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The Yukos Legal Insurgency | Kluwer Arbitration Blog

March 24, 2010 By

When former Yukos shareholders promised “life-long litigation” for their assets, very few took it seriously. After all, until recently there have been no precedents of successful enforcement of arbitration awards against the Russian Federation. But this perception has been changing over the last few months, with Yukos shareholders advancing on at least three “legal fronts”. They achieved a series of victories in several domestic jurisdictions, the Permanent Court of International Arbitration and European Court of Human Rights. The Yukos legal struggle is not yet over but is far from where it began.

Until the mid 2000s, Yukos headed by Mikhail Khodorkovsky was Russia’s biggest oil company. Following a series of tax demands totalling $27bn, the company was declared insolvent and liquidated in 2007. Mikhail Khodorkovsky was imprisoned on charges of economic crimes. The government-controlled Rosneft received the lion’s share of Yukos assets and became the largest Russian oil company.

Earlier this month, the European Court of Human Rights (ECHR) started hearings on a Yukos complaint against the Russian government. Under the European Convention on Human Rights, which came into force in 1953, the rights of all legal entities are protected, including companies. Yukos claims that the Russian government’s actions were “unlawful, disproportionate, arbitrary and discriminatory, and amounted to disguised expropriation” of the company. The Strasbourg proceedings may take a while and if the Yukos shareholders are successful the Russian Federation will be under obligation to enforce the ECHR judgment.

As a signatory to the European Convention, Russia is bound by any decision of the ECHR. But persuading the Russian courts in Moscow would be much more difficult than persuading Western-educated judges in Strasbourg. If the Russian judiciary is asked to enforce the award of $98bn against the Russian Federation the result is predictable, given the high political sensitivity of the case. But in the light of other recent developments, Yukos’ aspirations to get compensation are not entirely hopeless.

via Kluwer Arbitration Blog » Blog Archive » The Yukos Legal Insurgency.

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Two Decades and Counting for Iran Case

February 16, 2010 By Leave a Comment

Lawsuits — particularly the big-dollar, complex corporate variety — often get compared to marathons. In the case of McKesson Corp.’s legal struggle with the government of Iran, however, that comparison doesn’t quite cut it.

On Jan. 22, the dispute, a fight over shares in an Iranian dairy, reached its 28th anniversary. It has wended its way through one international arbitration, two federal trials and five trips to the U.S. Court of Appeals for the D.C. Circuit. Now, it could soon be heading for its sixth.

A decade ago, a federal judge awarded McKesson $20 million for claims that Iran expropriated the company’s interest in the dairy and withheld its dividends. But during the past seven years, the case has hit a series of unexpected bumps, from changes in government policy to new rulings from the U.S. Supreme Court. The longer it’s gone on, the trickier its path has seemingly become.

San Francisco-based McKesson, a medical products distributor that ranked 15th on last year’;s Fortune 500, is represented in the case by a team from Morgan, Lewis & Bockius headed by partner Mark Bravin. The company and Bravin declined to comment. Iran’s lawyers from Washington, D.C.’s Berliner, Corcoran & Rowe, including partner Thomas Corcoran Jr. and associate Laina Lopez, also declined to comment.

via Law.com – Two Decades and Counting for Iran Case.

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Group Works to Reform International Arbitration Process

February 4, 2010 By Leave a Comment

The global recession has led to a spike in cross-border commercial disputes, which in turn has led to a rise in international arbitration.

But even as more companies turn to arbitration, many in-house lawyers complain that the process, at its worst, can be as costly and time-consuming as litigation. Now an advocacy organization called the Corporate Counsel International Arbitration Group is highlighting the problems in order to encourage reform.

Though CCIAG was launched three years ago, it’s just beginning to make its influence felt. The Paris-based group is composed of 50 large multinationals, including General Electric Company, Exxon Mobil Corp. and Siemens AG.

Roland Schroeder, a member of CCIAG’s steering committee, said that no one he knows who uses arbitration regularly is happy with it. A senior counsel in General Electric’s Connecticut headquarters, Schroeder coordinates GE’s international arbitration policy. And the dissatisfaction he hears from other in-house lawyers goes well beyond the common complaint that arbitrators resolve disputes by splitting the baby.

Schroeder said that in his own experience, one of every ten arbitrations may be excellent, and another one or two pretty good, but the rest are generally unsatisfactory. Some disappointing results may technically be “victories,” after which an arbitrator will demand: “How can you be unhappy? You won!” To which Schroeder counters: “Yeah, but it took six years. And it should have been two. Or six months.”

The problem with an interminable arbitration isn’t just that it costs more, Schroeder explained. A dispute may revolve around language also used in other contracts. And until the dispute is resolved, the business doesn’t know whether it needs to change the language.

Nevertheless, most major institutions that administer international arbitrations report that their caseloads in 2008 (the most recent year for which data is available) increased over 2007. The jump at the London Court of International Arbitration was 55 percent; at the China International Economic and Trade Arbitration Commission, 28 percent; and at the American Arbitration Association's International Centre for Dispute Resolution, 13 percent.

via Group Works to Reform International Arbitration Process.

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A Litigation Boutique Grows in Manhattan

January 4, 2010 By Leave a Comment

Regular readers of our Churn feature know there was no shortage of big firm litigators hanging out their own shingles last year. Our colleague Nate Raymond at sibling publication the New York Law Journal checked in with a group of five former Clifford Chance litigators who joined the boutique boom by setting up their own shop to handle international arbitration, reinsurance, and commercial litigation in Manhattan. Here's his profile of the boutique Chaffetz Lindsey.

Writes Raymond, “A recession may not seem like the perfect environment for starting a new law business, but with clients under pressure to manage costs and large firms favoring institutional clients in potential conflicts, dozens of boutiques have popped up offering sophisticated legal expertise at reasonable costs to clients large and small.”

via A Litigation Boutique Grows in Manhattan.

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The top 50 litigation practices

December 7, 2009 By Leave a Comment

One of the key findings from The Lawyer’s annual round-up of the top 50 global disputes practices is that international arbitration is one of the main battlegrounds for the world’s top litigation teams.

What is also clear is that London is at the centre of the action, a fact that has not gone unnoticed by the top international firms.

“London certainly has to be a place where you increase resources,” argues Gibson Dunn & Crutcher partner Larry Shore. “The way we look at the world, there’s certainly significant growth in international arbitration in London and New York, with arguably some levelling off in Paris.”

Shore’s perception is backed up by statistics from the ICC International Court of Arbitration, which shows London is gradually closing in on the French capital as the world’s favourite city for arbitration (see below).

Globally, however, there is much more than just arbitration keeping firms busy. This year’s top 50 litigation practices, based on the proportion of firms’ 2008 revenue derived from disputes, reflects increasing levels of activity across a wide range of areas.

The list is inevitably dominated by US firms. Strategically and historically litigation is not as important to UK firms, a fact underlined by the presence of only five UK-headquartered firms in the list.

That said, the current performance of some UK firms with strong countercyclical practices (think Stephenson Harwood, where revenue was up 8 per cent at the half year) might encourage firms on this side of the Atlantic to invest a little more in building disputes teams.

[continued] Focus: Fight Club: The top 50 litigation practices | Features | The Lawyer.

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Ecuador Sues Chevron in U.S. to Block Arbitration « Ecuadorreport’s Blog

December 6, 2009 By Leave a Comment

The Republic of Ecuador asked a U.S. judge to block Chevron Corp. from pursuing arbitration in a $27 billion environmental lawsuit against the oil producer.

Lawyers for Ecuador made the request in a lawsuit filed yesterday in federal court in Manhattan. The environmental suit, initially filed in New York in 1993, was later transferred to Ecuador. Secret recordings made by a Chevron contractor and an American businessman in May and June led Chevron to claim that the Ecuadorean judge overseeing the case was involved in a bribery scheme and planned to rule against the company.

Chevron, based in San Ramon, California, on Sept. 23 filed an international arbitration claim against the South American country’s government. Ecuador is seeking to block the claim with yesterday’s lawsuit, saying Chevron has tried to move the case to arbitration since getting it transferred to Ecuador in 2003.

via Ecuador Sues Chevron in U.S. to Block Arbitration « Ecuadorreport’s Blog.

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