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GAR 100 - 12th Edition

King & Wood Mallesons

05 April 2019

Led Ukraine to victory in a real estate dispute

People in Who's Who Legal 3
People in Future Leaders 2
Pending cases as counsel 112
Value of pending counsel work US$18.3 billion
Treaty cases 17
Third-party funded cases 1
Current arbitrator appointments 17 (8 as chair or sole)
Lawyers sitting as arbitrator 7

King & Wood Mallesons, or KWM, was the product of two tie-ups that saw Mallesons Stephen Jaques in Australia and King & Wood in China join forces with UK-headquartered SJ Berwin, creating a mega-firm with a footing in Asia, Australasia, Europe and the Middle East.

KWM’s European arm (the legacy SJ Berwin) was put into administration in 2017 with £35 million in debt, with more than 90 partners having already left the firm amid reports of its financial troubles. Several arbitration partners were among those who left, including the London-based global head of dispute resolution, Craig Pollack, who went to Covington & Burling.

It hasn’t meant the dissolution of the arbitration team, however, as the firm’s Chinese and Australian arms launched a new outfit that allows the remaining members of the practice in Europe and the Middle East to continue trading as King & Wood Mallesons.

That means KWM retains an arbitration team in London headed by Ukrainian Andrei Yakovlev, and a group in Dubai overseen by Tim Taylor QC (founder of the legacy SJ Berwin practice), as well as partners in Madrid and Brussels.

All three legacy firms have a strong track record in international arbitration. Mallesons was one of Australia’s “Big Six” commercial law firms, with offices in all the major cities and in Beijing and Hong Kong.

Its international arbitration work grew out of the construction practice established by David Bateson and Paul Starr in Hong Kong in the early 1980s. The firm later added the likes of Max Bonnell (until his retirement in 2017) and Alex Baykitch in Sydney, who is president of the Australian Centre for International Commercial Arbitration.

King & Wood was one of the first law firms established in China in the modern era, with founding partners who had been working at the state-sponsored China Council for the Promotion of International Trade when the government permitted private ownership of law firms. The firm was famous for representing China’s leading beverage manufacturer Hangzhou Wahaha Group in eight parallel arbitrations brought by its French former joint venture partner, Danone, before the Stockholm Chamber of Commerce.

SJ Berwin’s international arbitration practice was founded by Taylor in London in 2005. The practice made a name for itself in some high-profile Russia and CIS-related disputes, including the US$2 billion battle for control of telecoms operator Megafon.

Network

Despite the collapse of KWM in Europe in 2017, the arbitration practice still has members in London, Dubai, Madrid and Brussels.

The rest of the team is concentrated in Sydney, Hong Kong and Beijing, though it also has members in Singapore, Perth, Brisbane, Melbourne, Shenzhen, Shanghai, Guangzhou and Tokyo.

Who uses it?

King & Wood Mallesons appears on the Chinese government’s list of preferred counsel for investment treaty work. Kyrgyzstan and Ukraine have repeatedly sought the firm’s counsel in treaty cases and related enforcement proceedings, while Panama and Malta have used it on law of the sea matters.

State-backed entities turn to the firm too. Ukrainian state energy company Naftogaz is using KWM to defend a high-stakes LCIA claim brought by companies linked to oligarch Igor Kolomoisky.

Past clients include BHP Billiton and Glencore, among other energy and mining outfits, as well as the Carlyle Group, Walmart, GE Healthcare, Telstra Corporation and the UAE’s Meydan Group.

The London office carries on the SJ Berwin tradition of acting for companies and high-net-worth individuals in Russia and the CIS.

Track record

Kyrgyzstan turned to KWM after finding itself hit with a US$118 million award under a little known regional treaty, the Moscow Convention for the Protection of Investors’ Rights. A team led by Andrei Yakovlev succeeded in obtaining an authoritative ruling from a CIS economic court in Belarus that the treaty didn’t contain a free-standing consent to arbitration – leading to the set-aside of the award in the Russian courts.

On the back of that result, KWM won a tender to represent Kyrgyzstan in all its investment arbitration matters. It went on to secure an eye-catching result for the state in the French courts, overturning a US$16 million treaty award in favour of Latvian businessman Valērijs Belokoņs after raising evidence of alleged money laundering. The French Supreme Court upheld that decision in July 2018.

For Ukraine, it helped to reduce a US$250 million claim by London-listed oil and gas company JKX concerning royalties on gas production to an award of just US$12 million.

Mallesons also had a significant victory for Australian mining company White Industries in an investment treaty claim against India, which concluded in 2011. It was the first-known victory for an Australian firm in a BIT claim and the first-known BIT award against India.

The Wahaha dispute handled by King & Wood pre-merger was the biggest Sino–Western arbitration to date, with total claims exceeding €1.8 billion. Following hearings on liability in 2009, the parties reached an amicable settlement.

The teams in London and Dubai are known for helping Mobile TeleSystems resist enforcement of a US$200 million LCIA award in favour of Nomihold Securities in three jurisdictions as part of a convoluted dispute over control of Kyrgyz telecoms company Bitel.

Recent events

A team led by Yakovlev and London-based partner Dorothy Murray helped Ukraine defeat a US$137 million ICSID claim brought by a UK company that accused it of expropriating real estate intended for a commercial development in the centre of Kiev.

The firm also secured a positive partial award for Ukraine’s Naftogaz in an LCIA dispute with entities controlled by Igor Kolomoisky over the country’s largest oil and gas producer. The LCIA tribunal ruled that corporate governance provisions in a shareholders’ agreement with the Kolomoisky companies were unenforceable.

There was another good result for Kyrgyzstan, as the firm helped the state settle a US$75 million treaty dispute with Kazakhstan’s BTA Bank over an alleged corporate raid on its local subsidiary.

The firm also received a new mandate from the state to defend it from a US$37 million UNCITRAL claim seated in Hong Kong brought by Russian state-owned hydroelectric company RusHydro.

Ongoing matters for Kyrgyzstan include a US$200 million UNCITRAL dispute with Russian investor Penwell, Canadian mining company Stans Energy and Centerra Gold, with protracted settlement negotiations continuing in the latter case.

Chinese state-owned enterprises are using the firm in a variety of matters, including an LCIA case related to the Ebola outbreak in Sierra Leone; a series of CIETAC arbitrations relating to sales of goods contracts; and a case relating to the power of the Supreme People’s Court of China to recognise and enforce LCIA awards.

KWM promoted Wilson Antoon, who has worked on a number of the Kyrgyzstan treaty claims, to of counsel in London. Mikkeli Godfree, who has particular experience in mining and infrastructure projects, was promoted to special counsel in Melbourne.

Client comment

A general counsel for one client says KWM has been representing it in a high-stakes CIETAC arbitration and that the firm’s “provided top-notch services in pre-arbitration due diligence, case strategy, pleadings and oral arguments during the proceedings.” Partners Liu Yuwu and Xu Xianhong in Beijing “are probably the best in the field in China.”

Insight

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