GAR 100 - 7th Edition

Shearman & Sterling

Professional notice

The first year following a shock departure went well.

People in Who’s Who:
4
Pending cases as counsel:
88
Value of pending counsel work:
US$194 billion
Treaty cases:
20
Current arbitrator appointments:
4 (of which 4 are as sole or chair)
No. of lawyers sitting as arbitrator:
4

Shearman & Sterling’s – huge – name for international arbitration started in the mid-1980s, when professor Emmanuel Gaillard joined from Bredin Prat. Originally hired for litigation, Gaillard opted instead to focus on international arbitration, of which he’d done a little for Algeria’s Sonatrach. And so Shearman became one of the first firms with a bespoke international arbitration team (along with Gide Loyrette Nouel, Coudert Brothers and soon Freshfields).

The gamble paid off. In 1992, Gaillard landed two huge cases – a billion-dollar construction dispute and a series of eight arbitrations for an energy firm – which gave the practice a boost. The burgeoning team then appeared on a series of seminal cases in the mid to late 1990s in the energy and construction areas, and a (new) discipline called investment arbitration.

In 1998, the team acted for a British investor against Egypt in Wena Hotels. It won both phases of the case – defeating Freshfields and winning US$20 million. It later blocked Egypt’s annulment request too, obtaining the first decision on interpretation in ICSID history. Wena is often credited as the first significant ICSID case of the modern era.

A year later, Gaillard published Fouchard, Gaillard, Goldman on International Commercial Arbitration, at the time the most comprehensive volume available on the practice of arbitration. It remains a seminal work.

By now, other members of the team were becoming recognised in their own right. Some have since moved on – Peter Griffin, Eric Teynier, John Savage and Phlippe Pinsolle come to mind. Others remain and have carved out particular niches. Todd Wetmore who joined in 1995 focuses on projects and technical disputes; Yas Banifatemi, who joined in 1997, has co-developed the firm’s investment arbitration practice and leads its public international law work. Mark McNeil focuses on IP work.

The 2000s saw the practice cement its reputation in investment arbitration. With a number of cases where in its own words “it displayed its pioneering spirit” – the first umbrella clause cases (SGS v Pakistan and SGS v Philippines); and the first serious arguing of most favoured nation clauses and denial of benefits points (in Plama Consortium v Bulgaria).

Then in 2003, Gaillard and Banifatemi landed the famous Yukos – now said to be the largest arbitration ever (estimates go as high as US$114 billion). The case has been quite a fight – taking 10 years to reach a final hearing (five weeks over autumn 2012).

Towards the tail end of the 1990s, the practice began to branch out from Paris, opening in London (in 1999), Germany (2001), Singapore (2002) and creating a Spanish-language team (run from Paris and built around former Garrigues partner Fernando Mantilla-Serrano, a Colombian national (in 2003). And it is in Abu Dhabi (as of 2008) and Milan (2011).

The US part of the practice is also far more active. It’s been boosted by the publicity surrounding a US$2.1 billion win for Dow Chemicals (New York-based partner Henry Weisburg has in fact collaborated with the Paris team fairly regularly since 1997).

It should be said that not all these forays into new cities have worked. London has had a couple of false starts, and Singapore and Germany now rely on good senior associates rather than partners.

But those blips aside, Shearman & Sterling is considered by many the class of the current arbitration field – for now. Even more than Freshfields, it has earned a reputation as the place to go when defeat would be intolerable – the proverbial “bet the company” case.

A recent survey showed it had a higher percentage of the world’s biggest cases than any other firm (American Lawyer Arbitration Scorecard 2013), with 12 of the biggest 30 cases on its books; the next two firms, Freshfields and Curtis Mallet-Prevost, had 10.

Gaillard for his part is a totemic figure – the equal of Paulsson – and his team in Paris at 80 people in size probably the largest collection of arbitration specialists under one roof (that figure breaks down as 50 lawyers, seven legal assistants, 20 trainees and five support staff). Together they enjoy the pick of the recruitment market and are one of those shops that seems to serve as an unofficial university for arbitration.

The practice also clearly remains ambitious too, despite its past hiccups. It has recently formed various sub-groups, notably for projects and IP.

Last, but not least, it runs a fantastic website about the New York Convention: www.newyorkconvention1958.org.

Network

There are international arbitration specialists on the ground in Paris, London, Frankfurt, New York, Washington DC, Abu Dhabi, and Singapore. A Cairo office is expected soon.

Who uses it?

The most regular clients are probably Sonatrach, Total, EDF, Thales, Areva, Rhodia, along with various states. Some other public names include Dow Chemical Company, Enka, ABB, General Electric, Credit Suisse First Boston, Enka, Orascom, Linde, Daimler Chrysler and IPIC – and of course the Yukos shareholders.

The team has been working more for states in recent years – particularly Lithuania, Egypt, Algeria and Venezuela, all of whom have instructed it on multiple matters.

For example, it is handling two huge matters for Lithuania against Gazprom (including one about the right to unbundle energy networks), while so many Egyptian matters are under way the firm is considering putting someone into Cairo full-time (hence the reference to a new office). The IP and Latin American practices are also pulling strongly.

Track record

The firm’s reputation as a miracle worker is well deserved – as all the above has probably made clear.

Those aren’t the only examples, though. In 2004 Gaillard and his team impressively reversed a loss in an investment case (Malaysian Historical Salvors) run, previously, by a different firm.

There there’s Yukos, where – against what some saw as the odds – they managed to persuade the tribunal that Russia is bound by a treaty it had never actually ratified. The final result in that case is expected in 2014.

More recently, the team won US$2.16 billion for Dow Chemical in a dispute over a chemicals joint venture, against a Kuwaiti state-owned petrochemicals company (with King & Spalding as co-counsel). The dispute was recently profiled in American Lawyer (“The Revenge of the Jilted Groom”).

This past year, as well as settling a monumental dispute in Brazil about ownership of one of the country’s largest retailers, it won costs for Lithania in one of its disputes with Gazprom (Gazprom withdrew its claim) and obtained full costs (and a dismissal) for a European utilities firm in a row with an African state.

As this book went to press, news also broke of a significant victory for a Swedish client, Viorel Micula, in a long-running ICSID claim against Romania. A tribunal found the state liable under a treaty for withdrawing economic incentives and ordered it to pay US$250 million in damages and interest to Micula and his brother Ioan (represented by King & Spalding). The eight-year-marathon case had also seen the intervention of the European Commission. Freshfields acted for the state.

Recent events

The big news in 2012 was the shock departure of Philippe Pinsolle for Quinn Emanuel Urquhart & Sullivan's arbitration project. At the time, we wrote that it was “is unclear what the full impact of that will be”. That’s probably still the case, although so far there are no signs of anything terrible occurring.

2013 has seen more shaking up and moving around. In Germany, a restructuring by the firm of its German offices, led to the departure of two international arbitration names at partner level: Markus Rieder and Richard Kriendler (a GAR editorial board member). They joined Latham & Watkins and Cleary Gottlieb Steen & Hamilton, respectively.

Meanwhile, newly promoted partner Alex Bevan moved to Abu Dhabi, where he will focus on construction and projects disputes; while Mark McNeill, who leads the IP sub-group, moved to London from Paris.

And it was in Paris where Maude Lebois was promoted to counsel and Corralie Darrigade to partner.

For Emmanuel Gaillard, the year included debating the “philosophy” of arbitration and its relevance to daily work at GAR Live Hong Kong – one of the best debates of our year – and winning (at least the public vote). He was also profiled in Vanity Fair as one of the world’s 100 most influential French people. Gaillard was the only practising lawyer in the list, which was topped by Daft Punk, a pop act.

Shearman & Sterling is a U.S. firm comprising approximately 850 lawyers in 18 offices around the world.

Shearman & Sterling has represented companies, States and State-owned companies in international arbitrations for over 40 years.

Our multinational multi-cultural international arbitration team, led by Emmanuel Gaillard, includes over 85 lawyers fully dedicated to international arbitration.

We appear as Counsel in investment, energy, construction and general commercial disputes, as well as disputes arising from corporate transactions.

 

Contacts

Emmanuel Gaillard[email protected]

Yas Banifatemi[email protected]

Alexander Bevan[email protected]

Jonathan Greenblatt[email protected]

Richard Kelly[email protected]

Fernando Mantilla-Serrano[email protected]

Mark McNeill[email protected]

Christopher M. Ryan[email protected]

Henry Weisburg[email protected]

Todd Wetmore[email protected]

 

www.shearman.com

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