Derains & Gharavi International

News

March 2014

Young Arbitrators Forum – ICC YAF Conference

Melanie van Leeuwen will speak at the Young Arbitrators Forum – ICC YAF Conference on the topic of “What happens behind the scenes once you’ve made it in?” on 3 April 2014 in Paris.

Derains & Gharavi retained in ICSID annulment proceeding

Derains & Gharavi has been retained by the company Kilic Insaat in the annulment proceeding of the award rendered in the case Kilic Insaat Ithalat Ihracat Sanayi ve Ticaret Anonim Sirketi v Turkmenistan (ICSID Case No. ARB/10/1). In an article dated 5 February 2014 on that case, GAR reports the following:

“A Turkish construction company that lost an ICSID claim against Turkmenistan for failing to observe a local courts requirement has instructed new counsel in its bid to have the award overturned. 

In its annulment application dated 13 January, Kilic Insaat alleges that the tribunal relied on an incorrect translation of a bilateral investment treaty when it ruled last July that the dispute should first have gone to the Turkmen courts. 

The company has retained Derains & Gharavi for the annulment proceeding, with partner Hamid Gharavi acting as lead counsel. In the arbitration, it used London-based public international law boutique Volterra Fietta and Turkey’s Çetinel Law Firm. 

In its annulment application, Kilic accuses the tribunal of manifestly exceeding its power by disregarding the language of the Turkey-Turkmenistan BIT and the intent of the signatory parties, and by not interpreting the BIT in accordance with the Vienna Convention on the Law of Treaties. 

The company also accuses the tribunal of imposing jurisdictional requirements that did not exist under the applicable law, of failing to state reasons for its decisions, and of committing a serious departure from a fundamental rule of procedure. 

As previously reported in GAR, a tribunal chaired by Canadian J William Rowley QC rejected jurisdiction over Kilic Insaat’s claims in July, holding that it had failed to first submit its dispute to local courts as required under the Turkey-Turkmenistan BIT. 

The panel also ordered Kilic to pay Turkmenistan US$1 million to cover half of the “reasonable” legal costs associated with the case, as well as 75 per cent of the arbitrator fees and administrative costs relating to a May 2012 partial award on the authenticity of different versions of the BIT. 

In its annulment application, Kilic argues that the tribunal relied on an incorrect English-language translation and interpretation of the “authentic” Russian version of the BIT, which was provided by Turkmenistan’s translator; and the opinion of a Turkish linguistics expert who was not a native English speaker. According to Kilic, the translation and opinion provide a mandatory requirement that the dispute be heard in local courts before initiating arbitration, while the “authentic” English and Russian versions of the BIT provide that the dispute can go to arbitration even if the investor has not submitted the case to local courts and a final award was not rendered within one year. 

In other words, Kilic argues that the presence of the word “if” in the dispute resolution clause shows that the BIT’s signatories intended to give an option to the investor either to have direct recourse to international arbitration, or to bring the dispute before the local courts. 

The claimant refers to the translator and linguistics expert as “hired guns” of Turkmenistan and suggests that the tribunal relied on their opinions simply to make the BIT “more correct and elegant from a grammatical point of view.” 

Moreover, Kilic alleges that Turkmenistan failed to submit any documentary or testimonial proof that Turkey and Turkmenistan intended to impose a mandatory recourse to local courts, while the claimants submitted three documents evidencing Turkey’s intent for optional recourse to local courts. Kilic argues the tribunal exceeded its powers and departed from a fundamental rule of procedure by placing the burden of proof on the claimant, rather than the state. 

“It is extraordinary that both contemporaneous and contemporary evidence in relation to the Turkish State’s intent and interpretations moreover given by the competent Turkish state organ […] was given no or very little value,” reads the annulment application. 

The application also compares the linguistic similarities between the Turkey-Turkmenistan BIT and Turkey’s other BITs, particularly those signed with Kazakhstan and Kyrgyzstan. Kilic notes that the ICSID tribunals in the Rumeli and Sistem cases, brought by Turkish investors against Kazakhstan and Kyrgyzstan respectively, did not find that these other BITs contained a mandatory recourse to local courts. The company also argues that Turkey’s intent for optional recourse to local courts in its BITs is evidenced by the fact that Turkey has never relied on mandatory recourse as a jurisdictional defence when it is the respondent in investment treaty cases.

Turkmenistan continues to be represented by a team from GAR 30 firm Curtis Mallet-Prevost Colt & Mosle, as well as Yurttutan Gürel Yörüker Law Firm in Turkey.

Curtis partner Peter Wolrich says, “Turkmenistan firmly maintains that the distinguished tribunal rendered an exceptionally well reasoned award, correctly applied the law and did not exceed its powers. This will be fully demonstrated in the course of the annulment proceedings.”

Derains & Gharavi in second tier of International Arbitration in The Legal 500 Paris 2013-2014

The Legal 500 Paris 2013-2014 has just been released and Derains & Gharavi is once more ranked among the best French arbitration law firms: ”Derains & Gharavi délivre ‘des prestations de première qualité’ et peut s’appuyer sur ‘un réseau international de conseils très solide’. Boutique française d’arbitrage, le cabinet n’affiche pas moins une ‘forte compréhension des différentes cultures’; l’équipe est fortement internationale dans sa composition et constituée d’avocats ‘très ouverts d’esprit’. Le cabinet gère de grands dossiers en provenance de toutes les parties du globe et a remporté plusieurs succès majeurs dans des affaires d’investissement de premier plan. L’équipe représente Repsol et Gas Natural dans un arbitrage CNUDCI aux enjeux financiers très importants l’opposant à Sonatrach et portant sur un contrat d’exploitation de gaz liquéfié. Le cabinet agit également pour le compte d’Oxus Gold dans un autre dossier CNUDCI l’opposant à l’Ouzbékistan concernant des investissements dans le secteur minier. Yves Derains est un arbitre de forte renommée qui intervient aussi en qualité de conseil dans les dossiers ; Bertrand Derains cumule une forte expérience en tant que conseil et arbitre ; le ‘très impressionnant’ Hamid Gharavi est ‘extrêmement pragmatique, percutant’ et ‘capable de résoudre des situations complexes selon les systèmes civiliste et de common law’; enfin la ‘très engagée, travailleuse et compétente’ Melanie van Leeuwen ‘connaît ses dossiers sur le bout des doigts et a l’œil pour les détails’.”

Inaugural Conference of the Dutch Arbitration Association

Melanie van Leeuwen will speak on the supervisory jurisdiction of domestic courts in investment arbitration and investment protection in the European context of the Inaugural Conference of the Dutch Arbitration Association in The Hague, on 25 September 2013.

Derains & Gharavi defies Ukraine’s annulment application against the ICSID Award in favour of Joseph Charles Lemire

Derains & Gharavi obtained on July 8, 2013, a Decision (ICSID Case No. ARB/06/18) dismissing Ukraine’s application for annulment of the Award rendered on March 28, 2011 in favour of Mr. Joseph Charles Lemire. The firm had successfully represented Mr. Lemire, a US investor, in the underlying ICSID Arbitration initiated on the basis of a bilateral investment treaty for unfair and inequitable treatment and discrimination re. his investment in the radio industry, which had led to a favourable Decision on Jurisdiction and Liability followed by a favourable Award for 10 million USD with interests and partial legal costs. It was the first international award holding a State liable for breach of international law in relation to tenders, namely in the case at hand for the award of frequencies in the radio industry.

LIBER AMICORUM

Yves Derains, together with Bernardo Cremades, has been honoured with a Liber Amicorum entitled “Arbitraje Internacional: Pasado, Presente y Futuro” during the VII Congreso Latinoamericano de Arbitraje that took place at the end of April 2013 in Lima. Representing 26 countries and written by 96 well-known authors in the field of arbitration, the publication was coordinated by Carlos Alberto Soto Coaguila and Delia Revoredo Marsana de Mur and is published by the Instituto Peruano de Arbitraje.

Derains & Gharavi secures ICSID win for Albania over gambling investment dispute, with full award of costs

Derains & Gharavi obtained on 29 May 2013 an Award (ICSID Case No. ARB/11/18) in favor of the Republic of Albania, with full legal and arbitration costs, dismissing all claims amounting to approximately USD 10 million for lack of jurisdiction. The claims were brought by an Albanian gambling company and its 65% shareholder (a dual national of both Italy and Albania) under the Italian-Albanian BIT and the Albanian Investment Law for the alleged expropriation of a gambling permit. Please click here to read the full Award. This is the seventh victory of the firm in ICSID arbitration out of seven cases so far, after the victory for the Republic of Albania against Pantechniki (ICSID Case No. ARB/07/21), the Republic of Turkey against Saba Fakes (ICSID Case No. ARB/07/20), and investors DLP v. Yemen (ICSID Case No. ARB/05/17), Rumeli/Telsim v. Kazakhstan (ICSID Case No. ARB/05/16), Lemire v. Ukraine (ICSID Case No. ARB/06/18) and Arif v. Moldova (ICSID Case No. ARB/11/23).

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