Clifford Chance

Instructed for a US$6.5 billion claim against Malaysia’s scandal-ridden 1MDB

Clifford Chance was one of the law firms originating in a common law jurisdiction to take international arbitration seriously. In the mid 1980s, it decided to create a separate department at around the same time as Freshfields. (Rumour has it that partners at the two firms conspired over their projects so that neither looked like they were “moving first”.)

The new department was led by John Beechey, who went on to serve as president of the ICC International Court of Arbitration from 2009 to 2015. Over 15 years, the group became a major international arbitration brand – strong in London, New York and Paris. It also became something of a training ground for lawyers seeking to get a start in the field. But a tough financial crisis and the departure of Beechey and another key partner, Jason Fry, for the ICC left the group looking a little lean.

The reinvigorated group is now co-led by Audley Sheppard (who became a QC in 2015 and chair of the LCIA Board in 2017) and Fry, who rejoined the Paris office in 2012 after five years with the ICC. Fry’s deputy at the ICC, Simon Greenberg, also joined in Paris and was rapidly promoted to partner.

Other names to know in London are Rob Lambert, Alex Panayides, Marie Berard and Jessica Gladstone (who joined from Debevoise & Plimpton in 2015 and brings public international law experience). Ignacio Suárez Anzorena in Washington, DC, and Romesh Weeramantry in Hong Kong specialise in investment treaty arbitration.

Areas of group expertise include the Energy Charter Treaty and its relationship with EU law. It was one of the first firms to fight cases on this.

Network

Clifford Chance operates from 26 countries. For international arbitration, the most important offices are London, Paris, Hong Kong and Singapore, with other practitioners stationed in Amsterdam, Düsseldorf, Frankfurt, Munich, Madrid, Milan, Rome, Moscow, Dubai, Hong Kong, Perth and Sydney.

In Singapore, the firm formed an alliance with local boutique Cavanagh Law in 2012 and was one of the first international law firms to obtain approval to open an office in Seoul.

Who uses it?

The wider firm has a great name in banking and finance, leading to some exciting banking-related arbitrations involving institutions such as Crédit Agricole, Standard Chartered Bank and Standard Bank of South Africa.

Otherwise, it’s a pretty mixed bag. Clients include Shell, Total, Eni, E.ON, Sinopec, US defence contractor Raytheon Systems, Spanish infrastructure groups Abengoa and Abertis and the French Football Federation. The vice president of FIFA, former French football star Michel Platini, recently turned to the firm.

Clients in investment treaty work have included EDF (in a couple of ICSID cases against Argentina in which it replaced a US firm) and Italian power company Enel in a claim against El Salvador. It also acted for a development company in a case against Papua New Guinea.

A rare state client is São Tomé and Príncipe in a law-of-the-sea arbitration filed by Malta over the detention of an oil tanker in 2013 on smuggling charges.

Track record

In 2013, the team won a US$1.4 billion partial award for Shell and its consortium partners in an Abuja-seated arbitration against the Nigerian National Petroleum Corporation. A Nigerian court later enjoined the arbitration from continuing. Clifford Chance is now seeking to enforce the partial award in the courts of New York.

Also in 2013, the firm secured an award of over US$100 million for French bank BNP Paribas in its long-running dispute with Basic Element Group, owned by Russian oligarch Oleg Deripaska.

In 2014 it won a £224 million LCIA award against the UK government for US defence contractor Raytheon Systems, arising from a dispute over a failed plan to implement an electronic border control system. The award was later overturned in the English courts but the UK settled the dispute with a payout of £150 million in 2015.

On the investment treaty side, it won US$45 million for Abengoa in an ICSID claim against Mexico and settled Enel Green Power’s dispute with El Salvador, securing a US$280 million payout for the claimant.

The German disputes team managed to set aside a €220 million award from the German Arbitration Institute (DIS) – one of the few times that a DIS award of that magnitude has been overturned.

Recent events

The firm helped its client Bawabet Al Kuwait – part of the business empire of Kuwait’s wealthy Al-Kharafi family – settle a US$400 million ICSID claim against Egypt on confidential terms in October 2016. The case concerned gas pricing and tax measures affecting a petrochemicals investment.

It also helped Malaysian media conglomerate Astro to enforce a US$130 million SIAC award against Indonesia’s Lippo Group in Hong Kong. An appeal court upheld its enforcement in December 2016 even though the bulk of the award has been declared unenforceable by the courts of Singapore, where the arbitration was seated.

But there were disappointing results in some investment treaty matters. An ICSID tribunal threw out a US$1.3 billion claim by its client Churchill Mining against Indonesia after concluding that licences underpinning the investment had likely been forged by Churchill’s local business partner. Clifford Chance had come late to the case, replacing Quinn Emanuel Urquhart & Sullivan.

In February 2017, the Paris Court of Appeal set aside a US$16.5 million award against Kyrgyzstan that Clifford Chance had obtained for its Latvian client Valeri Belokon three years earlier. The court held that the bank at the heart of the dispute had been established to facilitate money laundering – allegations that had failed to sway the arbitral tribunal chaired by Jan Paulsson.

Partner Thibaud d’Alès in Paris was unable to help former FIFA vice-president Michel Platini overturn his six-year ban from all football activities at the Court of Arbitration for Sport. 

There were some high-profile new instructions including from Abu Dhabi sovereign wealth fund IPIC in a US$6.5 billion LCIA claim against its embattled Malaysian counterpart 1MDB. The case concerns the alleged breach of a bailout deal in the wake of the scandal over missing 1MDB funds. Singapore’s OleoVest also turned to the firm for a new ICSID claim against Indonesia over a palm oil refinery.

At the start of 2017, Audley Sheppard QC took over as chair of the LCIA board after Canada’s J William Rowley QC completed his four-year term.

Former ICSID legal counsel Janet Whittaker joined the firm as a partner from Simpson Thacher & Bartlett in Washington, DC. In Hong Kong, legal consultant Kathryn Sanger left for Herbert Smith Freehills.

In Singapore, Kelvin Teo was promoted to counsel.

Client comment

The head of dispute resolution at a major international oil company that retained the firm for drilling-related disputes in Iraq says he sees it as an “extension” of his in-house team and praises the quality of its advice, which prioritises business sense and commercial objective over “esoteric legal argument”.

He describes partner Alex Panayides as “on the ball; whether he’s on a plane or in a meeting half way around the world – a response to your question is guaranteed.” The client also praises senior associate Paul Coates, whose “measured and calming approach” will make him “a worthy partner someday soon”.