Founded by ex-Big Law stars, the firm is already handling mega-cases
|People in Who’s Who Legal:||5|
|Pending cases as counsel:||36|
|Value of pending counsel work:||US$81.7 billion|
|Current arbitrator appointments:||28 (of which 12 are as sole or chair)|
|Lawyers sitting as arbitrator:||5|
Few stories have had as many hits on GAR’s website as the launch of Three Crowns in April 2014.
What made it so interesting? Two aspects. First: the boldness. There have been international arbitration “boutiques” before, but this was on another level. Three Crowns opened simultaneously in three countries (the United Kingdom, France and the United States). So, more of a mini-international arbitration firm than a boutique.
Second: the people. The founders included the illustrious Jan Paulsson, plus Constantine Partasides QC and Georgios Petrochilos – two of Paulsson’s heirs-apparent in the mighty Freshfields arbitration practice (Partasides was the practice’s co-chair). Joining them was some top talent from other shops: Todd Wetmore (a big part of the recent success of Shearman & Sterling), Gaëtan Verhoosel (co-chair of international arbitration at Covington & Burling) and Luke Sobota (of Jones Day, where he was part of the team representing Chevron in a series of interlinked disputes relating to environmental pollution in Ecuador).
Why would such good people want to leave such excellent firms? Nobody apart from the individuals in question really knows. But the official line is that Three Crowns embodies a “vision”; namely, that it is individuals, not firms, who “win” arbitrations, as long as those individuals have the “space” to focus on a case properly. Voilà: David can get the better of Goliath. So the founders say they saw a business opportunity, First, though, they had to create their own firm. The “space” they required was not apparently on offer where they were.
Nearly two years on, how’s it working out? The practice has certainly had no trouble attracting more talent. In 2015, it recruited its first female partner, Carmen Martinez Lopez, who had worked with Verhoosel at Three Crowns. And it made up its first homegrown partner, Scott Vesel, in the following year.
Clients have also been voting with their feet. The firm received more than 100 instructions in its first year, with the amount in dispute exceeding US$1 billion in 30 per cent of cases. Among them was an instruction in what is believed to be the largest claim in the ICC’s history (US$20 billion). Meanwhile profits per equity partner have reached Magic Circle levels.
Three Crowns has offices in London, Paris and Washington, DC.
Who uses it?
The firm caters to repeat users of international arbitration who know the business well enough to forgo a big, established brand name. Since opening it has been retained by:
- investors bringing treaty claims against Spain over reforms to its renewable energy sector;
- a claimant in a US$20 billion case against a state-owned company for its alleged role in an expropriation (the record ICC matter already mentioned);
- a consortium of oil companies for a large dispute in a former Soviet republic;
- BP (which has added Three Crowns to its list of “niche law firm providers” panel – the only arbitration firm on that list);
- a large Asian industrial conglomerate for potential BIT claims against a Latin American state;
- a French nuclear plant manufacturer, in one of the most important construction disputes under way; and
- various governments on state-to-state matters, including a very prominent Asian state that retained Paulsson and Petrochilos almost as soon as Three Crowns opened.
Members of the firm have also brought with them briefs from ConocoPhillips, ExxonMobil, Occidental Petroleum, Perenco, Chevron, and the UAE’s Dana Gas and Crescent Petroleum.
Though it’s still early days, the firm has been pretty busy already. High points from its first two years of operation include:
- winning Dana and Crescent a US$2 billion LCIA award against the Kurdistan regional government of Iraq in compensation for withheld gas payments (Freshfields continues to co-counsel on that case);
- obtaining an order requiring Kurdistan to pay US$100 million within 30 days, and persuading the High Court in London to throw out the regional government’s sovereign immunity arguments;
- helping Occidental defend the largest ICSID award ever in annulment proceedings before the oil company reached a US$980 million settlement with the government of Ecuador;
- acting as co-counsel to Chevron during three weeks of hearings for its denial of justice claim against Ecuador in The Hague; and
- defending a US$1.6 billion award in favour of ExxonMobil against Venezuela in ICSID annulment hearings.
Scott Vesel was promoted to the partnership in January 2016, only a year after he had been anointed counsel. Senior associate Josh Simmons joined around the same time in DC. Both are former US State Department lawyers.
The practice also promoted Australian Lucy Martinez to counsel in September 2015, only eight months after she joined the firm. She had previously worked with members of the team at Freshfields.
Verhoosel amd Martinez Lopez picked up a new instruction from a Canadian company, Edgewater Exploration, for a potential treaty claim against Spain over the termination of a concession to mine for gold in Galicia. The investor has already secured third-party funding for the case thanks to the brokering services of ClaimTrading.
Paulsson and Petrochilos were also instructed by companies owned by Czech senator Ivo Valenta for a treaty claim against the Czech Republic concerning the cancellation of licences for video lottery terminals. For that case, they have teamed up with the Czech finance ministry’s former director of investment protection Radek Šnábl, who was fired from his government post in 2013.