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In a coup for Miami’s growing community of lawyers who handle international arbitration, a multinational legal team led by two Miami attorneys has won a $95.7 million award in a closely watched arbitration case in London. The case involved a dispute between Luxembourg-based smart card manufacturer Gemplus and its co-founder and former chairman, Marc Lassus, over an $85 million payment the company made to him before he departed. Lassus, a Frenchman living in England, said the money was a gift or reward, while the company said it was a loan and demanded repayment. Smart cards contain transferable data information that are used in products such as cell phones. The 55-page decision, which is confidential, was handed down April 8 by a three-person arbitration panel in London after a five-day hearing in January. Gemplus won an award of 80.9 million euros — about $95.7 million — included the principal, interest, costs and attorney fees. Daniel E. Gonzalez and Richard C. Lorenzo, partners at Hogan & Hartson in Miami, led the winning legal team of 15 lawyers. Their victory showcased the growing prominence of Miami as a center for international arbitration. For several years, Miami has sought to position itself as a neutral, multicultural location that is ideal for arbitration proceedings. As Miami has become more popular as a venue, a growing number of South Florida lawyers have focused on international arbitration, and they’re increasingly being hired for big cases in Miami and elsewhere. In fact, two international law firms, Hogan & Hartson and Greenberg Traurig, have their lead international arbitration attorneys based in Miami. Gonzalez heads the Hogan & Hartson practice; Pedro Martinez-Fraga heads the group at Greenberg Traurig. This has become part of the city’s pitch in its appeal for the Free Trade of the Americas trade bloc to locate its permanent secretariat in Miami. Miami and Houston are often ranked behind New York as the most popular U.S. venues for international arbitration, said Lorraine M. Brennan, director of arbitration and alternative dispute resolution for North American International Chamber of Commerce International Court of Arbitrations. “Miami is becoming competitive with Washington and New York,” Gonzalez said. LOAN OR PAYMENT? While much of the Gemplus case remains confidential, it provides a glimpse into the high-stakes and secretive world of international arbitration. It particularly demonstrates the complexity of handling arbitration cases. The lawyers representing the parties were from five different countries, the United States, France, Great Britain, Luxembourg and Gibraltar. Under a clause in the contract for the disputed payment, the arbitration was seated in London but the laws of Luxembourg were applied. The official language of the arbitration was English, but part of the proceeding was conducted in French because Roland d’Ornano, lead counsel for Lassus, was more comfortable in his native language. In a statement, Gemplus said the arbitrators found there was “no doubt” the payment was a loan based on “abundant evidence.” Lassus could not be reached for comment. But he was quoted in the Paris-based Le Monde newspaper saying that he hopes to have the ruling “annulled.” Lassus co-founded Gemplus in 1988. Since then, it has expanded into 37 countries. Last year, it reported nearly $900 million in revenue. The company is publicly held and trades on both Nasdaq and the Paris stock exchanges. Its U.S. operations are based in Horsham, Pa., and Dallas. Over the past year its stock on the Nasdaq has traded between $1.75 and $5.80 a share. On Thursday, shares were trading at $4.17. In December 2002, according to the London-based Financial Times, Lassus resigned from the Gemplus board after the company’s largest shareholder, Fort Worth-based private equity firm Texas Pacific Group, sought to have him removed. Gemplus issued a press release announcing the terms of the arbitration award on April 14. But Gonzalez said Gemplus refuses to make public the arbitration panel’s written decision, and he declined to discuss specifics in the case. ‘SEAMLESS’ As national economies increasingly have become globalized, more companies are resolving big-dollar disputes in private arbitrations, where little if anything is ever revealed, rather than in public litigation. Arbitration increasingly is favored not only because it can be done in private, but because it ensures a neutral forum of the parties’ choosing. In contrast, many businesses worry about having disputes heard in the home courts of their foes, in which opponents may receive preferential treatment. Arbitrations also are regarded as faster and more efficient than litigation, though there is debate on that point. In addition, arbitral rulings are final, precluding a costly and lengthy appellate process. Gonzalez said that most of the pretrial work for Gemplus, and even some important tasks during the arbitration, were performed in Miami. All pretrial briefs were completed at Hogan & Hartson’s Miami office. At the end of each day’s proceeding, Gonzalez said, he called his Miami staff and had them prepare demonstrative exhibits for the next day. The Miami office then would create and e-mail the exhibits to Hogan’s London office. In the early hours of the morning, an associate in the London office would run out to get the exhibits printed at a nearby photocopy center. “It was seamless,” Gonzalez said. “When we showed up the first day in London, I hooked up my computer and felt like I was in the Miami office.” Gonzalez said Gemplus hired Hogan & Hartson for the case after conducting a “beauty pageant,” during which it interviewed a number of firms. He said he thought a big reason why his firm was selected was its experience doing international arbitrations and litigation in Latin America. In Latin America the courts, as in most European courts, use a civil code system rather than common law.

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