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GAR 100 - 13th Edition

Wikborg Rein

22 April 2020

The Norwegian firm helped Ukraine’s Naftogaz settle a sprawling dispute with Gazprom involving claims in the tens of billions

Pending cases as counsel 50
Value of pending counsel work US$26 billion*
Treaty cases 0
Current arbitrator appointments 3 (2 as chair or sole)
Lawyers sitting as arbitrator 2

* Includes recently settled Naftogaz cases

Wikborg Rein was founded as a one-man shipping law firm in Oslo in 1923 by Erling Wikborg, later Norway’s foreign minister. The other name partner, Norwegian resistance fighter Alex Rein, joined after the end of the Second World War.

The initial focus on shipping expanded to cover energy, banking and other industries as the firm followed its Norwegian clients abroad. It opened an office in London in 1987 and set up outposts in Singapore and Shanghai in the early 2000s.

International arbitration has therefore been part of the fabric of the firm from the very beginning, with shipping disputes still a mainstay of the practice in the Bergen office.

A successful representation of a European buyer in a then rare arbitration against a Norwegian oil and gas producer around 2006 led the Oslo office to pick up more energy work, later adding defence and telecoms sector clients to the mix.

In 2010, the London office recruited three experienced English disputes lawyers from City firms: Robert Jardine-Brown, Chris Grieveson and Clare Calnan (who has since left). Two further partners joined in London in 2016, Mike Stewart from K&L Gates and Nick Shepherd from Ince & Co, both also bringing arbitration experience. The firm reckons it is the only Norwegian firm with a significant English law capability.

Other names to know include Trond Eilertsen and Ola Haugen in Oslo, and Øystein Meland in Bergen, who as all sit as arbitrators.

Recently the practice has expanded into the upstream gas market, handling disputes between producers in Norway and abroad. It has gained added recognition thanks to its work for Ukraine’s national gas company Naftogaz in a monumental set of cases against Gazprom, which media reports have valued at more than US$125 billion (see below).

Network

Oslo and London are the most important offices for arbitration, but it also has boots on the ground in Bergen, Singapore and Shanghai.

Who uses it?

Besides Naftogaz, the firm has acted for Germany’s RWE in gas price matters. The London office has advised offshore contractors Kvaerner, Seajacks, Synergy, Bassoe and Prospector; shipowners Spar Shipping, Navig8 and Pareto; and mutual P&I insurance associations including Gard, Norwegian Hull Club, London P&I Association and Britannia and Standard Club.

It’s also acted for commodity traders Ronly and Bulk Trading. HNA Group, one of the largest privately owned conglomerates in China, has used it in more than 50 disputes since 2011, with a combined value of US$360 million.

Track record

The Oslo team has had some spectacular results for Naftogaz in SCC claims against Gazprom. In one case, it secured a downward price revision under a long-term gas supply agreement and defeated a US$56 billion counterclaim by Gazprom for breach of “take or pay” obligations. A second arbitration over a gas transit deal resulted in a net award worth US$2.56 billion in Naftogaz’s favour. Gazprom agreed to pay the award in late 2019 as part of a broader settlement (see “Recent events”).

In 2014, the London office helped an energy contractor prevail in an expedited LCIA arbitration against an Italian oil company concerning a major offshore project in Kazakhstan. After a nine-day hearing, the client was awarded more than 80% of the US$112 million it had claimed.

The Oslo office won a gas price adjustment for a Czech affiliate of RWE against Russia’s Gazprom in 2013, in an ICC arbitration seated in Vienna. The award entailed a refund of more than €1 billion from Gazprom. The year before, the firm persuaded a different ICC panel to reduce the client’s “take or pay” obligations for gas purchased under the same contract.

Another success was in 2011 for Norwegian shipping group Odfjell, securing the enforcement of an SCC award worth US$44 million against Russian state-owned shipyard Sevmash in the courts of St Petersburg.

Recent events

After an enforcement battle that saw Naftogaz obtain attachments against its UK and Dutch assets, Gazprom agreed to pay US$2.99 billion to satisfy the abovementioned SCC award with interest. The parties also settled a further set of SCC cases in which Gazprom had sought termination of their agreements and Naftogaz had requested an US$11 billion transit tariff revision. The settlement cleared the way for the companies to agree on new transit arrangements for the next five years.

In a separate case, the firm has been representing Naftogaz’s gas production subsidiary UkrGasVydobuvannya (UGV) in a joint venture dispute with subsidiaries of Sweden’s Misen Energy. A 2018 partial award ruled that the venture should be terminated, with an award on quantum awaited.

The firm is co-counsel to an Indian industrial company in an ICC arbitration over a contract for the supply of machinery – advising the client on all Norwegian law-related aspects of the case.

Together with Clyde & Co and Allen & Overy, the firm is representing the purchaser of a mega yacht in a dispute relating to warranty issues with the builder. The claim is worth around US$40 million.

Client comment

One client who used Wikborg Rein in a dispute related to a long-term energy supply agreement says the firm is “uniquely experienced in this very specialized field” and that Dag Mjaaland and his team “continue to impress” with their dedication, responsiveness and desire to win.

Eirik Thomassen, head of legal in the project department at Kværner, has high praise for the firm’s work on a complex dispute that encompassed a vast number of technical and commercial issues. “I think it is their good balance between attention to the details and a holistic approach that distinguishes them from other arbitration teams,” he says.

An in-house counsel for a multinational that has used the firm for gas price review cases since 2012 says: “For arbitration proceedings in the energy sector that involve the North European area or Russia, I consider Wikborg Rein the best choice.”

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