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GAR 100 - 4th Edition

Freshfields Bruckhaus Deringer LLP

18 February 2011

If any firm has cracked the recipe for success in international arbitration, it is Freshfields Bruckhaus Deringer.

People in Who’s Who:
16
Pending cases as counsel:
220
Value of pending counsel work:
US$80 billion
Treaty cases:
50
Current arbitrator appointments:
99* (of which 52 are as sole or chair)
No. of lawyers sitting as arbitrator:
22

It was the English part of the merged Anglo-German firm that arguably pioneered the idea of the partner who specialises in international arbitration.

Freshfields continues to benefit from having Jan Paulsson – the current ICCA president and one of the celebrities of the arbitration community – as its figurehead.

To be star-struck by Paulsson, however, is to overlook the formidable reputations of other members of the team. Partners Constantine Partasides in London and Lucy Reed in New York have both featured alongside Paulsson in The International Who’s Who of Commercial Arbitration’s annual list of the most highly regarded individuals, and five current Freshfields partners appeared in GAR’s first “45 under 45” list published five years ago. Partasides and US-based partner Nigel Blackaby are the current editors of Redfern & Hunter, the seminal international arbitration text produced by the founders of the London practice.

Firm’s development

Co-chaired by Paulsson and Reed, the Freshfields arbitration practice began as a tale of two cities. The group originated in London – where partners Alan Redfern and Martin Hunter represented the government of Kuwait in the Aminoil arbitration in the 1970s. Later it extended to Paris after Redfern and Hunter (recently described by Toby Landau QC as “living legends”) met emerging Parisian arbitration star Paulsson in the 1980s. Redfern and Hunter liked the idea of a practice that spanned the Channel and Paulsson liked the two of them, so the group was born. At that point there were few firms in the world who could say they had lawyers working exclusively in international arbitration and Freshfields had three of them.

Twenty years later the practice remains the pre-eminent arbitration powerhouse, only approached in the rankings by Shearman & Sterling (another pioneer of the dedicated arbitration group). A tale of two cities has become a tale of three cities, with the firm claiming to have three “focal centres of equal strength in each of the world’s three key markets for international arbitration” – London, Paris and New York/ Washington, DC.

To many, the London group, headed by Partasides and boasting four partners and 16 associates, is the nerve centre. The group certainly gained a boost from Paulsson’s recent decision to set up base in London while he carries out his duties as centennial professor at the London School of Economics. However, in fact the US team is larger: four partners and 26 associates divided between New York and Washington make it one of the largest US arbitration practices in the market.

Paris, meanwhile, continues to be key to the practice – as demonstrated by the recent promotion of fluent Russian-speaker Noah Rubins (who joins Elie Kleiman, Georgios Petrochilos and Peter Turner in the partnership). And, while Paulsson may have moved his formal office base to London, he has just traded in his role as president of the LCIA Court for a new role as vice president of the ICC Court of Arbitration, giving Paris a continued claim on his time.

Freshfields’ fully integrated practice also boasts offices in 11 other cities worldwide, including Bahrain, Cologne, Dubai, Düsseldorf, Frankfurt, Hong Kong, Madrid, Milan, Moscow, Rome and Vienna. Cross-office teams are put together for particular matters based on experience, language requirements and location.

Hong Kong partner Peter Yuen – who represented Danone against Chinese food group Wahaha in one of the largest Sino-Western disputes to date – continues to build the Asia arbitration practice, while Reza Mohtashami and Joe Huse are building a Middle East arbitration office in Dubai.

The firm also has a number of sub-practices, including a team specialising in gas price review disputes, led by Paris partner Georgios Petrochilos, and a Spanish-language practice, led by Nigel Blackaby in Washington and Lluis Paradell in Rome. The highly-ranked construction practice, led by Jane Jenkins in London and Jane Davies-Evans in Paris, has 49 lawyers offering industry-specific knowledge.

Thanks to Blackaby and Paradell, Latin American work is high on the agenda – Freshfields has appeared in many ICSID cases relating to nationalisations in Latin America, and Blackaby recently chaired the tribunal that heard Mexican brewer Grupo Modelo’s claim over the merger of its US parent company Anheuser Busch with a AmBev.

As highlighted in GAR’s Brazil edition, published in 2009, the group also has a core group of fluent Portuguese speakers, including Brazilian associate Luiz Aboim in Paris, Alex Wilbrahim in Washington, DC, and Blackaby (who studied it especially so that he could take advantage of work opportunities in the region). The firm’s Brazilian arbitration practice formally launched last year to coincide with the ICCA conference in Rio.

Who uses it?

The Paris office gained in strength in the 1990s partly because of a series of cases on behalf of the government of Kenya, which remains a client to this day (Partasides is rumoured to have briefed ministers personally). Most famously, Freshfields represented the state in the ICSID case of World Duty Free v Kenya – still a seminal case on the effect of corruption in international arbitration.

Other state clients include the governments of Tanzania, South Africa and Grenada. The firm’s recent Energy Charter Treaty work on behalf of Turkey, meanwhile, has apparently required more than 20 trips to Istanbul and Ankara for consultations with the Ministry of Energy and other branches of government.

Freshfields also regularly features on the claimant side of investment cases. Lucy Reed has been lead counsel to CMS Energy since 2000 – in both its groundbreaking treaty claim against Argentina at ICSID and other matters. Nigel Blackaby has led ICSID claims brought by clients in the utilities sector and a subsidiary of ConocoPhillips, as well as UNCITRAL claims by UK energy companies BG Group and National Grid. In a recently filed case, he is acting for London-listed power plant developer Rurelec in a UNCITRAL claim against Bolivia.

In Asia, Peter Yuen is leading a joint Hong Kong/Paris team in an energy-related investment treaty claim against Mongolia (said to be one of the largest East Asia has seen).

Although the group’s commercial work is mostly confidential, GAR has reported its role in two ICC arbitrations on behalf of Boeing Satellite Systems, which it represented alongside Seattle law firm Perkins Coie in a battle with a satellite operator and over 20 insurers. According to lawyers at the two firms, such work requires intimate knowledge of not only satellite technologies but US International Traffic of Arms Regulations that limit the information that can be conveyed to non-US persons about the country’s satellite industry. Hence every piece of technical information cited in the case has to be approved by the US State Department.

It has also worked on a number of disputes for mobile phone company MTN, relating to challenging jurisdictions such as Yemen, Iran, Syria and Ghana.

Big wins

Securing the enforcement of two UK energy companies’ awards against Argentina was big news for a team led by Blackaby, who said the cases show that investment arbitration under UNCITRAL rules works and may be an option for parties put off by the recent spate of annulments at ICSID.

Judge Reginald Walton of the US District Court of the District of Columbia gave rulings recognising and enforcing the UNCITRAL awards in June and September last year. One of them – in favour of BG Group – was the largest “emergency measure” arbitration to date.

Other successes in bilateral investment treaty cases against Argentina include the firm’s victory in CMS Gas (giving rise to the only ICSID “emergency measures” award to be upheld by an annulment committee to date). Freshfields has also celebrated two victories in cases brought by Suez, Vivendi and others relating to the Buenos Aires and Santa Fe water concessions. The awards – which had a combined value of over US$1.3 billion – were handed down in June 2010.

On the defence side, Freshfields has successfully defended Turkey against a number of multimillion-dollar ICSID claims brought by investors under the Energy Charter Treaty, alongside the local Cosar Law firm. Two claims were dismissed for lack of jurisdiction. A third related case – Libananco v Turkey – is still pending.

The firm also recently acted for South Africa in a dispute over access to investment opportunities for international mining companies in South Africa in light of the country’s black economic empowerment policies. The claimants eventually dropped their claim, but the tribunal went on to produce a carefully crafted award ordering them to contribute to South Africa’s costs, and paving the way for future cooperation between the government and mining industry.

Going back in time, the World Duty Free v Kenya case represented the first strike-out of an ICSID claim on non-jurisdictional grounds. Freshfields also won a famous ICSID case for Lithuania in a case that generated a landmark award on the meaning of fair and equitable treatment (Parkerings v Lithuania).

In the commercial field, the firm defended – and won – a dispute over ownership of shareholdings in Russia’s Megafon telecoms company, on behalf of an Alfa-owned company. The principal arbitration was in Stockholm with parallel court proceedings in Bermuda, Russia and the BVI. The eminent SCC tribunal who head the case commented that it was, “for all three arbitrators, of unprecedented procedural and substantive complexity”.

Recent developments

An event in London to mark the launch of the 5th edition of Redfern & Hunter provided an opportunity to reflect on the impact of this text, which was first published in 1986. According to Toby Landau QC – who gave a speech at the event – the book was “groundbreaking” when it first came out and has become “a standard work on its subject much like Chitty on Contracts; Dicey, Morris & Collins on Conflicts of Law or Wisden Cricketers’ Almanack”. It is a reflection of its international reach, he continued, that he once found a photocopy of a photocopy in a Thai law library.

Unlike the original version, Partasides and Blackaby’s latest edition covers investment as well as commercial arbitration. It also takes account of shifts in practice with extended sections on arbitrator challenges, document production and law and practice in emerging markets such as Latin America, China and India.

Paulsson continues to gather accolades. This year saw him step down as president of the LCIA after completing his six-year term, only to take on a new role as president of the International Council for Commercial Arbitration in time for its biennial congress in Rio de Janeiro. Widely expected to shake up the council, Paulsson has already overseen the revamp of the body’s website and the launch of Young ICCA (run by his wife, Marike Paulsson). He will preside over ICCA’s 50th anniversary celebrations in Geneva in May.

As centennial professor of the LSE, Paulsson has participated in a series of packed live debates for the Transnational Law Project – including taking on French arbitrator Alexis Mourre in relation to one of his pet subjects: whether institutions, not parties, should choose arbitrators to sit on tribunals.

For the early months of each year he teaches at the University of Miami, where he and Dutch arbitrator Albert Jan van den Berg aim to revitalise a tradition in international arbitration which dates back 50 years. He is also an adviser to the Royal Court of Bahrain, having won a major case on the state’s behalf.

Following Paulsson’s retirement, Freshfields continues to be represented at the LCIA through the recent election to the court of Lucy Reed. Reed has also substituted her role as president of the American Society of International Law with one as chair of the Institute for Transnational Arbitration in Houston.

Nigel Blackaby, meanwhile, is to help shape developments in investment arbitration as leader of IBA subcommittee devoted to this area. In Frankfurt and Vienna, Rolf Trittmann and Günther Horvath are among a recent batch of appointees to the ICC Court, while partner Massimo Benedettelli in Milan is one of group of experts chosen by the EU Commission to study the interplay between EU law and arbitration. Paris-based associate Marie Stoyanov chairs the LCIA’s young arbitrators’ group, YIAG, and hosted the first Brazilian semester in Rio.

Freshfields lawyers have also been responsible for the following recent publications: Guide to the LCIA Arbitration Rules (Peter Turner and Reza Mohtashami); The Law and Practice of Investment Treaties (Lluis Paradell); and International Construction Arbitration Law (Jane Jenkins).

Along with Rubins in Paris, the firm promoted German and UK-qualified lawyer Boris Kasolowsky in Frankfurt in 2010. Both have had interesting years: Rubins appeared in parallel ICSID and contractual cases for a Russian energy company against a former Soviet state and recalls appearing in Russian language proceedings in Moscow where he was expected to be cross-examined by his opposing counsel; and Kasolowsky has been advising a Western European government in connection with its financial stabilisation measures – in the face of allegations by sovereign wealth funds that emergency legislation had impaired their investments. On this occasion, matters were resolved diplomatically he reports – if they flare up again, he can always turn to Reed and Blackaby for some insights into Argentina’s “emergency” defence.

Neither of these “highlights of the year”, however, beats that of counsel Jane Davies-Evans in Paris: “Flying across Africa in a 1940s Dakota – complete with shrapnel scars – from D-Day for a site visit. Then driving back 1,000 kilometres across the game parks of Tanzania as the sun rose over the mountains and children as young as six walked two hours to school. That was one good day in the office!”

Client comment

Jason Doughty, deputy general counsel at ConocoPhillips in Houston, told us that the firm’s “written and oral advocacy was superb”. Jan Paulsson, Lucy Reed, Brian King and Alex Yanos were singled out for doing “a brilliant job”. Doughty concludes, “Freshfields are expensive but I feel that we did receive value for money.”

Jonathan Neal, a legal manager for BP International, said he was “impressed on many fronts by the Freshfields team.” In particular, he highlighted “their depth of legal knowledge, industry experience, attention to detail and rigorous case preparation”. Two lawyers who particularly stood out were Constantine Partasides, who “understands the need to stick to the budget”, and Shaparek Saleh in Paris, “who is very intelligent and commercially astute.” But, notes Neal, the firm “has high-quality lawyers at all levels.”

Charles Wheeler of mobile phone operator MTN is using the firm for a number of disputes and says “the team has put together persuasive pleadings and handled difficult settlement negotiations well.” Sylvia Noury, Nigel Rawding and Reza Mohtashami “combine top-notch legal minds with cultural and commercial awareness, fielding a team that speaks the languages – both literally and figuratively – of the emerging market jurisdictions where our disputes arise,” he says.

Meanwhile a client in Asia who spoke on condition of anonymity said the firm had “solid experience and good understanding of business practice in China” and was “very responsive and client-oriented.”

Who’s Who nominee:

  • Jan Paulsson

Who is Jan Paulsson?

Freshfields head of international arbitration (and public law) – Jan Paulsson – is one of the celebrities of the arbitration community.

Brought up in Liberia and educated in the US, Paulsson has been based in Paris for most of his Freshfields career. Dealing in Virtue, an account of international arbitration by two sociology professors, describes him as the defining figure in the development of arbitration as a profession: it divides the career path of arbitration lawyers into “before” and “after” Paulsson.

Among his peers he’s valued above all for his thought leadership. Paulsson lectures and articles swiftly enter the common consciousness and provide a way for the community as a whole to find its bearings.

When Freshfields slimmed down its partnership a few years ago, Paulsson was one of the few older partners the firm retained.

These days, Paulsson divides his time between counsel work, sitting as an arbitrator (though seldom for the claimant: he says he likes a certain control over whom he sits with) and teaching at law schools around the world.

As well as being a vice-president of the ICC Court, he’s the current president of ICCA. A recent marriage has coincided with a move to London.

However, as he explained to a GAR reporter, “I am constantly on the move, and anyone observing would probably say my real base of operations is my laptop.”

* excludes CAS matters.

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