Reed Smith

Kazakhstan’s long-time pick for investment disputes

The 2017 purchase of a team from the respected boutique Astigarraga Davis in Miami heralded Reed Smith’s arrival in the GAR 100 and brought it a new international arbitration practice head, José Astigarraga. Since then, the practice has been on something of a charge, adding additional talent around the world and seeking to harness existing elements (many already successful) into a coherent whole.

Founded in Pittsburgh in 1877, Reed Smith has enjoyed a name in energy and natural resources, life sciences, entertainment, shipping and financial services. While lawyers within its industry groups did international arbitration, there was no central practice in this area for many years.

The current practice began to take shape around 2007 when Reed Smith merged with UK firm Richards Butler, well known for disputes in London. A construction team from Pinsent Masons arrived soon after. During that period, London was the centre of the practice. Work tended to be led by Gautam Bhattacharyya, who has a focus on India and is now vice chair of the arbitration team; and Belinda Paisley, who specialises in investment treaty disputes and public international law.

Between 2008 and 2013, the practice extended to Hong Kong (when Reed Smith acquired Richards Butler’s local operations), Singapore, Houston and Astana – this last branching out in response to an increasing amount of work from the Kazakh government.

As global practice head, Astigarraga continues to be based in Miami. He is a renowned Latin American specialist, with an enviable personal network in the region. He is also a former vice president of the LCIA, a member of the ICC Commission on Arbitration and ADR, and an active member of the International Bar Association. He oversaw the task force responsible for the IBA guidelines on arbitrators’ conflicts of interest.

The past few years have seen further hires. In 2017, Peter Rosher, a renowned construction and energy specialist (he is the only non-French director of the French Arbitration Association) joined from Pinsent Masons in Paris. Soon after, more Pinsent Masons disputes lawyers joined in the Middle East – including Sachin Kerur (who was overall regional head) and Michelle Nelson (head of disputes).

Network

The key offices are now Miami, London, Paris, Singapore, Hong Kong, Dubai and Houston, with others in Frankfurt and New York.

The wider firm has 29 offices across the US, Europe, Asia and the Middle East. As of 2016, it also has a formal law alliance with Singaporean firm Resource Law.

Who uses it?

The firm has a policy of not naming clients, but those are known to include big players in the energy and natural resources, construction, pharmaceuticals and shipping industries.

Kazakhstan has used the practice for nearly two decades in investment treaty matters, some worth billions of dollars. Gabon has used the firm too. Bolivia’s state-owned telecoms company Entel and Tanzania’s national electricity company Tanesco have used members of the firm, as have General Electric and engineering and construction group SNC-Lavalin.

At their former practice, Astigarraga’s team regularly advised General Motors, GE Medical Systems, Citibank, and Ukrainian oligarchs Igor Kolomoisky and Gennadiy Bogolyubov.

Track record

Reed Smith has delivered a string of successes for Kazakhstan. In 2013, it knocked out a pair of ICSID claims each worth over US$1 billion, lodged by KT Asia and US power company AES.

In 2010, it helped Kazakhstan win complete dismissal of a US$200 million ICSID claim by Dutch companies Liman Caspian Oil and NCL. More recently, it knocked down a Turkish investor’s ICSID claim of US$150 million to an award of just US$23 million and a Canadian investor’s claim of US$2 billion to an award of less than US$14 million.

Further success came defending Tanzania’s Tanesco in two ICC arbitrations over a power project worth a combined US$150 million. One arbitration went entirely the client’s way, while another became the subject of Tanzanian and English litigation that eventually settled.

The former Astigarraga Davis team’s highlights reel includes enforcing an ICC award in favour of the US Federal Deposit Insurance Corporation against investment firm IIG Capital in the Florida courts; and winning various landmark US court decisions granting discovery in support of arbitral proceedings (in one case for a NAFTA claim).

Recent events

The team won a US$46 million award for a European engineering client in an ICC arbitration over a signalling system on a metro system in Asia; the arbitration included fraud allegations against the client, which were rejected.

It also won a partial ICC award for US pharma client BioCryst Pharmaceuticals in a dispute against an Australian counterparty over marketing of an anti-flu product in North America, Europe and the Asia-Pacific.

The firm has been acting for Hungerstation, the operator of a Saudi food delivery app, in a DIFC-LCIA arbitration between the client’s shareholders, although its instruction has been the subject of a challenge in the DIFC courts.

In Singapore, it is representing two subsidiaries of local engineering group Asiatic in a SIAC arbitration with Cambodia’s Phnom Penh Special Economic Zone, concerning electricity tariffs under a joint venture agreement.

It won an order from a New York court ordering German insurer HDI to pay client Phillips 66 nearly US$44 million to comply with a partial award. For client L1bero, it secured the dismissal of a civil contempt application by their joint venture partners in a Mexican taxi technology venture. 

In the Florida courts, Astigarraga is acting for the Panama Canal Authority as it defends a US$265 million ICC award from a set-aside application from a construction consortium.

The work for Kazakhstan continued. The firm knocked out a significant portion of Canadian miner Alhambra Resources’ claim, originally worth at least US$100 million. Both sides are now trying to partially annul the final award. Before the English courts, it also succeeded in annulling the quantum findings in a US$14 million award in favour of Toronto’s World Wide Minerals.

Astigarraga co-chaired an ICC taskforce dedicated improving the accuracy of fact witness testimony in international arbitration, which concluded that the interactions which commonly take place during the preparation and presentation of witness evidence can skew the memory of even honest witnesses.

The firm hired a new partner in its Singapore office, Timothy Cooke, from Stephenson Harwood, while New York partner Kyri Evagora moved to Singapore and was appointed managing partner for Asia.

In London it lost four partners, as Peter Cassidy retired, Shourav Lahiri joined Atkin Chambers and Vincent Rowan and Shareena Edmonds left for King & Spalding in London.

In Houston it hired new partner Nicolas Borda from Haynes & Boone, and in Miami partner Felipe Bererfrom Akerman.

Client comment

David Seton of gold mining company Besra, which retained the firm for an expropriation claim under the ASEAN trade agreement, says it has delivered “nothing short of excellence”. He calls the team “extremely professional, practical, and understanding of commercial reality”.

Seton says partner Chloe Carswell guided the process “with great skill and backed with obvious depth of experience and legal knowledge”; and associate Lucy Winnington-Ingram’s “complete grasp of detailed and complicated factual and legal issues instilled absolute confidence”.

Another client says counsel Ben Love possesses “exhaustive knowledge of arbitration against state actors” and is “very responsive”, adding that it is rare to find counsel with Love’s level of expertise in arbitrations involving sovereigns.