issue #09, week 11. 11 March 2008
Prepared by TDM and Aloysius Gng (CEPMLP/Dundee)

TDM News Digest

provides a condensed overview of recent events of interest to the international arbitration community.

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Recent issues:

NEWS

Oil is Canada's ace in any revisiting of NAFTA

March 10, http://www.reportonbusiness.com/servlet/story/
RTGAM.20080310.wagendarobinson0310/BNStory/robAgenda/?id=RTGAM.20080310.wagendarobinson0310

Both Hillary Clinton and Barack Obama are threatening to opt out of NAFTA if elected, which means re-negotiate, a position that is quite tenable particularly with a protectionist Congress. This really is about more than politics — this threat is genuine.

Negotiating treaties involves horse trading and results are uncertain. In preparation for negotiation of the predecessor 1989 Canada/U.S. Free Trade Agreement, the Hon. Donald MacDonald concluded after exhaustive study that Canada should make a "leap of faith" and plunge in.

Should Canada do so again? There may be no choice. And if that happens, we need to pay heed to at least three key areas.

TeliaSonera wins Turkcell arbitration ruling

March 7, http://biz.yahoo.com/bw/080307/20080307005186.html?.v=1

TeliaSonera has won a ruling in an international arbitration tribunal regarding the ownership of a stake in Turkish mobile operator Turkcell. The tribunal of the International Chamber of Commerce found that Turkcell shareholder Cukurova had 'violated certain share transfer restrictions' in an agreement under which TeliaSonera was to buy Turkcell shares from Cukurova, Reuters reports.

...

Special Report: Challenging perceptions: The steady growth of Iberian arbitration

http://www.iberianlawyer.com/content/view/996/528/

Among lawyers in Portugal and Spain there is a strong belief that the uncertainties currently affecting both the local and international economies will result in an increase in commercial disputes.

...

Swiss Bank Accounts Frozen in $60M CCC Yemen Oilfield Dispute

10th March 2008

Swiss Courts have frozen all bank accounts held by Consolidated Contractors Company's (CCC) main operating company, Consolidated Contractors International Company (CCIC) at Bank Audi Suisse SA in Geneva and Arab Bank Switzerland in Zurich. In an embarrassing twist, Bank Audi lists CCC's founder and majority shareholder Said Khoury as an Advisor to its Board of Directors and his son Wael Khoury as a Director of its US affiliate Interaudi.

The freezing of the bank accounts marks the latest setback to CCC in the long running litigation brought against it by Munib Masri in the English Courts. It shows the willingness of foreign courts to enforce the English Courts' judgments and brings into question CCC's strategy of attempting to avoid satisfying these judgments.

The legal case arose from Mr Masri's claim for breach of a contract relating to the sharing of revenues from production in the Yemeni Masila oil field, which entitles Mr Masri to a net 10% of revenues due to two CCC subsidiaries, Consolidated Contractors (Oil & Gas) Company SAL (CC (Oil & Gas)) and CCIC. The companies have failed to pay Mr Masri his entitlement since the first sales of oil from the concession in the early '90s.

The long running case saw Mr Masri win in the High Court and it went all the way to the House of Lords, where CCC's final appeal was dismissed by Law Lords in November 2007. The court has so far ordered CCC to pay Mr Masri approximately $60 million in amounts due under the agreement.

The grip on CCC is tightening with the court ordering the CCC companies to provide sworn statements detailing all their assets with a value in excess of $100,000. CCC have also had to agree to pay all ongoing oil revenues from the Masila concession into a UK bank account under the Court's control in Order to avoid the immediate appointment of a Receiver to collect the oil revenues from purchasers.

At a recent hearing before the Court of Appeal, Lord Justice Rix stated his opinion that "it is a complete disgrace that a large and solvent operation, such as the defendants and their holding company [CCC] involved in this case, should flout in this way the orders of this court after full and lengthy discussion about the merits. I think it is a complete disgrace, and it is very, very rarely found in this court."

CCC is already in contempt of Court for non-compliance with earlier orders issued by the High Court. The Court's orders warn that failure to comply with the injunctions of the Court could lead to the imprisonment of key figures in the organisation.

In a radical move, the family owned group has responded to recent developments by removing all four Khoury family members from the Boards of both CCIC and CC (Oil & Gas), replacing them with junior CCC employees who are nationals of Lebanon where the companies are registered. The removal of Khoury family members from the company boards may have also come as a reaction to the subpoena of Wael Khoury by the New York court in other court proceedings; he will be compelled to appear in court in New York on March 18, 2008 in an action against him and other affiliates of CCC.

It is understood that Mr Masri has now commenced enforcement proceedings in the US and will soon be commencing proceedings in Lebanon where the companies are registered.

Commenting, Simon Morgan a Partner at international law firm Simmons & Simmons, representing Mr Masri, said:

"It continues to surprise me that such a well known company would deliberately flout the Orders of the English court. However, as enforcement internationally continues, it will become increasingly difficult for CCC to continue to avoid satisfying the judgments of the English court."

Unctad to Sign Memorandum of Understanding with City University of Hong Kong on Capacity Building in International Dispute Settlement

http://www.unctad.org/Templates/webflyer.asp?docid=9673&intItemID=1528&lang=1

The United Nations Conference on Trade and Development and the City University of Hong Kong will conclude a Memorandum of Understanding on capacity building in international dispute settlement on 10 March 2008.

This Memorandum will reinforce the aims of UNCTAD and CityU to enhance expertise on dispute settlement in international trade, investment and intellectual property, and on international commercial arbitration. The MOU has as its regional focus China and other developing countries of the Asia-Pacific region. Hong Kong's CityU is well positioned to become a regional hub for professional education and training in international dispute settlement.

The growth in international and regional arrangements on trade and investment has seen an accompanying expansion of institutions to settle disputes. These typically involve different views of how international or regional trade rules should be interpreted and applied. Developing countries' share in world trade and investment has grown fast and they are now also increasingly involved in cases brought to international dispute settlement bodies, most notably at the World Trade Organization (WTO), at the International Centre for the Settlement of Investment Disputes of the World Bank group (ICSID) and at the World Intellectual Property Organization (WIPO). Interpreting international agreements on trade, investment and intellectual property has developed into a specialized area of international law and arbitration, and is therefore of crucial importance for developing countries.

Under the MOU, UNCTAD will provide cutting edge instruction packages, tailor-made for the specific audience of the School of Law's post-graduate programme on Arbitration and Dispute Resolution. This programme of CityU was established in 1992 for training and capacity building of professionals from China and other countries in the Asia-Pacific region.

The MOU will be signed by Dr. Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development and Professor Richard Yan-ki Ho, Acting President of the City University of Hong Kong. It will take effect upon signature on 10 March 2008.

Following the signing ceremony, Dr. Supachai Panitchpakdi will deliver a public lecture.

ICC International mediation competition awards unveiled

March 6, http://www.iccwbo.org/iccbjeig/index.html

A team from the FGV Sao Paolo Law School walked away with this year's top award for the 3rd annual ICC International Commercial Mediation Competition 18 February.

The award followed four days of intense competition, as the team from Sao Paolo and the University of California Hastings College of Law were pitted against each other to mediate a complex business deal.

The Brazilian team, made up of Gisela Ferreira Mation, Pedro Fida Fenelon Tibucheski, and Daniel Tabel Luis received a trophy, EUR 2000 in prize money, an internship at ICC's ADR Secretariat, and a set of legal reference books.

Every participant in this year's competition received a year's subscription to the ICC International Court of Arbitration Bulletin.

...

Russia moves forward on foreign investment law

March 6, http://www.guardian.co.uk/feedarticle?id=7363509

Russia moved a step closer on Thursday to passing a key law on foreign investment in strategic industries that has been eagerly awaited by investors seeking clarity on what they can and cannot buy. A parliamentary committee responsible for preparing the law approved a new draft ahead of a second reading on March 19 and rebuffed last-minute efforts by industry lobbyists to alter the text, already agreed with President Vladimir Putin.

"This is a political decision. You know very well which doors to knock on if you want anything changed," the head of the Duma lower house of parliament's land and construction committee Martin Shakkum told lobbyists. A renewed effort to push the new rules through the Russian legislature comes only days after Dmitry Medvedev, Putin's ally, won the presidential election. Putin is expected to step down in May but has vowed to stay on as Prime Minister.

Putin's economy guru and Finance Minister Alexei Kudrin said in January that Russia should change its hawkish foreign policy and seek more foreign investment amid the prospects of a shrinking current account and budget surpluses under Medvedev.

...

Indonesia: Arbitration on Newmont

March 5, http://www.asianewsnet.net/editorial.php?aid=15516

The Indonesian government's decision Monday (Mar 3) to file for international arbitration in a dispute over Newmont Mining Corporation's mandatory divestment at its gold and copper unit in West Nusa Tenggara will not scare off foreign investors. The impact would have been quite damaging if the government decided to act on its earlier threat to cancel Newmont's mining contract outright.

Such a move would not only have shocked other mining investors but also could have interrupted operations at the whole gold mine, which, according to the American company, now has a market value of US$4 billion.

...

Exxon: Chalmette could be part of Venezuela deal

March 5, http://www.reuters.com/article/rbssEnergyNews/idUSN0563330220080305

Exxon Mobil Corp (XOM.N: Quote, Profile, Research) Chief Executive Rex Tillerson said on Wednesday that Venezuela could offer up its share of their jointly run Chalmette refinery in Louisiana as part of a settlement of a dispute over an oil project the country nationalized last year.

"We think the right thing for us to do is to sit down and work out a mutually agreeable settlement for the assets that have been exproporiated," Tillerson said in a wide ranging briefing with reporters after the company's annual meeting with analysts in New York.

"Absent any conversation around that, we're left with no choice but to pursue the international legal remedies that are available to us under Venezuelan foreign investment law and were available to us under our contract with (state oil firm) PDVSA," he said.

...

Aker goes to arbitration

March 05, http://www.tradewinds.no/

Row with Kleven Maritime over sale of Floro shipyard could be settled this summer. The dispute between Aker Yards and Kleven Maritime over a shipyard sale has gone to arbitration....

ICC recommends that governments ensure their cross-border investment policies are "least-investment restrictive"

March 5, http://www.iccwbo.org/iccbjegg/index.html

ICC's Commission on Trade and Investment Policy has urged governments to safeguard freedom of investment by avoiding investment protectionism in a new policy statement.

"The many benefits of foreign investment - for economic growth, employment creation, and raising living standards - must be safeguarded through a strong commitment by governments to freedom of investment and avoiding protectionist measures," said ICC Secretary General Guy Sebban.

Cross-border investment and the openness of markets to receiving such investment are essential to sustaining prosperity, in developed and developing countries alike . But while the world has seen a sharp increase in cross-border investment in recent years, there has also been a worrying rise in investment protectionism.

Even though governments have the right to regulate economic activity and protect national security, ICC believes it is essential they do so in a way that does not impose unnecessary restrictions on the overall flow of cross-border investment.

...

You can read the ICC policy statement on safeguarding freedom of investment here: http://www.iccwbo.org/uploadedFiles/ICC/policy/trade/Statements/103-286%20rev3%20final.pdf [PDF]

PODCASTS

New episode IDN podcast: Offshore Litigation Work in India

International Dispute Negotiation (IDN) is presented by CPR as an example of the ways professionals from different countries and backgrounds approach dispute resolution. The podcast is intended to help listeners understand the risks of disputes and shed insight on optimal ways of accepting, mitigating, and managing those risks in the real world, whether through mediation, arbitration, or litigation that arises far from home. The host is Michael McIlwrath, Senior Counsel, Litigation for GE Infrastructure - Oil & Gas.

Mike visits Mumbai to look at the growth of legal process outsourcing. This controversial method of reducing litigation costs in common law systems, like the United States and the United Kingdom, sends legal work to India. Mike talks with an entrepreneur founder of outsourcing firm Pangea3, and one of its top managers, who say that their outsourcing business is growing at a rate of 200% a year.

EVENTS

JAMS International Arbitration Rules Featured at Vis Moot Court Competition in Vienna

http://www.jamsadr.com//FeatureFull.asp?Feature1ID=102

The 15th Annual Willem C. Vis International Commercial Arbitration Moot, a prestigious Vienna, Austria-based competition open to law students from all countries, for the first time has chosen JAMS International Arbitration Rules as the rules applicable to the hypothetical problem that all teams will argue. JAMS is a frequent sponsor of the event and JAMS neutrals regularly participate.

This year, three JAMS neutrals, Robert B. Davidson, Esq., Barbara A. Reeves Neal, Esq., and Jerry P. Roscoe, Esq., will serve as judges during the oral argument portion of the competition, which takes place March 15-20. Mr. Davidson, Executive Director of JAMS Arbitration Practice, will serve as chair of the final argument that will determine the winning team. Approximately 200 teams are expected to compete this year.

...

Law Students Test Their Skills at ICDR Practice Moot

March 3, http://www.adr.org/sp.asp?id=34149

Representatives from six law schools and a host of international arbitrators and academics recently attended the International Centre for Dispute Resolution (ICDR) Practice Moot and Seminar in New York City.

The ICDR Practice Moot, held Feb. 8 at the ICDR office in New York, gave students a platform for testing their arguments under the same conditions they will find in the Willem C. Vis International Commercial Arbitration Moot, according to Christian Alberti, ICDR solutions manager and organizer of the practice moot.

...

ICC/KLRCA seminar on international commercial arbitration, April 9

http://www.iccwbo.org/iccbjfci/index.html

Members of the Court and its Secretariat will speak at a joint ICC/KLRCA seminar to be held in Kuala Lumpur, Malaysia, on 9 April 2008.

Remedies in Commercial, Investment, and Energy Arbitrations Houston, April 17-18

http://www.utcle.org/conference_overview.php?conferenceid=796

What can the arbitrator do in fashioning remedies in commercial, investment and energy arbitrations? This program - jointly sponsored by the Permanent Court of Arbitration (PCA), the Houston International Arbitration Club (HIAC), and The University of Texas School of Law - brings together an internationally- renowned faculty from Europe, Latin America, Canada and the U.S., in a special conference focused on the law, economics, advocacy and enforcement of remedies in commercial and investment cases.

The conference blends analysis with practical application of economic and legal principles to solve real problems facing the international energy and construction sectors. Keynote speaker V. V. "Johnny" Veeder leads a distinguished opening panel that examines these issues, and also delivers the keynote luncheon address on Thursday. The conference ends with a distinguished General Counsel's panel, including counsel from ExxonMobil, ConocoPhillips, Baker Hughes, and Grupo ICA. Don't miss this unique and valuable program!

Last day for early registration: April 9, 2008-5 p.m. CST more information at the conference website http://www.utcle.org/conference_overview.php?conferenceid=796

MOVES / JOBS

Leading Arbitration Practitioner Anne Marie Whitesell to Join Dechert

International law firm Dechert LLP is pleased to announce that Anne Marie Whitesell, former Secretary General of the ICC International Court of Arbitration from 2001-2007, will be joining the firm's international arbitration practice in April 2008. At the ICC, Ms Whitesell headed up the Secretariat of the International Court of Arbitration, where she supervised approximately 1100 international arbitration cases involving parties from over 120 countries each year. She also worked closely with the 126 members of the International Court of Arbitration hailing from 88 different countries, and contributed to the development of the institution's profile and reputation around the world.

Ms Whitesell joins a dedicated arbitration team that has expanded significantly since its formation in 2005, and has been recognised "as a key player in international arbitration, both as counsel and arbitrators" by Legal 500 EMEA, an "extremely serious player in the market" by Chambers Europe and "a leading team with a global practice" by leading French legal magazine Décideurs, Stratégie Finance et Droit. The group is also ranked amongst the twenty leading law firms for international arbitration globally in Global Arbitration Review magazine. Leading players in Dechert's arbitration group include Pierre Mayer, Eduardo Silva Romero, Xavier Nyssen, and Philip Dunham, all based in Paris.

After starting in Paris, Ms Whitesell will be based in Dechert's Washington, D.C., office where she will work to further develop the firm's U.S-based arbitration team. Dechert is determined to extend the reach, breadth, and depth of its international arbitration practice, and having Ms. Whitesell in Washington is an important step in achieving that objective.

"Anne Marie Whitesell is widely recognized as a leading figure in the international arbitration arena, her stature and extensive experience will be a tremendous asset to the firm," said Barton J. Winokur, Dechert chairman.

Ms Whitesell received her JD from the University of Virginia School of Law and her Doctorate in law from the University de Paris I, Panthéon-Sorbonne. She is admitted to the New York State Bar and to the United States District Courts for the Southern and Eastern Districts of New York, has practised with law firms in both the United States and in France, and was a lecturer at the University de Paris I, Panthéon-Sorbonne and the Institut de Droit Comparé (University de Paris II).