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GAR 100 - 9th Edition

King & Spalding

18 February 2016

Acting for "Putin’s banker" in a US$12 billion claim against Russia

People in Who’s Who Legal: 14
Pending cases as counsel: 83
Value of pending counsel work: US$63 billion
Treaty cases: 31
Current arbitrator appointments: 56 (of which 15 are as sole or chair)
Lawyers sitting as arbitrator: 15

In 1995, King & Spalding – one of Atlanta’s oldest law firms – decided to open in Houston. The step paved the way for one of the success stories of the modern arbitration era.

Things got properly moving in 2000 with the hire of Doak Bishop (who joined with a single arbitration case). Bishop hired young lawyer Craig Miles – now a well-known partner in his own right – and from that acorn has grown one of the largest and most active practices operating today.

A series of wins in BIT matters against Argentina (relating to its 2001-2002 financial crisis) brought the team to wider attention and fuelled its expansion.

The practice’s gravity pulled in partners from the firm’s other offices. From 2004, Ed Kehoe from the New York office began to participate regularly, as did partners in Atlanta (Kehoe is today a co-chair of the practice).

Since then, lateral hires have broadened its reach further in Europe, the US, Asia and the Middle East. A former ICSID senior counsel, Margrete Stevens, joined as a consultant, and a Paris group formed around a pair of hires from Dewey & LeBoeuf – Eric Schwartz (a former secretary general of the ICC Court) and James Castello.

It opened a new office in Singapore in 2010 with the hire of John Savage from Shearman & Sterling, arguably the region’s best-known arbitration practitioner, and made other impressive hires from the likes of Weil Gotshal & Manges, Salans and Crowell & Moring, strengthening its investment treaty practice.

The London practice has grown considerably in recent years and is headed by Australian Thomas Sprange, who joined from Steptoe & Johnson in 2011 and was one of only five solicitor-advocates to take silk in 2015.

Doak Bishop, meanwhile, has emerged as an authority on international oil and gas law – thanks to a treatise analysing the most important major oil and gas arbitrations and their results.

Sixteen years on, the one-person practice has become an 80-strong enterprise that is now regularly found in the top tier of arbitration rankings.

Network

The most important offices for arbitration are Houston, New York, London, Paris and Singapore but the group also has a presence in Frankfurt, Moscow, Dubai, Abu Dhabi, Tokyo, Atlanta, San Francisco and Washington, DC.

Who uses it?

International corporations, particularly in the energy sector. A few names that are on the public record as using the firm are Chevron (in its long-running dispute with Ecuador over liability for environmental pollution in the Amazon), ConocoPhillips, Dow Chemical, El Paso, ExxonMobil, Salini Impregilo, KBR, Murphy Oil, Sempra Energy, Spain’s Marsans Group, the US’s Renco Group, India’s Reliance Industries, Malaysian media group Astro, French waste management group Veolia and Oleg Deripaska’s En+ Group.

As the practice has evolved, the client list has become more diverse, now even including the occasional government. Turkey’s state-owned oil and gas company has been an ICSID client.

Track record

King & Spalding built its name on results. Between 2003 and 2008 it had a series of wins against Argentina at ICSID (US$185 million for Azurix; US$175 million for Sempra; and US$106 million for the creditors of Enron). It also won US$133 million for a hotel investor against Egypt.And things haven’t slowed. In recent years, it has obtained US$8 billion for Anadarko, Maersk and Eni in a dispute with Algeria, and US$2 billion for Dow Chemicals from a Kuwaiti state-owned petrochemicals company (on that case, it teamed up with Shearman & Sterling).

In 2013, the firm won a US$503 million award against Kazakhstan for Moldovan investors Anatolie and Gabriel Stati – the second-largest award ever issued under the Energy Charter Treaty.

Another triumph came in 2012 in a long-running ICSID case against Romania. Once again teaming with Shearman, King & Spalding helped Swedish brothers Ioan and Viorel Micula win around US$250 million in a claim over Romania’s withdrawal of economic incentives. Romania is now seeking to have the award annulled, while the European Commission has declared the award in breach of EU state aid rules.

Another eye-catching result in 2013 was in US enforcement proceedings on behalf of US engineering firm KBR. It persuaded a district court to uphold a US$465 million award against Mexico’s state oil company, Pemex, even though it had been set aside by a court in Mexico. The result was hailed as a departure from more than a decade of US case law that has given primacy to the courts of the arbitral seat when deciding on enforcement. Pemex’s appeal to the Second Circuit is pending.

Recent events

The biggest instruction of the past year came from exiled Russian oligarch Sergei Pugachev, once known as “the Kremlin’s banker”, who is pursuing a US$12 billion treaty claim against Russia over the seizure of his assets.

It has also brought new cases against Argentina, including an ICSID claim filed on behalf of Salini Impregilo; and a multibillion-dollar lawsuit and related arbitration on behalf of two Petersen companies that held a minority stake in Argentine oil and gas operator YPF before its nationalisation in 2012 (Burford Capital is financing that case).

Other instructions have come from Malaysian satellite TV group Astro in a dispute with India, and a number of investors affected by reforms to the renewable energy subsidy regimes in Italy and Spain.

The London office welcomed Russia and CIS-focused partner Nick Cherryman, who formerly headed the international disputes practice at Fried Frank. Barrister Stuart Isaacs QC also joined in London from Berwin Leighton Paisner, giving the group its second QC after partner Tom Sprange took silk earlier in the year.

It acquired a team in Tokyo from Ashurst, including arbitration partner Christopher Bailey. Meanwhile Singapore-based partner Peter Megens left after two years with the firm to join Pinsent Masons in his native Australia.

Three new partners were made up in early 2016 – Sajid Ahmed in London, Amy Frey in Paris and Elizabeth Silbert in Atlanta. There were two counsel promotions: Sarah Vasani in London and Isabel Fernandez de la Cuesta in New York.

Client comment

Duke Energy’s deputy general counsel Martin Lythgoe praises the firm’s “outstanding” work in an arbitration against a Peruvian state entity. Lythgoe says the firm “reflect[ed] in very solid terms our position in a very cost effective manner.” He says the group’s knowledge of arbitration and the oil and gas industry allowed them to produce submissions that were “easy to understand even for a lay person.”

He gives partner Silvia Marchili in Houston special praise: “Her very dynamic style and strong leadership skills were essential in both bringing together the strategy of the case as well as achieving a final work product that meets the highest standards.”

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