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GAR 100 - 12th Edition

Schönherr

05 April 2019

Secured damages for an Austrian investor against Serbia

People in Future Leaders 3
Pending cases as counsel 9
Value of pending counsel work US$900 million
Treaty cases 3
Third-party funded cases 0
Current arbitrator appointments 3 (0 as chair or sole)
Lawyers sitting as arbitrator 1

Founded more than 50 years ago, Schönherr is part of the Austrian establishment. As such, it has long been counsel to numerous big-name companies in central and eastern Europe. In 2000, the firm decided to expand its service to include a focused international arbitration practice.

Hellwig Torggler and Gerold Zeiler were instrumental in training up the team (the firm opted to grow its own rather than make lateral hires). Both later left to set up their own firms: Torggler in 2007 and Zeiler in 2014.

Since Zeiler’s move, the arbitration practice has been headed by Christoph Lindinger, also Schönherr’s managing partner. Lindinger is supported by counsel Leon Kopecký, who has acted as lead counsel in a number of ICC and ICSID disputes also takes appointments as arbitrator.

In 2017, the firm picked up the GAR award for “international arbitration practice that impressed” following its successes for Baltic clients in investor-state disputes.

Network

The anchor of the practice is Vienna but the firm is present in 11 other countries across central and eastern Europe and the Balkans. It also has an office in Brussels and has had a cooperation agreement with a firm in Istanbul, where the local disputes head is Murat Canyürek. There are country desks for Albania, Bosnia and Herzegovina, Macedonia and Montenegro.

Who uses it?

The arbitration group’s focus is on energy or investment work – much of it related to central and eastern Europe. It has acted for German energy group RWE in various oil and gas arbitrations, as well as Romania’s OMV Petrom. Siemens, Spanish carmaker SEAT and Kosovan mobile phone operator Dardafone have also relied on the firm.

On the government side, it has represented the Czech Republic, Montenegro, Moldova and Republika Srpska in disputes arising from investments in energy, metals, banking, agriculture and real estate, including at ICSID.

Track record

The firm has obtained particularly impressive results for Montenegro. In 2016, it helped the state see off its first ICSID case – a €100 million claim brought by a pair of Dutch investors in a bankrupt steel plant.

Later in the year, it helped Montenegro see off a pair of cases brought by companies linked to Russian tycoon Oleg Deripaska’s En+ Group over a bankrupt aluminium plant. One of these, a €600 million ICSID claim, was tossed out after Schönherr persuaded the tribunal that the claimant didn’t have a “seat” in Cyprus, whose bilateral investment treaty with Montenegro it had sought to invoke. In 2018, the firm saw off an annulment petition.

Schönherr also helped Montenegro defeat the bulk of a €650 million contractual claim brought by Deripaska’s companies, with an UNCITRAL panel in Vienna awarding its client damages in a counterclaim. Deripaska has since personally filed a claim against the state under a Russian BIT, for which Montenegro has once again retained the firm. Chalking up another win for Montenegro, the firm defeated an UNCITRAL claim concerning the sale of a stake in a marina.

The firm scored a big win for the government of Republika Srpska in a case brought by Czech energy conglomerate CEZ, knocking the claim out at the jurisdictional phase.

As for private clients, it helped Dardafone win over €30 million in a case against Kosovo Telecom. It defended Swiss retail holding group Valora in a post-M&A dispute heard in Frankfurt, with the tribunal rejecting all claims against the client in 2015.

It has also secured favourable settlements for Austrian oil and gas firm OMV in two ICC cases relating to a post-M&A dispute and a petroleum concession in Pakistan, having replaced another GAR 100 firm on the matter.

Recent events

Schönherr secured damages for an Austrian logistics company specialising in the storage and transport of art in its ICSID claim against Serbia. The company was awarded €1.7 million, although this was only 10% of what it had originally claimed. 

The firm saw off the bulk of an ICSID claim brought by a US-Polish national who alleged he was subject to threats and extortion in a dispute over farm leases against its client Moldova. He was awarded US$400,000, with his claim having been valued at US$3 million to US$15 million.

Schönherr did however suffer defeat in a US$450 million ICSID claim it was helping Swiss energy company Alpiq bring against Romania over cancelled energy supply contracts.

Ongoing work includes representing two other investors in ICSID claims against Serbia. One is a several hundred million Euro claim brought on behalf of Cyprus-based Mera Investment Fund, whose alleged beneficial owner was jailed for tax evasion. The final case is brought on behalf of a Belgian company over the construction of Serbia’s first animal waste-processing plant.

It continues to represent Montenegro in two other cases at the Permanent Court of Arbitration in The Hague: one filed by Deripaska and another by an investor called Medusa.

Other work includes defending three parties in a politically charged Swiss Rules arbitration concerning a syndicate agreement, acting in Vienna seated ad hoc arbitration and representing one of Austria’s largest banks in a Vienna Rules dispute arising from a payment guarantee.

The firm’s only other partner aside from Lindinger, Anne-Karin Grill, departed for fellow Austrian firm Vavrovsky Heine Marth.

Client comment

Andreas Aigner, head of M&A and legal at Austrian oil and gas company OMV, says the firm’s recent advice in a potentially contentious matter “was quick, to the point and guided OMV in the right direction.” Aigner continues that the firm is “24/7,” saying he has no doubt he “would be able to reach the right lawyer at Schönherr within less than an hour at 11pm on Christmas Eve if I needed that person.”

German arbitrator Rolf Knieper, who sat on the ICSID tribunal hearing the recently resolved Moldova case, says he was “particularly impressed” by lead counsel Kopecky, whose “style of work was straightforward, diligent and firm in substance.” He says it was “an excellent performance.”

Gregor Kahr, the manager of the Austrian logistics company the firm helped win damages against Serbia, says his company has “experience with law firms in many jurisdictions, but we have not come across any other firm that delivers this level of legal advice and advocacy” whether in writing, orally or in English, German or Serbian. “In our opinion Schönherr leaves their competitors far behind.”

Kahr continues that in a Paris hearing Kopecky “showed skills far superior to those of opposing counsel” and praises attorney Victoria Pernt for her impressive level of advocacy.

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