DLA Piper

Introduction

DLA Piper is a global law firm that provides its clients with legal and business solutions locally, regionally, and internationally using integrated teams of lawyers with experience that spans a broad range of disciplines. The firm is widely recognized for its pioneering approach and extensive geographic reach, enabling it to safeguard the rights and interests of its clients.

The firm’s international arbitration practice handles complex cross-border disputes in various jurisdictions under a wide range of arbitral institutions. DLA Piper’s team is highlighted for its outstanding offering in key areas of activity including banking, telecoms, energy and natural resources, construction, and tax-related cases. The team is known for its investor-State arbitration proceedings, acting for both sovereign States and private investors. Likewise, the team assists with commercial arbitrations and the coordination of enforcement proceedings.

This month, Jus Mundi is pleased to bring light to DLA Piper’s International Arbitration team along with an interview with its Global Co-Chair Michael Ostrove.

Recent victory case analysis: Mazen Al Ramahi v. Hungary

In an award issued on April 19, 2021, an ICSID tribunal dismissed all claims on the merit in Mazen Al Ramahi v. Hungary. The award is yet to be made public.

Facts

• The dispute related to Mr. Al Ramahi’s investment in several hotels in Budapest, as well as liquidation proceedings initiated against ZeinaHotel, the company through which he owns Continental Hotel Zara.
• Ramahi opened Continental Hotel Zara in 2010.
• In 2014, a supplier filed liquidation proceedings against ZeinaHotel.
• ZeinaHotel had been fined for trademark infringement, yet the fine was overturned in 2014.
• After ZeinaHotel reached an agreement with its creditors, the liquidation proceedings ended in 2016.
• Ramahi filed his ICSID claim in 2017, relying on the Hungary – Jordan BIT.

Tribunal constitution

• Ian Binnie  President
• Hamid G. Gharavi  Appointed by the investor
• Brigitte Stern  Appointed by the State

Tribunal’s decision

The tribunal upheld jurisdiction over the dispute but dismissed all of Mr. Ramahi’s claims on the merits. It also awarded Hungary a portion of its costs.

Legal rationale

The Award is currently subject to a confidentiality order, so the reasoning behind the decision is unfortunately not available.

Interview with Michael Ostrove (Global Co-Chair of DLA Piper’s International Arbitration group)

1. Congratulations on the Mazen Al Ramahi v. Hungary case! What does this significant victory mean for the firm?

We are delighted with this result for Hungary. We are Hungary’s “go-to” law firm for public international law advice, and currently we are advising on six disputes for the State. We have a truly excellent disputes team in Budapest who is working in conjunction with other PIL specialists based in Paris, Madrid, and New York. A case like this absolutely hits DLA Piper’s sweet spot insofar as we are able to advise on complex local law issues (in this case parallel court litigation and bankruptcy proceedings) in conjunction with providing the highest quality investment law advice.

This latest success is a testament to DLA Piper’s ability to handle complex investment treaty arbitrations and secure great results for our State clients. This victory follows other significant wins in recent years for Kenya, Timor Leste, Oman, and Moldova, among others.

2. You also recently achieved a win for the investor in the De Sutter and others v. Madagascar (II) What important implications does this case have on ISDS today?

The De Sutter case is one of the relatively rare instances of a tribunal finding a violation of the full protection and security obligation. The award provides a detailed analysis of this standard, commonly found in BITs. In this case, a mob led by disgruntled workers broke into the secure compound housing the claimants’ garment factory and other businesses and proceeded to plunder and burn the factory while the Malagasy security forces stood by and watched. The tribunal held that the lack of intervention of the Malagasy forces amounted to a breach of the full protection and security standard.

As Madagascar raised approximately 40 objections to jurisdiction and admissibility, the award also contains interesting analysis on a wide array of issues, including some important analysis on the applicable law relevant to the determination of nationality under the ICSID Convention.

3. What are the key challenges you see on intellectual property issues in investor-State dispute settlement?

Intellectual property issues arise in a wide array of investor-State cases. Interestingly, they even arise in cases relating to mining projects. An investor may claim that geological studies and the like form part of the IP of the project. However, such documents are commonly required to be submitted to the State as part of the licensing application process. The question then arises whether there is still intellectual property in such studies or whether any rights are lost. Of course, this question will be very fact-dependent. This question arose in the Cortec v. Kenya case which my colleagues handled, and which resulted in an outright victory for our client, Kenya. In the annulment decision, the Committee was not persuaded by the investor’s arguments that it retained any IP in documents “freely given” to the State.

4. What are your thoughts on the global transparency of arbitration outcomes where parties consent to publication or redacted publication?

Moves to promote greater transparency in investor-State disputes, such as the Mauritius Convention and the UNCITRAL Transparency Rules, have had a very positive impact in the field. DLA Piper has been fortunate to participate in some of the landmark cases in that regard, such as the BSG Resources v. Guinea matter, which included one of the first live-streamed arbitration ICSID hearings. On the back of the investor-State trend, we have seen various initiatives in the commercial arbitration world with similar aims. Here I am thinking of the recent amendment to the ICC Rules making publication of awards and procedural order the default position, subject of course to any objections raised by the parties.

5. As one of the world’s largest law firms, DLA Piper has developed sizeable arbitration teams worldwide. Could you share with us how the expansion generates cross-border disputes work for the firm?

DLA Piper has seen phenomenal growth in its arbitration team in recent years, both in terms of internal promotions and lateral hires. One consistent piece of feedback we receive from clients is that they appreciate having lawyers on the ground in the relevant jurisdiction to the dispute who work hand-in-hand with other team members across the globe. We invest a lot of time in understanding where our clients have operations so that we can offer a commercially driven solution when a dispute arises. Our wide global footprint is a significant advantage for developing work as it gives us much better visibility of potential flashpoints which could give rise to disputes.

6. As a significant part of your practice is focused on Africa, in your view, what are the key developments in the investment arbitration scene with the African continent today?

African practitioners and governments are really at the forefront of some of the most innovative developments in investment arbitration in recent years. As with our work in other regions of the world, it is crucial for us to be working with local practitioners on our Africa-related cases. The increasing experience and expertise of these lawyers are going to change the face of arbitration not only on the Continent but globally. Governments are not being left out. The 2016 Nigeria-Morocco BIT was one of the first in the new generation of BITs which sought to ensure that social and environmental concerns relating to foreign investment were addressed expressly.

One of the most eagerly awaited developments is the Investment Protocol of the African Continental Free Trade Agreement. Having created a single market of 1.2 billion people and a combined GDP of more than USD 2.2 trillion, it remains to be seen what investment protections will be granted to intra-African investors and whether investment arbitration will be embraced as the preferred dispute resolution mechanism.

7. You have particular experience with the OHADA arbitration framework. Could you tell our readers more about your experience? What are the important challenges when arbitrating under the framework?

Especially following the most recent reforms to the OHADA Uniform Arbitration Act, the legal framework itself includes several innovations that make it very attractive. An example is simplified enforceability throughout the OHADA Zone. Moreover, the CCJA is developing a solid jurisprudence in arbitration and demonstrating that its judges master the field. OHADA arbitration does remain a work in progress, however, and there have been times when the CCJA could act more quickly and aptly to correct errors by various State courts. The biggest challenge within OHADA arbitration is thus dealing with local courts that are sometimes unfamiliar with arbitration, under-resourced, and unable to handle delaying or other disruptive tactics. But this is a challenge that other parts of the world have faced and overcome in the past, and given the number of devoted and talented practitioners in the field, there is reason to be optimistic that OHADA arbitration will continue to develop and thrive.

Presentation of the firm

DLA Piper’s international arbitration practice handles a large amount of investment and commercial arbitration, and is highly ranked by Chambers, Legal 500 and Global Arbitration Review. The team has extensive experience handling arbitration disputes involving sovereign States, notably acting for, among others, Hungary, Guinea, Kenya, Lithuania, Oman, and Moldova. The global practice group deals with a broad range of issues, including corporate and contract law and different industry sectors, including telecoms and construction. In addition to investment arbitration, the team offers dispute resolution and advisory services to government and corporate clients facing public international law issues, such as boundary disputes, law of the sea, treaty negotiations, cross-border resource development, sanctions, and human rights law.

The practice is co-headed by Michael Ostrove and Kate Brown de Vejar.

Key clients

For sovereign States: The Republic of Hungary, Democratic Republic of Congo, East Timor, Ghana, Guinea, Kenya, Lithuania, Kyrgyzstan, Moldova, Oman, and Zambia.

For private clients: Gazprom, Sinopec, Chevron, Unión Fenosa Gas, Technip, Turkcell, DS2 and the De Sutter brothers, Atlantique Telecom SA (Etisalat), Compass Group, and Vodacom.

For international organizations: INTERPOL, UNHCR.

Track-record highlights

• In 2020, the firm helped Zambia prevail in an LCIA arbitration against a US company, Lodestar International, under a housing facility construction contract.
• In 2019, the Republic of Guinea reached a tentative settlement involving the withdrawal of all claims by BSGR in a multi-billion dollar ICSID arbitration relating to the Simandou iron ore mine. The firm represented Guinea after advising it on the international investigation of corruption allegations since 2011. The ICSID tribunal suspended the case pending the finalization of the settlement.
• In 2018, the firm defended Kenya against an ICSID claim brought by subsidiaries of a Canadian mining company. The tribunal dismissed the claims by ruling that the license was issued in violation of local laws to protect the environment.
• In 2018, the firm helped East Timor sign a treaty with Australia to end their maritime boundary dispute after a conciliation proceeding based on the UNCLOS under the auspices of the PCA.
• In 2017, the firm also defended East Timor in an ICSID claim brought by an Australian energy company Lighthouse Corporation and its Seychelles affiliate. The tribunal declined jurisdiction by ruling that the agreement between the parties did not incorporate an arbitration clause.
• In 2015, the firm helped Oman defeat a US$273 million ICSID claim brought by Adel A Hamadi Al Tamimi under the Oman-US FTA over a limestone concession.
• In 2013, the firm helped Moldova defeat a €40 million ICSID claim brought by Franck Charles Arif under the France-Moldova BIT relating to duty-free concessions.
• In 2012, the firm helped the city of St Petersburg defeat a US$460 million UNCITRAL claim and defended the award in the Swedish courts in 2017.

Table of public international law cases involving DLA Piper

DLA Piper is currently acting as counsel in multiple investor-State and commercial arbitration cases, notably representing the Republic of Hungary in ICSID annulment proceedings.

DLA Piper earns its spot to be the ATOM for its extensive track record of arbitration cases and clients. We selected a few recent victories and ongoing cases of DLA Piper in the table below.

To see all types of cases (investor-State, inter-State, and commercial arbitration) involving DLA Piper available on Jus Mundi, please click here.

[table id=23 /]

(Note*: This table is not exhaustive.)

Spotlight – the Mazen Al Ramahi v. Hungary case team

• Michael Ostrove (Partner)

Michael Ostrove co-chairs the firm’s Global International Arbitration group. He has over 25 years of experience handling investor-State arbitration, international commercial arbitration, as well as litigation related to enforcement and annulment of arbitral awards. Michael has extensive experience representing both claimants and respondents in arbitral proceedings under all the major arbitration rules, involving various sectors, including mining, oil, and gas (upstream and downstream), pharmaceuticals, agriculture, telecoms, and distribution.

• Théobald Naud (Partner)

Théobald Naud concentrates his practice on investment arbitration and international commercial arbitration. He also represents clients before French courts to challenge or enforce international arbitration awards and arbitration clauses. He has experience in arbitration proceedings administered by ICSID, the ICC, and the PCA, as well as ad hoc arbitrations pursuant to the UNCITRAL Arbitration Rules.

• András Nemescsói (Partner)

András Nemescsói has significant experience in both regulatory and administrative matters focusing on dispute resolution. He is experienced in BIT-based investment arbitration, with a focus on financial regulatory issues, such as stock exchange, clearing and settlement, banking and investment services.

• Dávid Kőhegyi (Local Partner)

Dávid Kőhegyi is experienced in regulatory investigations and international dispute settlement, particularly in investor-State arbitration. His practice centers on representing clients in solving regulatory problems, dealing with high-profile investigations, and resolving international disputes.

• Clémentine Emery (Associate)

Clémentine Emery represents clients in international arbitration and public international law matters, with a focus on international investment law. She advises sovereign States, private companies, and international organizations in arbitration procedures under the aegis of the ICSID, the PCA, and the ICC.

• Zoltán Fabók (Special Counsel)

Zoltán Fabók has vast experience in cross-border and domestic insolvency law, complex international and domestic litigation and arbitration. His practice focuses on advising government agencies, international organizations, private companies, and global market players in their respective industries in a wide range of industries, including pharmaceutical, the energy sector, real estate, finance and banking, engineering, and film production.

• Zsofia Deli (Associate)

Zsófia Deli is specialized in representing clients in investment arbitration proceedings administered by ICSID and the ICC. She also has advised clients in international commercial arbitration, investigations, and human rights proceedings before the ECtHR.

• Kate Mala (Junior Associate)

Kate Mala has been involved in multi-billion international arbitrations in the oil & gas, renewable energy, IT & gambling sectors before the LCIA. She also has been working on several complex arbitrations representing the clients before ICSID.

For more information on DLA Piper’s international arbitration practice, click here.

Congratulations to the team again, and Jus Mundi wishes them good luck for the future!