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This survey covers large recent arbitrations with a European connection. The 10 entries consist of resolved or partly resolved disputes and are listed by the amounts at stake ($700 million or higher). Each dispute has been resolved or partly resolved since January 2001 by an arbitral award or settlement. Awards decided before January 2001 are excluded even if court challenges persisted after that date. Each dispute features a European forum or at least one European party or lead advocate. To confine international arbitration within Europe’s bounds is necessarily arbitrary, but disputes are not considered “European” for this survey merely because of the nationality of an arbitrator or the location of the supervising institution. Except where otherwise noted, all listed lawyers are based in a firm’s main office. The information is current as of June 2003, when a longer version ran in Focus Europe, a sister publication of The National Law Journal. Research assistance was provided by Michael Ravnitzky. Threatening a landmark merger of two agricultural giants The Scotts Co. (United States) v. Aventis S.A. (France) and Aventis CropScience GmbH (Germany) International Chamber of Commerce, Paris Stakes: Up to $26 billion In arbitration as in gardening, The Scotts Co. has a green thumb-but not nearly as deep a shade of green as it would like. Its complaint stemmed from two merger and acquisition deals. Rh�ne-Poulenc S.A. announced its $26 billion merger with Hoechst A.G. (to form Aventis) in 1998. Shortly before this announcement, The Scotts Co. had bought Rh�ne-Poulenc’s European lawn products business for $200 million. Scotts cried fraud because it hadn’t been told that Rh�ne-Poulenc and Hoechst planned to merge their agricultural product lines, which stiffened the competition for its new division. Scotts sought to enjoin the Aventis merger and to recover damages in the amount it overpaid for its own acquisition. The panel declined to break up the $26 billion Aventis merger, but in January 2002, it awarded Scotts nearly 11 million euros in damages, plus interest, fees and costs. LEAD LAWYERS: For Scotts, Elliot Polebaum of the Washington office of New York’s Fried, Frank, Harris, Shriver & Jacobson and Gregory Joseph, now of New York’s Gregory P. Joseph Law Offices. For Aventis, Lawrence Friedman of New York’s Cleary, Gottlieb, Steen & Hamilton; Jean-Yves Garaud of Cleary in Paris; and Romano Subiotto of Cleary in Brussels. ARBITRATORS: Neil Kaplan of London’s Essex Court Chambers (chair); Peter Cory, retired justice of the Supreme Court of Canada; Louis Vogel of Paris’ Vogel & Vogel. Dispute over right to bid on ‘Project Kuwait’ Lasmo PLC (United Kingdom), Khaleej Petroleum Co. (Kuwait) and Al-Nawasi General Trading & Contracting Co. (Kuwait) v. BP PLC (U.K.) London Court of International Arbitration, London Stakes: Up to $7 billion If history is any guide, arbitration lawyers will be among those who mop up after this year’s Persian Gulf war. Destruction brings reconstruction contracts; and with contracts come disputes. At the end of the first U.S.-Iraq conflict, Kuwait announced that it would put out for bids a $7 billion plan to modernize the oil fields set afire by Saddam Hussein’s forces during their retreat. The Scottish exploration firm Lasmo teamed up with Al-Nawasi Trading, controlled by Kuwaiti tycoon Abdul Aziz Al-Ghanim, to form the joint venture Khaleej Petroleum. Lasmo, Al-Nawasi and Khaleej joined a consortium with Amoco Corp. with the right to bid on the contract. Though the Scottish and Kuwaiti entities were tiny compared to Amoco, they secured a 45% share of the consortium. After BP swallowed Amoco in 1999, the British oil giant sought to take control of the consortium, and the claimants filed an arbitration to enforce the terms of the original agreement. Last year, the claimants won a declaration giving them control of the consortium with the right to bid on the “Project Kuwait” contract. How much this declaration is ultimately worth depends on how much, if any, of the $7 billion project is awarded to the Khaleej-BP consortium. LEAD LAWYERS: For Lasmo, John Bellhouse of the London office of New York’s White & Case. For the Al-Ghanim family, Jonathan Schiller of the Washington office of Boies, Schiller & Flexner. For BP, Tom Lidstrom of London’s Linklaters and Jonathan Sumption of London’s Brick Court Chambers. ARBITRATORS: J. William Rowley of London’s 20 Essex Street and Toronto’s McMillan Binch (chair); Bernard Hanotiau of Brussels’s Hanotiau & van den Berg; Georg von Segesser of Zurich, Switzerland’s Schellenberg Wittmer. The Unicover Reinsurance scandal Sun Life Assurance Co. of Canada (Canada), Phoenix Home Life Mutual Insurance Co. (U.S.), American Phoenix Life and Reassurance Co. (U.S.) and General & Cologne Life Re of America Inc. (U.S.) v. Cigna Corp. (U.S.), Life Reassurance Corp. of America (U.S.), Lincoln National Life Insurance Co. (U.S.), ReliaStar Life Insurance Co. (U.S.) and Cragwood Managers LLC (U.S.) (Though all of the named parties are North American, some are controlled from Europe: ReliaStar is a unit of the Netherlands’ ING Groep N.V.; Life Reassurance and Lincoln’s reinsurance business are owned by Zurich-based Swiss Reinsurance Co.) Ad hoc tribunal, New York Stakes: Nearly $2 billion In the late 1990s, many of the world’s reinsurers plunged into the business of reinsuring the health-insurance portion of American workmen’s compensation policies. A risk manager, Unicover Managers Inc. (now Cragwood), spread its risks with a pool of reinsurers including Cigna and Lincoln (known as the retrocedents). A Bermuda-based arbitrageur named John Cackett then reinsured this pool of Unicover’s reinsurance with another group of reinsurers, including Sun and Phoenix (known as the retrocessionaires). Both Unicover’s reinsurance contracts and Cackett’s retrocessional contracts badly miscalculated the size of the losses, and trouble followed. As companies passed risk from one to the other, intermediaries kept taking a portion of the insurance premium as commission. Doing so left the companies at the end of the chain with less premium and more risk. Cackett’s retrocessionaires assumed liabilities about $1 billion higher than the premiums they received. In 1999, the retrocessionaires demanded arbitration, and the Unicover pool members filed cross-demands. A consolidated arbitration ended in October 2002 with an award apportioning the insurance loss of at least $1 billion among the parties. The losses flowing from all the reinsurance pools managed by Unicover have been pegged in the trade press at nearly $2 billion. Based in part on the charges to earnings announced by the companies, industry newsletters characterized the retrocessionaires as the winners and the retrocedents as the losers. LEAD LAWYERS: For Sun Life, Peter Chaffetz of Clifford Chance in New York. For Phoenix Home Life, James Shanman of Edwards & Angell in New York. For Cologne Life Re, John Nonna of New York’s LeBoeuf, Lamb, Greene & MacRae. For Cigna, Clifford Schoenberg of New York’s Cadwalader, Wickersham & Taft. For Lincoln National and Swiss Re, Stephen Stublarec of Latham & Watkins in San Francisco. For ReliaStar, John Beerbower of New York’s Cravath, Swaine & Moore. For Cragwood, Henry Weisburg of New York’s Shearman & Sterling. ARBITRATORS: Thomas Tobin (umpire); Paul Edward Dassenko; Daniel Schmidt IV. All three are retired insurance industry in-house counsel. Dispute over Indonesia’s telephone system PT Telekomunikasi Indonesia Tbk (Indonesia) v. PT AriaWest International (Indonesia) International Chamber of Commerce, Geneva Stakes: $1.3 billion It’s been called “Asia’s ugliest corporate battle.” AriaWest-a foreign investor vehicle that is now partly owned by AT&T Wireless Services Inc.-signed a 1995 joint operating agreement with Indonesia’s state phone company, known as Telkom, to build and operate a fixed-line phone service in West Java. When the Indonesian currency crisis of 1997 struck, the state ended AriaWest’s exclusive rights, and refused to let phone bills keep pace with inflation. The agreement subsequently broke down, and Telkom unilaterally took over control of the operations. AriaWest and Telkom publicly traded accusations of misconduct, and at one point Telkom’s president made a statement that AriaWest took to be a bomb threat, which is no joking matter in Java. Telkom’s president says he was misunderstood. Pending board approval, the arbitration has been settled as part of a roughly $350 million buyout of AriaWest by Telkom. One source close to Indonesia estimates that the portion of the price attributable to the arbitration amounts to about $20 million. LEAD LAWYERS: For Telkom, Dana Freyer of New York’s Skadden, Arps, Slate, Meagher & Flom. For AriaWest, Stephen Bond of the Paris office of New York’s White & Case and Kim Rooney of White & Case in Hong Kong. ARBITRATORS: Allan Philip of Copenhagen, Denmark’s Philip & Partners (chair); L. Yves Fortier of Montreal’s Ogilvy Renault; Emmanuel Gaillard of the Paris office of New York’s Shearman & Sterling. The ‘Great Manmade River’ of Libya Braspetro Oil Services Co. (Brazil) v. The Great Manmade River Authority (Libya) International Chamber of Commerce, Paris Stakes: $1.3 billion Braspetro Oil Services, known as Brasoil, drilled water to pipe from Libya’s coast to its desert south via a 1,000-kilometer concrete aqueduct known as the Great Manmade River. Brasoil sued for unpaid bills and Libya counterclaimed for $1.3 billion. The case settled on undisclosed terms in 2001. LEAD LAWYERS: For Brasoil, William Laurence Craig and Michael Polkinghorne of the Paris office of New York’s Coudert Brothers. For Libya, Claude Goldman of Paris. ARBITRATORS: Yves Derains of Paris’ Derains & Associ�s (chair); Richard Fernyhough of London’s Keating Chambers; John Tackaberry of London’s Arbitration Chambers. Turkmenistan pipeline project contract dispute Bridas SAPIC (Argentina) v. Government of Turkmenistan International Chamber of Commerce, Houston Stakes: $1.23 billion ($980 million claim; $247 million counterclaim) Turkmen dictator Saparmurat Niyazov is famous for renaming both the month of April and the word for bread after his mother, Gurbansoltan-edzhe. But breaching a contract with a solid arbitration clause may have been his craziest move. The Argentine energy company Bridas formed a joint venture for the operation and upgrading of an oil and gas field in southwestern Turkmenistan. Turkmenistan terminated the contract, alleging that Bridas was spending extravagantly and operating the venture like a fiefdom. In a final award of January 2001, the panel found that, while Bridas was guilty of misconduct, the termination was not justified. The panel awarded Bridas $473 million in damages for lost profits. The U.S. District Court for the Southern District of Texas confirmed the award in September 2001-in a ruling now on appeal to the 5th U.S. Circuit Court of Appeals. An ICC arbitration in Stockholm, Sweden, between the same parties arose out of a second joint venture for gas exploration in the eastern part of the country. In that case, resolved in 2000, Bridas won $200 million in damages, but lost its quest for $2 billion in lost profits. LEAD LAWYERS: For Bridas, Sergio Le Pera of Argentina’s Le Pera & Lessa. Mary O’Connor of Akin, Gump, Strauss, Hauer & Feld in Dallas joined Le Pera in representing Bridas in the U.S. federal court challenge. For Turkmenistan, William Knull III of the Houston office of Chicago’s Mayer, Brown, Rowe & Maw and Ali Malek of London’s 3 Verulam Buildings. ARBITRATORS: In Houston: Edward Chiasson of Vancouver, British Columbia’s Borden Ladner Gervais (chair); Griffin Bell of Atlanta’s King & Spalding; Hans Smit of Columbia University. In Stockholm: Helge Jakob Kolrud of Oslo, Norway’s Haavind Vislie (chair); Sydney Kentridge of London’s Brick Court Chambers; Jan Paulsson of Freshfields Bruckhaus Deringer in Paris. The Russian ‘Aluminum Wars’ Base Metal Trading S.A. (Switzerland) v. Novokuznetsk Aluminum Zavod (Russia) Zurich Chamber of Commerce Alucoal Holdings Ltd. (Cyprus) v. NKAZ Stockholm Chamber of Commerce Base Metal Trading Ltd. (Channel Islands) v. NKAZ Ad hoc tribunal, Cyprus Stakes: More than $1 billion During the “Aluminum Wars” of the 1990s, rival Russian oligarchs fought violently for control of that nation’s second-largest industry. The losers of the Aluminum Wars don’t trust Russian courts, so they have carried the fight to tribunals around the world. Their allegations read like a post-Cold War thriller. As the claimants tell the story, billionaire Oleg Deripaska and alleged mafia boss Mikhail Chernoi stripped exiled oligarch Mikhail Zhivilo of the Novokuznetsk aluminum plant by bribing and strong-arming officials to file false murder charges against him (hence his exile), and to make false claims that drove his company into bankruptcy. The claimants are companies that had signed contracts with the Novokuznetsk factory before Deripaska allegedly rigged its bankruptcy and bought it on the cheap. According to Deripaska, the claimants themselves are controlled by Zhivilo. In the first decisive legal battle, Base Metal Trading S.A. lost early this year in the Zurich arbitration, on jurisdictional grounds. Base Metal appealed to the Swiss supreme court, and then withdrew its appeal. Meanwhile, Base Metal Trading Ltd. and Alucoal have filed parallel arbitrations before the Stockholm Chamber of Commerce and before an ad hoc tribunal in Cyprus. These arbitrations remain undecided. In conjunction with other parties, Alucoal and the Base Metal entities filed a racketeering suit in the Southern District of New York against various entities allegedly controlled by Deripaska and Chernoi, including NKAZ, Russian Aluminum Co. and the Sibirsky Aluminum Group. After trebling, the Racketeer Influenced and Corrupt Organizations Act (RICO) claim was valued at $3 billion. But the defendants won a motion to dismiss the federal case on forum non conveniens grounds in late March 2003. A 2d Circuit appeal is likely. The stakes in Cyprus are said to be about $30 million. In Zurich and Stockholm, a source close to NKAZ estimates the stakes as more than $100 million each. The RICO complaint, however, listed the losses of Base Metal S.A. and Alucoal at more than $400 million each. LEAD CLAIMANTS’ LAWYERS: For Base Metal Trading S.A. in the Zurich arbitration, Jacques Jones of Geneva’s Python Schifferli Peter & Partners and Bruce Marks of Philadelphia’s Marks & Sokolov. For Alucoal in the Stockholm arbitration, Christer S�derlund of Stockholm’s Vinge. For plaintiffs in the S.D.N.Y. litigation, Bruce Marks, Robert Abrams and James Bernard of New York’s Stroock & Stroock & Lavan. LEAD RESPONDENTS’ LAWYERS: For NKAZ in the Zurich arbitration, Nicolas Ulmer of the Geneva office of Chicago’s Winston & Strawn. For NKAZ in the Stockholm arbitration, Bengt �ke Johnsson of the Stockholm office of New York’s White & Case. For NKAZ in the Cyprus arbitration, Soteris Pittas of Cyprus’s Patrikios Pavlou & Co. For defendants in the S.D.N.Y. litigation, Michael Burrows of Winston & Strawn in New York and Ira Feinberg and John Redmon of the New York office of Washington’s Hogan & Hartson. SOLE ARBITRATOR IN ZURICH: Marc Blessing of Zurich’s Baer & Karrer. ARBITRATORS IN STOCKHOLM: Allan Philip of Copenhagen’s Philip & Partners (chair); Michael Bogdan of Sweden’s Lund University; David Sutton of London’s 20 Essex Street. Money for oil: claims against Russia Compagnie Noga D’Importation et D’Exportation S.A. (Switzerland) v. Rus-sian Federation Stockholm Chamber of Commerce, Stockholm Stakes: More than $1 billion In the early 1990s, Noga, a Swiss trading company, agreed to lend about $1.4 billion to the Russian government in return for oil. Noga filed claims for failure to pay and consequential damages exceeding $1 billion. The arbitration, completed in March 2001, awarded Noga less than 10% of what it sought. Efforts to collect the judgment are ongoing. LEAD LAWYERS: For Noga, Samuel Pisar of Paris. For Russia, Boaz Morag, George Weisz and Howard Zelbo of New York’s Cleary, Gottlieb, Steen & Hamilton. ARBITRATORS: Allan Philip of Copenhagen’s Philip & Partners (chair); Andreas Lowenfeld of New York University; Stephen Schwebel of Washington, former president of the International Court of Justice. Taiwan high-speedtrain contract Eurotrain Consortium (Germany and France) v. Taiwan High Speed Rail Corp. (Taiwan) International Chamber of Commerce, New York Stakes: $800 million The Taiwan High Speed Rail Corp. (THRC) needed a contractor to supply and maintain the fast trains that will link Taipei with Taiwan’s second-largest city, Kaohsiung. In 1997, THRC preliminarily picked the Eurotrain Consortium, which includes Alstom Transport S.A. and Siemens A.G. In December 2000, THRC awarded the bid instead to the Taiwan Shinkansen Consortium, including Japan’s Mitsubishi Heavy Industries Ltd., which promised to do the work for $2.7 billion. Eurotrain claimed for breach of contract. In early 2002, arbitrators ruled in favor of Eurotrain on liability. The damages phase is ongoing. LEAD LAWYERS: For Eurotrain, Charles Adams Jr. of the Geneva office of Chicago’s Winston & Strawn. For THRC, Arthur Rovine of Baker & McKenzie in New York. ARBITRATORS: The names of the arbitrators could not be obtained. Satellite agreement flies out of orbit Alcatel Space S.A. (France) v. Loral Space & Communications Ltd. (Bermuda and U.S.) International Chamber of Commerce, Geneva Stakes: $700 million ($300 million claim; $400 million counterclaim) Jacques Chirac and George W. Bush are not the only Franco-American partners who are failing to see eye to eye. During the 1990s, Loral Space & Communications, whose principal place of business is New York, and France’s Alcatel Space worked out an operational agreement over satellite maker Space Systems/Loral Inc. The agreement flew out of orbit when Loral flirted in 2000 with another American player in the space industry, Lockheed Martin Corp. A preliminary arbitral ruling was handed down in February 2002 and confirmed by the U.S. District Court for the Southern District of New York four months later. The arbitral panel agreed with Alcatel on the main issues: that Loral had breached the agreement by sharing secret information with Lockheed and by hiding operational details from Alcatel. A more recent arbitral ruling, handed down in January 2003, rejected all of Loral’s counterclaims. The panel has yet to issue a ruling quantifying Alcatel’s damages claim. LEAD LAWYERS: For Alcatel, George Hritz and Paul Sarkozi of the New York office of Washington’s Hogan & Hartson. For Loral, Steven Reisberg of New York’s Willkie, Farr & Gallagher. ARBITRATORS: Francois Dessemontet of the University of Lausanne (chair); David Lawson of Geneva’s Byrne-Sutton Bonnard Lawson Meakin & Partners; William Park of Boston University and Boston’s Ropes & Gray.

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