International arbitration might seem an obvious next
step for the Asian offices of Shearman and Cleary, both
of which recently began to practice local law in Hong
Kong, in addition to their existing U.S. law practices there.
Asian arbitration is a growth industry: The Hong Kong
International Arbitration Centre has increased its caseload
from 281 to 624 disputes in the past five years. The HKIAC
this year doubled its premises because it was having to turn
disputes away, according to the center’s chairman, Huen
Wong. The new facilities are also an effort to keep up with
the Singapore International Arbitration Centre, which
has recently increased twofold the number of new cases
it handles annually, from 99 in 2008 to 198 in 2010. That
explosion is thanks in part to the government-backed state-of-the-art Maxwell Chambers arbitration center, which
opened in Singapore last year.
According to statistics published by the SIAC, eight of
Asia’s major arbitral institutions—two in China, one in
each of Singapore, South Korea, Vietnam, Japan, Hong
Kong, and the Philippines—administered 722 disputes in
2010. That’s not too far behind the American Arbitration
Association’s International Centre for Dispute Resolution,
based in New York, which administered 888. The Paris-based International Chamber of Commerce administered
793 arbitrations in the same period, and the London Court
of International Arbitration administered 237.
“There is an increasing amount of good work here [in
Asia] to be had, and potentially lucrative work,” says
Robert Pé, a dispute resolution partner at Orrick,
Herrington & Sutcliffe’s
Hong Kong office. He joined
Orrick from Paul Hastings
in 2007, and has frequently acted as arbitration counsel or
arbitrator in the region. But despite mounting interest in
dispute resolution in general among American firms in the
region, he says that he is surprised that some of the market
leaders haven’t followed where Skadden dared to tread.
billion-dollar mandates from Malaysian telecom company
Maxis Communications Berhad and China’s state-owned
resources giant, Sinopec Group [Arbitration Scorecard,
Focus Europe, Summer 2011].
For smaller disputes, regional clients have typically
turned to domestic Asian firms, with which they have
close relationships. But occasionally these local firms hit
the big time, too. India’s Siva Ventures Limited appointed
Singapore’s Drew & Napier to represent it in a claim
against Malaysia’s Maxis Communications and Global
Communications Services Holdings Ltd., a Mauritian
investment holding company, in the Singapore arbitration
arising from Maxis’s purchase of Indian cell phone operator Aircel Limited in 2005. The amount in dispute is now
more than $1 billion. Korean law firms such as Bae, Kim &
Lee; Kim & Chang; and Shin & Kim also frequently appear
in arbitrations, representing their country’s powerful conglomerates such as the Hyundai and Daewoo companies,
either alone or in tandem with international firms.
U.S. firms are more likely to try to run their Asia arbitration practices from New York, Washington, or London.
Debevoise & Plimpton has followed this path, although the
firm moved toward a stronger on-the-ground presence this
year when it transferred counsel Philip Rohlik from New
York to the firm’s Hong Kong office. A New York–based
partner, Christopher Tahbaz, will also spend up to half of
his time in Hong Kong. Tahbaz worked with Debevoise
other shareholders from selling petroleum refiner Hyundai
Oilbank Co. Ltd. (Instead, the shareholders were ordered
to sell their stake in the company to Hyundai Heavy
Industries at a 25 percent discount from market value,
worth around $750 million.)
Tahbaz describes his firm’s change in strategy as “an evo-
lution” rather than a brash dive into the market. Debevoise
will continue to work with local firms, as it did with Korean
firm Bae, Kim & Lee during the Hyundai dispute.
Other U.S. firms have been even more hesitant. Cleary’s
managing partner, Washington, D.C.–based Mark Leddy,
says the firm has no immediate plans to expand its Asia
presence, but will “keep a close eye on market developments” in the region. Shearman & Sterling, which was
the fourth-busiest firm on the Arbitration Scorecard with
roles in 19 disputes, used to have an arbitration partner
in Singapore, John Savage, who left the firm last August
to join King & Spalding’s office in that city. But he hasn’t
been replaced. The firm now has just one counsel and two
associates in Singapore handling arbitrations.
Shearman has been “looking at the question” of whether
it should once more build up its arbitration team based in
“People, including ourselves, see
potential,” says K&S’s Savage. “But I
think there’s a risk that it has been
hyped up more than it deserves.”
MAYBE IT’S BECAUSE OF THE BRITISH. THE U.K.
firms poured into Asia in the 1980s, offering a broad spread
of practices, in contrast with the capital markets focus of
many of their U.S. competitors. At that time, international
arbitration was shifting into vogue: Hong Kong first established the HKIAC in 1985. And in the quarter-century
since, the British firms’ arbitration teams have grown with
the practice.
Herbert Smith now has 13 Asia-based partners who
focus heavily on arbitration. Hogan Lovells has seven
arbitration partners in Asia; Clifford Chance has five;
Freshfields Bruckhaus Deringer and Allen & Overy have
two apiece. Their investment has paid off in the form of
local big-ticket assignments: Herbert Smith has represented India’s Tata Group of Companies in a recent major
arbitration, for example. Clifford Chance has picked up
