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GAR 100 - 4th Edition

Herbert Smith LLP

18 February 2011

Starting in the late 1970s, Herbert Smith began to develop a particular niche in the City for dispute resolution. Today, some 81 partners work exclusively on commercial disputes, most cross-border. In essence, the firm pioneered the notion of the “solicitor-litigator” – who could add value to the process and not merely be a letter box for a barrister somewhere.

People in Who’s Who:
10
Pending cases as counsel:
94
Value of pending counsel work:
US$23 billion
Treaty cases:
10
Current arbitrator appointments:
37 (of which 22 is as sole or chair)
No. of lawyers sitting as arbitrator:
17

When, in the 1980s, firms such as Freshfields and Clifford Chance began to carve out international arbitration as a separate speciality – on the basis that lawyers who marinate themselves in arbitration are better advocates and strategists – Herbert Smith brought in Julian Lew (now QC) to secure its credibility. Lew, who founded the School of International Arbitration in London and was then working for Coudert Brothers, was one the few English lawyers with an established name in arbitration.

Lew coached the Herbert Smith partners of the day in what he called “the ring-craft” of international arbitration. He also groomed a generation of younger lawyers who today run the practice. Many of Lew’s protégés have emerged as leaders in the field, at Herbert Smith and elsewhere.

For whatever reason, in the 1990s the firm stopped short of adopting the stand-alone international arbitration group model (“We allowed people to continue dipping in and out until almost when Julian left,” a Herbert Smith lawyer has said). The firm’s failure to do this meant rivals had an easy way to spin against Herbert Smith. Indeed, the ambiguous structure of the group may explain “one of the mysteries” of the international arbitration rankings in legal directories – namely why Herbert Smith’s reputation in arbitration hasn’t benefitted more from its domination of the wider disputes market.

In 2005, the firm did create a stand-alone arbitration practice, shortly before Lew joined the English bar. It also took the innovative step of making the Paris and London arbitration teams a single profit centre, so reducing competition between the two groupings (a surprisingly common problem at other firms). These days, the Herbert Smith international arbitration team is as big as any other arbitration operation in either Paris or London, and its reputation with key arbitral institutions – particularly the LCIA and the ICC – is fantastic. It is also strong in investment related matters (London based partner Matthew Weiniger is GAR’s regular correspondent on the area).

The firm is often picked in legal directories as the leader of the field for commercial dispute resolution in Asia, where its specialists include Nicholas Peacock in Singapore, Alastair Henderson in Bangkok and Justin d’Agostino in Hong Kong. In particular, it fields a good team in India related matters, often including London-based associate Promod Nair. In addition, the firm has recently made hires aimed at building its Spanish and Latin American practice.

The practice is co-headed by Paula Hodges in London and Charles Kaplan in Paris.

Who uses it?

A few years ago, the Channel Tunnel operating consortium retained Herbert Smith to pursue the English and French governments for damages, following break-ins by asylum-seekers from the Sangatte camp in Calais.

The United States government retained it as co-counsel for a trade dispute with Canada that went to arbitration at the LCIA. A former Soviet republic, meanwhile, chose it to resolve monumental litigation and arbitration over alleged fraud at a metals business. (Herbert Smith reputedly billed US$100 million for that instruction.)

Other clients of late include a Kuwaiti telecoms investor, Japanese mobile operator NTT Docomo, one of the big four accountancy firms, BP, Rio Tinto, RWE and Stagecoach. A number of companies with issues in Indonesia are at present using it, as is Standard Chartered Bank in a dispute with Tanzania over a power plant in Dar es Salaam.

Big wins

The Eurotunnel “Sangatte” case took place in front of a five-person panel of arbitrators and resulted in a payment of £30 million. The arbitration for Stagecoach against the UK government also resulted in a positive award. Although the sides disagreed about the value of the future revenue support, there was agreement it would be worth more than £70 milllion.

Recent events

Emmanuelle Cabrol, a Paris arbitration specialist, and Chris Parker, in London, made partner in 2010. So did May Tai and Gavin Margetson in Shanghai and Tokyo. In Spain, the firm recruited the former head of Linklaters’ disputes practice – Ignacio Diez-Picazo – while the London team gained Christian Leathley, a fluent Spanish-speaking investment and commercial arbitration specialist from Curtis Mallet-Prevost Colt & Mosle in New York. These two are expected to work closely together in building the firm’s Spanish and Latin American practice, while Leathley also brings valuable experience of acting for states (including defending ICSID cases on behalf of Venezuela).

The past year also saw the firm relocate several associates from London to offices in Asia. In Paris, Charles Kaplan has played a key role in moving “Paris - Home of International Arbitration” – a new body dedicated to promoting the city as a seat – to an operational stage. Along with Alexis Mourre (see entry for Castaldi Mourre & Partners), he also engineered the relaunch of the Paris Journal of International Arbitration, which now includes English-language content and articles that will be of interest beyond the domestic market.

In Asia, the firm has started co-sponsoring a new lecture on arbitration with the Singapore Management University (Bernard Hanotiau delivered the first one). Justin d’Agostino, meanwhile, has been involved in setting up a new under 45 group for arbitration specialists in Hong Kong. Lately, the team brought in two new significant BIT matters and received several instructions from senior French corporations.

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