Introduction<\/u><\/strong><\/p>\n Shearman & Sterling needs no introduction. It has acquired a reputation as a go-to advisor for complex and high-stakes disputes and has an impressive track record in both commercial and investment treaty arbitrations.<\/p>\n Following the firm’s extraordinary victory in 2014 against the Russian Federation on behalf of the majority shareholders of former Yukos Oil Company, the US$\u00a050\u00a0billion historic award<\/a>s rendered by a Tribunal comprising Yves Fortier<\/a> (Chair), Charles Poncet,<\/a> and Judge Stephen Schwebel<\/a>, speak volumes about the firm’s reputation in high-stakes international disputes. After the awards were set aside by The Hague District Court in 2016 on questions of jurisdiction, the Hague Court of Appeal overturned that judgment on appeal on February 18, 2020.<\/p>\n In commercial arbitration, the firm is known, among other things, for securing a record US$ 2.47 billion award<\/a> in a commercial arbitration for Dow Chemical against a Kuwaiti state-owned entity over a failed joint venture in 2012.<\/p>\n Earlier this year, the firm secured a victory for Algeria in Ortiz v. Algeria<\/em><\/a>, an ICSID case brought under the Spain-Algeria bilateral investment treaty. The Tribunal dismissed the US$ 46 million claims in their entirety.<\/p>\n More recently, in what is a significant development in the field of international arbitration, the firm secured a major victory for Algeria when an ICSID ad hoc<\/em> Committee<\/a> chaired by Judge Peter Tomka dismissed Orascom’s application to set aside an award<\/a> rendered in 2017 by a Tribunal chaired by Professor Gabrielle Kaufmann-Kohler<\/a>, which had found the investor\u2019s claim to be inadmissible on the ground, inter alia<\/em>, that it constituted an abuse of rights<\/a>. In a decision<\/a> dated September 17, 2020, the Committee refused to annul the Tribunal’s award and found no excess of powers, failure to state reasons, or breach of a fundamental rule of procedure<\/a>.<\/p>\n This month, Jus Mundi is pleased to bring light on the law firm and its team along with an interview with Shearman & Sterling’s practice group leaders, Emmanuel Gaillard<\/a> and Yas Banifatemi<\/a>.<\/p>\n Key facts of the case and legal rationale<\/u> in <\/u>Orascom TMT Investments v. Algeria<\/em><\/a><\/strong><\/p>\n Interview with Emmanuel Gaillard and Yas Banifatemi<\/u><\/strong><\/p>\n What do you think of the approach of the Arbitral Tribunal concerning parallel arbitral proceedings brought by<\/strong> different shareholders at different levels of an integrated corporate chain?<\/strong><\/p>\n The Tribunal tackled the problem squarely, by showing that, depending on the circumstances, parallel claims can be dismissed in their entirety even at the admissibility level. This was a particularly complex case, especially because the arbitral case law had, starting with Lauder<\/em><\/a>, gone down a path that allowed abusive conduct by focusing on each action and each treaty in isolation, without considering the broader factual and legal context involving the same parties and same economic interests. This is the first time a tribunal has effectively captured the entire context and viewed arbitration as a whole, rather than from the isolated viewpoint of each tribunal, notwithstanding that each tribunal is constituted on the basis of a distinct treaty and may have jurisdiction under that treaty.<\/p>\n We are also immensely pleased that the Committee confirmed the Tribunal\u2019s landmark award and stance on this issue. The Committee\u2019s decision is very well-reasoned, in particular with respect to the concept of admissibility. The Committee confirms that deriving rules of admissibility from principles of international law, the tribunal\u2019s inherent powers, and\/or the purpose of investment arbitration as a process constitutes a legitimate exercise of the tribunal\u2019s judicial function. This is a very welcome confirmation of the powers of investment tribunals and of their role in the development of investment law.<\/p>\n What impact do you think the Orascom case will have on the issue of \u201cabuse of process\u201d in investment arbitration?<\/strong><\/p>\n Recognizing abuse of process sends a very strong signal to the investment arbitration community and will no doubt contribute to reducing the growing number of instances of abuse in international arbitration. This is a very welcome development. Absent any recognition of the phenomenon of abuse of process and of legal tools to address situations of abuse, tribunals would be deprived of an effective means to tackle the growing instances of abuse in arbitration. The Orascom<\/em> award is bound to become a reference, not only in relation to abuse of process but also in its consideration of investment arbitration as a system.<\/p>\n Speaking of Africa, you have recently been engaged by the OHADA to develop and shape the Private International Law regime in the OHADA region with a Uniform Act on conflict of laws, conflicts of jurisdictions, and the circulation of judicial and extrajudicial documents. Could you tell us the meaning of this engagement for Shearman & Sterling?<\/strong><\/p>\n This opportunity is yet another feather in the cap of our leading Africa practice. Shearman & Sterling is working with a network of highly competent lawyers in various African countries to develop the most appropriate private international law regime that will replace local private international law rules currently applicable in those States. We are proud to bring our experience and expertise to this important project that aims to create a safer investment climate in the 17 OHADA countries.<\/p>\n Shearman & Sterling has the largest team in Paris and continues to branch out globally. What is the secret for the firm to maintain one of the prime choices for clients?<\/strong><\/p>\n Shearman & Sterling\u2019s international arbitration team was established in Paris in 1987. It was then one of the first specialist teams on the market. Demand for our services grew rapidly and exponentially and we expanded our team to have an additional presence in leading business centers and arbitration hubs such as New York, Washington DC, London, Frankfurt, Singapore, Abu Dhabi, Hong Kong, and Beijing. We thus have broad experience in disputes conducted in accordance with a large variety of rules. This blend of local and international experience, together with our unique track record and thought leadership, makes us the firm of choice for clients around the world.<\/p>\n Congratulations on the new partnership with the UK-based charity human rights at sea to develop an international arbitration-based system of redress for victims of human rights abuses at sea. What motivated the firm to engage in this initiative? How will this initiative change the current state of human rights at sea?<\/strong><\/p>\n Our principal motivation behind this initiative is our strong belief in the rule of law and our desire to promote its application using international arbitration and public international law, both of which feature among Shearman & Sterling\u2019s foremost areas of expertise.<\/p>\n The initiative itself, which we are calling \u201cHuman Rights at Sea Arbitration\u201d, is focused on providing victims of human rights abuses at sea with an effective remedy, which they are utterly lacking under the current legal regimes.\u00a0 Taking inspiration from the investor-State arbitration model, in which the rule of law has been strengthened by individual investors having access to a direct right of claim against the host State, the Human Rights at Sea Arbitration initiative rests on the idea that putting enforcement of human rights in the victim\u2019s hands \u2013 again, through a direct right of claim \u2013 will significantly improve victims\u2019 access to justice.<\/p>\n Can you tell us about the role of the \u201chuman rights at sea\u201d arbitral institution under the initiative? How are States\u2019 and companies\u2019 consent for arbitration obtained?<\/strong><\/p>\n The ultimate goal is to set up a standalone, institutional system of international arbitration that is readily accessible by victims of human rights abuses at sea.\u00a0 The initiative envisages a self-contained system much like ICSID\u2019s role in the context of the investor-State disputes, but which is specifically tailored to deal with the unique set of issues that human rights abuses at sea entail.\u00a0 These include accessibility, cost-effectiveness, and striking the right balance between confidentiality and transparency.<\/p>\n One of the biggest challenges, as you rightly note, will be how to secure the necessary participants\u2019 consent to arbitrate human rights claims raised by victims.\u00a0 This would include flag States and coastal States with jurisdiction over the victims and\/or abusers, as well as companies active in the maritime sphere.\u00a0 Innovative solutions, including ways to incentivize offers of consent \u2013 for example, by having ESG-minded banks offer preferential financing arrangements to consenting States and companies \u2013 are under development, as are draft model arbitration clauses and offers of consent.<\/p>\n<\/blockquote>\n How are the costs of arbitration managed to keep it accessible for victims?<\/strong><\/p>\n Accessibility would be a key feature of the self-contained, institutional system that we envisage \u2013 both in terms of cost and geographic accessibility (which itself can have cost implications).\u00a0 Among the innovative features, we are considering implementing to these ends are a mechanism providing for pro bono representation of victims (something akin to the public defender in some jurisdictions\u2019 criminal justice systems) and a set of procedures for the conduct of virtual or remote hearings.\u00a0 Regarding the latter, the COVID pandemic has provided us with a good deal of experience as to best practices and pitfalls to avoid.<\/p>\n What are the key challenges you see to enforce Human Rights at Sea awards, and what are the potential solutions?<\/strong><\/p>\n One of the big challenges that enforcement poses is the possibility that a human rights victim, once successful in an arbitration that was specifically tailored to the needs of the human rights at sea context, is left having to seek enforcement before a court.\u00a0 This would bring into play all of the accessibility and cost concerns (as well as others) that the Human Rights at Sea initiative seeks to address.\u00a0 It is also why we have in mind a self-contained system like ICSID, in which the need to seek recourse from a court or other body is minimized to the extent possible.<\/p>\n Do you foresee arbitral tribunals playing a more active role in Human Rights at Sea arbitrations, given the significant imbalance of power between the parties?<\/strong><\/p>\n This is precisely the goal we seek to accomplish with the Human Rights at Sea initiative.\u00a0 One does not need to look very far to see that the current system (if one can even call it that) is failing.\u00a0 Human rights abuses at sea seem to get worse and worse all the time and with no end in sight, so we are certain that something needs to change.<\/p>\n The idea of having arbitral tribunals involved in this way is, as I mentioned, inspired to a large extent by what we have seen in the context of the investor-State disputes.\u00a0 There, and even more so with human rights abuses at sea, we can see a tremendous imbalance between the parties.<\/p>\n The hope is that an institutional system dedicated to Human Rights at Sea Arbitration will help to level the playing field somewhat \u2013 among other ways, by giving both parties a say in their choice of the decisionmaker, increasing accessibility and minimizing costs in the ways mentioned and providing mechanisms for direct pro bono support to victims.<\/p>\n<\/blockquote>\n Presentation of the law firm<\/u><\/strong><\/p>\n Shearman & Sterling is one of the world’s premier international arbitration firms. The practice is one of the historic players in the field. The elite team has been repeatedly distinguished for its illustrious track record, the unsurpassed quality of its work and its contributions to the development of arbitration and investment law. It is instructed by companies, States and State-owned entities on many of the most sensitive commercial and investment disputes globally. It is known for acting on disputes that few firms can effectively tackle, either because of the legal or factual complexity of the case, the magnitude of the dispute, or the strategic interests at stake. The team handles multibillion-dollar disputes in virtually all industry sectors, with a focus on investment, energy, construction, and M&A disputes. Recognized globally for its strategic perspective and considerable expertise in arbitration processes and comparative law, Shearman & Sterling’s International Arbitration Practice is ranked band 1 global-wide, Europe-wide, Africa-wide, and in France in the 2020 edition of Chambers Global<\/em>.<\/p>\n Emmanuel Gaillard<\/a> and Yas Banifatemi<\/a> jointly head the firm’s global international arbitration practice. The team includes approximately 100 lawyers.<\/p>\n Key clients of Shearman & Sterling include a number of sovereign States<\/strong>, including China, Algeria, Egypt, Lithuania, Ukraine, Georgia, Colombia; State-owned entities<\/strong>, such as Sonatrach, EGAS, Sonangol, ADNOC, OCP, PetroVietnam, Sinopec or Ecopetrol; and numerous companies in France (e.g., EDF, Thales, Bollor\u00e9, Lacoste, Sportfive EMEA) and elsewhere (e.g., The Dow Chemical Company, Obrascon Huarte Lain S.A., Eldorado Gold, Hyundai Engineering).<\/p>\n In addition to its work on behalf of Algeria, the firm is acting for Egypt in a US$2 billion claim over a petrochemical plant before a Tribunal under the PCA. It has acted on behalf of the Egyptian Republic and its entities in over 15 major international disputes.<\/p>\n On the company side, Shearman & Sterling recently helped long-standing client Turkish construction company Enka obtain the full satisfaction of a US$47 million ICC award<\/a> against Gabon in relation to the construction of the presidential palace.<\/p>\n The firm has been acting as co-counsel for Alpiq as it seeks to revive a US$450 million Energy Charter Treaty claim<\/a> against Romania.<\/p>\n It also represents Togo Terminal in an ICSID claim<\/a> against Togo.<\/p>\n Table of arbitration cases involving Shearman & Sterling \u00a0(Recent victories\/pending cases)*<\/u><\/strong><\/p>\n Shearman & Sterling is currently acting as counsel in multiple ICSID cases, notably representing Algeria, Panama, Georgia, and Egypt, and others. The Abu Dhabi office has been defending OHL in an ICC case brought by a Qatari foundation.<\/p>\n To see all types of cases (investor-state, inter-state, commercial arbitration) involving Shearman & Sterling available on Jus Mundi, please click here<\/a>.<\/p>\n Shearman & Sterling earns its spot to be the ATOM for its extensive track-record of arbitration cases & clients. We selected a few recent victories and ongoing cases in the table below.<\/p>\n (Note*<\/strong>: This table is not exhaustive and only includes the most famous cases)<\/p>\n [table id=13 \/]<\/p>\n Spotlight: The Orascom <\/em>case team<\/u><\/strong><\/p>\n Emmanuel Gaillard<\/strong><\/a><\/p>\n Founder of Shearman & Sterling’s 100-lawyer International Arbitration practice, Professor Gaillard is the Firm’s Global Head of Disputes and Global Head of the International Arbitration Practice Group. He has advised and represented corporations, States, and State-owned entities in international arbitration cases for over 30 years. In addition to the USD 50 billion award<\/a> secured for the former Yukos Oil Company’s majority shareholders, he acted on the ICC arbitration brought by The Dow Chemical against Petrochemical Industries, which led to a USD 2.47 billion award<\/a> in favor of Dow.<\/p>\n Yas Banifatemi<\/strong><\/a><\/p>\n Partner and co-Head of Sherman & Sterling’s International Arbitration practice, Dr. Banifatemi also serves as Public International Law Team Leader and Energy Industry Leader. She advises and represents States, State-owned entities, and companies on both public international law and international arbitration issues. She acts as both counsel and arbitrator in international arbitrations conducted under a variety of arbitration rules, with particular focus on investment protection, oil & gas, and general commercial matters.<\/p>\n Benjamin Siino<\/strong><\/a><\/p>\n Partner in the International Arbitration and Public International Law practices, Benjamin Siino focuses on the energy, investment, and general commercial arbitrations, as well as arbitrations related to Africa. He also acts as counsel in litigation proceedings before French courts, with a focus on proceedings to seek the recognition and enforcement of arbitral awards and foreign judgments.<\/p>\n Pierre Viguier<\/strong><\/a><\/p>\n Associate in the International Arbitration practice, Pierre Viguier\u2019s experience includes ad hoc and institutional arbitrations with a focus on investment and general commercial disputes. He also focuses on sports arbitration.<\/p>\n Teresa Vega<\/strong><\/a><\/p>\n Associate in the International Arbitration practice, Teresa Vega has worked on international arbitration proceedings conducted in accordance with ICC and ICSID arbitration rules, as well as arbitration-related proceedings before national courts.<\/p>\n Peter Petrov<\/strong><\/a><\/p>\n Associate in the International Arbitration practice, Peter Petrov\u2019s experience includes ad hoc and institutional arbitration proceedings, with a focus on energy and investment disputes.<\/p>\n The team involved in the Human Rights at Sea initiative<\/u><\/strong><\/p>\n Yas Banifatemi<\/strong><\/a><\/p>\n See above.<\/p>\n Alexander Marcopoulos<\/strong><\/a><\/p>\n Counsel in the International Arbitration practice, Alexander represents companies and States in commercial, investor\/State, and maritime arbitrations carried out under the auspices of a variety of institutional rules. His practice focuses particularly on disputes in the energy and maritime sectors.<\/p>\n Elise Edson<\/strong><\/a><\/p>\n Counsel in the International Arbitration practice, Elise represents States and companies in international arbitrations under the auspices of the ICC, SCC, LCIA, and ICSID, as well as in proceedings conducted in accordance with the UNCITRAL Rules, with a focus on investment disputes as well as arbitrations related to the energy sector in Eastern Europe.<\/p>\n Sandrina Antohi<\/strong><\/a><\/p>\n Associate in the International Arbitration practice based in Paris, Sandrina’s experience includes international commercial and investment arbitrations conducted under the ICSID, ICC, HKIAC, and UNCITRAL Rules, concerning energy, construction, and commercial disputes.<\/p>\n\n
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