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GAR 100 - 5th Edition

The guide to “approved” specialist international arbitration firms

06 March 2012

Each year, a group of students about to embark on a course in international arbitration gets the same introductory lecture.

“This is the White Book,” says their teacher – who’s also a partner at a London law firm – showing a copy of the UK’s court rules of procedure. “It’s two volumes and takes up this amount of space on your shelves.” He measures a breeze block with his hands. “It tells you everything that can happen in a High Court case.

“And this is the ICC rules,” he says, holding up a... well, a pamphlet. “It’s about this thick,” indicating by picking up an imaginary cat in a finger pinch. “But ICC arbitration is no less complex than High Court litigation.”

“The difference between those two thicknesses” – he does the pinch and the breeze block again – “is what international arbitration lawyers know. And it’s not written down.”

That unwritten lore helps those who’ve acquired it to navigate a process that’s unique within law. A leading textbook on the subject – Redfern & Hunter on International Arbitration – observes that a stranger stumbling upon an international arbitration hearing might not realise that a legal process was underway. They’d see two small groups of lawyers wearing lounge suits, occupying a hotel room or training room. On the other side of the room: a trio of types with possibly a bit more grey hair. There’s no audience, no usher and little hint of pomp or ceremony. It could perhaps be mistaken for a training course (apart from the stenographer).

But appearances can be deceiving. As business has gone global, so international arbitration has ballooned. Every industry apart from banking now relies on the arbitral process to settle disputes in large international contracts. These quiet private occasions in hotel rooms – or nowadays, bespoke hearing centres – decide the fates of billions of dollars in shareholder value. Two whole regional telecoms businesses have changed hands in the past decade thanks to the decisions of arbitrators. Last year, arbitration led to one of the world’s biggest proposed joint venture – between BP and Rosneft – being abandoned.

For the advocates who represent the two sides on those occasions, it requires a very different mindset. For a start, the case probably won’t settle on the courtroom steps; international arbitrations tend not to. They will also have to navigate all sorts of legal and cultural issues on the way to those steps – ranging from the mindset of the opposing lawyer to perhaps applying some other country’s law.

A well-publicised ICC case gives a flavour of a typical scenario. One law firm representing a Middle Eastern government and the other firm two international oil companies. The arbitrators were French, Belgian and English; the counsel were English and American. Although the hearings physically took place in a European capital city, the law was from somewhere else and the backdrop to the case was the Islamic tradition of sparse documentation. One of the law firms said it had to work without sending its client the standard written memorandums on unfolding issues, conveying their advice orally instead... oh, and $10 billion or so was at stake.

Similarly, if you work in the area, it’s more than likely that at least one of the groups you regularly deal with on the case will prove a bit of a handful. The clients who require international arbitration help are not always nice, listed companies who document things well and follow cold commercial logic. Quite a few arbitrations have their roots in the cutthroat politics of resource-rich states. So, if you’re a lawyer in the area, you can find yourself having (subtly) to do your opposing counsel’s job for them, if so you can then rebut them.

It’s not everybody’s cup of tea. Recently, a young UK litigator told a GAR reporter who was attending a non-arbitration related event that he’d loathed his stint in the firm’s arbitration department – because people don’t play nice. He said that some of the rough-house tactics he’d seen would be regarded as unethical – and would have been sanctioned – in a domestic litigation. In arbitration, though, there’s no bar association or regulator to ensure everybody behaves sportingly.

He isn’t alone. Quite a few younger lawyers who step across from litigation find the lack of rules and regulations to consult leaves them feeling almost queasy. They’re disorientated to be in a world where case procedure can be entirely ad hoc.

Wisely, many of the big commercial law operations now treat international arbitration as as specialist skill set. This movement began in the early 1990s when a handful of firms – including, among others, Freshfields, Clifford Chance and Shearman & Sterling – decided to centralise the work. Others took more time. A London lawyer at another well-known firm tells how a leading partner at his firm made himself a thorn in the side of the management, with continued calls for it to separate litigation from international arbitration and allow some of the partners to focus full-time. “No dabblers,” became his mantra. The penny finally dropped when the firm’s senior partner attended a client care meeting with a leading international energy firm. The client was in a good mood, goes the anecdote, because the law firm had recently triumphed on its behalf in a major UK court case. So, the senior partner took the opportunity to ask if they could expect future instructions.

“Yes,” said the client. “Absolutely. We think you’re the best firm – for litigation”.

“And what about arbitration?” the senior partner enquired, thinking of his latest run-in with the difficult colleague.

“Oh, then we’d go to Freshfields,” the client said. “You’re brilliant for the litigation but they’re a specialist arbitration firm.”

Twenty years on, more and more law firms can supply a client with a group of lawyers who’ve done little except work in the field of international arbitration.

As you might be starting to expect, when an international arbitration specialist takes on a dabbler, the specialist tends to have the upper hand.

It’s not just the comical stories one hears about US plaintiffs’ lawyers addressing the chairman of their tribunal as “Excellency” and “Your Holiness” (true incidentally).

Rather, for example, the unskilled arbitration advocate may fail to calibrate properly before going into their usual schtick when tackling opposing witnesses – “you see some people who come out of the blocks at 100 miles per hour against an elderly Swiss professor,” says one good source, who adds that such bombast, “which may be appropriate in a courtroom”, will play badly in front of arbitrators. “Especially if they are also Swiss professors!”

Another mistake is to prick the curiosity of an arbitrator by suggesting something is off limits, forgetting about the flexibility they have to determine the boundaries of their inquiry. And a few haughty types simply have trouble treating lawyers from other traditions without condescension.

Matthew Weiniger – a partner with Herbert Smith in London (and the visiting professor whose students get the breeze block/cat pinch comparison) – recalls one case in which an opponent’s naivety gifted him tremendous scope for mischief.

On that occasion, the other side consisted of a reasonable UK corporate firm (“you’d immediately know them”) and a QC (“who was brilliant but doing his first arbitration”). Weiniger, in contrast, has spent his professional life appearing before international arbitrators. Early on in the case in question, his opponents misconstrued a key order. It led them to hand over more documents than the arbitrator had ordered. “The good and bad documents – everything, including internal client memos,” he remembers. As a result, Weiniger – who handed over only his “good” documents, went into the cross-examination phase better prepared. His client won the case. The arbitrator’s order, it so happened, was a fairly standard formulation.

Does Weiniger get gifts of that type often? “I’m used to it,” he says. “Usually there are more subtle things.”

There have been some high-profile examples since then. In 2011, a joint venture proposal between BP and Rosneft imploded after BP lost an arbitration. It was noted by the cognoscenti in London that BP’s chosen law firm isn’t super-famous for international arbitration.

In the end, it all comes down to an old adage, “know your judge” – and its even more important other half, “make sure your judge knows you”. In other words, the longer an advocate spends in the presence of a population of adjudicators, the better his or her chances of being persuasive in front of them. The advantage arises for two reasons: improved intuition and the fact that the advocate arrives in front of them with personal capital.

“QCs, in the High Court, are brilliant because they know those panels inside out and that style of advocacy,” according to a lawyer with a similar type of practice to Weiniger, who asked to speak on condition of anonymity so he could be fully frank.

“Laurence Rabinowitz QC [a well-known UK advocate for commercial cases from One Essex Court] can appear before any judge and they know him. ‘Ah, Mr Rabinowitz – very interesting and nice to see you!’ The same thing applies in international arbitration. For example, I’ve got a case right now in front of [a leading international arbitrator]. Every time I go to a conference, he’s there. We read each other’s books. My opponent on the case... well, he hasn’t got a clue.

“Between all the partners in our group,” the lawyer continues, “we’ve appeared before every single arbitrator worth knowing. Not just once, but multiple times in the past few years and we have the inside knowledge as a result of that. If I pick up the phone to [several leading arbitrators] because I want to appoint them, I know they’re going to phone back.

“QCs in the high court are brilliant, because what they have is ringcraft. But when it comes to international arbitration, I have the ringcraft.”

Another specialist says he wishes more of his opponents could come from the ranks of the specialist international arbitration bar because it would save time and aggravation. “I would love to do more cases against Freshfields,” he says. “I tell clients: If this were against Freshfields, I’d get you a deal in two days. It would be over. But because we’ve got these idiots we’re probably going to have to fight for years.”

Sophisticated clients, to give them their due, are now aware of this dynamic. A survey* published in 2006 found that three-quarters of in-house counsel interviewees would seek a lawyer they regarded as an international arbitration advocate rather than a litigator. They defined specialisation as a mix of reputation, amount of work undertaken and experience. In the interim, more law firms have caught religion and created their own international arbitration groups.

Nowadays, the challenge for clients and students alike is not so much to find a specialist arbitration group as to distinguish between the many now in existence.

The book you are holding may help. Five years ago, Global Arbitration Review created GAR 100 as an opportunity to identify at least 100 firms it would be safe to consider “approved” for expertise in this discipline. To qualify, firms had to open their books to researchers and allow them to audit its recent work and previous experience.

With this edition – our fifth – the number of approved firms has grown to 147, representing 38 countries. Eleven firms make their debut. We now also profile smaller practices, including a couple of one-person boutiques (if the person in question is a recognised leader in this field). The composition of the 100 will continue to change, but its underlying ethos won’t. It will always exist to point you towards dependable counsel around the world who are versed in international arbitration.

To ensure that, firms have to accept being vetted by our researchers for the various components that make up “specialisation” (reputation, volume of work and experience). In most cases, this “audit” means responding in detail to a questionnaire that itemises its experience through to how many merits hearings it’s participated in and before whom as arbitrator.

This information is then triangulated against responses from other firms, external sources (both online and in print) and proprietary internal GAR information. To give the book a broad coverage, where information is harder to extract, other forms of vetting have been used – including word of mouth and strong personal recommendations from existing 100 firms.

As well as adding new firms, the descriptions of charter members of the 100 continues to expand. Many now include extra sections outlining the history of the practice – especially (where information could be obtained) its connection with key figures of the past.

A number of descriptions now recap their track record. As the introduction to our ranking section – GAR 30 – makes clear, the editorial team sets little store by “wins” considered out of context. Even so, it’s fair to expect that over time every arbitration group worth its salt should have one or two impressive outcomes to its name.

The research period for all data in the book is 1 August 2009 to 1 August 2011. All the other information is correct as of 1 January this year.

The editorial team is enormously grateful to the firms who responded to this year’s request for current information. We’re also grateful to various colleagues within Law Business Research – particularly Tom Barnes, Nick Hafezi and Francisco Freitas from Who’s Who Legal – for their contribution. On a personal note, I’d like to thank the many international arbitration lawyers – young and old – who have taken time over the years to explain the nuances of their craft to me. I also owe a big thank you to the rest of the GAR writing team who manage to fit in writing large tracts of the book with their other duties, and features editor Sebastian Perry in particular, for managing the production cycle so effectively.

David Samuels

February 2012

* International Arbitration: a study into corporate attitudes, by PricewaterhouseCoopers and the School of International Arbitration, London.

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