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GAR 100 - 5th Edition

Vinson & Elkins

05 March 2012

The go-to firm for energy companies moved several steps forward last year in a long-running Indian oil field dispute.

People in Who’s Who:
1
Pending cases as counsel:
30
Value of pending counsel work:
US$5.6 billion
Treaty cases:
4
Current arbitrator appointments:
1 (of which 0 are as sole or chair)
No. of lawyers sitting as arbitrator:
1

Vinson & Elkins styles itself as “the world’s leading energy firm”. Having grown up with the US oil industry in Texas, those clients took the firm with them wherever they went in the world, having its lawyers draw up every type of energy-related contract, project or investment, and turning to them the minute a dispute arose.

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

Loftis joined in London after working at the United Nations Compensation Commission. Since then, the firm has turned the group into a free-standing international dispute resolution team, adding partners in Asia and in Houston. Several members of the trade group and other related practice areas also joined the team. More recently, Loftis has been spending more time in the Dubai office, building up relationships in the Middle East where the firm reports “a huge expansion” in the number of disputes arising.

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 Beijing, Hong Kong, Shanghai, London and Dubai, and to a lesser degree in Abu Dhabi, Tokyo, Moscow and Washington, DC.

Who uses it?

In upstream oil and gas, the firm represents the majors as well as a number of national oil companies. Long-standing clients include Cairn Energy and El Paso Corporation, while newer ones include the Iraqi Ministry of Oil. Lower down the value-chain it has been connected with arbitration work for an Omani power company and Essar Oilfield Services.

In the investment treaty field, it has advised investors bringing claims against India, Ecuador and Armenia.

Track record

In the past, the firm has defeated a US$170 million claim by ExxonMobil made against its client, Spectra Energy.

It showed off its technical knowledge by winning US$20 million award for Niska Energy during a disagreement about the final purchase price of gas storage facilities in North America (Vinson & Elkins’ team persuaded a sole arbitrator to reclassify part of the gas supplied “inherited” as valueless “cushion gas”, despite contrary reports in official records.)

Meanwhile, partner Christopher Walker and associate Samantha Bakstad were behind one of the first successful retroactive applications of an arbitration clause in the UK. 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 pre-dated the arbitration clause, but was related to it.

The group also obtained a big win in 2011 in a long-running dispute with the government of India.

Recent events

FIDIC contracts specialist Nick Henchie joined the firm’s international disputes and construction practices from Mayer Brown in January 2011. Solicitor-advocate Mark Beeley in London and Nicholas Song in Beijing were promoted to the partnership in January 2012.

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

In 2011, one of the arbitral tribunals made a ruling in favour of the firms clients to the tune of around US$500 million. Meanwhile, after seven years of proceedings, Malaysia’s highest court finally confirmed a separate 2004 award that saw India win on the bulk of the merits, but the contractors win the most financially significant issue on recoverability of costs and tax owed.

Partner Tim Tyler in Houston saw the first batch of students graduate from the LLM programme at the University of Texas School of Law’s Centre for Global Energy, International Arbitration and Environmental Law, which he helped formulate in his capacity as director of the Centre’s arbitration section.

James Loftis has begun to divide his time between London and Houston.

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