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GAR 100 - 12th Edition

Vinson & Elkins

05 April 2019

Settled a dispute over a US$40 billion M&A in the pharmaceuticals sector and continued its streak of success in cases concerning the Panama Canal

People in Who's Who Legal 1
People in Future Leaders 3
Pending cases as counsel 70
Value of pending counsel work US$10.2 billion
Treaty cases 18
Third-party funded cases 2
Current arbitrator appointments 26 (9 as chair or sole)
Lawyers sitting as arbitrator 2

Founded in Houston in 1917, Vinson & Elkins is arguably one of the leading firms when it comes to energy work. Its US oil clients have tended to take the firm wherever they go in the world, calling on it to draw up contracts and turning to it the minute a dispute arises.

In the 1990s, commercial litigation lawyers handled most of the firm’s international disputes, but an increasing demand for arbitration, particularly investment treaty claims, led the firm to start building a practice in 2000 with the recruitment of James Loftis.

Loftis – who now leads the disputes practice – joined in London after working at the United Nations Compensation Commission (the body set up to deal with claims against Iraq arising from the first Gulf War). The practice expanded to the UK in 2001, followed by Beijing and Hong Kong, with the recruitment of partner Christopher Walker from Linklaters in 2008.

By that time, the group had turned into a free-standing international dispute resolution team, reporting to the firm’s head of commercial litigation.

While the focus remains on the energy sector, big strides have been made in developing the construction side of the practice. Led by partners Amir Ghaffari in Dubai (formerly of Shearman & Sterling) and Nick Henchie in London, the firm has been instructed on some of the largest construction disputes in the world, including those related to the expansion of the Panama Canal; the terminated South Stream project to build a pipeline between Russia and southern Europe via the Black Sea; and the Marmaray rail project to develop a link between Europe and Asia under the Bosphorus Strait.

Vinson & Elkins is proud of the fact that its lawyers are always in the thick of the action – but this has sometimes led to a spot of bother. In recent years, the firm has seen two of its attorneys arrested by the police in a state against which the firm was bringing a treaty claim, and one came under small-arms fire, also in the course of duty.

Network

The firm’s core business is such that it opened in China before New York. The arbitration team is small but covers a lot of ground. There is a regular arbitration presence in Houston, Beijing, Hong Kong, London, Riyadh and Washington, DC.

After spending a significant amount of time in the Dubai office, building up relationships in the Middle East, Loftis is now based in Houston. Ghaffari relocated from London to Dubai in 2017 to lead the firm’s dispute resolution practice in the region.

Who uses it?

In upstream oil and gas, the firm represents the majors as well as a number of national oil companies.

Big-name clients include ExxonMobil, Cairn Energy, Noble Energy, Statoil and El Paso Corporation, while newer ones include the Iraqi state-owned oil trading company SOMO. It represents Iraq in a claim against Turkey and its state-owned pipeline operator Botas, over the purchase of crude oil from the semiautonomous region of Iraqi Kurdistan.

Lower down the value chain it has been connected with arbitration work for an Omani power company and Essar Oilfield Services.

Outside the energy sphere, the firm has acted for Dubai’s Alamar Foods in a US arbitration concerning a fast food franchise, Dubai Mercantile Exchange in shareholder disputes and Emirate Aluminium Company in a claim brought by a subcontractor.

In the investment treaty field, it has advised investors bringing claims against India, Ecuador and Armenia. The firm has also featured on a list of 15 international firms that China prefers to use for such matters.

Resource contractors have also instructed the firm to represent them in a number of maritime boundary disputes, including between Nicaragua and Colombia, Cyprus and Turkey, and Lebanon and Israel.

In the Panama Canal matter, it’s acting for the Panama Canal Authority against a European consortium; meanwhile, in the South Stream pipeline matter, it’s acting for Eni Saipem, which was contracted by Gazprom entity South Stream to lay the submarine sections of the pipeline. 

Track record

Vinson & Elkins has had good results so far for the Panama Canal Authority in a series of ICC cases against GUPC, the Spanish-Italian consortium overseeing the waterway’s expansion. In 2017, the firm secured the dismissal of a US$192 million claim by GUPC, also obtaining US$22 million in costs. It then helped to defend the award in the Florida courts. This was followed in 2018 by another ICC award requiring GUPC to reimburse US$847 million in advances paid by the authority and US$6 million in costs. The firm continues to act in various other ICC cases relating to the project, where the total amount in dispute exceeds US$5 billion.

The firm helped Spectra Energy defeat a US$170 million claim by ExxonMobil. It also won a US$20 million award for Niska Energy during a disagreement about the final purchase price of gas storage facilities in North America.

Partner Christopher Walker was behind one of the first successful retroactive applications of an arbitration clause in the United Kingdom. In Norscot Rig Management v Essar Oilfield Services, the court agreed that an arbitration clause could be applied to a dispute from a contract that predated the arbitration clause, but was related to it.

For more than a decade, the firm has been representing Cairn Energy, Ravva Oil and Videocon Petroleum against the government of India in three UNCITRAL arbitrations and related court claims in India and Malaysia. The disputes arose out of a joint venture to develop an oilfield in the Bay of Bengal.

In 2011, one of the arbitral tribunals made a ruling in favour of the firm’s clients to the tune of around US$500 million. The award was later upheld in the Malaysian courts at two instances. Vinson & Elkins and local co-counsel HM Ooi & Associates defended the award.

Recent events

Ari Berman in New York had been representing multinational pharmaceutical company Teva in an arbitration with another phrama company, Allergan, in an arbitration filed over the value of a generic drug business that Teva had acquired in a US$40.5 billion deal. In February 2018 it was announced that the parties had agreed a US$700 million settlement to end the dispute.

The firm represented a group of US real estate investors in a US$100 million claim against Costa Rica under the Dominican Republic-Central America free trade agreement, only to see the case dismissed in 2018. A tribunal concluded that measures taken by state authorities to protect wetlands and forests were not arbitrary or unlawful. Costa Rica’s counterclaim for environmental damage was also rejected. The high-profile case was funded by Vannin Capital.

Washington, DC-based partner Michael Dry has been acting alongside Dechert for French telecoms group Orange, as it requests permission from a US court to seize a Boeing aircraft used by Equatorial Guinea’s president as part of its efforts to enforce a €135 million ICC award against the state.

In London, Mark Beeley left to join Orrick Herrington & Sutcliffe, while Louise Woods and Scott Stiegler were promoted to partner and Susanna Fidoe and Alexander Slade were promoted to counsel.

Client comment

Mark Lowes of Australian infrastructure company KBR says he regularly recommends Loftis to other in-house counsel, as he is “one of my go-to individuals for international arbitration”

Laith Al-Shaher, the Iraq oil ministry’s director general, describes the firm’s performance as “excellent” and says that as well as Loftis, partners Ahmed el-Gaili in Dubai and Christopher Strong in London are “highly qualified, smart, professional, experienced, honest and clever.”

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

Highlights

CRCICA Overview

Ismail Selim and Dalia Hussein

The Cairo Regional Centre for International Commercial Arbitration (CRCICA)

DIFC-LCIA Arbitration Overview

Alec Emmerson

DIFC Arbitration Institute (DAI)

Robert Stephen, Matthew Harley and Katy Hacking

DIFC-LCIA Arbitration Centre