Boies Schiller Flexner has urged a Manhattan state court to uphold an arbitration ruling that awarded the firm more than $640,000 in a dispute over legal fees with a former client, the Chinese real estate tycoon Miles Kwok.
Boies Schiller filed a petition in New York Supreme Court on Nov. 21 looking to confirm a decision by New York-based JAMS arbitrator Frank Maas. On Oct. 6, Maas ordered Kwok, who is also known as Guo Wengui, to pay just under $627,000 in fees and interest to Boies Schiller, which had represented the Chinese businessman between May 2017 and December 2017 in five separate litigation matters. Maas also cleared Boies Schiller to apply an additional $500,000—the amount Kwok put up as a retainer when he hired the firm—to cover unpaid fees.
Boies Schiller argued in its Nov. 21 petition that the arbitrator’s ruling was fair and should be upheld by a state judge. The firm also maintained that more interest has accrued since the time of the arbitration award, and that Boies Schiller is owed a little more than $721 for paying Kwok’s share of a fee related to the arbitration agreement. With the additional fee and interest, Boies Schiller said the New York state court should approve an award totaling $640,004.55, on top of the $500,000 retainer.
Kwok has featured prominently in headlines over the past couple of years, and he’s reportedly living in exile in the U.S. in light of public allegations he has made about widespread corruption among high-ranking members of the Chinese government. That press attention made its way into Boies Schiller’s petition. In support of its argument that Kwok should have to pay the legal fees the arbitrator awarded, the firm points to at least one recent article about Kwok—a New York Times Magazine profile that in January reported the Chinese tycoon has pulled together a $150 million “war chest” dedicated to legal expenses.
Contacted for comment on Monday, Boies Schiller partner Joshua Schiller, who’s representing the firm alongside associate Benjamin Margulis, said what has been filed in court speaks for itself.
Aaron Mitchell of The Law Offices of Cohen & Howard, who represented Kwok in the arbitration proceedings, did not immediately respond to a request for comment.
In the underlying arbitration proceeding, Kwok and his lawyers pursued several arguments that they said undercut Boies Schiller’s claims for unpaid fees. Specifically, Kwok alleged that he had objected to Schiller’s continued work on his cases and that Boies Schiller’s bills were unreasonably high. Kwok also alleged that he initially brought the firm on board based on assurances that firm chairman David Boies would personally serve as lead counsel.
But the arbitrator found against Kwok on each of those arguments and found several specific problems with the assertion about Boies’ purported lead counsel role. If Boies had indicated that he would sign on as lead counsel for Kwok, the firm would have asked for a much larger upfront payment for the Chinese property tycoon, according to the arbitration ruling. Instead of a $500,000 retainer, the firm’s standard policy for retaining Boies as lead counsel likely would have required somewhere between $1 million and $15 million, an amount that was not called for in Kwok’s engagement letter.
“There is not a shred of written evidence that Kwok based his retainer of Boies Schiller with respect to any of the five matters on an express representation by Boies that he—rather than [Joshua] Schiller—would serve as lead counsel,” the arbitrator wrote. “While I have little doubt that Kwok hoped Boies would be heavily involved in his cases, there is no credible evidence that Boies ever made that commitment.”
The petition to recover fees from Kwok marks the second time in recent months that Boies Schiller has ended up in Manhattan state court in connection with a dispute with a former client. The other dispute involved Canadian billionaire Alex Shnaider, whom Boies Schiller had represented for about two years before the relationship broke down.
The firm alleges Shnaider owes about $1 million in unpaid legal fees and interest. In October, a state judge in Manhattan ordered Shnaider to place $860,000 in an escrow account while the fee dispute plays out.