K&L Gates

The firm saw some successes in investment arbitrations but lost two members of the practice to a rival

K&L Gates is the product of a fairly complicated sequence of mergers: East Coast firm Kirkpatrick & Lockhart absorbed UK practice Nicholson Graham & Jones in 2005, then fused with Seattle-based firm Preston Gates & Ellis two years later before going on to merge with three other firms from Texas, North Carolina and Chicago. More recently, in January 2013, the firm merged with Australia’s Middletons, making it the largest US-based firm in the Asia-Pacific region.

The arbitration practice of the legacy firms focused on construction and insurance matters to a large extent, but the merged practice significantly widened its scope in 2009 with some high-profile lateral hires. One of those hires, Sabine Konrad – an investment arbitration specialist and one of Germany’s appointees to the ICSID panel of arbitrators – has recently left the firm for McDermott Will & Emery. But the other 2009 recruits – Louis Degos in Paris, a former Eversheds partner better known for his commercial arbitration work; and Raja Bose in Singapore, who came on board after 10 years at Watson Farley & Williams to become head of the Asia practice – remain.

The firm expanded further in 2010 with the acquisition of Hogan & Hartson’s Warsaw office in the run-up to the Lovells merger (including a strong team of arbitration specialists led by Maciej Jamka), and new partner hires in Singapore and Hong Kong. In Tokyo, meanwhile, the firm was joined by a team from Clifford Chance, including Atsushi Yamashita, who has worked on a number of international arbitrations.

There followed the recruitment of Johann von Pachelbel in Frankfurt from Mannheimer Swartling, a specialist in Scandinavian disputes, in 2011. The Middletons merger also gave K&L Gates three additional dispute resolution lawyers in Melbourne.

The firm is proud of the relative youth of the arbitration group – many of its leading members are 45 or under. Despite that, several members of the group are established arbitrators: namely, Raja Bose, Louis Degos, Mike Gordon, Maciej Jamka, Peter Kalis, Ian Meredith and Rafal Morek.

Network

The arbitration practice has boots on the ground in London, Paris, Frankfurt, Warsaw, Dubai, Hong Kong, Singapore, Taipei, Tokyo, and various US offices (New York, Dallas and Pittsburgh). The wider firm has 46 offices on five continents (of which over half are in the US).

Who uses it?

Poland, Germany and the Netherlands have been government clients on investment treaty-related matters. It has also advised ICSID claimants including German airport operator Fraport.

In the commercial sphere, multinationals to have used the firm include Alcoa, Duke Energy, Fujifilm America, Goldman Sachs, Honeywell International and World Wrestling Entertainment.

Other past clients include Murphy Oil, in an insurance coverage dispute arising out of damage by Hurricane Katrina; and the West Indies Cricket Board, in a fast-track LCIA arbitration with Digicel relating to the Twenty20 cricket tournament.

Track record

In late 2012, Jennifer Coughlin, in the Anchorage office, helped the US state of Alaska secure a US$245 million award against BP, in compensation for delayed oil production as a result of two oil spills in the North Slope region.

The firm has a solid track record in investment treaty matters, though key members involved in those cases have since left.

For instance, in late 2010, a team led by Sabine Konrad helped Fraport overturn an ICSID award that had denied jurisdiction over its treaty claim against the Philippines concerning a Manila airport contract. The company has since re-filed its claim (but has followed Konrad to her new firm).

In another matter, Konrad helped Germany settle its first-ever ICSID dispute – with Swedish nuclear power investor Vattenfall – to its satisfaction in 2011.

In 2009, K&L Gates helped Belgium’s Transcor Astra Group win a US$640 million against the US arm of Brazil’s Petrobras in a dispute over put options – and went on to get the award enforced in a US court. Petrobras had challenged enforcement on the grounds that Astra, though registered in the Netherlands, should be considered a US company because its CEO lives in California. The US court denied the challenge, and a team of K&L Gates lawyers led by Gerald Novak and Beth Petronio finally helped Astra secure a US$820 million settlement with Petrobras in July 2012.

Recent events

Aside from the hire of Johann von Pachelbel – a descendant of the famous composer – from Mannheimer Swartling in Frankfurt, the firm promoted Singapore-based disputes lawyer Ian Fisher to the partnership. Wojciech Sadowski and Charlotte Baillot also made partner in Warsaw and Paris, respectively.

Sabine Konrad left the firm for McDermott Will & Emery in late 2012, taking with her of counsel Lisa Richman in Washington, DC. The pair were at the forefront of the firm’s investment arbitration practice.

Before the pair left, they helped German nationals Marion and Reinhard Unglaube win US$4 million in an ICSID claim against Costa Rica over a beach resort expropriation.

K&L Gates also represented the Netherlands as intervener in Frankurt court proceedings in which Slovakia sought to set aside a jurisdictional award in favour of Dutch insurer Achmea. Slovakia argued that the arbitration clause in its investment treaty with the Netherlands ceased to apply after it joined the EU in 2004. The court ruled in favour of the insurer, whose position the Netherlands supported. An appeal is pending before Germany’s highest court.

A team from K&L Gates’ Warsaw office continues to defend Poland in two ICSID claims brought by US investors.

In Asia, the firm has been involved in four cases using the new emergency arbitration procedure under the 2010 SIAC rules, with Raja Bose being appointed as an emergency arbitrator in one of them.

It continues to act for Taiwan Power Company in enforcement and vacatur proceedings in the Taiwanese courts for an award against Stone & Webster Asia. K&L Gates represented the state-owned utility before the Taiwanese arbitration panel that handed down the award and before a US court that dismissed Stone & Webster’s attempt to enforce the award in 2009.