Melanie van Leeuwen will be the keynote speaker of the 6th edition of the Paris Arbitration Week that will take place from 28 March to 1 April 2022. As per last year, the event will be hosted in simultaneously virtually and physically in Paris. Please see Le Monde du Droit, 27 January 2022 for more information about Melanie’s role in this event.
Sophia von Dewall and Emmanuel Foy were promoted to partners on 1 January 2022.
The promotion was reported in the press in the following articles :
Global Arbitration Review – 7 January 2022 (click here to see the original article)
“Two new partners for Derains & Gharavi Derains & Gharavi has appointed two new partners who have been with the firm for a decade and helped to secure high-profile wins in cases involving Albania and Bahrain: Sophia von Dewall and Emmanuel Foy.
The two Paris-based lawyers were promoted before the holiday, with the promotions taking effect on 1 January.
Derains & Gharavi’s founder Hamid Gharavi tells GAR: “We are fortunate to welcome two dynamic, talented, home-grown arbitration specialists to the partnership who will be among the leaders of their generation. They have played an important role in the successful representation of our clients over the past decade in some of the most complex commercial and investment treaty arbitrations we have handled.”
Von Dewall, who is Dutch and qualified in Paris and Amsterdam, joined Derains & Gharavi as an associate in 2012 after seven years at Freshfields Bruckhaus Deringer. There, she started out practising corporate law before switching to dispute resolution and worked in the New York, London and Amsterdam offices.
She was appointed counsel at Derains & Gharavi in 2017.
Foy, who is French and Irish, joined Derains & Gharavi as an intern and has worked as an associate at the firm since 2013.
Soon after joining the firm, both von Dewall and Foy worked with Gharavi to secure ICSID wins for Albania in cases brought by Greek fuel distributor Mamidoil and scratch card investors Burimi and Eagle Games. They also acted in commercial cases on behalf of the state.
Ledina Mandia, who was Albania’s General State Advocate at the time and subsequently Deputy Prime Minister, says the state’s collaboration with Derains & Gharavi was highly successful and that von Dewall and Foy “provided first class legal assistance that contributed to us winning all of these cases.”
“I strongly recommend both of them,” she says.
Von Dewall has since then successfully represented a leading engineering procurement construction contractor in an ICC arbitration over a power plant (with partner Melanie van Leeuwen) and a major Dutch bank in a post-M&A dispute under the rules of Belgian arbitration institute CEPANI.
She has also acted in arbitrations for Dutch media network RTL. Marjolein van der Linden, director of legal at RTL, describes her as a “thorough, independent, critical, legal mastermind, who has never lost a case for us.”
“She gets to the bottom of a legal case by dissecting each piece of documentation and evidence and then builds irrefutable strong and compelling legal argumentation,” she says. “She is eloquent in all of her languages as well as in writing.”
Dutch arbitrator Albert Jan van den Berg, who acted alongside her in the RTL cases, says, “She is great to work with, gifted not only with superb analytical skills but also with lots of humour. She is very smart and unbelievably hard working.”
Von Dewall also receives praise from Swiss arbitrator Michael Schneider, who says that in a legally and technically complex case she proved herself “an excellent counsel, of the type that I find most effective.”
“She has thorough knowledge of the file, is factual and elegant in presentation and responsive to the questions of the tribunal,” he says, adding that he looks back on her appearance in the case “with pleasure and admiration”.
Von Dewall regularly sits an arbitrator herself.
As well as acting for Albania, Foy has been part of a team led by Gharavi and Beirut-based partner Nada Sader that in 2017 secured an award of US$22 million for Desert Line Projects in two Muscat-seated ICC construction arbitrations against Oman.
More recently, Foy acted alongside Gharavi in a politically sensitive UNCITRAL arbitration brought by two Iranian banks, Banks Melli and Saderat, against Bahrain (the first investment treaty arbitration faced by the state). In November, Bahrain was ordered to pay over €200 million damages to the banks for the “politically motivated” expropriation of their joint venture in Manama.
Foy has also been secretary to the tribunal in a long running arbitration chaired by Gharavi, with British barrister Joe Smouha QC and Swiss lawyer Charles Poncet as co-arbitrators.
Smouha says: “I was delighted to hear of Emmanuel’s promotion to the partnership – he is a very able and talented arbitration practitioner, of deep experience particularly in the investment arbitration field, and will undoubtedly be very successful as a partner at Derains & Gharavi, a talent to watch.”
Poncet says: “Emmanuel is a terrific lawyer, a remarkable advocate and one of the great arbitrators of tomorrow. I am sure his partnership with Derains & Gharavi will be a great success”.
The promotions bring the number of partners at Derains & Gharavi to seven. Gharavi tells GAR that the firm “continues to favour organic growth through internal training and the promotion of associates.”"
Le monde du droit – le magazine des professions juridiques – 24 January 2022 (click here to see the original article)
“Le cabinet Derains & Gharavi annonce la promotion comme associés de Sophia von Dewall et Emmanuel Foy
Derains & Gharavi s’élargit encore avec la promotion de Sophia von Dewall et Emmanuel Foy, en qualité d’avocats associés.
Fondé en 2009, le cabinet d’avocats Derains & Gharavi regroupe plus de 20 avocats spécialisés en arbitrage international, tant dans le domaine commercial, la construction, le droit international des investissements, le droit international privé ou public, la résolution des différents entre Etats, ou encore le droit du sport. Il représente de nombreux États (l’Iran, la Roumanie, la Fédération de Russie, le Soudan, l’Égypte etc.), institutions internationales (l‘ONU), entreprises, et investisseurs français et étrangers (TRASTA, Nokia, RTL Group etc.), dans des affaires ayant trait au secteur bancaire, minier, le pétrole et le gaz, les fusions-acquisitions, les médias et les télécommunications entre autres. A cela s’ajoutent plusieurs dossiers d’arbitrage dans le sport.
Avec pas moins de 500 arbitrages conclus à son actif, et un portfolio moyen de 100 arbitrages en cours en tant qu’arbitre ou conseil, dans plus de 140 pays, le cabinet s’est imposé depuis plusieurs années en tant que référence dans le domaine.
Inscrite au Barreau de Paris et d’Amsterdam, de nationalité néerlandaise, Sophia von Dewall a rejoint le cabinet en 2012, après 7 ans chez Freshfields Bruckhaus Deringer dans les bureaux de New-York, Londres et d’Amsterdam.
Au sein du cabinet, Sophia von Dewall a contribué avec Me Hamid Gharavi à plusieurs victoires de l’Albanie dans des dossiers d’investissement devant le CIRDI (Centre international pour le Règlement des Différends Relatifs aux Investissements), et intervient dans d’autres dossiers étatiques, dont deux en représentation de la Roumanie et l’Egypte. Elle a également défendu avec succès les intérêts d’une banque néerlandaise majeure dans un arbitrage CEPANI concernant une fusion-acquisition, ainsi que le groupe médiatique RTL dans un arbitrage concernant l’exploitation de divers droits télévisuels. Sophia von Dewall intervient aussi comme arbitre dans de nombreux dossiers.
Emmanuel Foy, de nationalité franco-irlandaise, inscrit au Barreau de Paris après une formation complète en Angleterre (LL.B et LL.M) et en France (Licence et deux Master II), a rejoint le cabinet en 2013 en tant que stagiaire. Il a, dans la foulée, été recruté en tant que collaborateur.
Après être également intervenu aux côtés de Me Gharavi et Me von Dewall dans les dossiers Albanais et Roumains, il a notamment participé au succès du cabinet dans un important arbitrage CNUDCI, largement commenté dans la presse nationale et internationale, initié pour le compte de deux banques étatiques iraniennes (les banques Melli et Saderat)“.
Finyear – 25 January 2022 (click here to see the original article)
“Le cabinet Derains & Gharavi annonce la promotion comme associés de Sophia von Dewall et Emmanuel Foy
Derains & Gharavi, cabinet d’avocats classé parmi les meilleurs en arbitrage international, s’élargit encore avec la promotion interne de deux talents : Sophia von Dewall et Emmanuel Foy, en qualité d’avocats associés.
Fondé en 2009, le cabinet d’avocats Derains & Gharavi regroupe une dizaine de nationalités et plus de 20 avocats spécialisés en arbitrage international, tant dans le domaine commercial, la construction, le droit international des investissements, le droit international privé ou public, la résolution des différents entre Etats, ou encore le droit du sport. Il représente de nombreux États (l’Iran, la Roumanie, la Fédération de Russie, le Soudan, l’Égypte etc.), institutions internationales (l’ONU), entreprises, et investisseurs français et étrangers (TRASTA, Nokia, RTL Group etc.), dans des affaires ayant trait au secteur bancaire, minier, le pétrole et le gaz, les fusions-acquisitions, les médias et les télécommunications entre autres. A cela s’ajoutent plusieurs dossiers d’arbitrage dans le sport.
Avec pas moins de 500 arbitrages conclus à son actif, et un portfolio moyen de 100 arbitrages en cours en tant qu’arbitre ou conseil, dans plus de 140 pays, le cabinet s’est imposé depuis plusieurs années en tant que référence dans le domaine.
C’est dans cet environnement d’envergure internationale au sein d’un cabinet en pleine croissance que Sophia von Dewall et Emmanuel Foy sont aujourd’hui cooptés comme associés.
“C’est avec joie que nous annonçons l’association au sein de notre cabinet de deux talentueux spécialistes de l’arbitrage formés par la ‘maison’. Ils ont tous les deux joué un rôle important dans la représentation de nos clients et dans les victoires obtenues au cours de la dernière décennie et ce, dans certains de nos plus complexes dossiers. Ils figurent parmi les meilleurs de leur génération et vont marquer les prochaines années”, confirme Me Hamid Gharavi, associé-fondateur de Derains & Gharavi. Un cabinet qui attache une importance particulière aux promotions internes, et souhaite “continuer à former et à mettre en avant des talents prometteurs”.
La nouvelle associée Sophia von Dewall se dit “honorée de rejoindre en tant qu’associée un cabinet composé de personnalités aussi exceptionnelles et talentueuses, qui ont fait de celui-ci un cabinet incontournable en matière d’arbitrage international. Dans ce nouveau rôle, je souhaite mettre mon expertise et mon engagement au service de nos clients dans leurs dossiers les plus complexes ou stratégiques, qui nécessitent une approche ‘out of the box’ et qui ont fait la réputation du cabinet”.
Son confrère et maintenant associé, Emmanuel Foy, abonde en ce sens : “je suis extrêmement honoré par cette promotion au sein du cabinet dont les associés, aussi prestigieux qu’avant-gardistes, m’ont recruté et formé depuis 10 ans. J’espère pouvoir, dans ce nouveau rôle, continuer à promouvoir le rayonnement international du cabinet et sa contribution au développement du droit en assurant la meilleure représentation de ses clients”.
À propos de Sophia von Dewall Inscrite au Barreau de Paris et d’Amsterdam, de nationalité néerlandaise, Sophia von Dewall a rejoint le cabinet en 2012, après 7 ans chez Freshfields Bruckhaus Deringer dans les bureaux de New-York, Londres et d’Amsterdam. Au sein du cabinet, Sophia von Dewall a contribué avec Me Hamid Gharavi à plusieurs victoires de l’Albanie dans des dossiers d’investissement devant le CIRDI (Centre international pour le Règlement des Différends Relatifs aux Investissements), et intervient dans d’autres dossiers étatiques, dont deux en représentation de la Roumanie et l’Egypte. Sophia a également défendu avec succès les intérêts d’une banque néerlandaise majeure dans un arbitrage CEPANI concernant une fusion-acquisition, ainsi que le groupe médiatique RTL dans un arbitrage concernant l’exploitation de divers droits télévisuels. Sophia intervient également comme arbitre dans de nombreux dossiers.
À propos d’Emmanuel Foy Emmanuel Foy, de nationalité franco-irlandaise, inscrit au Barreau de Paris après une formation complète en Angleterre (LL.B et LL.M) et en France (Licence et deux Master II), a rejoint le cabinet en 2013 en tant que stagiaire. Il a, dans la foulée, été recruté en tant que collaborateur. Après être également intervenu aux côtés de Me Gharavi et Me von Dewall dans les dossiers Albanais et Roumains, il a notamment participé au succès du cabinet dans un important arbitrage CNUDCI, largement commenté dans la presse nationale et internationale, initié pour le compte de deux banques étatiques iraniennes (les banques Melli et Saderat). Cet arbitrage s’est soldé par une sentence rendue en novembre 2021 condamnant le Bahreïn à verser plus de EUR 200 millions aux deux banques, au motif que l’expropriation de leur investissement avait été motivée par des considérations politiques, et donc en violation du droit international, et ce dans un contexte d’hostilité de certains pays arabes dont l’Arabie Saoudite contre l’Iran“.
Décideurs Magazine (Leaders Ligue) – 27 January 2022 (click here to see the original article)
“Derains & Gharavi promeut deux avocats en interne
Formés “par la maison”, Sophia von Dewall et Emmanuel Foy sont les deux nouveaux associés de Derains & Gharavi. Au cours des dix années passées au sein du cabinet, tous deux ont eu l’occasion de s’illustrer sur d’importants dossiers d’arbitrage.
Chez Derains & Gharavi, il faut désormais compter deux associés supplémentaires. Fidèle à son attachement pour les promotions internes, le cabinet spécialisé en arbitrage international a promu Sophia von Dewall et Emmanuel Foy. Deux talents “formés par la maison” qui, souligne Hamid Gharavi, associé fondateur du cabinet, “ont joué un rôle important dans les victoires obtenues au cours de la dernière décennie”. Il n’en doute pas : les deux avocats “figurent parmi les meilleurs de leur génération et vont marquer les prochaines années”.
Tous deux se disent “honorés” par leur association. Sophia von Dewall, inscrite aux barreaux de Paris et d’Amsterdam, où elle a étudié le droit européen, a rejoint Derains & Gharavi en 2012. Elle s’est investie dans des dossiers variés : arbitrages d’investissement devant le Cirdi, pour le groupe médiatique RTL et pour une importante banque néerlandaise, en matière de fusions-acquisitions. Avant, elle a passé sept ans entre les bureaux new-yorkais, londonien et amsterdamois de Freshfields Bruckhaus Deringer. Dans d’autres dossiers, elle intervient aussi comme arbitre.
D’abord stagiaire, en 2013, puis collaborateur, Emmanuel Foy a fait toutes ses classes avec Derains & Gharavi. Il s’est illustré dans un important arbitrage CNUDCI, lancé pour le compte de deux banques étatiques iraniennes expropriées de leur investissement par le Bahreïn. Il s’est inscrit au barreau de Paris après un parcours universitaire réalisé en France et en Angleterre“.
Derains & Gharavi obtains a EUR +200 million award for leading Iranian banks against the Kingdom of Bahrainthe_time('j F Y');?>
Derains & Gharavi obtained a EUR +200 million award on November 9, 2021, against the Kingdom of Bahrain for leading Iranian banks for illegal pretextual and politically driven expropriation of their shares in Future Bank by Bahrain in PCA Case No. 2017-25, Bank Melli Iran (Iran) and Bank Saderat Iran (Iran) v. The Kingdom of Bahrain see
- Washington post, November 26, 2021: Iranian banks notch win in dispute over sanctions enforcement;
- Figaro, November 28, 2021: Iran: satisfaction des banques après la condamnation de Bahreïn, Manama conteste;
- Figaro, November 30, 2021: L’Iran veut récupérer ses avoirs gelés à l’étranger;
- Global Arbitration Review (GAR), November 22, 2021: Bahrain held liable for political expropriationin the following terms:“Bahrain has been ordered to pay over €200 million damages plus costs to two Iranian state-owned banks for the unlawful expropriation of their banking venture in Manama in an act of “political retribution” in the wake of the 2015 Iran nuclear deal – but the state says a set-off means the financial value of the award could be eroded to nothing.
On 9 November, a tribunal presided over by Swiss arbitrator Gabrielle Kaufmann-Kohler upheld the claims of Banks Melli and Saderat that Bahrain had indirectly expropriated Future Bank by placing it under the administration of its central bank and subsequently in liquidation – in breach of Article 6 of the Bahrain-Iran bilateral investment treaty. It found it did this in the context of Saudi Arabian-led hostility to Iran in the wake of the nuclear deal.
In a 235-page award, which GAR has seen, the tribunal said it based its ruling on the “staggering” lack of evidence of reasons why Future Bank was put into administration, combined with the political context. These led it to believe that the justifications Bahrain afterwards gave for its action were “merely pretextual“.
It said it considered it “significant” that another Iranian company operating in Bahrain, the Iran Insurance Company, was put into administration on the very same day as Future Bank – and during the same meeting of the central bank’s crisis management committee.
It also noted the severity of the decision to put Future Bank into administration, normally an action of “last resort“, and the failure to consider alternative ways of dealing with it.
Other claims brought by Banks Melli and Saderat, including claims for moral and reputational damages, were rejected. So too were Bahrain’s admissibility objections based on the Iranian banks alleged “unclean hands“, breaches of international public policy and failure to exhaust local remedies.
The case was under the 1976 UNCITRAL rules and administered by the Permanent Court of Arbitration in The Hague. Filed in 2017, it was originally presided over by German arbitrator Rudolf Dolzer, with French arbitrator Emmanuel Gaillard as the banks’ appointee to the tribunal and former UK Supreme Court judge Lord Collins as Bahrain’s appointee.
Dolzer died suddenly on 3 April 2020 and Gaillard almost exactly a year later, on 1 April 2021, with the pair being replaced by Kaufmann-Kohler and Belgian arbitrator Bernard Hanotiau, respectively.
Although neither of the replacement arbitrators had been there for the hearing in the offices of Shearman & Sterling in Paris in May 2019, they were able to issue the award with Collins after hearing oral summaries of the evidence (in Kaufmann-Kohler’s case) and reviewing the evidence and transcripts of the hearing (in Hanotiau’s case).
It was Bank Melli’s and Saderat’s case in the arbitration that Bahrain’s expropriation of Future Bank was part of a Saudi-led, politically motivated campaign against Iranian businesses that also saw it target the Iran Insurance Company and Iranian central bank.
Bahrain defended the claims by alleging that Future Bank had failed to comply with Bahraini banking regulations and engaged in substantial illegal conduct, including money laundering and circumventing economic sanctions against Iran. This justified the actions taken against it, Bahrain argued.
Details of the alleged illegal conduct were leaked to The Washington Post in April 2018, with Bahraini officials telling the newspaper that Iran had introduced Future Bank into the kingdom as “a Trojan horse” to dodge sanctions and help finance terrorism.
More recently, Bahrain held a series of well-publicised trials in which Future Bank and Banks Melli and Saderat (together with other Iranian banks) were convicted of sanction-dodging and fined millions of Bahraini dinars. Officials of the banks were also convicted in their absence and sentenced to lengthy terms of imprisonment.
In August, an Iranian foreign ministry spokesman vehemently denounced these trials, alleging that they were “driven by political ends” and that the defendants had not been notified of the proceedings or allowed to defend themselves.
In the award, the tribunal accepted there was “limited” evidence of illegal activities by Future Bank but said this only emerged after it was placed into the administration of Bahrain’s central bank on 30 April 2015, on the recommendation of the crisis management committee. The committee did not have evidence of illegality before it and accordingly did not consider it, the tribunal said.
In fact, the tribunal said the decision to put Future Bank into administration was taken by the committee “without any substantial deliberation or consideration of reasons“. The minutes of its meeting merely recorded that the bank’s continued operation would “cause harm to the production of financial services and the general interest in the kingdom“.
Giving evidence, the governor of the central bank – who was on the committee – could not recall any reasons for the decision and there was no “paper trail” of discussions at earlier meetings that led to it, the tribunal said.
The tribunal said the “manifest” lack of reasons suggested that the decision was “not a legitimate law enforcement measure” on Bahrain’s part. If it had been, it said it was confident there would have been “a full documentary record of internal correspondence, reports and minutes of meetings discussing the reasons justifying such an extreme measure.“
It was “striking” that there was only one document, the minutes of the committee meeting, that shed any light on Bahrain’s decision, it said – and this had been disclosed only following a production order.
The tribunal said that Bahrain’s central bank did not appear to have raised significant concerns about Future Bank’s non-compliance with regulations before 30 April 2015 or sought up-to-date evidence of non-compliance.
Asked during the hearing why he had not issued Future Bank with fines or warnings before, the governor of the central bank said he was “a very patient man” but offered no explanation as to why his patience had suddenly run out.
There was also no evidence of the central bank considering “less restrictive measures” to punish the non-compliance, the tribunal said. The governor testified that only administration and liquidation were discussed and gave “no credible reason” why the suspension of Future Bank’s licence would not have sufficed.
Combined with all this, the tribunal said it could not ignore the “wider political context” at the time that Future Bank was put into administration.
It noted that just a few weeks before, on 2 April 2015, Iran had agreed with China, France, Germany, Russia, the UK and the US to accept constraints on its nuclear programme in exchange for some relief from the economic sanctions that had long been imposed on the state. This agreement led to the signing of the Joint Comprehensive Plan of Action on 14 July 2015.
It also noted reports that Saudi Arabia was strongly opposed to the nuclear deal and had put pressure on neighbouring and other states to sever ties with Iran, as well as Bahrain’s “strong ties” with and economic dependence on Saudi Arabia.
The tribunal said it did not think there was sufficient evidence before it to show “nationality-based discrimination” on Bahrain’s part but “the political context and…absence of…reasons” for putting both Future Bank and the Iran Insurance Company into administration on the same day were “strong circumstantial evidence” that the state’s motivation was “political retribution“.
The only apparent similarity between the two entities was that both were Iranian-owned businesses, it said.
A statement made by an official of Bahrain’s central bank that it had been “a sovereign decision” to put Future Bank into administration supported the finding that the action was politically-motivated, the tribunal held. Although Bahrain argued that any decision of a central bank or government agency is “sovereign” in nature, the tribunal said the “natural meaning of the expression” and context suggested that the decision was “dictated by a political agenda as opposed to regulatory considerations“.
From all this, the tribunal concluded that Bahrain’s “ex post facto” reasons for putting Future Bank into administration were not the real ones and the decision was “a political one… not a result of the bank’s alleged shortcomings.”
Bahrain had acted, it said, not in “bona fide” response to criminality or regulatory breaches and to stabilise its financial sector, but “with a contrived agenda of political retribution against the claimants’ investment.“
The state’s actions amounted to indirect expropriation because, although Banks Melli and Saderat retained formal ownership of their shares in Future Bank, they had been prevented from exercising their rights as shareholders for six years, the tribunal said.
It considered that this expropriation had become permanent as the banks had “no realistic prospect” of recovering their rights as shareholders; “nor is it clear, more than six years from Future Bank’s placement in administration, whether and to what extent the claimants will receive proceeds from the bank’s liquidation.”
As well as awarding damages of over €200 million (the exact figure is unclear for reasons that will emerge), the tribunal ordered Bahrain to pay the Iranian banks simple interest in 5-year US Treasury bonds from the date of expropriation to the date of payment of the award.
It said these damages could be set off in the liquidation process, in light of debts Banks Melli and Saderat owe to Future Bank, but the position would depend on the chronology of the collections.
“If the claimants collect under this award before liquidation proceeds are paid out…it would be up to the competent Bahraini authorities to consider the amounts at issue and avoid the materialisation of the risk of double recovery,” the tribunal said.
“If, by contrast, the claimants receive liquidation proceeds before they collect on the award, then the tribunal sees no reason why the liquidation payment could not come in deduction of the amounts of damages owed hereunder.”
A request by the banks that they should be given advance immunity to any set-off was refused.
With respect to the banks’ request for €10 million moral and reputational damages, the tribunal said that the burden of proof rested on them as claimants to prove they had suffered damage caused by Bahrain’s BIT breaches and that they had failed to offer evidence of this.
The banks had argued that their professional reputation was affected by “the sensational claims raised for the first time in this arbitration” and the leak to The Washington Post, while Bahrain countered that any such damage flowed from their own conduct “as longstanding and notorious participants in sanctions evasion and financial crime“.
Claims under other articles of the BIT were rejected as the facts relied on were the same as those in the unlawful expropriation claim and they would not “would not alter or add to the remedies already available to the claimants“.
With respect to costs, Bahrain was ordered to pay nearly 88% of the banks’ share of the €1.8 million costs of the tribunal and PCA, around €722,000. The tribunal said that neither party should alone bear the extra costs caused by the “sad and unforeseen” deaths of Dolzer and Gaillard, which required two reconstitutions of the tribunal and the re-hearing of oral submissions.
Summarising its findings in the costs section of the award, the tribunal said that the banks had “largely prevailed on the preliminary objections, as well as on liability and quantum” but “did not succeed with respect to their argumentation on valuation methodology, interest rate and moral damages“.
It said both sides had conducted the proceedings efficiently and professionally and, while each made unsuccessful applications – for interim measures in the claimants’ case and security for costs in Bahrain’s case – these were not abusive.
Banks Melli and Saderat were represented in the case by a team from Derains & Gharavi, led by the firm’s founder Hamid Gharavi, who is a French-Iranian dual national. Gharavi – who has also won a treaty case against South Korea for Iranian claimants – served Bahrain with a notice of dispute on behalf of the Iranian Insurance Company in 2017 but GAR understands that the case was stayed by agreement of the parties pending the outcome of the arbitration over Future Bank.
Gharavi is also behind a US$1 billion claim against Bahrain brought by Iran’s central bank, also relating to investments allegedly lost in the wake of the 2015 nuclear deal. The central bank is among those that have been convicted of sanction-dodging in Bahrain.
Approached by GAR for comment, Gharavi paid tribute to Dolzer and Gaillard, praising their “human qualities and contributions to international law.“
Gharavi declined to comment on the award in his clients’ favour save to say that “the ex post facto defences advanced by Bahrain were not only phony but dirty and increased costs for the banks and Bahrain.”
As a citizen of Iran himself, he said he found it “regrettable that Bahrain unnecessarily broadened and aggravated the dispute by leaking these ex post facto, dirty allegations to a large mainstream media outlet such as The Washington Post and then initiating a string of rogue local criminal proceedings in Bahrain that targeted not only the claimants but also other Iranian entities and private individuals.“
Gharavi went on to convey his hope that “now that its political taking has been set down in history by a unanimous international tribunal applying an international law instrument, Bahrain will engage in mitigation, limit its own costs and exposure to further awards and return all other Iranian assets taken on its territory over the same period“.
Bahrain was represented in the arbitration by Jan Paulsson, who secured a famous win for the state at the International Court of Justice in a case against Qatar. He worked with a team of lawyers from Three Crowns, the firm he founded and retired from earlier this year.
A source from the Bahraini side tells GAR that although Banks Melli and Saderat are “putting on a brave face“, the reality is that the liquidation of Future Bank extinguishes their claim because it is set off against the admitted debts they owe to that bank, which the source said are close to 140 million Bahraini dinars (€329 million).
The Bahraini criminal proceedings – which the source says followed a lengthy and painstaking investigation by financial fraud experts, including a former executive director of the Bank of England – have furthermore resulted in judgments for more than US$1.4 billion against the Iranian banks.
The source adds that Bahrain was punctilious about putting the Iranian defendants on notice of these proceedings, in a number of ways and in compliance with legal requirements applying to out-of-country defendants – because it predicted Iran’s likely disparagement of the court actions. The defendants chose not to appear because “they had been caught red-handed and had no defence and know the Iranian courts will protect them from enforcement of any judgments,” the source says.
Although confident that the award will be extinguished by set-off, the Bahraini source nevertheless challenges the award’s findings, telling GAR, “the tribunal’s treatment of sanctions and violations by the Iranian banks raises more questions than it answers; it is therefore unacceptable in principle and Bahrain is entitled to seek its set aside by the courts of the Netherlands“.
Among the questions that are said to concern Bahrain are how states can prevent suspected criminal activities by banks if they have to provide full evidence of carefully concealed misdeeds before they are able to halt their operations and investigate; and how the leniency to the Iranian banks sits with the sanctioning of Western banks fined billions in criminal penalties.
Asked whether the Iranian banks agree that the damages may be subject to set-off, Gharavi says that Bahrain declared during proceedings that it did not plan any set-off based on local findings of liability.
Gharavi adds: “It is regrettable that Bahrain has suggested to GAR that it could reply on criminal judgments and other findings in proceedings in Bahrain – staged without proper notice, against unrepresented defendants and on the basis of the very allegations dismissed by this tribunal under international law – to provide an alternative basis for set-off against the award. A unanimous BIT award rendered by a first-tier tribunal after years of adversarial process under international law is enforceable worldwide, whereas ex parte motions and findings in Bahrain based on charges that were held by the tribunal to be phony and political are not worth the paper they are written on.”
GAR’s attention has, meanwhile, been drawn to a currency mix-up in the award, which states in one place that the claimants’ expert calculated the asset-based value of the Iranian banks’ shares in Future Bank as “US$243 million, which converts to 91,366,000 Bahraini dinars” and goes on to set the fair market value at the date of expropriation (and the compensation due) as “91,368,000 Bahraini dinars“. In euros, this would be €215 million.
Later, in the “operative” final section of the award, the compensation due is stated in euros, as €243 million.
As the sums in euros are nearly €30 million apart, the arbitral tribunal has been approached to correct the award, as permitted by the UNCITRAL rules.”
Melanie van Leeuwen has been appointed Chair of the ICC Commission on Arbitration and ADR on 8 November 2021. Melanie had previously been a member of the Commission from 2008 to 2021, and had served as a Vice-Chair since 2018. Until now, she was the liaison officer between the Commission’s Steering Committee and the Working Group on Information Technology in International Arbitration.
GAR commented on this appointment on 8 November 2021 in the following terms:
“Van Leeuwen to chair ICC commission
Derains & Gharavi partner Melanie van Leeuwen has been appointed as the new chair of the ICC commission on arbitration and ADR.
The ICC announced today that it has appointed van Leeuwen to serve a three-year term as chair of the commission, which drafts and revises all the ICC’s rules for dispute resolution.
She takes over from Helsinki-based arbitrator Carita Wallgren-Lindholm, who announced in September that she was stepping down as chair after three years.
Wallgren-Lindholm says, “Melanie is an excellent choice for all her obvious professional qualifications. Having seen her on the job as vice-chair during my tenure I want to single out one feature that in my book characterises a good leader: courage. Melanie will speak her mind also when it may be politically inconvenient and she is not there to please. Good prospects for the commission.”
ICC International Court of Arbitration president Claudia Salomon says, “Melanie has a stellar reputation as counsel and arbitrator in arbitration but is also known as a tremendous leader and communicator, with a demonstrated and long-standing commitment to the work of the Commission.”
Alexander Fessas, secretary general of the ICC Court, adds: “I warmly congratulate Melanie on her appointment and wish her every success in her new role.”
Van Leeuwen has been a member of the commission since 2008, having served as a vice-chair since 2018. Up to now, she has been the liaison officer between the commission’s steering committee and its working group on information technology in international arbitration.
She says, “The steering committee will be focused on improving the engagement with the commission’s membership, revising our working methodologies and taking advantage of recent technological advancements. The name of the game is evolution, not revolution. I am extremely pleased to lead that charge.”
A Dutch national, van Leeuwen joined the partnership at Derains & Gharavi in Paris in 2011 after six years as counsel at Dutch firm Loyens & Loeff. She previously worked at Freshfields and Stibbe.
She has practised international arbitration for 25 years, across industries including energy, mining and construction. Earlier this year, she was instructed by India in a Dutch court challenge a US$1.2 billion award won by the UK’s Cairn Energy, before the parties reached a settlement.
As arbitrator, she is chairing a €400 million treaty claim brought by a Slovenian mining investor against North Macedonia; and a US$15 million claim against Armenia over alleged embezzlement at a real estate project. She is also hearing a US$35 million ICSID claim against Gambia over a tiger-prawn farming business; and is sitting on an annulment committee reviewing a €7 million ICSID award against Madagascar over a destroyed clothes factory.”
Melanie van Leeuwen will speak at the 41st ICC Institute Annual Conference: “Rethinking the Paradigms of International Arbitration” on the topic of “Technology and Arbitration: Revisiting the Paradigms of Case Management”. This hybrid event will take place in Paris and online on 29 November 2021, from 09.00 to 18.00 CET.