World Bank arbitrators asserted jurisdiction Feb. 24 over claims for more than $1 billion brought by Churchill Mining plc and its Australian affiliate alleging that the Republic of Indonesia expropriated Churchill’s coal mining concession in East Kutai, Indonesia.
In its rulings, the arbitrators rejected both of Indonesia’s arguments for dismissal. They held that the coal concession fell within the scope of Indonesia’s investment treaties with Britain and Australia because the requirement that the investment be “granted admission” was satisfied by Indonesia approving the initial investment, and did not require a showing of ongoing approval. In addition, they held that Indonesia had given advance consent to the claim under the terms of the British treaty, and had expressed consent under the Australian treaty by later issuing letters of approval to local subsidiaries of the claimant.
Churchill’s interim victory is among the early returns on Quinn Emanuel Urquhart & Sullivan’s own investment in arbitration. Laterals to join the group since 2012 include Stephen Jagusch and Anthony Sinclair from Allen & Overy in London, Philippe Pinsolle from Shearman & Sterling in Paris, David Orta from Arnold & Porter in Washington, D.C., John Rhie from Kim & Chang in Hong Kong and former New York Law School professor Tai-Heng Cheng in New York.
“Over the last two years we have quickly grown our arbitration practice, and leading practitioners in key jurisdictions have joined us,” said Cheng. “Already our docket is quite full, and we’ve had some early successes.”
The group has reported 47 pending cases to Global Arbitration Review, with a collective value of $20 billion. Among them are multiple World Bank filings by Jordan’s Ossama Al Sharif against Egypt arising out of a $2 billion liquid natural gas terminal deal, and a new claim in the American Arbitration Association for damages or rescission of Abu Dhabi Investment Authority’s ill-fated $7.5 billion stock purchase in Citigroup, Inc., dating to November 2007.
Citigroup has called the new Abu Dhabi claim “an assault” on the arbitrators’ dismissal of a prior claim related to the same investment. In a major victory for Citi, the U.S. Court of Appeals for the Second Circuit upheld the confirmation of that dismissal on Feb. 19. However, in the new claim, U.S. District Judge P. Kevin Castel held on Nov. 25 that the preclusive effect of Abu Dhabi’s initial defeat is an issue for the arbitrators. On Dec. 23, Citi filed an appeal to the Second Circuit.