Pursuing the first investment treaty claim against Iraq
|People in Future Leaders||1|
|Pending cases as counsel||28|
|Value of pending counsel work||US$13 billion|
|Third-party funded cases||0|
|Current arbitrator appointments||1 (1 as chair or sole)|
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It is rare for an international firm to earn the largest part of its revenue from court cases, but Kirkland & Ellis does just that, helped by some huge instructions that include defending BP in the multi-district litigation over the Deepwater Horizon oil spill. The size of the firm’s litigation practice has tended to overshadow its name for international arbitration, but Kirkland & Ellis does have a serious practice in this area, working mainly from London and, more recently, the US.
The firm started to build that capability in 2005 with the hire of partners Christopher Colbridge and Rajinder Bassi from Shearman & Sterling, where Colbridge was head of the London arbitration group. Both their careers began at Clifford Chance. Under their stewardship, the group has grown through a mix of internal promotions and strategic hires.
Colbridge now heads the international arbitration group from London. The US side of the practice was strengthened in 2016 by the hires of partners Javier Rubinstein (formerly of PwC and Mayer Brown) in Chicago, and Lauren Friedman and Lucila Hemmingsen in New York. The trio had been active on the firm’s investor-state work. However, all three left in 2020 to join King & Spalding.
Partner Kelly Naphtali in Hong Kong leads the firm’s work on Asia-related disputes.
London remains the anchor of the practice, but it also has capability in Hong Kong. There are litigation partners with arbitration experience in Los Angeles and Washington, DC.
Who uses it?
Big names include Boeing, BP America, Oleg Deripaska’s En+ Group, General Motors, General American Transport, Goldman Sachs, Orascom Telecom, PwC, Samsung and Egyptian telecoms magnate Naguib Sawiris. It counts Chinese insurer Ping An and Kuwaiti logistics firm Agility among its ICSID clients. The firm has also represented chemicals companies Dow and Innospec.
In 2014, Kirkland & Ellis oversaw an amicable settlement of a US$48 billion LCIA dispute between shareholders in Russian aluminium company Rusal, one of the largest Russian disputes to be heard in London. The firm acted as counsel to Rusal’s controlling shareholder, Jersey holding company En+ Group, which was a respondent in the case.
The firm successfully acted for Boeing in a dispute with two Russian and Ukrainian state-owned entities concerning a joint venture for a satellite launch system. The firm secured awards and judgments worth US$530 million in favour of the client, following an UNCITRAL arbitration seated in Sweden and various actions in the Swedish, Russian, English and US courts.
Colbridge led a team that won a multimillion-dollar award for the UK’s ICS Inspection and Control Services in an ICC claim against Kenya. The win was backed up by a victory at the enforcement stage in the English High Court, including a freezing order on Kenyan assets that secured a full settlement of the claims. ICS’s parent company, Agility, has retained the firm in several other matters, including AAA proceedings against military contractor Dyncorp that saw an award in the client’s favour.
Partner Rajinder Bassi managed to help an automotive client knock out 95% of a €250 million UNCITRAL claim (winning most of her costs too). Relations between the two sides remained sufficiently amicable for them to go on doing business afterwards.
The firm has also achieved a number of favourable settlements, including for the Monier Group in two ICC arbitrations with the Lafarge Group. In 2015, it secured a US$78 million settlement for ExxonMobil in a dispute with an engineering company over the flawed design of an oil drilling platform off Sakhalin Island in eastern Russia. It also helped the UN Relief Works Agency for Palestine Refugees in the Near East (UNRWA) settle a dispute over a delayed infrastructure project in the Gaza Strip.
On the investment treaty side, Kirkland & Ellis continues to co-counsel Agility in the first known treaty claim against Iraq. In 2019, an ICSID tribunal issued a decision reportedly declining to hear Agility’s main claim but upholding jurisdiction over two residual alleged breaches.
The firm is also acting for Agility subsidiary ICS in a resubmitted UNCITRAL claim against Argentina concerning a contract for customs inspection services. The firm obtained a jurisdictional award in favour of the client in 2019 and the dispute has moved onto the merits phase.
In the commercial arbitration realm, it successfully defended a Canadian developer of drones from a US$20 million ICC claim filed by a US supplier of tactical military radio equipment. It is now defending the award in the California courts.
The firm, acting as co-counsel in an antitrust dispute, also helped a local healthcare product distributor obtain a favourable decision from the US Supreme Court in support of an arbitration. In a decision written by Justice Brett Kavanaugh, the court unanimously held that courts cannot override a contract delegating the question of arbitrability to an arbitrator.
It was recently instructed by a Delaware holding company to help resist enforcement of a US$59 million ICC award arising from a dispute over a luxury hotel in Morocco.
Chiraag Shah, African disputes specialist and partner in the firm’s London office, left the firm to join Morrison & Foerster.
Oded Friedmann, legal counsel at shopping centre operator Atrium, says Kirkland provides “detail-oriented” advice while always keeping the big picture in mind. “We needed legal advisers with proven international experience in a number of fields, which we found at Kirkland.”
Naguib Sawiris, executive chairman of telecoms company Orascom TMT, highlights the “commercial sense” of the lead partners who have helped him and his company in several matters. He says Rajinder Bassi and Christopher Colbridge were “more in command” than any other lawyers he has encountered.
Dispute over newspaper headquarters to play out in Milan
04 December 2018
The media group behind Italian newspaper Corriere della Sera has brought an arbitration against US private equity group Blackstone as it seeks to reverse the €120 million purchase of its headquarters in central Milan in 2013 – bringing together the name partners of several major Italian firms as counsel.
The arbitration came to light after Blackstone filed a complaint in the Supreme Court of the State of New York on 20 November revealing details of the case, which it alleges is a “spurious, malicious and extortionate” attempt by RCS Media to halt the onward sale of the properties to Allianz Real Estate. RCS subsequently put out a press release confirming that the arbitration is underway.
GAR understands that RCS Media filed the arbitration claim on 9 November under the rules of the Milan Chamber of Arbitration. The group has instructed Sergio Erede, the founder of prestigious Milan-based firm BonelliErede, to represent it, along with Laura Salvaneschi of the same firm.
In 2013, RCS conducted a financial restructuring which involved selling 14 of its magazines, signing a €600 million loan agreement with several banks and completing “a rights offering” for €410 million.
As part of the restructuring, Blackstone purchased RCS’s headquarters in three interconnected buildings on Via San Marco, Via Solferino and Via Balzan in central Milan.
In its New York court filing, Blackstone alleges that the dispute should not be subject to arbitration as the arbitration clauses are included in the same sale agreements that RCS now claims are invalid. It also states that a Milan arbitration is “inappropriate and insufficient” to address all of the claims in the dispute.
With the help of counsel from Kirkland & Ellis in New York, it is seeking at least US$500,000 damages for loss of opportunity to sell its interest in the properties, economic and reputational loss as well as legal fees.
The Kirkland & Ellis international arbitration team has extensive experience in international commercial and investor-state arbitrations across all key sectors of the global economy. We guide clients through every stage of their cross-border disputes, from crafting risk mitigation strategies, handling complex bet-the-company arbitrations, conducting successful settlement negotiations, enforcing and executing arbitral awards in courts around the world, as well as dealing with any collateral court litigation. We deal with arbitrations and other proceedings, whatever the place, language, governing law, or subject matter. Our practice is dynamic and commercially minded. The team adopts a holistic approach to dispute resolution that focuses on achieving our client’s commercial goals.
Our language capabilities, cultural diversity, and broad legal training enable us to better understand the dispute and all its nuances, allowing us to assess our client’s options and present the case in the most compelling way possible. We also regularly represent investors and states or state-entities in investor-state arbitrations conducted under the rules of ICSID and ad-hoc arbitrations governed by the UNCITRAL Rules.
To learn more, please visit us at kirkland.com.