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GAR 100 - 9th Edition

Foley Hoag

18 February 2016

Helped Belgium win its first ICSID case

People in Who’s Who Legal

3

Pending cases as counsel

30

Value of pending counsel work

US$11.5 billion

Treaty cases

27

Current arbitrator appointments

9 (of which 2 are as sole or chair)

Lawyers sitting as arbitrator

3

Once upon a time, Foley Hoag’s international arbitration practice consisted of the occasional investor-state case, often on behalf of left-wing Latin American governments. Those cases were an offshoot of its higher-profile work in the public international law arena: practice co-head Paul Reichler was Nicaragua’s advocate in the International Court of Justice case in the 1980s concerning the US government’s support of Contra guerillas.

Since 2007, the firm has expanded its practice greatly, bringing in additional partners known for investment treaty work: notably, Ronald Goodman, formerly of White & Case and Winston & Strawn; and Mark Clodfelter, for many years the United States’ NAFTA claims supremo at the Department of State. The Washington, DC team also includes Nicaraguan-born investment and trade partner Mélida Hodgson and of counsel Alberto Wray, a former Ecuadorian Supreme Court judge.

In 2011, the firm set up an office in Paris – its first outside the United States – with a five-strong team poached from Winston & Strawn that is led by Bruno Leurent (a former member of the United Nations Compensation Commission, the body charged with assessing Iraq’s liabilities following the invasion of Kuwait).

The collapse of Dewey & LeBoeuf brought partners Derek Smith and Luis Parada to the DC office in 2012. The pair have acted for states including El Salvador and Georgia at ICSID.

Network

The centre of the practice is in Washington, DC, with a nine-strong team in Paris and a smaller contingent in Boston.

Who uses it?

A long list of governments in Latin America, Asia, Africa and, increasingly, Europe. In investment treaty matters, the firm’s clients include, Bangladesh, Belgium, Ecuador, El Salvador, India, Slovakia, Ukraine, Uruguay and Venezuela. The firm has also been advising Canada on a couple of NAFTA matters.

Another big client is the Philippines in a maritime dispute with China under the United Nations Convention on the Law of the Sea (UNCLOS). Meanwhile, the east African state of Djibouti is using the firm in an arbitration with Eritrea under the auspices of the Emir of Qatar to resolve a long-running border conflict.

The firm has also represented Bangladesh, Croatia, Djibouti, Guyana, Mauritius and Nicaragua in various state-to-state matters before the ICJ and the International Tribunal for the Law of the Sea (ITLOS). It reckons to have been involved in more cases at these two institutions than any other law firm.

Foley Hoag’s private clients don’t attract as many headlines, but Orange, Air France and Credit Agricole have used it in international litigation and arbitration matters.

Track record

The firm has had strong results over the years, including a number for Latin American states. In 2013, it helped Venezuela defeat a US$1 billion ICSID claim by Canadian miner Infinito Gold. The case had run for nine years before it was dismissed on the merits.

It also helped Venezuela see off a pair of US$180 million treaty claims by Canada’s Nova Scotia Power concerning a coal supply contract; and knock out a US$633 million ICSID claim brought by Dutch and Panamanian mining investors at the jurisdictional stage.

Ecuador is another happy client. In 2010, Foley Hoag persuaded an ICSID panel to throw out a claim by Murphy Oil concerning a tax on windfall oil profits. Murphy, it transpired, had failed to observe the six-month “cooling off” period prescribed in the BIT before initiating arbitration (Murphy has since refiled its case).

Another claim brought by Chevron ended with a US$96 million award against Ecuador over the failure of its courts to resolve various contractual disputes (the case is unrelated to Chevron’s high-profile environmental dispute with Ecuador). This wasn’t a bad result for Ecuador, as Chevron had been demanding closer to US$700 million. That case also generated a rare state-to-state arbitration between Ecuador and the United States, also handled by Foley Hoag.

And in 2012, it brought home El Salvador’s second jurisdictional victory in a DR-CAFTA case. The claim, which was brought by US investor Pacific Rim, represented the first time a state has successfully invoked the denial of benefits provision in a treaty.

In the public international law arena, the firm has helped Bangladesh obtain good outcomes in disputes with Myanmar and India over rights to resources in the Bay of Bengal. It also helped Nicaragua in a tussle with Colombia over territory in the Caribbean Sea. The ICJ awarded the Central American state over three-quarters of the disputed area in 2012 – prompting a disgruntled Colombia to terminate the treaty in which it recognised the court’s jurisdiction.

In another ICJ case, the firm helped Uruguay defeat claims by Argentina alleging ecological damage caused by a pulp mill on the banks of a river between the two countries. Uruguay has since tapped the firm for another case – to defend it against Philip Morris’s controversial ICSID claim concerning the state’s tobacco packaging laws.

Recent events

Foley Hoag’s most impressive result in 2015 was helping Belgium to knock out a €1 billion claim brought by Ping An, a Chinese shareholder in the Fortis financial services group. The case, which concerned a government bailout in the wake of the 2008 financial crisis, was the first ICSID claim to be filed by a mainland Chinese investor under a Chinese BIT – as well as the first known investor-state case against Belgium.

There were some good results in state-to-state work. Reichler was part of a team that helped Mauritius prevail in an UNCLOS claim against the UK over the Chagos archipelago in the Indian Ocean, where the UK had established a marine protection area. The tribunal chastised the UK for its conduct and ruled that the territory must be handed over once it is no longer needed for defence purposes.

Reichler also helped an UNCLOS claim by the Philippines against China clear the jurisdictional phase. China is refusing to participate in the case, which concerns maritime rights in the South China Sea. The hearing also gave rise to a cyber-attack on the website of the Permanent Court of Arbitration, which is administering the case.

In another UNCLOS case, a tribunal ordered Foley Hoag’s client, Ghana, to refrain from new drilling in Atlantic waters claimed by Ivory Coast until the dispute is resolved, but refused to call a halt to all ongoing oil exploration and exploitation in the disputed area.

Elsewhere, Foley Hoag has been helping Venezuela to resist enforcement of a US$740 million award in favour of Canadian mining company Gold Reserve in the US courts, while it tries to overturn the award in the courts of Paris.

On the people side, Daniel Schimmel, the former co-chair of arbitration at US firm Kelley Drye & Warren, joined Foley Hoag to develop the New York arbitration practice.Clara Brillembourg in DC and Hery Ranjeva in Paris were promoted to the partnership.

Partner Luis Parada also found time to be interviewed by journalists from the Guardian, telling them the investor-state arbitration system “has gone completely rogue”.

Client comment

Khurshed Alam of the ministry of foreign affairs in Bangladesh described the Foley team as “outstanding in all respects”.

“They understood the case from the client’s perspective and gained our full trust and confidence. And they did a brilliant job in their written pleadings and oral presentations. They are the complete package,” he said.

Andrea Holíková of the Slovakian ministry of finance praised the firm’s “very professional approach, case management, and creativity”.

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