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October 16, 2020 |
The Singapore Convention on Mediation: New Kid on the Dispute Resolution Block Now in Force

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The United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention” or the “Convention”) came into force on 12 September 2020.[1] The Singapore Convention is a significant step for international commercial dispute resolution, enabling enforcement of mediated settlement agreements among its signatories. For international businesses this means that they are presented with another viable and effective alternative to litigation and arbitration in resolving their cross-border disputes, especially during the global COVID-19 pandemic.[2]

Key Features of the Convention

By facilitating a negotiated settlement between parties, mediation can usually provide them with a faster, more cost-effective and commercial method of resolving disputes than resorting to litigation and arbitration. With the aid of neutral and qualified professionals, mediated settlements focus parties onto what really matters to them, ironing out their differences swiftly in confidentiality while preserving businesses’ reputation and their long term relationship. However, until the Singapore Convention, no harmonised enforcement mechanism existed for these negotiated settlements. Hence, the only remedy for a party who was faced with an opponent refusing to honour the terms of such negotiated settlement, was to bring an action for breach of contract and then seek to have the subsequent judgment enforced, potentially in multiple jurisdictions. This was an expensive and inefficient deterrent for parties to even consider mediation for the resolution of their disputes, so they instead turned to arbitration or litigation from the outset.

Now, the Singapore Convention has the potential to greatly increase the appeal of mediation as a mechanism of resolving commercial disputes with a cross-border dimension. The Convention provides parties who have agreed a mediated settlement with a uniform and efficient mechanism to enforce the terms of that agreement in other jurisdictions, in the way that the New York Convention on the Recognition and Enforcement of Arbitral Awards (the “New York Convention”) does for international arbitral awards.

Where a State has ratified the Convention, the Convention commands that a relevant court (or other competent authority) in that State enforces an international mediated settlement agreement in accordance with the Convention and its own rules of procedure, without the parties needing to initiate new proceedings for its recognition and enforcement. Provided the settlement agreement falls within the scope of the Convention, the negotiated settlement can also be invoked as a defence by the parties, preventing further litigation or arbitration of a matter already settled by the agreement.

Conditions for Enforcement

The Convention applies to international mediated settlement agreements concluded in writing and which resolve a commercial dispute. A settlement agreement will be classified as “international” under the Convention if the parties have their place of business in different States or the parties’ place of business is different from the State in which a substantial part of the obligations under the settlement agreement is performed or with which the subject matter of the settlement agreement is most closely related. The Convention excludes from its scope agreements arising from transactions engaged in by one of the parties (a consumer) for personal, family or household purposes, or whose subject matter concerns family, inheritance or employment law. The Convention also does not apply to settlement agreements that have been concluded during court proceedings (and which are therefore already enforceable as a judgment) and to settlement agreements that are enforceable as an arbitral award. In addition, signatory States have the option to make reservations to the application of the Convention, excluding settlements involving them or their government agencies; or agreeing to apply the Convention only to the extent that disputing parties have agreed to its application. So far, Belarus and Iran have made reservations to that effect.

A party seeking to enforce a settlement agreement under the Convention will have to show that it resulted from mediation. The Convention sets out a number of ways parties can do this, including provision of a settlement agreement signed by the mediator herself/himself or confirmation that a mediation was carried out; or an attestation by the institution that administered the mediation. When none of these are available, the Convention also allows proof by any other evidence acceptable to the relevant competent authority enforcing the agreement.

Similar to the New York Convention, there are limited grounds for refusal to enforce a mediated settlement agreement under the Singapore Convention. These include cases where:

  1. a party is under some kind of incapacity when entering the settlement agreement;
  2. the settlement agreement is null and void, inoperative or incapable of being performed under the law to which the parties have validly subjected it;
  3. the settlement agreement is not binding, or final according to its terms; or has been subsequently modified;
  4. the obligations in a settlement agreement have been performed, or are not clear or comprehensible; or granting relief would be otherwise contrary to its terms;
  5. there was a serious breach by the mediator of the applicable standards without which a party would not have entered into the settlement agreement; and
  6. there was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator’s impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement.

Likewise, if granting relief would be contrary to public policy in the enforcing State or the subject matter of the dispute is not capable of settlement by mediation under the laws of the enforcing State, then enforcement can be refused by the competent authority of such State as it is the case under the New York Convention.

Interestingly, the Singapore Convention does not have a reciprocity requirement like the New York Convention, meaning that a mediation performed anywhere in the world could potentially be recognised and enforced in a ratifying State.

Acceptance of the Convention

On the first day the Singapore Convention opened for signature (7 August 2019), 46 States including the U.S., Singapore, and China signed the Convention. This rose to 53 by January 2020. At the time of writing (October 2020), six of these signatories have ratified the Convention (Singapore, Qatar and Fiji for whom the Convention came into force on 12 September 2020, followed by Saudi Arabia in November 2020, Belarus in January 2021 and Ecuador in March 2021).[3] None of the EU Member States or the EU itself have signed the Convention yet.[4] Similarly, according to a policy statement from the UK Government in June 2020 and the following Parliamentary discussions in September 2020, no formal decision has yet been taken on whether the UK should join the Convention.[5]

Like the New York Convention, the Singapore Convention requires implementation into domestic legislation.  Thus, the corresponding UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation adopted by the United Nations General Assembly in 2018 (amending the UNCITRAL Model Law on International Commercial Conciliation, 2002)[6] will also assist signatory countries by providing the legal framework and procedures for implementing the Convention.

Why Is the Singapore Convention More Important Now?

As with everything in the current challenging climate, the impact of the COVID-19 pandemic on the civil justice systems and formal dispute resolution methods has been palpable. Since the early months of 2020, businesses have been forced to search for alternative means of resolving their mounting disputes, allowing them to fast-track resolution before things escalate into intractable ends.

As such, the Convention’s entry into force is more than timely. If the current uptake by signatories and the historic experience with the New York Convention in terms of promoting arbitration globally are anything to go by, things are looking very positive for the future of mediation and the Singapore Convention. It is without a doubt that the Convention is a momentous step in growing and developing mediation globally and providing a viable alternative to the current dispute resolution gridlock.

That is probably why international institutions for mediation have been quick to see the opportunities lying ahead. For example, in May 2020, the Singapore International Mediation Centre launched the SIMC COVID-19 Protocol with the aim of providing “a swift and inexpensive route to resolve commercial disputes during the COVID-19 period” by introducing expedited online mediation procedures.[7] Likewise, the London Court of International Arbitration has updated its Mediation Rules for the first time in eight years, effective from 1 October 2020.[8]

Unsurprisingly, Singapore is playing a pioneering role in Asia for the promotion of the Convention and mediation, to further solidify Singapore’s place as an international dispute resolution hub. Its proactivity has a high chance of paying off to cement that position in the long run, especially because mediation is viewed as a means of dispute resolution consistent with Asian business culture, as it encourages parties to work towards an acceptable and face-saving outcome, preserving the commercial relationships. Indeed, various Asian jurisdictions have already enacted mediation legislation in recent years, including Singapore, Hong Kong, Malaysia and China. Thus, the Convention is one more step in the right direction for Singapore, perhaps giving it the slight edge over its biggest rival in the region—Hong Kong—as an alternative dispute resolution centre.

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   [1]   Available at: https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements.

   [2]   See our previous alert on the Convention here: https://www.gibsondunn.com/singapore-convention-on-mediation-and-the-path-ahead/.

   [3]   See here for a full list of signatories.

   [4]   However, please note that the Member States have the benefit of the Mediation Directive  No.2008/52/EC which allows the enforcement of cross-border mediated settlement agreements through the national courts of EU Member States.

   [5]   Available here and here.

   [6]   Available at: https://uncitral.un.org/en/texts/mediation/modellaw/commercial_conciliation.

   [7]   Available at: http://simc.com.sg/simc-covid-19-protocol/.

   [8]   See https://www.lcia.org/lcia-rules-update-2020.aspx.


Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s International Arbitration and Transnational Litigation practice groups, or the following:

Cyrus Benson - London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden Q.C. - London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com) Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Rahim Moloo - New York (+1 212-351-2413, rmoloo@gibsondunn.com) Ceyda Knoebel - London (+44 (0)20 7071 4243, cknoebel@gibsondunn.com) Brad Roach - Singapore (+65 6507 3685, broach@gibsondunn.com) Robson Lee - Singapore (+65 6507-3684, rlee@gibsondunn.com) Brian Gilchrist - Hong Kong (+852 2214 3820, bgilchrist@gibsondunn.com) Elaine Chen - Hong Kong (+852 2214 3821, echen@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

October 5, 2020 |
Benchmark Litigation Europe 2021 Names Four Partners Stars

The 2021 edition of Benchmark Litigation Europe has recognized four partners as stars in their respective practice areas: London partners Cyrus Benson and Penny Madden were recognized as stars in International Arbitration; London partner Philip Rocher was recognized as a star in Commercial and Transactions, Insurance, and International Arbitration; and Paris partner Jean-Pierre Farges was recognized as a star in Banking and Financial Services, Commercial and Transactions, Insolvency, and Insurance. Benchmark Litigation Europe was published September 17, 2020. Cyrus Benson serves as Co-Chair of the firm’s International Arbitration Practice Group. Cyrus represents clients from a wide variety of sectors before commercial and investment treaty tribunals with particular experience in telecoms, oil & gas, mining and infrastructure disputes. ​Penny Madden is also Co-Chair of the International Arbitration Practice Group. She has a wide range of experience in all key aspects of international arbitration with particular expertise in shareholder, telecommunications, SPA, energy, international trade and insurance disputes. Philip Rocher specializes in litigation, often with an international element, and regulatory and internal investigations. He has extensive experience in the financial services sectors. Philip regularly advises on high value disputes arising from the full range of commercial activities and has taken many large and complex matters through to a concluded trial. Jean-Pierre Farges specializes in complex M&A litigation, arbitration, industrial risk, construction, international trade, insurance, reinsurance, equity capital insolvency dispute matters and public and administrative law disputes and regulatory issues. He has been involved in a number of major disputes before state courts and arbitral tribunals, acting for banks, funds companies and listed industrial companies.

October 5, 2020 |
Gibson Dunn Ranked in the 2021 UK Legal 500

Gibson Dunn earned 13 practice area rankings in the 2021 edition of The Legal 500 UK. Four partners were named to Legal 500’s Hall of Fame, recognizing individuals who receive consistent feedback from their clients for continued excellence, and four other partners were named Leading Lawyers in their respective practices. The firm was recognized in the following categories:

  • Corporate and Commercial: Corporate Tax
  • Corporate and Commercial: Equity Capital Markets – Mid-High Cap
  • Corporate and Commercial: EU and Competition
  • Corporate and Commercial: M&A: upper mid-market and premium deals, £500m+
  • Dispute Resolution: Commercial Litigation: Premium
  • Dispute Resolution: International Arbitration
  • Dispute Resolution: Public International Law
  • Human Resources: Employment – Employers
  • Projects, Energy and Natural Resources: Oil and Gas
  • Public Sector: Administrative and Public Law
  • Real Estate: Commercial Property – Investment
  • Real Estate: Property Finance
  • Risk Advisory: Regulatory Investigations and Corporate Crime (advice to corporates)
Legal 500’s Hall of Fame for 2021 consists of: Steve Thierbach – Corporate and Commercial: Equity Capital Markets; Philip Rocher – Dispute Resolution: Commercial Litigation; Cyrus Benson – Dispute Resolution: International Arbitration; and Alan Samson – Real Estate: Commercial Property – Investment and Real Estate: Property Finance. The partners named as Leading Lawyers are Sandy Bhogal – Corporate and Commercial: Corporate Tax; Ali Nikpay – Corporate and Commercial: EU and Competition; Jeffrey Sullivan – Dispute Resolution: International Arbitration; and Anna Howell – Projects, Energy and Natural Resources: Oil and Gas. Benjamin Fryer has been named a Next Generation Partner for Corporate and Commercial: Corporate Tax. Additionally, Claibourne Harrison has been named a Rising Star for Real Estate: Commercial Property – Investment, and Mitasha Chandok has been named a Rising Star for Projects, Energy and Natural Resources: Oil and Gas. The guide was published on September 30, 2020. Gibson Dunn’s London office offers full-service English and U.S. law capability, including corporate, finance, dispute resolution, competition/antitrust, real estate, labor and employment, and tax.  Our lawyers advise international corporations, financial institutions, private equity funds and governments on complex and challenging transactions and disputes.

October 5, 2020 |
Law360 Names Eight Gibson Dunn Partners as 2020 MVPs

Law360 named eight Gibson Dunn partners among its 2020 MVPs.  Law360 MVPs feature lawyers who have “distinguished themselves from their peers by securing hard-earned successes in high-stakes litigation, complex global matters and record-breaking deals.” The list was published on October 4, 2020. Gibson Dunn’s MVPs are:

  • Thomas Dupree, a Transportation MVP – Tom is Co-Partner-in-Charge of the Washington, D.C. office.  He is an experienced trial and appellate advocate. He has argued more than 80 appeals in the federal courts, including in all thirteen circuits as well as the United States Supreme Court.  He has represented clients throughout the country in a wide variety of trial and appellate matters, including cases involving punitive damages, class actions, product liability, arbitration, intellectual property, employment, and constitutional challenges to federal and state statutes.
  • Scott Edelman, a Media & Entertainment MVP – Scott is a partner in the Century City office and Co-Chair of the Media, Entertainment and Technology Practice Group.  He has first-chaired numerous jury trials, bench trials and arbitrations, including class actions, taking well over twenty-five to final verdict or decision.  He represents multiple studios, television networks, music companies, production companies and other media-related entities.
  • Shukie Grossman, a Fund Formation MVP – Shukie is a partner in the New York office and Co-Chair of the Investment Funds Practice Group.  His practice focuses on the formation of private investment funds, including domestic and offshore funds focused on buyout, growth equity, infrastructure, real estate, credit and other investment strategies.  He also advises investment firms on their operation, regulation and internal governance arrangements.
  • Andrew Lance, a Hospitality MVP – Andrew is Co-Partner in Charge of the New York office and Head of the Real Estate Practice Group’s Hotel and Hospitality Practice.  His clients include private real estate equity funds, hedge funds, sovereign wealth funds, corporate and individual developers and owners, mortgage and mezzanine lenders, REITs and other public and privately held companies investing in or using real estate.
  • Kristin Linsley, a Technology MVP – Kristin is a partner in the San Francisco office.  She specializes in complex business and appellate litigation across a spectrum of areas, including water and energy law, cybersecurity and technology law, international and transnational law, data and privacy, and complex financial litigation.  She has broad experience in the area of data privacy, cybersecurity, and technology law, representing companies such as Facebook and Expedia with respect to some of their most challenging data security issues.
  • Brian Lutz, a Securities MVP – Brian is a partner in the San Francisco office and Co-Chair of the Securities Litigation Practice Group.  His practice focuses on complex commercial litigation, with an emphasis on corporate control contests, securities class actions, and shareholder actions alleging breaches of fiduciary duties.  He represents and advises clients in connection with shareholder activist matters, mergers and acquisitions, and corporate governance issues, and regularly represents and advises boards of directors and board committees on litigation issues.
  • Rahim Moloo, an International Arbitration MVP – Rahim Moloo is a partner in the New York office.  His practice focuses on assisting clients to resolve complex international disputes in the most effective and efficient way possible.  His experience spans a number of industries, including energy, mining, telecommunications, financial services, infrastructure, construction and consumer products.
  • Jason Schwartz, an Employment MVP – Jason is a partner in the New York office and Co-Chair of the Labor & Employment Practice Group.  His practice includes sensitive workplace investigations, high-profile trade secret and non-compete matters, wage-hour and discrimination class actions, Sarbanes-Oxley and other whistleblower protection claims, executive and other significant employment disputes, labor union controversies, and workplace safety litigation.

September 22, 2020 |
Thirteen Gibson Dunn Partners Recognized in Expert Guides’ Women in Business Law

Expert Guides has named 13 Gibson Dunn partners to its 2020 Guide to the World’s Leading Women in Business Law, which recognizes top female legal practitioners advising on business law. Selection to this guide is determined by a survey of fellow legal practitioners. The Gibson Dunn partners included in the guide are Hong Kong partners Kelly Austin and Patricia Tan Openshaw, London partners Anna Howell and Penny Madden, Los Angeles partners Jennifer Bellah Maguire, Catherine Conway, Ruth Fisher and Amy Forbes, New York partners Barbara Becker, Lauren Elliot and Jane Love, San Francisco partner Mary Murphy and Washington, D.C. partner Judith Alison Lee. The guide was published on September 7, 2020.

July 10, 2020 |
Gibson Dunn’s International Arbitration Practice Recognized in 2020 GAR 30

Global Arbitration Review ranked Gibson Dunn among the 2020 GAR 30, its annual guide to the world’s top 30 arbitration practices. A client noted that the firm’s International Arbitration practice is “outstandingly skilled, fully available [and] capable of adapting efficiently to the evolving dynamics of the case.” The GAR 30 was published on July 9, 2020. Gibson Dunn’s International Arbitration Practice Group advises leading multinational corporations in arbitration proceedings around the world. We regularly assist clients in litigation involving arbitration issues and have represented clients in national court proceedings under the Hong Kong Arbitration Ordinance, the U.S. Federal Arbitration Act, the English Arbitration Act and the New York Convention. We advise clients on each stage of the dispute resolution process, from the drafting of arbitration clauses to mediation or early neutral evaluation to the conduct of arbitration proceedings and through to the enforcement of arbitral awards.

July 6, 2020 |
Law360 Names Five Gibson Dunn Lawyers as 2020 Rising Stars

Five Gibson Dunn lawyers were named among Law360’s Rising Stars for 2020, featuring “attorneys under 40 whose legal accomplishments transcend their age.”  The following lawyers were recognized: New York partner Brian Ascher in Media & Entertainment, Dallas partner Krista Hanvey in Benefits, New York partner Saee Muzumdar in Mergers & Acquisitions, New York associate Lindsey Schmidt in International Arbitration, and Washington, D.C. of counsel Molly Senger in Employment. The list of Rising Stars was published on July 5, 2020.

June 25, 2020 |
Best Lawyers in France 2021 Recognizes 17 Gibson Dunn Attorneys

Best Lawyers in France 2021 recognized 17 Gibson Dunn attorneys and named Gibson Dunn the Insolvency and Reorganization Law “Law Firm of the Year.” The partners highlighted, with their respective practice areas, include: Nicolas Autet – Public Law, and Regulatory Practice; Ahmed Baladi – Information Technology Law, Intellectual Property Law, Privacy and Data Security Law, Technology Law, and Telecommunications Law; Nicolas Baverez – Administrative Law, Public Law, and Regulatory Practice; Maïwenn Béas – Administrative Law, and Public Law; Amanda Bevan-de Bernède – Banking and Finance Law, and Investment; Eric Bouffard – International Arbitration; Bertrand Delaunay – Mergers and Acquisitions Law, and Private Equity Law; Jérôme Delaurière – Tax Law; Jean-Pierre Farges – Arbitration and Mediation, Banking and Finance Law, Insolvency and Reorganization Law, and Litigation; Pierre-Emmanuel Fender – Insolvency and Reorganization Law, and Litigation; Benoît Fleury – Corporate Law, and Insolvency and Reorganization Law; Bernard Grinspan – Corporate Law, and Information Technology Law; Ariel Harroch – Corporate Law, Mergers and Acquisitions Law, Private Equity Law, and Tax Law; Patrick Ledoux – Corporate Law; Vera Lukic – Information Technology Law, Privacy and Data Security Law, and Technology Law; Judith Raoul-Bardy – Corporate Law; and Jean-Philippe Robé – Banking and Finance Law, and Corporate Law. The list was published on June 25, 2020.

June 12, 2020 |
Best Lawyers in the United Kingdom 2021 Recognizes 12 Gibson Dunn Attorneys

Best Lawyers in the United Kingdom 2021 has recognized 12 Gibson Dunn attorneys as leading lawyers in their respective practice areas: Cyrus Benson – International Arbitration; Thomas Budd – Real Estate Finance; Gregory Campbell – Private Equity Law; James Cox – Employment Law; Patrick Doris – International Arbitration; Charlie Geffen – Mergers and Acquisitions Law, and Private Equity Law; Penny Madden – International Arbitration; Mitri Najjar – Corporate Law; Philip Rocher – Litigation; Alan Samson – Financial Services, Real Estate Finance, and Real Estate Law; Jeffrey Sullivan – International Arbitration; and Steve Thierbach – Capital Markets Law. The list was published on June 9, 2020.

June 1, 2020 |
Supreme Court Holds That The New York Convention Permits The Use Of Equitable Estoppel To Enforce An Arbitration Agreement Among Nonsignatories

Click for PDF Decided June 1, 2020 GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, No. 18-1048

Today, the Supreme Court unanimously held that the New York Convention permits the use of state-law equitable estoppel doctrines to compel arbitration between parties that did not sign the arbitration agreement. 

Background: ThyssenKrupp entered into a series of contracts with F.L. Industries to buy three cold rolling mills for use in the manufacture of steel products. Each contract contained a clause calling for arbitration of all “disputes arising between both parties” to be arbitrated in Germany. The contracts defined “Parties” to include the “Buyer” (ThyssenKrupp) and “Seller” (F.L. Industries). They further defined “Seller” and “Parties” to include subcontractors.

F.L. Industries subcontracted with GE Energy to supply motors for the mills. The motors allegedly failed, and Outokumpu (who purchased the manufacturing plant from ThyssenKrupp) sued GE Energy in Alabama state court. After removing the case to federal court, GE Energy moved to compel arbitration in Germany under the arbitration agreement in the ThyssenKrupp-F.L. Industries contracts and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). The district court compelled arbitration, ruling that the contracts were signed, written agreements between ThyssenKrupp and F.L. Industries and that GE Energy, as a subcontractor, was not excluded from the arbitration provision.

The Eleventh Circuit reversed, holding that because the New York Convention applied only to parties that actually sign the arbitration agreement the Convention precluded the use of equitable estoppel doctrines to compel arbitration among parties that did not sign the arbitration agreement.

Issue: Whether the New York Convention permits the use of equitable estoppel to compel arbitration between parties that did not actually sign the arbitration agreement.

Court's Holding: Yes. The New York Convention does not preclude parties who did not sign an arbitration agreement from seeking to compel arbitration under state-law equitable estoppel doctrines.

“[T]he Convention requires courts to rely on domestic law to fill the gaps; it does not set out a comprehensive regime that displaces domestic law.

Justice Thomas, writing for the unanimous Court

What It Means:
  • The Court’s analysis focused on the text of the New York Convention, a 1958 treaty designed to facilitate the recognition and enforcement of international arbitration agreements. Because the New York Convention is silent on whether parties who did not sign an arbitration agreement can compel arbitration, the Court concluded that nothing in the Convention’s text prohibits the application of equitable estoppel. The Court’s decision therefore aligned the enforcement of international arbitration agreements under the New York Convention with the enforcement of domestic arbitration agreements under the Federal Arbitration Act, which permits parties to use equitable estoppel and other state-law doctrines when seeking to enforce arbitration agreements.
  • The Court’s decision is consistent with the Court’s broader trend of favoring the resolution of disputes through arbitration. The Court also noted that its decision is consistent with the weight of authority from other countries that have signed the New York Convention and that permit enforcement of arbitration agreements by nonsignatories.
  • The Court did not elaborate on the conditions that must be satisfied to compel arbitration under equitable estoppel, or the body of law governing those conditions. Instead, the Court remanded the case for the lower courts to determine those issues.

The Court's opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders:

Appellate and Constitutional Law Practice

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Matthew D. McGill +1 202.887.3680 mmcgill@gibsondunn.com

Related Practices: International Arbitration and Enforcement

Robert L. Weigel +1 212.351.3845 rweigel@gibsondunn.com Rahim Moloo +1 212.351.2413 rmoloo@gibsondunn.com
© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 13, 2020 |
The Termination of Intra-EU Bilateral Investment Treaties and the Impact on Foreign Investment Protection in Europe

Click for PDF On 5 May 2020, twenty-three European Union (“EU”) Member States[1] signed an agreement purporting to terminate approximately 130 intra-EU bilateral investment treaties or “BITs” (the “Termination Agreement”). The Termination Agreement will enter into force 30 days after the Secretary-General of the Council of the EU receives a second instrument of ratification, approval or acceptance.[2] The four EU Member States that have not signed the agreement are: Austria, Finland, Ireland and Sweden. Any intra-EU BITs concluded by these EU Member States shall not be affected by the Termination Agreement. The United Kingdom (the “UK”), which left the EU on 31 January 2020, was not a signatory, and its BITs with EU Member States therefore remain in force. The Termination Agreement does not apply to multilateral investment treaties where EU Member States are parties, such as the Energy Charter Treaty (the “ECT”). Background Intra-EU BITs are agreements between two EU Member States containing reciprocal undertakings for the promotion and protection of private investments made by nationals of the signatories in each other’s territories. Apart from providing for substantive investment protections against adverse state measures (such as expropriation, unfair or inequitable treatment or discrimination), these BITs typically include arbitration provisions allowing for the settlement of investment disputes between the contracting Member State hosting the investment, and investors of the other contracting Member State before a private international arbitration tribunal instead of national courts. The preamble of the Termination Agreement considers, inter alia, that, “in compliance with the obligation of Member States to bring their legal orders in conformity with [EU law]”, Member States must “draw the necessary consequences from [EU law] as interpreted in the CJEU in [the Achmea Judgment]”. The Achmea Judgment (Achmea B.V. (formerly known as Eureko B.V.) v. Slovakia) was rendered by the Court of Justice of the European Union (the “CJEU”) on 6 March 2018. The CJEU held that investor-State arbitration clauses in intra-EU BITs, such as the one in Article 8 of the BIT between The Netherlands and Slovakia,[3] are incompatible with EU law.[4] Further information about the Achmea Judgment can be found in our previous client alert here. Following the Achmea Judgment, respondent EU Member States in intra-EU investment treaty arbitration proceedings (i.e., involving an investor from an EU Member State) have consistently sought to challenge the jurisdiction of tribunals relying on the findings of the Achmea Judgment. So far, these efforts have proved unsuccessful; indeed, every single arbitral tribunal that has considered the “intra-EU objection” to jurisdiction has rejected it. The Termination Agreement

(1) What does the Termination Agreement cover?

In summary, the Termination Agreement provides as follows:
  • Pursuant to Article 2(1), certain intra-EU BITs are terminated – a full list of which is contained in Annex A to the Agreement.
  • Article 2(2) confirms that the “sunset clauses” in those intra-EU BITs – that is, clauses in treaties that extend the protection of investments made prior to the date of termination of the BIT for a further period of time – are, likewise, terminated.
  • Article 3 further clarifies that the sunset clauses contained in intra-EU BITs that have previously been terminated prior to the Termination Agreement are, similarly, terminated. The relevant BITs are listed in Annex B to the Agreement.
  • Article 4(1) states that the signatories confirm that arbitration clauses in intra-EU BITs are contrary to EU law and are “thus inapplicable” as of “the date on which the last of the parties to a[n intra-EU BIT] became a Member State of the [EU]”. The practical effect of this provision is that any arbitration clauses under the relevant BITs cannot serve as the basis for arbitration proceedings and the Termination Agreement applies retroactively as of the date the last contracting party to the BIT joined the EU.
  • Article 4(2) confirms that the termination of the intra-EU BITs and sunset clauses described above shall take effect as soon as the Termination Agreement enters into force.
  • Article 5 states that arbitration clauses in terminated intra-EU BITs shall not serve as the legal basis for new arbitration proceedings. In other words, a tribunal constituted under such BITs would lack jurisdiction since there would be no consent to arbitration.
  • Article 7 sets out the “duties” of the signatories in either pending or new arbitration proceedings. Respondent states to either type of proceedings that have signed the Termination Agreement must inform the relevant arbitral tribunals in those proceedings of the “legal consequences of the Achmea Judgment” as described in Article 4 of the Termination Agreement – i.e., that arbitration clauses in intra-EU BITs have no legal effect. (This is, however, a wider interpretation of what the CJEU in fact concluded in the Achmea Judgment, which is that intra-EU BITs “such as Article 8 of the Agreement [between the Netherlands and Slovakia]” (emphasis added) are precluded under EU law.)
  • In addition, where those signatories are parties to judicial proceedings concerning an award issued on the basis of an intra-EU BIT, they are obliged to ask the competent court to “set aside, annul [or] refrain from recognising and enforcing” the award. (Of course, in the context of proceedings brought under the Convention on the Settlement of Investment Disputes (the “ICSID Convention”), national courts have no power to set aside or annul ICSID awards as the Termination Agreement envisages.)
The Termination Agreement then sets out two “transitional measures” designed to aid EU Member States involved in pending arbitration proceedings. First, the Agreement provides that an investor may ask the Member State to enter into settlement discussions in such proceedings, which shall be overseen by “an impartial facilitator”.[5] Any final settlement agreement must include an obligation for the investor to withdraw the arbitration claim or renounce execution of its award, as well as a commitment to refrain from initiating new arbitration proceedings.[6] The Termination Agreement, however, is silent as to what might happen if such settlement discussions are unsuccessful and how pending arbitration proceedings are then to proceed. Second, the Termination Agreement entitles investors to “access the judicial remedies under national law against a measure contested in Pending Arbitration Proceedings” even if national time limits for bringing such actions have expired (but subject to the time limits in the Agreement). This is, again, subject to, inter alia, an investor withdrawing the pending arbitration proceedings and waiving all rights and claims pursuant to the relevant BIT. It is yet to be seen how the Termination Agreement will impact pending arbitration and national court proceedings concerning intra-EU BITs. Ultimately, those tribunals and national courts will need to assess how the Termination Agreement interacts with other international obligations of the EU Member States that might also be in play, such as those under the ICSID Convention and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

(2) What does the Termination Agreement not cover?

The preamble to the Termination Agreement expressly notes that it does not cover intra-EU proceedings under Article 26 of the ECT, and the Termination Agreement suggests that this will be dealt with by the EU and its Member States “at a later stage”.[7] Further, Article 6(1) states that it does not affect “Concluded Arbitration Proceedings”– proceedings where a final award was rendered prior to the Achmea Judgment on 6 March 2018, and where no challenge to that award was pending (for example, annulment proceedings) on that date – which explicitly “shall not be reopened”. Article 6(2) similarly notes that the Termination Agreement does not affect agreements to settle an arbitration that were initiated prior to the Achmea Judgment. What Should Investors Consider Doing in Light of the Termination Agreement? In light of the Termination Agreement, it would be wise for EU-based investors with investments in other EU Member States to consider structuring (or restructuring, as the case may be) their investments through a vehicle incorporated outside of the EU in order to ensure they are fully protected by a BIT between a Member State and a third State not affected by the Termination Agreement. Caution should be taken in the context of restructuring investments, however, and investors seeking to do so should seek legal advice. This is because, whilst the re-structuring of investments before a dispute arises with a view to maximising investment treaty protections is a legitimate business goal; undertaking such a restructuring when a potential dispute is already on the horizon, may result in the loss of treaty protection. ______________________          [1]   The twenty-three EU Member States are: Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.          [2]   The press release can be accessed at ec.europa.eu.          [3]   The Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, 1 January 1992.          [4]   The ruling can be accessed at curia.europa.eu.          [5]   Termination Agreement, Article 9(7). If the parties fail to agree on a candidate, the Termination Agreement Director General of the Legal Service of the European Commission will designate a former Member of the CJEU to appoint one “after having consulted” the parties (Article 9(8)).          [6]   Termination Agreement, Article 9(14)(a).          [7]   Termination Agreement, p. 5.
The following Gibson Dunn lawyers assisted in the preparation of this client update: Jeff Sullivan, Rahim Moloo, Ceyda Knoebel, Stephanie Collins and Theo Tyrrell. Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm's International Arbitration Practice Group, or the following: International Arbitration Group: Cyrus Benson - London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden - London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com) Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Rahim Moloo - New York (+1 212-351-2413, rmoloo@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 30, 2020 |
Technology and Construction Court of England and Wales Holds That Experts Can Owe Clients a Fiduciary Duty of Loyalty

Click for PDF The Technology and Construction Court of England and Wales (“TCC”) has this month held that expert consultancy firms can owe a fiduciary duty of loyalty to a client. The relevant decision is A Company v (1) X (2) Y (3) Z, in which Mrs Justice O’Farrell has continued an injunction preventing the Defendant, an expert witness services firm, from acting for Claimant’s opponent in an ICC arbitration because, in short, that would be contrary to the firm wide fiduciary duty of loyalty that was created when Defendant’s Asian subsidiary was retained by the Claimant in another ICC arbitration that relates to the same project and overlaps on issues.[1] The court’s decision can be read here. The party names have been anonymised by the court because the litigation relates to two ongoing arbitrations. Below is our summary and initial reaction to the decision. The background facts Claimant is the developer of a petrochemical plant on which multiple construction related disputes have arisen. Claimant approached the First Defendant X (“X”) to provide expert services on 15 March 2019. A confidentiality agreement was signed on the same day and a letter of engagement concluded on 13 May 2019. Claimant’s formal letter of instruction, incorporating the confidentiality agreement by reference, followed on 26 May 2019. In short, as per the letter of engagement, X’s expert K and his team in Asia were to, in broad terms, undertake a delay analysis and prepare a report, give oral evidence at the arbitration hearing, and provide “ad-hoc support” to Claimant and its “professional team” (presumably lawyers and other experts) in connection with an arbitration commenced against Claimant in relation to Packages A and B of the project (the “Works Package Arbitration”). K and his team started work – evaluating delays on the construction subcontract for non-process buildings - around June 2019. Later in the summer of 2019, an ICC arbitration was commenced against Claimant by a third-party entity seeking payment for sums due and owing under the project’s EPCM agreement (the “EPCM Arbitration”). In defence of those arbitration proceedings Claimant is advancing counterclaims for delay and disruption. Claimant is also alleging that the third-party caused Claimant loss by failing to manage and supervise the contractor. Materially, in the EPCM Arbitration, the delays in dispute are the same as those in the Works Package Arbitration. In October 2019, however, the Second and Third Defendants were approached to provide expert services – quantum and delay - for the Claimant’s opponent in the EPCM Arbitration.[2] K emailed Claimant noting the third party’s approach and setting out his firm’s position that there was no legal conflict because other experts and offices in the Defendant’s network would be involved in the EPCM Arbitration and not K and his team working on the Works Package Arbitration. Between October and February there was no correspondence between Claimant and the Defendants in relation to the EPCM Arbitration, but later, in February 2020, Claimant learnt that its opponent on the EPCM Arbitration was in the process of instructing M – an expert working for the Defendant X firm – to act as quantum expert. The appointment of M was confirmed to Claimant by email dated 10 March 2020. Prior to this confirmation, on 5 March 2020, Claimant had written to K of X to expand his engagement to include expert services (delay) in respect of the EPCM Arbitration. On learning of M’s appointment in the EPCM Arbitration, Claimant’s counsel put on record its position, requested further information to consider the issues more thoroughly, and reserved all rights - including the right to challenge the appointment of the Defendants in the EPCM Arbitration. Counsel for Claimant’s opponent responded by rejecting Claimant’s position, resisting the information request, and countering that Claimant’s objections were simply an attempt to derail the EPCM Arbitration timetable. By letter dated 12 March 2020, Claimant informed X that its engagement in the EPCM Arbitration created a conflict of interest contrary to its terms of engagement in respect of the Works Package Arbitration. In a letter of response seven days later, N of the Third Defendant (“Z”) rejected the suggestion of conflict and set out the measures taken to ensure X’s compliance with its confidentiality obligations to Claimant. As a result of this impasse, on 20 March 2020, Claimant applied (ex parte) to the TCC seeking an interim injunction preventing the Defenders from providing expert services to the third party in the EPCM Arbitration. The application was granted. Continuation Hearing At the continuation hearing, Claimant submitted that the interim injunction should be continued on the ground that Defendant’s provision of services to the third party in the EPCM Arbitration is a breach of the rule that a party owing a duty of loyalty to a client must not, absent informed consent, agree to act or actually act for a second client in a manner which is inconsistent with the interests of the first. The Defendants opposed continuation on the grounds that the claimant's application is misconceived. In short, they said, independent experts do not owe a fiduciary duty of loyalty to their clients and there is, in this case, no conflict of interest or risk that confidential information has been or will be disclosed to the third party. The material issues before the court at the continuation hearing were:

i) whether independent experts, who are engaged by a client to provide advice and support in arbitration or legal proceedings, in addition to expert evidence, can owe a fiduciary duty of loyalty to their clients;

ii) whether, on the evidence before the Court, the claimant is entitled to a fiduciary obligation of loyalty from the first and/or second and /or third defendants;

iii) whether there has been, or may be, a breach of any duty of loyalty or confidence; and

iv) if so, whether the Court should exercise its discretion and grant the injunction.

Whether independent experts can owe a fiduciary duty of loyalty to clients A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty; the principal is entitled to the single-minded loyalty of his fiduciary.[3] A number of legal authorities were cited by the parties in argument. In respect of expert witnesses, Mrs Justice O’Farrell distilled the authorities to the following general principles:

i) an expert can be compelled to give expert evidence in arbitration or legal proceedings by any party, even in circumstances where that expert has provided an opinion to another party;[4]

ii) when providing expert witness services, the expert has a paramount duty to the court or tribunal, which may require the expert to act in a way which does not advance the client's case;[5] and

iii) where a fiduciary duty of loyalty arises, it is not limited to the individual concerned. It extends to the firm or company and may extend to the wider group[6].

iv) Where no fiduciary relationship arises, having regard to the nature and circumstances of the expert's appointment, or where the expert's appointment has been terminated, the Bolkiah test based on an ongoing obligation to preserve confidential and privileged information does not necessarily apply to preclude an expert from acting or giving evidence for another party.[7]

Accordingly, having regard to the above - and noting Defendants’ failure to cite any authority supporting its proposition that an independent expert does not owe a fiduciary obligation of loyalty to his or her client - Mrs. Justice O’Farrell found that experts can, in fact, owe such a fiduciary duty. Paragraph 53 of the judgment:
[a]s a matter of principle, the circumstances in which an expert is retained to provide litigation or arbitration support services could give rise to a relationship of trust and confidence. In common with counsel and solicitors, an independent expert owes duties to the court that may not align with the interests of the client. However, as with counsel and solicitors, the paramount duty owed to the court is not inconsistent with an additional duty of loyalty to the client.”
Disposal Having established that an expert can in principle owe a fiduciary duty to his or her client, Mrs Justice O’Farrell assessed whether a duty of loyalty was owed by the Defendants to Claimant as a result of expert K’s engagement in respect of the Works Package Arbitration. Mrs Justice O’Farrell found it was clear in the circumstances that there was a “clear relationship of trust and confidence” giving rise to a fiduciary duty of loyalty because, in addition to providing an expert report, the engagement was to “provide extensive advice and support for the [C]laimant throughout the arbitration proceedings”. Given that a fiduciary duty of loyalty had arisen, it was held, applying Bolkiah, that the duty of loyalty extended – because of the global management, marketing and common financial interest of the Defendants – beyond subsidiary X to the entire group (including Y and Z).[8] On that basis, accepting instruction on the EPCM Arbitration for another client was “plainly a conflict of interest” in breach of the fiduciary duty.[9] The injunction was continued pending trial on the issue. Observations This decision will no doubt cause concern among expert consultancy firms. An initial and understandable reaction will be to update terms of engagement to expressly exclude the fiduciary duty of loyalty. It is however the substance – the contract as a whole, the scope of the engagement - that is examined when deciding whether a relationship is fiduciary. While an express exclusion will help, it is by no means the complete solution: to avoid the suggestion of a fiduciary relationship, experts must ensure that the terms and parameters of their engagement are clearly and comprehensively set out. Also, before accepting an appointment relating to a project on which the firm is already engaged, it’s essential to carefully consider the conflicts position. As this case illustrates, the position of the individual expert or his subsidiary is not all that matters: if another expert in the group owes a fiduciary duty then that may extend to the group as a whole, and where that is the case – absent express consent – the firm cannot act without breaching its duty of loyalty to the first client. The authors are grateful to Trainee Solicitor Adam Ismail, London, for his assistance in preparing this alert. _____________________ [1] A Company v (1) X (2) Y (3) Z [2020] EWHC 809 (TCC). [2] The First, Second and Third Defendants are part of the same group. [3] Bristol & West Building Society v Mothew [1998] Ch 1 (CA), per Millett LJ at p. 18 (as cited at para. 40 of the Judgment in the present case). [4] Harmony Shipping Co SA v Saudi Europe Line Limited [1979] 1 WLR 1380. [5] Jones v Kaney [2011] 2 AC 98 (SC). [6] Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 (HL) , per Lord Millett at p. 234; Marks and Spencer Group plc and Another v Freshfields Bruckhaus Deringer [2004] EWCA Civ 741; Georgian American Alloys, Inc & Or v White and Case LLP & Anor [2014] EWHC 94. [7] Meat Corporation of Namibia Ltd v Dawn Meats (UK) Ltd [2011] EWHC 474 (Ch); A Lloyd’s Syndicate v X [2011] EWHC 2487 (Comm); Wimmera Industrial Minerals Pty Ltd v Iluka Midwest Ltd [2002] FCA 653. [8] Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 (HL). [9] A Company v (1) X (2) Y (3) Z [2020] EWHC 809 (TCC), per O’Farrell J at p. 61.
Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm's International Arbitration Practice Group or the following authors: Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Ryan Whelan - London (+44 (0) 20 7071 4176, rwhelan@gibsondunn.com) International Arbitration Group: Cyrus Benson - London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden - London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com) Graham Lovett (+971 (0) 4 318 4620, glovett@gibsondunn.com Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Rahim Moloo - New York (+1 212-351-2413, rmoloo@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 30, 2020 |
Gibson Dunn Ranked in Legal 500 EMEA 2020

The Legal 500 EMEA 2020 has recommended Gibson Dunn in 19 categories in Belgium, France, Germany and UAE.  The firm was recognized in Competition – EU and Global in Belgium; Administrative and Public Law, Data Protection, Dispute Resolution – Commercial Litigation, Industry Focus – IT and the Internet, Insolvency, International Arbitration, Mergers and Acquisitions, Private Equity and Tax in France; Antitrust, Compliance, Corporate, Corporate – M&A Large Deals (€500m+), Corporate – M&A Mid-Size Deals (-€500m), Internal Investigations, and Private Equity in Germany; and Corporate and M&A and Investment Funds in UAE. Dubai partner Chézard Ameer, Paris partners Ahmed Baladi and Jean-Pierre Farges, and Munich partner Benno Schwarz were all recognized as Leading Individuals. Frankfurt partner Dirk Oberbracht and Dubai partner Chézard Ameer were also recognized in The Legal 500’s Hall of Fame. Paris of counsel Vera Lukic was listed as a Rising Star. The publication also recommended 37 Gibson Dunn attorneys in their respective practice areas, with some listed in more than one category.

April 6, 2020 |
California Supreme Court Confirms That the Hague Service Convention Does Not Preempt Right of Parties to Contract for Their Preferred Method of Service

Click for PDF On April 2, 2020, the California Supreme Court issued an important opinion regarding the right of parties to agree to waive the mandatory provisions for service of process abroad under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (hereinafter the “Hague Service Convention”). Gibson Dunn drafted the leading amicus brief that set forth the legal argument that supported the right of private parties to agree to waive the provisions of the Hague Service Convention in the context of proceedings to enforce an award resulting from an international commercial arbitration. I.  The California Supreme Court’s Decision In Rockefeller Technology Investments (Asia) VII v. Changzhou Sinotype Technology Co., Ltd., No. S249923, ___ Cal.5th ___, 2020 WL1608906 (Cal. Apr. 2, 2020), the California Supreme Court reversed a court of appeal decision that had ruled that the failure to comply with the Hague Service Convention rendered a judgment confirming an arbitration award void because the plaintiff’s service of the petition to confirm the arbitration award did not conform with the requirements of the Hague Service Convention.  Instead, the Court, in a unanimous opinion authored by Justice Corrigan, ruled that the parties could agree to provide for notice and service of process through other means, as permitted under California law, because the Hague Service Convention “applies only when the law of the forum state requires formal service of process to be sent abroad” and alternatively, “because the parties’ agreement constituted waiver of formal service of process under California law in favor of an alternative form of notification.”  (Id. at *1.) In Rockefeller, Rockefeller Technology and Changzhou SinoType had contracted to arbitrate their disputes in Los Angeles, to submit to the jurisdiction of the federal and state courts in California, and to consent to service of process by notice via Federal Express or similar courier, with copies via facsimile or email.  (Id.)  After a dispute arose and despite notice as provided in the contract, SinoType did not appear at the arbitration, and a default award for $414.6 million was issued against it.  (Id. at *2.)  Thereafter, Rockefeller petitioned to confirm the award and served the petition and summons pursuant to the notice provisions in the contract.  (Id.)  SinoType did not appear, and the award was confirmed.  (Id.)  Only when Rockefeller sought assignment of various royalty payments owed to SinoType did SinoType assert that Rockefeller’s failure to comply with the Hague Service Convention rendered the judgment confirming the award void.  (Id.) The California Court of Appeal agreed and held that, notwithstanding the parties’ agreement, service had to comply with the Hague Service Convention.  (Id.) In reversing the Court of Appeal, the California Supreme Court “conclude[d] that the parties’ agreement constituted a waiver of formal service of process under California law” and thus the Hague Service Convention did not apply.  (Id. at *5.)  First, the high court observed that the Code of Civil Procedure provides that a petition to confirm, correct, or vacate an arbitral award provides that it shall be served “in the manner provided in the arbitration agreement for service of such petition and notice.”  (Id. at *7, quoting Code Civ. Proc., § 1290.4, subd. (a).)  It then ruled that when the parties agree to waive formal service of process under California law in favor of informal notification, the case does not present the need to transmit a judicial document for formal service abroad under the Hague Service Convention.  (Id.)  And it concluded that “because the parties’ agreement constituted a waiver of formal service of process under California law in favor of an alternative form of notification, the Convention does not apply.”  (Id. at *1.)  It explained that “[r]equiring formal service abroad under California law where sophisticated business entities have agreed to arbitration and a specified method of notification and document delivery would undermine the benefits arbitration provides” and that uncertainty with respect to service “appears contrary to the Legislature’s attempts to position California as a center for international commercial arbitration.”  (Id. at *10.) II.  Conclusions Gibson Dunn has played a leading role in supporting the legal foundation for international commercial arbitration in California.  Its partner, Daniel M. Kolkey, co-authored California’s International Arbitration statute (Code Civ. Proc., § 1297.11 et seq.), chaired a working group formed by the California Supreme Court in 2017 that led to the enactment of legislation authorizing foreign and out-of-state attorneys to represent their clients in international commercial arbitrations in California, and was the author of the lead amicus brief in the Rockefeller case. Gibson Dunn’s amicus brief helped secure the stable future of those choosing California law for their contracts calling for arbitral resolution in their dealings abroad, ensuring California will remain a sought-after market for legal expertise in this increasingly important arena.


For more information, please feel free to contact the Gibson Dunn lawyer with whom you usually work or the leaders of Gibson Dunn’s California Appellate Practice Group and its International Arbitration Practice Group set forth below.

California Appellate Practice Group: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Daniel M. Kolkey – San Francisco (+1 415-393-8420, dkolkey@gibsondunn.com) Julian W. Poon – Los Angeles (+1 213-229-7758, jpoon@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com)

International Arbitration Practice Group: Cyrus Benson – London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden – London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com)

© 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 30, 2020 |
Online Dispute Resolution: An Option for Times of Crisis and Calm

Click for PDF Courts around the world have responded to the COVID-19 outbreak by delaying or suspending proceedings.  While some courts have attempted to use technological solutions such as remote appearances by videoconference to mitigate delays,[1] others have opted to postpone all proceedings deemed non‑essential.[2]  The status of matters pending before courts is changing on a daily basis, in most cases providing little clarity about when or how they will be addressed. Yet, disputes continue to arise, including disputes relating to the disruption and delays caused or exacerbated by the COVID-19 crisis.[3]  To minimize further disruption in an increasingly uncertain economic climate, many parties may seek avenues to resolve such disputes immediately and efficiently.  Though not a panacea, these parties may consider entering post-dispute arbitration or mediation agreements that tend to provide greater flexibility to the parties to resolve disputes remotely and in an expedited manner.  Last week, Gibson Dunn published certain best practices to consider when entering such agreements.[4]  In this client alert, we outline key features of online arbitration and mediation options which are particularly attractive not only for times of calm, but particularly in times of crises such as this.  In this regard, many arbitration institutions have expressly confirmed that they remain open for business despite the global pandemic.

I. Considerations for Online Dispute Resolution

Online Dispute Resolution (“ODR”) broadly refers to dispute resolution practices that take advantage of the convenience and efficiency of the internet and online communications.  The term encompasses everything from the electronic filing of submissions and exchange of documents to online hearings. Like any avenue for dispute resolution, companies must weigh a number of considerations to determine whether ODR is appropriate for their situation.  With respect to filing and exchanging documents, electronic filing is generally more efficient, economical, environmentally friendly, and less burdensome.  Moreover, remote hearings, which avoid travel time, expenses, and other fees associated with in-person hearings, should typically be more efficient to schedule and less costly for the parties. ODR also allows parties to present their case from anywhere in the world, including from their homes or offices.  This option is particularly important given that COVID-19 has currently reached more than 150 countries in the world, many of which have placed their citizens on lock down and/or have temporarily shut down the courts leaving little recourse for parties requiring immediate assistance.  Of course, companies and counsel may have concerns about whether they will be able to effectively present their case without in-person interactions with the arbitrators, witnesses, experts, opposing parties, and even members of their own party.[5]  But as a growing number of legal practitioners develop experience with ODR, advocates are growing increasingly comfortable with conducting oral arguments remotely.  There are also studies which raise doubts as to the extent to which face-to-face contact actually assists in assessing credibility.[6] There are other potential risks and downsides associated with ODR.  Electronic document exchange and communication are not error‑proof and may present technical problems and cybersecurity risks.  However, these issues are capable of management, as shown by the robust cybersecurity measures recommended for use in international arbitration by the International Council for Commercial Arbitration, the New York City Bar Association and the International Institute for Conflict Prevention and Resolution.[7]  Similar technological and cybersecurity concerns, and remedies, exist for remote hearings. Crucially, the successful use of ODR requires access to a basic modern technological infrastructure, including a reliable internet connection and computers, which may not always be available to parties, particularly in less developed economies.  Many of these issues are, however, being addressed by technological innovations and creative procedures. In the context of arbitration proceedings, Gibson Dunn has successfully conducted cross-examination of witnesses, participated in procedural conferences and emergency application hearings virtually.  While there is likely to be a learning curve for all participants using new technology, the potential benefits may prove well-worth the effort and many new technologies have developed user-friendly interfaces. Of course, in many instances, in-person hearings will be preferable to remote hearings.  But companies should know that in-person hearings are not always necessary, or—as we have come to appreciate in recent weeks—possible.

II. Arbitration and ODR

While any ODR proceeding, whether in court or in arbitration, can face the challenges described above,[8] international arbitration practitioners have developed particular expertise in resolving these issues and using technology to their advantage.[9]  This is because arbitrators and practitioners have long dealt with international parties, often separated by large geographical distance, for whom travel may not always be convenient or even possible.  For example, it is relatively common for witnesses to provide testimony over videoconference if that witness is unable to attend the hearing as a result of visa regulations, government restrictions, or even for business or convenience purposes.  Additionally, for cost and efficiency reasons, sessions involving procedural or interlocutory issues are often held over telepresence or videoconference rather than in‑person. As a result, arbitral institutions have adopted procedural rules and guidelines that allow parties to rely on technological solutions that reduce or even eliminate the need for paper filings and in‑person hearings.  And the international arbitration community has developed specific guidelines and protocols to manage ODR that are available for parties to use in any dispute.  Venues for arbitration hearings, particularly in the international context, often provide assistance with technology and are well-versed in assisting parties to conduct virtual aspects of their arbitrations.[10]  We describe some of these features below.

A. Arbitration Institutions and ODR

As a general matter, arbitral institutions’ rules, particularly international ones, have long provided for a great degree of flexibility that allows hearing and procedural conferences to be conducted virtually.  Several major arbitration institutions have developed  rules and platforms to better enable online or remote arbitrations.  Some have developed platforms enabling arbitration proceedings that can be fully remote—i.e., where submissions are filed exclusively by electronic means and no in‑person hearings are required.  Alongside arbitral institutions, specialized service providers have developed virtual platforms that enable remote hearings and other sessions.[11]  For instance, the procedural rules of the International Chamber of Commerce (“ICC”) enable expedited and emergency arbitration proceedings to be held by “videoconference, telephone or similar means of communication.”[12] In response to the COVID-19 crisis in particular, the ICC, the American Arbitration Association (“AAA”), the AAA’s  international division, the International Centre for Dispute Resolution (“AAA‑ICDR”),[13] JAMS,[14] the International Center for the Settlement of Investment Disputes (“ICSID”),[15] and the Singapore International Arbitration Centre (“SIAC”)[16] have all issued guidance on the use of videoconferencing for remote participation in hearings.  These institutions have highlighted the growing number of online hearings even before the crisis began, and have therefore developed robust systems and staff who are trained to handle such processes.[17] In addition to videoconferencing, arbitral institutions such as the Stockholm Chamber of Commerce (“SCC”)[18] and the London Court of International Arbitration (“LCIA”),[19] have also recently issued guidance on using fully digitized case management systems.[20] A recent ICC arbitration between J&F Investimentos SA and Paper Excellence demonstrates the flexibility offered by arbitration institutions to resolve disputes online.  The hearing in that arbitration was originally scheduled to start this month in São Paulo, Brazil and take place for two weeks.[21]  After the first week of in-person hearings, guidance from authorities in various countries prohibited further in-person hearings due to the COVID-19 outbreak.  Instead of delaying the remainder of the hearing, the parties chose to hold their second week of hearings on the online video platform Zoom with all 70 participants, located in Spain, Singapore, London, and New York, as well as Brazil.[22]  This immediate transition from in-person to online hearings during the midst of the COVID-19 outbreak demonstrates the capacity and benefits of choosing a dispute resolution option that has robust and developed ODR capabilities.

B. ODR Guidance and Protocols

In addition to arbitration institutions that have developed the technological capabilities to conduct proceedings online, there are at least two sets of salient protocols available for use by arbitration practitioners in ODR proceedings. First, the Seoul Protocol on Video Conference in International Arbitration (“Seoul Protocol”)—developed with input from a broad number of arbitration users—offers guidelines on videoconferencing in international arbitrations.[23]  While the Seoul Protocol focuses on witness testimony, its guidelines are informative for remote arbitrations generally.  The Seoul Protocol provides detailed provisions on, among other matters, the conditions under which witnesses must provide testimony, which services are used, technical requirements, troubleshooting and planning, cybersecurity, presentation of documents, and use of interpretation services.[24] Second, the Protocol on Cybersecurity in International Arbitration (“Cybersecurity Protocol”) provides guidance on reasonable information security measures that the parties and arbitrators can take, particularly in light of increasingly virtual hearings and paperless document transfer.[25]  The Cybersecurity Protocol was developed by a working group, established by the International Council for Commercial Arbitration, the New York City Bar Association and the International Institute for Conflict Prevention & Resolution, which recently released the 2020 edition of the Protocol.  The Cybersecurity Protocol includes procedural and practical guidance on how to assess security risks and identify appropriate solutions.

III. Online Mediation Procedures

In addition to arbitration, businesses may also look to mediation[26] as an alternative dispute resolution mechanism that offers many of the same technological advantages as arbitration—either as an independent or initial step in the dispute resolution process.  Online mediation is already popular for a host of disputes, especially in circumstances where the parties are located in different geographic areas, the dispute originated in an online transaction, or the parties have other reasons to avoid meeting in person.[27]  The process offers significant flexibility as mediations may be conducted exclusively through email or chat rooms, subject to the parties’ preferences, where mediators can communicate with the parties, separately and simultaneously, and where documents can be shared only by electronic means.[28]

IV. Next Steps

In light of the current crisis, parties may wish to consider ODR options to resolve their disputes.  A number of considerations, including the type of dispute, amount in dispute, the opposing parties, and the urgency for resolution will need to be considered.  While most dispute resolution mechanisms employed today will inevitably involve some online element, the relevant question for the parties may be to what extent the proceeding can take place online in the interest of saving time and cost. Assuming a party determines it is necessary and feasible to resolve a dispute through ODR, it need not already have a pre-existing arbitration agreement.  Rather, it can enter into a post-dispute ODR agreement, tailored to the specific requirements of the parties and the dispute.  Companies not currently facing a dispute may also consider whether to add ODR clauses for future disputes in their contracts.  Such clauses can preserve the option not just for any future crises but also for disputes that can more efficiently be resolved by virtual means.  As today’s reality has shown, businesses are becoming increasingly comfortable, as they must, to the use of online tools to manage their day-to-day operations.  In the same way, parties should consider the potential for using these same online tools as viable platforms for resolving disputes.

*          *          *

   [1]   For example, on March 24, 2020, the highest appeals court in the United Kingdom conducted a case entirely by video link for the first time in its history, following the imposition of a nationwide lockdown as a result of the COVID-19 pandemic.  Richard Crump, Top UK Court Hears Cases Via Video As Country Locked Down, Law360UK, Mar. 24, 2020, https://www.law360.co.uk/commercial-litigation-uk/articles/1256347/top-uk-court-hears-cases-via-video-as-country-locked-down?nl_pk=d9ba0ccc-104a-4e48-92db-314cec1778be&utm_source=newsletter&utm_medium=email&utm_campaign=commercial-litigation-uk.    [2]   Debra Cassens Weiss, SCOTUS delays arguments while other courts suspend trials or close over COVID-19 conerns, Aba Journal, Mar. 16, 2020, https://www.abajournal.com/news/article/supreme-court-delays-arguments-while-other-courts-through-country-suspend-trials-or-close.  Likewise, US state courts have largely responded to the COVID-19 outbreak by restricting or ending jury trials, and generally suspending in-person proceedings.  National Center for State Courts, State courts are responding to the coronavirus to protect the public, while maintaining access to justice, National Center for State Courts, Mar. 24, 2020, https://www.ncsc.org/Newsroom/Public-health-emergency.aspx.  For example, on March 23, 2020, the New York Supreme Court issued an administrative order putting a stop to all filings, both electronic and paper, deemed non-essential.  Chief Administrative Judge of the Courts, Administrative Order AO/78/20 (N.Y., Mar. 22, 2020), http://nycourts.gov/whatsnew/pdf/AO-78-2020.pdf; Chief Administrative Judge of the Courts, Administrative Order AO/71/20 (N.Y., Mar. 19, 2020), http://nycourts.gov/whatsnew/pdf/AO71-20.pdf.    [3]   See e.g. Gibson Dunn, Coronavirus and Force Majeure: Addressing Epidemics in LNG and Other Commodities Contracts, Gibson, Dunn & Crutcher (Feb. 12, 2020), https://www.gibsondunn.com/coronavirus-and-force-majeure-addressing-epidemics-in-lng-and-other-commodities-contracts/.    [4]   See Gibson Dunn, Practical Solutions to Resolving Commercial Disputes When the Courthouse Is Closed, Gibson, Dunn & Crutcher (Mar. 25, 2020), https://www.gibsondunn.com/practical-solutions-for-resolving-commercial-disputes-when-the-courthouse-is-closed/.    [5]   Remote hearings can also be more difficult to enforce protocols such as witness sequestration.    [6]   See, e.g., Malcolm Gladwell, Talking to Strangers: What we Should Know about the People We Don’t Know (Little Brown and Co. 2019) (discussing studies that challenge the notion that person-to-person contact is actually as informative as it is perceived to be).    [7]   CPR, CyberInsecurity: A New Protocol to Counter Cyberattacks in International Arbitration, International institute for conflict prevention and resolution,  (July 5, 2018), https://www.cpradr.org/news-publications/articles/2018-07-05-cyberinsecurity-a-new-protocol-to-counter-cyberattacks-in-international-arbitration.    [8]   Ering Coe, Technical Difficulties: Courts Face COVID-19 Learning Curve, Law360, Mar. 23, 2020, https://www.law360.com/articles/1256124/technical-difficulties-courts-face-covid-19-learning-curve?nl_pk=e3a36347-a2b9-4d09-8c33-c3067f41fcc6&utm_source=newsletter&utm_medium=email&utm_campaign=special.    [9]   See e.g. Ihab Amro, Online Arbitration in Theory and In Practice: A Comparative Study in Common Law and Civil Law Countries, Kluwer Arbitration Blog, Apr. 11, 2019, http://arbitrationblog.kluwerarbitration.com/2019/04/11/online-arbitration-in-theory-and-in-practice-a-comparative-study-in-common-law-and-civil-law-countries/ (noting that the 2017 Rules of the International Commercial Arbitration Court of the Chamber of Commerce and Industry of the Russian Federal allows for any party to request to participate in a hearing through videoconferencing); Program on Negotiation, Using E-Mediation and Online Mediation Techniques for Conflict Resolution, Harv. L. Sch. Program on Negot., Jan. 27 2020, https://www.pon.harvard.edu/daily/mediation/dispute-resolution-using-online-mediation/ (noting that e-mediation and online mediation services have been offered since the late 1990s). [10]   See, e.g., Arbitration Place, Arbitration Place Virtual: Dispute Resolution for the Digital Age (Mar. 25, 2020), https://mcusercontent.com/5b67e063012fb13aa8dff852a/files/904c774e-5f58-408c-91c5-2071d197d2ee/APV_Fact_Sheet_20_03_2020.pdf. [11]   Id. [12]   ICC Rules of Arbitration, App’x VI, art. 3(5) and App’x V, art. 4(2); see also App’x VI(f), available at https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration. [13]   AAA-ICDR, COVID-19 Update, American Arbitration Association- International Centre for Dispute Resolution (Mar. 20, 2020), https://go.adr.org/covid19.html?_ga=2.128862348.1686453586.1584112272-260696787.1566227680. [14]   JAMS, Coronavirus (COVID-19) Advisory for JAMS Visitors, JAMS Mediation, Arbitration, ADR Services (Mar. 17, 2020), https://www.jamsadr.com/news/2020/coronavirus-(covid-19)-advisory-for-jams-visitors. [15]   ICSID, A Brief Guide to Online Hearings at ICSID, ICSID News Release (Mar. 24, 2020), https://icsid.worldbank.org/en/Pages/News.aspx?CID=362. [16]   SIAC, COVID-19 Information for SIAC Users, Singapore International Arbitration Centre (No Date), https://www.siac.org.sg/images/stories/press_release/2020/[ANNOUNCEMENT]%20COVID-19%20Information%20for%20SIAC%20Users.pdf. [17]   See e.g., ICSID, A Brief Guide to Online Hearings at ICSID, ICSID News Release (Mar. 24, 2020), https://icsid.worldbank.org/en/Pages/News.aspx?CID=362 (“Year-on-year, ICSID has seen a steady uptick in its number of online hearings. In fact, last year about 60 per cent of the 200 hearings and sessions organized by ICSID were held by videoconference.”) [18]   Arbitration Institute of the Stockholm Chamber of Commerce, COVID-19: How the SCC is Responding, Stockholm Chamber of Commerce (Mar. 18, 2020), https://sccinstitute.com/about-the-scc/news/2020/covid-19-how-the-scc-is-responding/. [19]   LCIA, LCIA Service Update: COVID-19, London Court of International Arbitration (Mar. 18, 2020), https://www.lcia.org/lcia-services-update-covid-19.aspx. [20]   Certain less-utilized institutions are now exclusively online.  Though not widely used outside of China, the China Guangzhou Arbitration Commission (“CGAC”), founded in 1995, transformed itself into an online arbitration institution in October 2015 by launching a proprietary arbitration cloud platform and associated procedural rules to run arbitrations entirely online.  See Chen Zhi, The Path of Online Arbitration: A Perspective on Guangshou Arbitration Commission’s Practice, Kluwer Arbitration Blog, Mar. 4, 2019, http://arbitrationblog.kluwerarbitration.com/2019/03/04/the-path-for-online-arbitration-a-perspective-on-guangzhou-arbitration-commissions-practice/ (highlighting the China Guangzhou Arbitration Commission as an online arbitration institution with a proprietary cloud-based arbitration platform for all portions of the arbitration, including filing, delivery of material, hearings, and rendering awards).   Domain name disputes handled by the World Intellectual Property Organization and the Hong Kong International Arbitration Center’s (“HKIAC”) are also dealt with exclusively online.  See Internet Corp. for Assigned Names & Numbers (“ICANN”), Uniform Domain Name Dispute Resolution Policy (2015), https://www.icann.org/resources/pages/udrp-rules-2015-03-11-en (note these are promulgated by ICANN and adopted by HKIAC). [21]   Graziella Valenti, A Pandemia na maior arbitragem societária do país, a disputa pela Eldorado, Exame, Mar. 22, 2020, https://exame.abril.com.br/negocios/a-pandemia-na-maior-arbitragem-societaria-do-pais-a-disputa-pela-eldorado/. [22]   Id. [23]   KCAB International, Seoul Protocol on Video Conference in International Arbitration is Released, Mar. 18, 2020, http://www.kcabinternational.or.kr/user/Board/comm_notice_view.do?BBS_NO=548&BD_NO=169&CURRENT_MENU_CODE=MENU0025&TOP_MENU_CODE=MENU0024. [24]   The full text of the Seoul Protocol on Video Conference in International Arbitration can be found here: http://www.kcabinternational.or.kr/user/Board/comm_notice.do?BD_NO=172&CURRENT_MENU_CODE=MENU0015&TOP_MENU_CODE=MENU0014. [25]   The full text of the  Protocol on Cybersecurity in International Arbitration (2020) can be found here: https://www.arbitration-icca.org/media/14/76788479244143/icca-nyc_bar-cpr_cybersecurity_protocol_for_international_arbitration_-_print_version.pdf. [26]   Mediation, as opposed to litigation and arbitration, provides a mechanism for private parties to discuss and resolve a dispute with the guidance of a neutral third person. [27]   Derric Yeoh, Is Online Dispute Resolution the Future of Alternative Dispute Resolution?, Kluwer Arbitration Blog, Mar. 29 2018, http://arbitrationblog.kluwerarbitration.com/2018/03/29/online-dispute-resolution-future-alternative-dispute-resolution/; Program on Negotiation, Using E-Mediation and Online Mediation Techniques for Conflict Resolution, Harv. L. Sch. Program on Negot., Jan. 27 2020, https://www.pon.harvard.edu/daily/mediation/dispute-resolution-using-online-mediation/. [28]   Id.
Gibson Dunn lawyers have extensive experience in alternative dispute resolution, including drafting alternative dispute resolution clauses, and conducting arbitrations and mediations, both online and through traditional means.  If you have any questions about how your company can formulate a creative procedural mechanism to resolve an ongoing or future dispute, we would be pleased to assist you. Authors: Rahim Moloo, Ankita Ritwik, Patrick Taqui, Kelly Tieu* and Bethany Saul* Please also feel free to contact any of the following leaders and members of the International Arbitration Group: USRahim Moloo, Lindsey Schmidt, Victoria Orlowski, Charline Yim, Ankita Ritwik LondonCy Benson, Penny Madden, Jeff Sullivan, Sarah Wazen DubaiGraham Lovett * - Not admitted to practice in New York; currently practicing under the supervision of Gibson, Dunn & Crutcher LLP. © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 12, 2020 |
Ryan Whelan Named 2020 Legal Personality of the Year

London associate Ryan Whelan was named “Legal Personality of the Year” at the LexisNexis Legal Awards 2020 for his work in leading the legal and political campaign in the UK against “upskirting.” The award was presented on March 11, 2020. Ryan has a broad international practice that includes infrastructure, energy and investment disputes. He is particularly experienced in advising and representing clients in connection with disputes relating to major capital projects. He has experience of litigation in the Court of Session, Scotland, the High Court, London and the DIFC Courts, Dubai. He has also acted in arbitrations under a variety of governing laws and institutional rules, including the ICC, LCIA, SIAC, ADCCAC and DIAC rules.

February 21, 2020 |
UK Supreme Court Paves the Way for Enforcement of an ICSID Award in the Long-Running Micula v Romania Dispute

Click for PDF On 19 February 2020, the UK Supreme Court rendered its judgment in Micula and others v Romania.[1] In a unanimous ruling, the Supreme Court lifted a stay of enforcement of an ICSID arbitral award despite an extant State aid investigation by the European Commission (the Commission). With the stay lifted, the requirement for Romania to provide security as a condition of the stay was discharged. This highly significant decision is the latest stage in the Micula brothers’ (the Claimants) longstanding attempts to enforce their ICSID Award against Romania, which has involved proceedings in numerous jurisdictions. The Court’s judgment concluded that while the English courts have the power to stay execution of ICSID awards in certain limited circumstances, the stay in this case exceeded the proper limits of that power. In particular, the EU Treaties did not displace the UK’s obligations under the ICSID Convention (pursuant to which the UK had a prior (pre-EU-accession) obligation to enforce the Award). Background In December 2013, an ICSID Tribunal issued an Award finding Romania in breach of the Sweden-Romania bilateral investment treaty,[2] and awarding the Claimants compensation of approximately £150 million (~$200 million), plus compound interest until satisfaction of the Award.[3] Romania subsequently commenced ICSID annulment proceedings, which were ultimately rejected.[4] In October 2014, the Claimants applied for registration of the Award before the Commercial Court,[5] pursuant to the Arbitration (International Investment Disputes) Act 1966, which implemented the ICSID Convention into English law. In July 2015, Romania applied for the registration to be varied or set aside. By a counter-application, the Claimants sought an order for security to be made in the event that a stay of enforcement was ordered. Meanwhile, in March 2015, the European Commission issued a decision (the Commission Decision) addressed to Romania concluding that payment of the Award constituted State aid in breach of the Treaty on the Functioning of the EU (the TFEU). Payment was, therefore, prohibited,[6] and any payments made hitherto were to be recovered. The Claimants applied to the General Court of the EU (the GCEU) for the Commission Decision to be annulled. Returning to the UK enforcement efforts: the High Court refused to set aside registration, but granted a stay enforcement pending the outcome of the GCEU proceedings.[7] The High Court meanwhile refused the Claimants’ application for security.[8] In 2018, the Court of Appeal took a different approach. While maintaining the stay, it ordered Romania to provide security in the sum of £150 million.[9] Romania was permitted to appeal the order for security before the Supreme Court. The Claimants cross-appealed the grant of a stay. In a further twist, on 18 June 2019—the morning the Supreme Court proceedings were scheduled to start—the GCEU annulled the Commission’s Decision (the Annulment Decision). The GCEU found that the Commission had exceeded its competence by retroactively applying its State aid powers under the TFEU to events predating Romania’s accession to the EU.[10] The GCEU’s judgment caused the Court of Appeal’s order of a stay (and the conditional security) to lapse. The Supreme Court hearing was postponed. The Commission next made clear its intention to appeal the GCEU’s decision before the Court of Justice of the EU (CJEU) triggering further applications by Romania and the Claimants for the stay of enforcement and grant of security, respectively. The High Court ordered both.[11] A leapfrog application was granted for the parties’ appeals on these issues to be heard by the Supreme Court, with the Commission participating as an intervening party.[12] The Supreme Court Judgment The Supreme Court essentially considered three issues in relation to the stay, advanced by the Claimants. As the stay was lifted, it was unnecessary for the Court to consider Romania’s grounds of appeal against the order of security.

  1. Did the Annulment Decision mean that the EU law duty of sincere cooperation no longer required the English courts to stay enforcement?
EU law provides for a “duty of sincere cooperation”,[13] which includes a mutual legal obligation for the EU and its Member States to assist each other in carrying out tasks which flow from the EU Treaties. It is intended to preserve the effectiveness of actions taken by EU bodies. The issue for the Supreme Court was whether the Annulment Decision also annulled—as the Claimants argued—the Commission’s prior decision initiating formal State aid proceedings against Romania (on the basis it was “tainted by the same illegality”).[14] If so, no requirement existed for the stay to be maintained. The Court disagreed. While the prior decision was subject to the “same flaws” as the Commission Decision, those flaws did not prevent the Commission from relying on it as giving rise to a duty of sincere cooperation on the part of the national courts. Moreover, the Annulment Decision left the State aid investigation open. Absent a final decision by the CJEU and a formal closure of the State aid investigation, the duty of sincere cooperation applies:[15] i.e., the English courts must ensure compliance with EU law. Subject to the further grounds of appeal, the Court found the grant of stay should be upheld.
  1. Do the English courts have the power to grant the stay, and is it incompatible with the ICSID Convention?
The UK signed the ICSID Convention in 1966, prior to its accession to the EU. Under the ICSID Convention, Article 54(1) imposes a duty on national courts to recognise an ICSID award as binding, and to enforce it “as if it were a final judgment” by a domestic court. In the Claimants’ view, while national courts have control over the execution of an award (including the power to grant a temporary stay), it may only do so: (i) for procedural (not substantive) reasons; and (ii) where no inconsistency arises with the (Convention) duty to recognise and enforce the award. The English courts thus did not have the power to grant a stay pending determination of the GCEU proceedings. The Court agreed. The Court first observed that “a notable feature” of the ICSID Convention was that “once the authenticity of an award is established, a domestic court … may not re-examine the award on its merits”; nor can a domestic court refuse to enforce on grounds of public policy.[16] Nevertheless, the Convention’s travaux préparatoires indicate that in “certain exceptional or extraordinary circumstances” national law defences to enforcement may be invoked.[17] With that in mind, and taking into account the wording of Article 54(1), the Court concluded (agreeing with the majority in the Court of Appeal) that English courts have the power to stay execution in the “limited” circumstances described above.[18] In the present case, the Court found the stay “exceeded the proper limits of that power”, and “was not consistent with the ICSID Convention under which the [UK] and its courts had a duty to recognise and enforce the Award”.[19] The stay was not a limited stay on procedural grounds, but a prohibition on enforcement of the Award on substantive grounds.[20]
  1. Do the UK’s EU law obligations require the UK to breach its pre-accession obligations under the ICSID Convention?
Article 351 TFEU provides that obligations arising from pre-EU-accession agreements involving third countries (i.e., non-EU Member States) “shall not be affected by the provisions of the EU Treaties”. In the Claimants’ view, the UK’s obligations to recognise and enforce awards under the ICSID Convention are pre-accession obligations within the meaning of Article 351. As such, they are unaffected by EU obligations and a stay is not required. The Court agreed with the Claimants. While the UK, Sweden and Romania were at all times EU-Member States, under the ICSID Convention, obligations are owed not just to EU-Member States but to Contracting States which are third countries. Article 351 is, therefore, engaged. More specifically, the ICSID Convention confers specific duties—owed to all other Contracting States—to recognise and enforce awards (Article 54) and take such measures as may be necessary to implement the Convention (Article 69).[21] Nothing in the Convention or the travaux warranted viewing those specific duties as only owed to the State of nationality of an award beneficiary (which, in this case would mean only the rights of EU-Member States are engaged, and Article 351 would not apply). In Romania’s (and the Commission’s) view, the Article 351 issue nevertheless required a stay in accordance with the duty of sincere cooperation. This is because of the risk of conflict with a future (CJEU) ruling. The Court, however, disagreed; it was not required to defer to the EU courts on this issue.   First, questions regarding prior treaties under Article 351 are not are not reserved to the EU courts.[22] Second, the Article 351 issue before the EU courts was different: it concerned Romania’s obligations, and not the UK’s obligations.[23] Third, the possibility that the EU courts may consider the issue at some future stage is “contingent and remote”.[24] Thus, the circumstances did not require a stay. Accordingly, the Supreme Court allowed the Claimants’ appeal, and lifted the stay, which it described as “an unlawful measure in international law and unjustified and unlawful in domestic law”.[25] The issue of security consequently fell away.[26] Comment The Supreme Court’s judgment in Micula is significant.  The Court agreed with the majority in the Court of Appeal that English courts have the power to stay execution of an ICSID award—but only in limited circumstances.  Stays may only be granted for procedural (and not substantive) reasons, and only in circumstances where no inconsistency arises with the ICSID Convention duty on national courts to recognise and enforce the award.  This is positive news for parties looking to enforce ICSID awards in the UK. So far as Brexit is concerned, as matters currently stand, the UK remains bound by EU law.  The relevance of the “duty of sincere cooperation” in future proceedings of a similar nature will depend on the agreement subsequently reached between the UK and the EU. ______________________ [1]     Micula and others v Romania [2020] UKSC 5. [2]     Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Award, 11 December 2013. [3]     The Award plus interest is now estimated to be worth in excess of £251 million. [4]     Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Decision on Annulment, 26 February 2016. [5]     Micula and others v Romania [2020] UKSC 5, ¶ 28. [6]     Commission Decision 2015/1470 of 30 March 2015 on State aid SA.38517 (2014/C) (ex 2014/NN) implemented by Romania. [7]     Viorel Micula and others v Romania and European Commission (Intervener) [2017] EWHC 31 (Comm); [2017] Bus LR 1147. [8]     As per a subsequent judgment in Viorel Micula and others v Romania and European Commission (Intervener) [2017] EWHC 1430 (Comm). [9]     Viorel Micula and others v Romania and European Commission (Intervener) [2018] EWCA Civ 1801; [2019] Bus LR 1394. [10]    European Food SA and Others v European Commission (Cases T-624/15, T-694/15 and T-704/15) EU:T:2019:423. [11]    Viorel Micula and others v Romania and European Commission (Intervener) [2019] EWHC 2401 (Comm). [12]    Micula and others v Romania [2020] UKSC 5, ¶ 36. [13]    Micula and others v Romania [2020] UKSC 5, ¶ 42. [14]    Micula and others v Romania [2020] UKSC 5, ¶ 49. The Claimants further argued that the Annulment Decision annulled the effect of the Commission’s injunction decision of May 2014, which prohibited Romania from implementing the Award pending further investigation by the Commission. The Court concluded that it was not necessary to reach a conclusion on this issue. Micula and others v Romania [2020] UKSC 5, ¶ 52. [15]    Micula and others v Romania [2020] UKSC 5, ¶ 51. [16]    This may be contrasted with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, which provides a detailed list of grounds on which recognition and enforcement may be refused, including public policy grounds pursuant to Article V(2)(b). Micula and others v Romania [2020] UKSC 5, ¶ 68. [17]    Micula and others v Romania [2020] UKSC 5, ¶ 78. [18]    I.e., provided that in the particular circumstances it was just to do so and the stay was temporary and consistent with the purposes of the ICSID Convention. Micula and others v Romania [2020] UKSC 5, ¶ 84. [19]    Micula and others v Romania [2020] UKSC 5, ¶ 84. [20]    Micula and others v Romania [2020] UKSC 5, ¶ 84. [21]    ICSID Convention, Article 69 (“Each Contracting State shall take such legislative or other measures as may be necessary for making the provisions of this Convention effective in its territories.”). [22]    Micula and others v Romania [2020] UKSC 5, ¶ 112. [23]    Micula and others v Romania [2020] UKSC 5, ¶ 113. [24]    Micula and others v Romania [2020] UKSC 5, ¶¶ 114-117. [25]    Micula and others v Romania [2020] UKSC 5, ¶ 118. [26]    Micula and others v Romania [2020] UKSC 5, ¶ 119.
The following Gibson Dunn lawyers assisted in the preparation of this client update: Cyrus Benson, Jeffrey Sullivan, Piers Plumptre, Stephanie Collins and Theo Tyrrell. Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm's International Arbitration Practice Group or any of the following: International Arbitration Group: Cyrus Benson - London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden - London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com) Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Rahim Moloo - New York (+1 212-351-2413, rmoloo@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 13, 2020 |
Law360 Names Gibson Dunn Among Its 2019 International Arbitration Practice Groups of the Year

Law360 named Gibson Dunn one of its five International Arbitration Groups of the Year for 2019.  The profile was published on February 12, 2020. The International Arbitration Practice Group advises leading multinational corporations in arbitration proceedings around the world.  The International Arbitration group’s lawyers have appeared before many of the world’s leading arbitrators and work with all major arbitral institutions and rules.

February 12, 2020 |
Coronavirus and Force Majeure: Addressing Epidemics in LNG and Other Commodities Contracts

Click for PDF On 30 January 2020, the Director-General of the World Health Organization declared that the outbreak of novel coronavirus (2019-nCoV) met the criteria for a Public Health Emergency of International Concern (“PHEIC”).[1] In order to qualify as a PHEIC, an event must: (i) be extraordinary; (ii) constitute a public health risk to other States through the international spread of disease; and (iii) potentially require a coordinated international response.[2] Since the PHEIC regulations were enacted 15 years ago, a PHEIC has been declared only on five previous occasions: swine flu (2009); polio (2014); zika (2016); and ebola (2014 and 2019).[3] Coronavirus is taking a tremendous human toll and our thoughts go out to those affected. Recent reports also suggest that coronavirus is beginning to impact commercial operations as facilities are shut down or production is curtailed, workforces are sent home, and demand falls. In particular, recent press coverage suggests that this issue has arisen in the LNG market, with Chinese buyers citing the impact of coronavirus in connection with the failure to take delivery of LNG.[4] Coverage also suggests that there are concerns about a tightening of demand and the potential effect of coronavirus on the supply chain for other critical commodities such as coal and iron ore.[5] As the effects of coronavirus continue to impact the markets, contractual counterparties will look to the terms of their contracts where they are unable to perform. One possibility that has already been reported in the LNG markets (and is being discussed in the iron ore markets) is a declaration of force majeure. This client alert examines common formulations used in force majeure provisions in LNG sale and purchase agreements (“SPAs”), considers the scope of force majeure clauses under English and New York law, and identifies points that clients should consider when negotiating and seeking to enforce force majeure clauses. Force Majeure Clauses in LNG Sale and Purchase Agreements The concept of a communicable disease crisis (we address the distinction between “epidemics” and “pandemics” below) is sometimes included in force majeure clauses in LNG SPAs and has been seen in contracts for delivery into various global markets, including Europe and Asia. Where included, however, it is typically still set out as part of a non-exhaustive list of events which may constitute force majeure provided that the general requirements for force majeure are also met. These usually require performance to have been prevented, hindered (or impaired), or delayed due to an event not within the reasonable control of the party seeking to claim force majeure, acting as a reasonable and prudent operator. They may also require that the event be unforeseen and that the claiming party has endeavoured to overcome or to mitigate the force majeure event, using reasonable diligence. In addition, some LNG SPAs require the event to have affected the relevant facilities in a specific way, such that the facilities are damaged or not capable of being operated due to the relevant event, in order for force majeure to be available as a remedy. Finally, since a force majeure clause is typically drafted as a general test with (more often than not) a non-exhaustive list of examples, the LNG SPA will contain a long list of excluded events (such as financial hardship, lack of demand or economic downturns). These types of qualifiers and exclusions mean that the occurrence of an epidemic, on its own, may not trigger force majeure relief. References to “quarantine restrictions” are also sometimes included in non-exhaustive lists of force majeure events. Whilst we expect such clauses were likely intended to cover the quarantine of vessels, it remains to be seen whether this may also be relied upon where a party is unable to operate a facility due to quarantine restrictions affecting its workforce. Under LNG SPAs there may also be limitations on the period or the quantities of LNG in respect of which an affected facility can continue to claim force majeure relief where the contract contains optionality as to delivery locations. There is considerable divergence among LNG SPAs on the treatment of volumes which have been excused for force majeure. Some LNG SPAs require volumes to be taken at a later date (or require a buyer to use reasonable endeavours to take volumes at a later date) in order to restore the overall quantity delivered to the contracted quantity. Typically, these restoration quantities would be taken at the market price at the time of actual delivery, which may be either higher or lower than the time of the force majeure event. Naturally, this can create winners and losers depending on market fluctuations and may lead to assertions of arbitrage against the party claiming force majeure. Capacity and scheduling issues will also need to be addressed. Other LNG SPAs simply remove the volume from the contract quantity, leaving the seller with additional volumes to market. Whilst this may be attractive for both sellers and buyers during periods where prices are high and cargoes can be diverted, it is likely to be less attractive in the current environment of oversupply and low prices. Extended force majeure must also be considered in the context of an ongoing health crisis. Termination for extended force majeure appears as a remedy in many LNG SPAs (although where the LNG SPA underpins the financing of a liquefaction facility, financiers may have pushed back on this provision). The inclusion of a termination right may actually prevent a seller from triggering a force majeure claim if the continuation of the contract is more valuable to it where it is fixed with high prices (notwithstanding the possible force majeure event). However, neither the presence of remedies nor the inclusion of a reference to epidemic or quarantine, of itself, guarantees relief. Instead, these provisions must be read and interpreted with the rest of the force majeure clause and the remainder of the contract. We consider this further below. The Position Under English Law “Force majeure” is not a term of art under English law. Accordingly, a force majeure clause in a commercial contract will be construed in each case on its own terms.[6] As the English Court of Appeal explained recently:

[T]he question is one of construction … and the answer to that question is determined by the language of the clause which the parties have chosen, having regard to the context and purpose of the clause.”[7]
The usual rules of contractual interpretation under English law apply to the interpretation of force majeure clauses. The court must ascertain the objective meaning of the language which the parties have chosen to express their agreement, and consider not only the wording of the particular force majeure clause but must also consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning.[8] Market practice may also be relevant to the exercise of interpretation, provided that it is clearly evidenced.[9] In practice, however, market practice may be difficult to prove and a recent English case has confirmed that evidence of market practice after a contract is concluded will not result in terms being implied into a contract.[10] Force majeure clauses typically cover events that “prevent” a party from performing its contractual obligations or that “hinder” or “delay” performance. Therefore, when invoking force majeure clauses in response to events that prevent performance, it is usually necessary to establish that performance has become legally or physically impossible. Mere difficulty or unprofitability generally will not suffice.[11] By contrast, clauses that refer to a party being hindered or delayed have been construed more widely, although a change in economic circumstances or a market downturn affecting profitability or the ease with which obligations can be performed is still unlikely to qualify as a force majeure event in the eyes of the law,[12] and, as noted above, is commonly expressly carved out of force majeure relief in a well-drafted contract to avoid misuse of the clause. In either case, causation is key. In a recent case, the English High Court held that where there are multiple potential causes, some falling within a force majeure clause and some without, the force majeure must be the sole cause of the failure to perform the obligation.[13] The Position Under New York Law New York law on the interpretation of force majeure clauses generally aligns with English law. As with all contractual disputes, the terms of the agreement and the intent of the parties control a court’s analysis. Force majeure clauses will only limit damages where circumstances beyond the parties’ control have frustrated the parties’ “reasonable expectation[s].[14] Force majeure clauses are construed narrowly, and “the general words are not to be given expansive meaning; they are confined to things of the same kind or nature as the particular matters mentioned.[15] Moreover, some courts have held that the event must not only be included in the force majeure clause; it “must be unforeseeable as well,” although others have refused to impose an unforeseeability requirement where one cannot be found in the parties’ agreement.[16] Notwithstanding these principles, New York courts will take account of well-established business practices in order to determine the parties’ intent, particularly in highly technical industries such as oil and gas. In a recent decision on questions certified by the Second Circuit Court of Appeals, the New York Court of Appeals confirmed that, consistent with the practices of other “oil jurisdictions” such as Texas and California, force majeure clauses “must be construed with reference to both the intention of the parties and the known practices within the industry.[17] Accordingly, the terms of the relevant contract are the starting point in any analysis of a force majeure event. But industry custom is important too, particularly in contracts relating to well-developed, technical industries such as oil and gas, where the parties’ intent may be gleaned from established practices. In all cases, however, force majeure clauses are construed narrowly and their terms will not be expanded beyond events of the same kind or nature as those listed in the parties’ agreement. Drafting Tips In light of the increased risk of global health crises, it is likely that this issue will continue to be widely and explicitly addressed in force majeure clauses within commodities contracts. As contractual language is the predominant factor in interpreting force majeure clauses, contracting parties should carefully consider how they draft such provisions to allocate risk appropriately. Notwithstanding the increased frequency of disease outbreaks, absent express contractual protection, courts are likely to continue to construe force majeure clauses narrowly. We pause to note that parties should be mindful of the distinction between epidemics, which are local or regional, and pandemics, which are epidemics with global reach. When drafting force majeure clauses, the parties should consider the point at which the outbreak of a communicable disease would sufficiently impact their business relationship so as to trigger a force majeure clause. When drafting force majeure clauses to account for disease outbreaks, the following complicating factors should be considered: (i) the difficulty of distinction between natural and political events; (ii) whether the event has a direct or indirect effect on performance, and the extent to which it affects performance; (iii) inability to perform versus desire to escape performance due to unprofitability; (iv) the types of mitigating actions that an affected party should undertake and (v) the possibility of an extended force majeure event. First, force majeure clauses often distinguish between natural and political events.[18] Although of natural origin, the economic impact of an epidemic will flow in large part from governmentally imposed quarantines and travel restrictions. To avoid claims that a natural event force majeure clause has not been triggered because the prevention or hindering of performance is the result of government intervention, contracts should be clear on any distinction between natural and political events, or make express provision for government-imposed measures responding to the outbreak of infectious disease. Second, parties should consider the real extent to which performance needs to be prevented by the event claimed as force majeure or the extent to which there could be a combination of events that prevent performance. Where a facility is unable to operate due to workforce unavailability, consider the extent to which it must be shown that this is a result of the force majeure event. Third, force majeure clauses typically contain language on the exercise of reasonable diligence or efforts to overcome an event. Rather than rely on case law to interpret what these measures might or might not involve, specific examples could be included. Fourth, as stated, a typical force majeure clause will usually only offer protection where performance is genuinely hindered, prevented or delayed. Where an event leads to reduced demand (and potentially reduced prices in a spot market), the stakes can be raised for a variable-price seller or a fixed-price buyer. Force majeure clauses should be crafted carefully or such risks should be otherwise addressed. Fifth, epidemics pose a relatively high risk of creating an extended force majeure event. Contracting parties should consider whether termination rights should be included, and whether to set a minimum duration for a force majeure event before a party may elect to enforce any termination rights. _____________________ [1] World Health Organization, Statement on the second meeting of the International Health Regulations (2005) Emergency Committee regarding the outbreak of novel coronavirus (2019-nCoV) (Jan. 30, 2020), available at https://www.who.int/news-room/detail/30-01-2020-statement-on-the-second-meeting-of-the-international-health-regulations-(2005)-emergency-committee-regarding-the-outbreak-of-novel-coronavirus-(2019-ncov). [2] See International Health Regulations, art. 1(1) (2005). [3] See James Gallagher, Coronavirus declared global health emergency by WHO, BBC News (Jan. 31, 2020), available at https://www.bbc.co.uk/news/world-51318246. [4] See Stephen Stapczynski, China LNG Force Majeure Rejected as Virus Chaos Sparks Dispute, Bloomberg News (Feb. 7, 2020), available at https://www.bloomberg.com/news/articles/2020-02-07/china-lng-force-majeure-rejected-as-virus-chaos-sparks-dispute; Alaric Nightingale & Alex Longley, When God Appears in Contracts, That’s ‘Force Majeure’, Bloomberg News (Feb. 6, 2020), available at https://www.bloomberg.com/news/articles/2020-02-06/when-god-appears-in-contracts-that-s-force-majeure-quicktake. [5] See Deepali Sharma, Coronavirus impact on iron ore market, American Metal Market (Feb. 6, 2020), available at https://www.amm.com/Article/3917527/Coronavirus-impact-on-iron-ore-market.html; Frick Els, Coronavirus drops iron ore shipping gauge 99.9%, Mining.com (Jan 31, 2020), available at https://www.mining.com/coronavirus-drops-iron-ore-shipping-gauge-99-9/; Jun Kai Heng, Niki Wang, & Yuchen Huo, Iron ore outlook bearish as steel demand seen weak on coronavirus, S&P Global (Feb. 5, 2020), available at https://www.spglobal.com/platts/en/market-insights/latest-news/metals/020520-iron-ore-outlook-bearish-as-steel-demand-seen-weak-on-coronavirus. [6]  The English courts will not imply a force majeure clause or, where there is such a clause, imply particular events within it. However, in the absence of an express contractual provision catering for the consequences of the event that has occurred, it may still be possible for a party facing impossibility of performance to rely on the common law doctrine of frustration. The operation of the doctrine of frustration requires an unforeseen, supervening event which renders it physically or commercially impossible for a party to fulfil a contract or transforms the obligation to perform into a radically different obligation from that undertaken at the moment of entry into the contract and operates to bring a contract to an end “forthwith, without more and automatically. See Chitty on Contracts (33rd ed.), §§ 23-001, 23-007; J. Lauritzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd’s Rep 1, 8. [7]  Classic Maritime Inc v Limbungan Makmur Sdn Bhd and another [2019] EWCA Civ 1102 at [32]. [8]  Wood v Capita Insurance Services Limited [2017] UKSC 24 at [10]. [9]  Crema v Cenkos Securities Plc [2010] EWCA Civ 1444. [10] TAQA Bratani Ltd & Others v RockRose UKCS8 LLC [2020] EWHC 58 (Comm). [11] Chitty on Contracts (33rd ed.), § 15-156. [12] Chitty on Contracts (33rd ed.), §§ 15-158 to 15-160; Tandrin Aviation Holdings Limited v Aero Toy Store LLC and another [2010] EWHC 40 (Comm) at [40]. [13] Seadrill Ghana Operations Ltd v Tullow Ghana Ltd [2018] EWHC 1640 (Comm). [14] See Constellation Energy Servs. of New York, Inc. v. New Water St. Corp., 146 A.D.3d 557, 558, (1st Dep’t 2017) (internal citation omitted) (emphasis added). [15] Kel Kim Corp. v. Cent. Markets, Inc., 519 N.E.2d 295, 297 (N.Y. 1987) (citing 18 Williston, Contracts § 1968 (3d ed. 1978)). [16] See Phibro Energy, Inc. v. Empresa De Polimeros De Sines Sarl, 720 F. Supp. 312, 318 n.8 (S.D.N.Y. 1989) (citing United States v. Brooks-Callaway Co., 318 U.S. 120, 122–23 (1943)); see also Goldstein v. Orensanz Events LLC, 146 A.D.3d 492, 493 (1st Dep’t 2017) (“[T]he clause must be interpreted as if it included an express requirement of unforeseeability or lack of control.”). [17] Beardslee v. Inflection Energy. LLC, 31 N.E.3d 80, 84 (N.Y. 2015). [18] See, e.g., World Bank, Force Majeure Clauses – Checklist and Sample Wording 8–9, available at http://siteresources.worldbank.org/INTINFANDLAW/Resources/Forcemajeurechecklist.pdf (last visited Feb. 11, 2020).
The following Gibson Dunn lawyers assisted in the preparation of this client update: Cyrus Benson, Anna Howell, Brad Roach, Zachary Kady, Mitasha Chandok, Nick Kendrick, Piers Plumptre, Philip Shapiro, Moeiz Farhan and Brandon Davis. Gibson, Dunn & Crutcher's lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm's International Arbitration or Oil and Gas practice groups, the authors or any of the following: International Arbitration Group: Cyrus Benson - London (+44 (0) 20 7071 4239, cbenson@gibsondunn.com) Penny Madden - London (+44 (0) 20 7071 4226, pmadden@gibsondunn.com) Jeffrey Sullivan - London (+44 (0) 20 7071 4231, jeffrey.sullivan@gibsondunn.com) Rahim Moloo - New York (+1 212-351-2413, rmoloo@gibsondunn.com) Oil and Gas Group: Anna P. Howell - London (+44 (0)20 7071 4241, ahowell@gibsondunn.com) Brad Roach - Singapore (+65 6507.3685, broach@gibsondunn.com) Saptak Santra - Singapore (+65 6507.3691, ssantra@gibsondunn.com) Mike Raiff - Dallas (+1 214-698-3350, mraiff@gibsondunn.com) Doug Rayburn - Dallas (+1 214-698-3442, drayburn@gibsondunn.com) Michael P. Darden - Houston (+1 346-718-6789, mpdarden@gibsondunn.com) Tull Florey - Houston (+1 346-718-6767, tflorey@gibsondunn.com) Hillary H. Holmes - Houston (+1 346-718-6602, hholmes@gibsondunn.com) Shalla Prichard - Houston (+1 346-718-6644, sprichard@gibsondunn.com) Gerry Spedale - Houston (+1 346-718-6888, gspedale@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

January 30, 2020 |
Who’s Who Legal Names 12 Partners to Practice Guides for Trade & Customs, Arbitration and Restructuring & Insolvency

Who’s Who Legal guides for 2019 and 2020 named 12 Gibson Dunn partners to practice guides in their respective fields. Washington, D.C. partners Donald Harrison, Judith Lee and Adam Smith were recommended for Trade & Customs. London partners Cyrus Benson, Penny Madden and Jeffrey Sullivan were recommended for Arbitration. New York partner Rahim Moloo was also named a Future Leader in Arbitration. Los Angeles partners Robert Klyman and Jeffrey Krause, New York partners David Feldman and Michael Rosenthal and Paris partner Jean-Pierre Farges were recommended for Restructuring & Insolvency. The 2019 Trade & Customs guide, the 2020 Arbitration guide, and the 2020 Restructuring & Insolvency guide were published in December 2019.