The American Lawyer - Focus Europe, Summer 2011

DISPUTE: Renée Rose Levy de Levi (France) v. Republic of Peru CLAIMANT’S COUNSEL: Estudio Paitan & Asociados RESPONDENT’S COUNSEL: Sidley Austin ARBITRAL INSTITUTION: ICSID NOTES: Renée Rose Levy, who claims to have been the majority shareholder in the liquidated Peruvian bank, Banco del Nuevo Mundo, alleges breaches of the France-Peru bilateral investment treaty. Peru contests the claim.

AMOUNT IN CONTROVERSY: $2 billion DISPUTE: Vattenfall AB (Sweden), Vattenfall Europe AG (Sweden), and Vattenfall Europe Generation AG & Co. KG (Sweden) v. Federal Republic of Germany CLAIMANT’S COUNSEL: Mannheimer Swartling; Luther Rechtsanwaltsgesellschaft RESPONDENT’S COUNSEL: K&L Gates ARBITRAL INSTITUTION: ICSID NOTES: Vattenfall turned to arbitration under the Energy Charter Treaty after it clashed with local officials over construction delays and regulatory restrictions on a coal-fired power plant in Hamburg. In 2010 the parties agreed to settle the case, and the arbitration was discontinued in early 2011. The claim was the first under the E.C. T. against a Western European state.

AMOUNT IN CONTROVERSY: $2 billion

DISPUTE: Caratube International Oil Company LLP v. Republic of Kazakhstan

CLAIMANT’S COUNSEL: Crowell & Moring

RESPONDENT’S COUNSEL: Curtis, Mallet-Prevost, Colt & Mosle ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C. NOTES: Caratube claims that Kazakhstan expropriated its long-term contract to explore and develop hydrocarbons in the Aktobe region of the country. Kazakhstan contests the claim. In August 2010 a federal court in the District of Columbia declined Caratube’s motion for discovery in aid of arbitration under 28 U.S.C. section 1782. In February 2011 hearings on the merits were held.

AMOUNT IN CONTROVERSY: Up to $1.8 billion DISPUTE: Shell Nigeria Ultra Deep (Nigeria) v. Federal Republic of Nigeria CLAIMANT’S COUNSEL: Clifford Chance RESPONDENT’S COUNSEL: Alegeh & Co ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C. NOTES: Shell claims that the Nigerian government breached the terms of a production-sharing contract between Shell Nigeria and Nigeria’s state petroleum company (NNPC), when the government ordered that NNPC’s portion of the venture be handed over to a private company. Shell alleges that this action breached not only the terms of its production sharing contract for an ultra-deep-water area, but also the protections of the Nigeria-Netherlands BIT. Nigeria disputes the allegations.

AMOUNT IN CONTROVERSY: $1.6 billion DISPUTE: Chevron Corporation (U.S.) and Texaco Petroleum Company (U.S.) v. Republic of Ecuador CLAIMANT’S COUNSEL: De Brauw Blackstone Westbroek; King & Spalding RESPONDENT’S COUNSEL: Spigthoff; Winston & Strawn

ARBITRAL INSTITUTION AND SITE: Permanent Court of Arbitration (UNCITRAL)/The Hague

NOTES: Not to be confused with the more highly publicized fight over Chevron’s liability for environmental damage in Ecuador, this claim under the U.S.–Ecuador BIT relates to a series of commercial disputes that languished for many years in Ecuador’s courts. In the underlying suits, Texaco alleged that Ecuador violated their 1973 production contract by requiring the company to supply Ecuador with more oil than it needed internally, at below-market prices. In March 2010 arbitrators ruled that chronic delays in the Ecuadorian courts breached the treaty’s guarantee of an effective means of defense. The panel assessed damages of $698.6 million in favor of Chevron, but decreed that a separate phase of the arbitration will determine what portion of that amount is owed to Ecuadorian tax authorities.

AMOUNT IN CONTROVERSY: Up to $1.6 billion DISPUTE: Cemex Caracas Investments B.V. (The Netherlands) and Cemex Caracas II Investments B.V. (The Netherlands) v. Bolivarian Republic of Venezuela CLAIMANT’S COUNSEL: Skadden, Arps, Slate, Meagher & Flom RESPONDENT’S COUNSEL: Curtis, Mallet-Prevost, Colt & Mosle ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C. NOTES: A pair of Dutch subsidiaries of Mexican cement juggernaut Cemex are claiming losses arising out of Venezuela’s nationalization of that country’s largest privately owned cement business. In December 2010 arbitrators confirmed that Venezuela’s denunciation of the Netherlands–Venezuela BIT came too late to short-circuit the claimants’ claims. However, arbitrators declined jurisdiction over claims brought under Venezuela’s ambiguously worded investment law.

AMOUNT IN CONTROVERSY: $1.5 billion

DISPUTE: Giovanna a Beccara et al. v. Argentine Republic CLAIMANT’S COUNSEL: White & Case; Grimaldi e Associati; Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz, Jr. RESPONDENT’S COUNSEL: Cleary Gottlieb Steen & Hamilton; Attorney General of Argentina ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C. NOTES: A claim by Italian bondholders who declined to accept settlements offered by Argentina in the aftermath of its sovereign debt default. Originally, more than 180,000 investors, holding bonds with a face amount of about $4.5 billion, alleged unfair and discriminatory treatment and expropriation under the Italy–Argentina investment treaty. A new settlement offer by Argentina in 2010 peeled away two-thirds of the claimants, but the case still involves over 60,000 bondholders, holding bonds with a face amount of about $1.5 billion. The largest arbitration to arise out of Argentina’s crisis, the case is novel in using treaty arbitration to pursue a mass claim, and to challenge a sovereign debt restructuring. Argentina contests the aggregation of claims and denies that it is liable under the treaty. In April 2010 the tribunal concluded the hearing on jurisdiction after seven days of argument and testimony. If the bondholders lose on jurisdiction, they may resume their stayed New York litigation—but enforcing any U.S. court judgment might be tricky.