged group combined the strength of Lovells’ practice in Europe and Asia with Hogan & Hartson’s prominence in the Americas. Since then it has expanded, hiring a Latin America-focused team from Chadbourne & Parke in 2013 and tying up with a Mexican firm a year later. More recently it is increasingly focused on Africa-related work.

The combined practice was initially co-led by partners from the two legacy firms: Daniel González in Miami (from Hogan & Hartson) and Michael Davison in London (from Lovells). Davison stepped down from the role in 2013, and now serves as global head of litigation, arbitration and employment at the firm. His successor Simon Nesbitt (now QC) stepped down in 2014 ahead of his move to the bar, leaving González as sole practice head.

González set up an international arbitration steering committee formed of partners from various regions who coordinate client relationship management, lawyer training, staffing of major disputes and marketing. Its members include Karl Pörnbacher in Munich, Kieron O’Callaghan in London, Laurent Gouiffès in Paris, Luis Enrique Graham in Mexico City and Tim Hill in Hong Kong.

The London office is also home to Markus Burgstaller, an investment treaty specialist who led the work on the Achmea case together with Pörnbacher.

Other names to know include Samaa Haridi in New York, who has a focus on disputes emanating from the Middle East and North Africa and is a vice chair of the International Bar Association’s arbitration committee; and Maurice Burke and Shaun Langhorne in Singapore.

Network

Key offices for the arbitration group include London, Paris, Miami, Munich, New York, Singapore, Hong Kong and Washington, DC. There are other members based in Amsterdam, Madrid, Moscow, Milan, Dubai, Düsseldorf, Caracas and Houston, while tie-ups with local firms have given it a presence in Jakarta, Johannesburg and Mexico City. The firm also has strategic alliances in India, Mongolia and Saudi Arabia.

Who uses it?

Hogan Lovells is popular with governments, particularly for investment arbitration. The firm has acted for Venezuela, Panama, Vietnam, Mexico, Mongolia and Slovakia on high-profile cases, and is on China’s list of preferred counsel for investment treaty advice.

It’s also acted for state-owned energy companies such as Mexico’s Pemex,Venezuela’s PDVSA, Brazil’s Petrobras and Norway’s Statoil in commercial matters, while private energy clients include AES, Royal Dutch Shell, Statoil, the UAE’s Crescent Petroleum, Enel, Eni, ExxonMobil and Iberdrola.

Other clients of note include Russia’s Alfa Group, Alstom, French insurer AXA, BHP Billiton, Bilfinger, BNP Paribas, Hard Rock, Hitachi, HTC Corporation, Mitsubishi Corporation, IBM, Samsung Engineering, Siemens, Suzuki, Sabre Corporation, Vodafone, Ukrainian-born oligarchs Konstantin Grigorishin and Victor Pinchuk and the estate of Georgian billionaire Badri Patarkatsishvili.

Track record

One of Hogan Lovells’ most eye-catching victories came in 2015, when it helped Suzuki prevail in an ICC claim against Volkswagen over a troubled joint venture to market eco-friendly cars in Asia. The award required the German company to sell back its US$3.8 billion stake in Suzuki to the Japanese side. Hogan Lovells replaced Debevoise & Plimpton on the case when it was already under way.

Another great result was helping an international oil consortium led by Italy’s Eni win US$573 million in a tax dispute with Nigeria’s national oil company. The arbitration was seated in Nigeria and saw Hogan Lovells team up with local firm Aluko & Oyebode. Before the award could be issued, the team also had to overturn an injunction in the Nigerian courts.

Statoil used Hogan Lovells for an ICC claim against Algerian state entity Sonatrach, obtaining a US$536 million award in 2013. The firm then helped defend the award in the English Commercial Court.

It defended German engineering group Bilfinger against a €150 million claim over the supply of tubing for a Finnish nuclear power plant. The claimant, a subsidiary of Swiss energy company Alpiq, won only €1.8 million and was ordered to pay €6.5 million towards Bilfinger’s costs.

The firm has helped Petrobras defeat a US$200 million ICC claim brought by a Brazilian contractor over a floating oil production unit, winning costs.

For Vietnam, the firm has secured a hat-trick of defence wins in treaty cases. In 2014, it helped the state to defeat a US$3.75 billion claim by a US investor over a proposed tourism resort; and a US$47 million claim by a French investor in a dialysis clinic. In the following year, it knocked out a US$66 million claim by a French trader (the Swiss courts upheld the ruling in 2016).

Another defence win came in 2015 for Venezuela when an ICSID tribunal threw out a US$150 million claim by a Barbadian investor in the fertiliser industry. The panel concluded that the claimant didn’t own the shares in question at the time they were expropriated. The award was later upheld by an annulment committee.

Hogan Lovells’ Paris office helped Samsung Engineering settle an ICSID claim against Oman relating to a tender for a US$12 billion project to upgrade an oil refinery.

In the pre-merger days, Lovells’ win-sheet included a victory for SAB Miller and its Tanzanian subsidiary in an ICC arbitration arising from the breakdown of a joint venture with Diageo – referred to as the “African beer wars”. Lovells also helped to win a €29 million investment treaty award against Thailand on behalf of German construction company Walter Bau.

Recent events

In the wake of Hogan Lovells’ triumph before the ECJ in the Achmea case, Germany’s highest court set aside a €22 million UNCITRAL award in favour of the Dutch health insurer. Meanwhile the ripple effects of Achmea continue, with EU member states signing a political declaration in early 2019 agreeing to terminate all intra-EU BITs by the end of the year.

Meanwhile a different team at Hogan Lovells defeated an attempt by Hungary to reopen an intra-EU BIT award worth €23 million in favour of French voucher provider Edenred, which was rendered before the Achmea decision. While Hungary’s request for revision of the award was dismissed in early 2019, annulment proceedings are pending.

There was also a victory for Panama at ICSID, where the firm defeated a US$100 million claim relating to the construction of a luxury ecotourism resort on an indigenous reservation. A majority of the tribunal found the project had violated local law. The claimants in the case included a company owned by the family of a prominent Costa Rican politician.

Hogan Lovells continues to defend Panama in two other ICSID cases – a US$268 million claim by US mining company Dominion Minerals; and a claim by the Dutch founder of a financial services firm that went into liquidation. 

Jamaican billionaire Michael Lee-Chin has retained the firm for a US$300 million treaty claim against the Dominican Republic concerning the seizure of a landfill site. It is also instructed by two New Jersey-based companies threatening Morocco with a US$75 million treaty claim over contracts to manage a landfill in Casablanca.

It is representing claimants in two ICSID cases against Turkey. The client in one of the cases is a Belgian company that alleges its interest in the country’s largest newspaper was expropriated as a result of President Recep Tayyip Erdoğan’s crackdown on press freedom. The other case is brought on behalf of Colorado-based Westwater Resources over the seizure of uranium mines.

It is acting for another mining client, Amsterdam-based Cunico Resources, in an ICSID claim against Macedonia concerning measures resulting in the bankruptcy of its ferronickel business in the country.

It also continues to advise Spanish company Lidercon in an ICSID claim against Peru concerning rights to provide vehicle inspection services. The case is reportedly worth US$300 million.

The firm closed its Caracas office in 2018 amid political turmoil in Venezuela. Luis Bottaro remains in the country and will continue to act as a senior advisor. Gonzalo Rodriguez Matos and Bruno Ciuffetelli have moved to work from Houston and New York respectively.

There were partner promotions for Ben Hornan in London, Inken Knief in Munich, Jorge Valdes King in Mexico City and Siafa Chauke in Johannesburg. Melissa Ordonez was promoted to counsel in Paris. 

In London, partner Richard Kiddell and counsel Nicholas Gould, Andrew Mackenzie and Anna Mills left the firm. 

Client comment

Salvador Escalón, the Florida-based general counsel for telecoms group Millicom, used Hogan Lovells for two high-stakes cases in El Salvador. He says the firm’s lawyers “did an excellent job” and presented their case “in a clear and convincing manner”. Partners Daniel González, Richard Lorenzo and Maria Eugenia Ramirez in Miami succeeded in mastering “extremely technical” business details.

Another client told GAR: “Hogan Lovells produced some pleadings which blew the other side’s case away.” The client added: “They are on top of the details at all times with an experience that is extremely reassuring.”

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

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CRCICA Overview

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The Cairo Regional Centre for International Commercial Arbitration (CRCICA)

DIFC-LCIA Arbitration Overview

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DIFC Arbitration Institute (DAI)

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DIFC-LCIA Arbitration Centre