Law360 01/02/2019
King & Spalding LLP's international arbitration group saw its most successful year ever in 2018, securing three victories in just two months for clients Chevron, Union Fenosa Gas and Reliance Industries at a total of $13.4 billion, winning it a place among Law360's Practice Groups of the Year.
These wins reflect a strategy of hiring lawyers with a reputation for international arbitration expertise who then build the King & Spalding group in cities around the world, according to practice co-head Ed Kehoe. He pointed to "big names" including John Savage, who opened the Singapore practice and is now back in London alongside Tom Sprange and six other arbitration partners, and Eric Schwartz and James Castello, who opened the Paris office that now houses eight arbitration partners.
"We put the right people on the cases, and we all get along and collaborate well, which helps us achieve these terrific results for the clients," Kehoe told Law360.
Recently, King & Spalding has hired two arbitration partners in Paris, Laurent Jaeger and Marc-Olivier Langlois, and several counsel within other offices, and it's also growing organically with the promotions of Viren Mascarenhas in New York and David Weiss in Houston, according to John Templeman, who joined the law firm's international arbitration group as counsel last year in the New York office.
The group got its start about 15 years ago when New York-based Kehoe, Houston-based partner Doak Bishop and others identified international arbitration as an area that was "seriously poised" for growth as a market, Kehoe said. Since then, he said, the arbitration group's practice has grown to include an eight-partner team in Houston led by Bishop and Craig Miles and a six-partner team in New York led by Kehoe, Harry Burnett and Caline Mouawad.
This is the third year in a row that Law360 has chosen King & Spalding as having an International Arbitration Practice Group of the Year, with the law firm racking up recognition for a banner year in 2016 and again in 2017.
In the landmark Chevron Corp. arbitration, King & Spalding achieved a $9.5 billion victory in August when a Permanent Court of Arbitration tribunal in The Hague held that Ecuador's courts violated an investment treaty when they fraudulently rendered a judgment against the company in 2011 over environmental claims of pollution in the Amazon that the country had previously settled and released, the law firm said.
The international tribunal concluded that the evidence pointed to corrupt conduct by an Ecuadorian judge and a denial of justice by the country in enforcing the fraudulent judgment. It ordered Ecuador to take immediate steps to remedy the matter, including rendering the $9.5 billion judgment unenforceable.
"The Chevron win was important for the company, not just because it was a $9.5 billion judgment, but because the company perceived it to just be a shakedown, frankly," Kehoe said. "We proved that the judgment was fraudulent, and the tribunal also ruled that Chevron had performed the environmental remediation that it had committed to perform."
Within a day of the Chevron award in August, King & Spalding achieved a major win for Union Fenosa Gas against Egypt when an International Centre for Settlement of Investment Disputes tribunal handed down a $2.2 billion award favoring the Spanish energy company — the largest award ever rendered by an ICSID tribunal, according to the law firm.
The tribunal's award came after Egypt broke its promise under its supply contract with UFG to deliver gas to a liquefied natural gas plant the company built in the port city of Damietta, according to the company.
"Egypt claimed that it was allowed to withhold the supply of LNG to Union Fenosa Gas because of force majeure — the Egyptian revolution and the financial crisis — but the tribunal agreed that these were not the reasons why Egypt failed to deliver the gas," Kehoe said. "The real reason was essentially Egypt's own policies, including that it provided subsidies locally, which put a strain on its own ability to pull gas out of the ground."
A $1.7 billion arbitration favoring Reliance Industries Inc., a petroleum conglomerate based in India, represented the third big award the law firm won for a client in the space of two months over the summer. A New Delhi-seated arbitration involving a production-sharing contract between Reliance and India for an offshore gas block in the Bay of Bengal led to a win for the company when the tribunal rejected India's $1.7 billion in claims and found that Reliance was entitled to produce all gas from its contract area.
King & Spalding's international arbitration group in 2018 handled 157 arbitration matters with a combined value in dispute of approximately $130 billion in 17 offices worldwide, according to Templeman.
"The practice keeps getting busier and going from strength to strength," Templeman said. "We now have over 110 specialist international arbitration practitioners. From a geographic perspective, King & Spalding has one of the largest and broadest arbitration groups in the world."
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