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GAR 100 - 9th Edition

Vinson & Elkins

18 February 2016

One of the world’s leading energy firms is developing a construction arbitration practice to match

People in Who’s Who Legal: 3
Pending cases as counsel: 41
Value of pending counsel work: US$13 billion+
Treaty cases: 3
Current arbitrator appointments: 22 (of which 9 are as sole or chair)
Lawyers sitting as arbitrator: 4

Houston-headquartered firm Vinson & Elkins styles itself as “the world’s leading energy firm”. Its US oil clients have tended to take the firm wherever they go in the world, calling on it to draw up energy-related contracts and turning to it the minute a dispute arises.

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 a practice in 2000 with the recruitment of James Loftis.

Loftis joined in London after working at the United Nations Compensation Commission (the body set up to deal with claims against Iraq arising from the first Gulf War). The practice expanded to the United Kingdom in 2001, followed by Beijing and Hong Kong, with the recruitment of partner Christopher Walker from Linklaters in 2008.

By that time, the group had turned into a free-standing international dispute resolution team, reporting to the firm’s head of commercial litigation.

The arrival in 2013 of George Burn, former London head of international arbitration at Salans (now Dentons), brought added expertise in investment arbitration.

While the focus remains on the energy sector, big strides have been made in developing the construction side of the practice. Led by London-based partners Amir Ghaffari (formerly of Shearman & Sterling) and Nick Henchie, the firm is acting in some of the largest construction disputes in the world: the expansion of the Panama Canal; a terminated project to build a pipeline to run from Russia to southern Europe via the Black Sea; and the Marmarey rail project to develop a link between Europe and Asia under the Bosphorus Strait.

Vinson & Elkins is proud of the fact that its lawyers are always in the thick of the action – but this has sometimes led to a spot of bother. In recent years, the firm has seen two of its attorneys arrested by the police in a state against which the firm was bringing a treaty claim, and one came under small-arms fire, also in the course of duty.

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

After spending a significant amount of time in the Dubai office, building up relationships in the Middle East, Loftis is now based in Houston.

Who uses it?

In upstream oil and gas, the firm represents the majors as well as a number of national oil companies.

Big-name clients include Cairn Energy, Noble Energy, Statoil and El Paso Corporation, while newer ones include the Iraqi Ministry of Oil and Iraq oil trading company SOMO. The firm also continues to advise Reliance Industries in a claim it is jointly bringing with BG Group against India over tax and cost recovery related to oilfields off the coast of Mumbai.

Lower down the value chain it has been connected with arbitration work for an Omani power company and Essar Oilfield Services.

Outside of the energy sphere, the firm has acted for Dubai’s Alamar Foods in a US arbitration concerning a fast food franchise, Dubai Mercantile Exchange in shareholder disputes and Emirate Aluminium Company in a claim brought by a subcontractor.

In the investment treaty field, it has advised investors bringing claims against India, Ecuador and Armenia. The firm has also featured on a list of 15 international firms that China prefers to use for such matters.

Resource contractors have also instructed the firm to represent them in a number of maritime boundary disputes, including between Nicaragua and Colombia, Cyprus and Turkey, and Lebanon and Israel.

In the Panama Canal case, it’s acting for the Panama Canal Authority against a European consortium, while in the Pipeline case, it’s acting for Eni Saipem, which was contracted by Gazprom entity South Stream to lay the submarine sections of the pipeline.

Track record

The firm helped Spectra Energy defeat a US$170 million claim by ExxonMobil. It also won a US$20 million award for Niska Energy during a disagreement about the final purchase price of gas storage facilities in North America.

Partner Christopher Walker was behind one of the first successful retroactive applications of an arbitration clause in the United Kingdom. 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 predated the arbitration clause, but was related to it.

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 disputes arose out of a joint venture to develop an oilfield in the Bay of Bengal. Most recently, the Malaysian Court of Appeal upheld the award in the firm’s clients’ favour in July 2014.

In 2011, one of the arbitral tribunals made a ruling in favour of the firm’s clients to the tune of around US$500 million. A Malaysian court refused India’s application to set aside the US$500 million in August 2012, and the state is now appealing. Vinson & Elkins and local co-counsel HM Ooi & Associates are defending the award.

Recent events

A Vinson & Elkins team triumphed in England’s Court of Appeal in July, after ruling that Geneva-based oil trader Taurus Petroleum could not enforce an award against letters of credit issued following a crude oil sale by the award debtor, Iraq’s State Oil Marketing Company, or SOMO, in favour of the Central Bank of Iraq.

The firm still represents the Iraqi government in its claim against Turkey and its state-owned pipeline operator BOTAS, accusing it of aiding the export and sale of crude oil from Kurdistan, an autonomous region of northern Iraq, in breach of a 40-year old agreement.

In another construction-based instruction, the firm is also acting in dispute arising from a US$700 million road upgrade project in the Middle East.

On the personnel side, former Australian police detective John Zadkovich was promoted to counsel in Hong Kong. He works primarily in oil and gas, energy, and natural resources.

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