- Steven K. Davidson
- Patrick M. Norton
+44 20 7367 8091
Arbitration is the most widely used method of third-party resolution of international disputes. International arbitration takes two principal forms: investor-state arbitration involving disputes between investors from one country and the government of a different country in which they have invested; and international commercial arbitration involving private-law disputes between individuals or corporations of different countries. Specialized tribunals conduct international commercial arbitration in particular industries, e.g., insurance, maritime, and commodity trading disputes. Governments also sometimes agree to submit their diplomatic disputes to state-to-state arbitration governed by public international law.
Steptoe has long had one of the world’s leading international arbitration practices. In the 1970’s the firm represented several major oil companies in the arbitration of expropriation claims against the Libyan government; and in the early 1980’s the firm represented a broad range of US companies in investment claims against the Iranian government before the Iran-US Claims Tribunal in The Hague. Steptoe has continued this practice in recent years with prominent representations in investor-state arbitration, international commercial arbitration, and state-to-state arbitration. Steptoe lawyers also act as arbitrators in international commercial arbitrations, serve on commissions in the leading arbitral institutions, and have held academic appointments in international commercial and investment arbitration at leading law schools in the US and the UK. Steptoe’s International Arbitration Group has a particularly successful record in enforcing international arbitral awards.
In addition to representing clients in contentious settings, Steptoe’s lawyers also regularly counsel clients with regard to arbitration clauses in international contracts and treaties.
Foreign investors sometimes contend that statutory or regulatory measures adopted by host governments have deprived them, in whole or in part, of the economic value of their investments. The investors may have the right to bring their claims against the host state before an international arbitration tribunal under the auspices of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) if the investors’ home state and the host state of the investment are parties to (a) a bilateral investment treaty (BIT), (b) a free trade agreement with investment protection provisions (e.g., the Korea-United States Free Trade Agreement), or (c) a multilateral investment treaty (e.g., the North American Free Trade Agreement (NAFTA) or the Energy Charter Treaty (ECT)). Investor-state disputes of this nature are typically complex and often involve issues governed by both public international law and the laws of one or more states.
Steptoe lawyers have a broad range of experience in representing both corporations and the governments of states in investor-state arbitrations. Steptoe has, for example:
- Represented Motorola in an ICSID arbitration against Turkey that resulted in payments to Motorola of approximately US$1 billion. The case arose out of Motorola’s claims against Telsim, a Turkish telecom company, which was seized by the Government of Turkey after Motorola had obtained both a US court judgment and a Zürich Chamber of Commerce arbitral award against Telsim and its owners.
- Represented Corn Products International in an ICSID Additional Facility arbitration against Mexico (Case No. ARB(AF)04/1) arising from the application of a discriminatory tax. When rendered, the US$58 million (after tax) award was the largest rendered in a NAFTA Chapter 11 investment dispute.
- Advised the Government of Canada in two high-profile NAFTA Chapter 11 arbitrations.
- Represented foreign investors in three ICSID arbitrations against the Government of Zimbabwe, including the first ICSID case involving multiple, unrelated parties (Funnekotter & Ors v Zimbabwe, (ICSID Case No. ARB/05/6); Border Timbers Ltd & Ors v Zimbabwe (ICSID Case No. ARB/10/25); and von Pezonld & Ors v Zimbabwe (ICSID Case No. ARB/10/15).
- Served as lead co-counsel to investors in Trans-Global Petroleum Inc. v. The Hashemite Kingdom of Jordan, an ICSID arbitration arising from alleged breaches of a BIT.
Steptoe also advises clients on the structuring of their international investments so as to ensure that any disputes with the host country will be subject to international arbitration under a BIT or other applicable treaty.
Our lawyers work closely with the Rule of Law Committee and the Private International Law Committee of the US State Department to formulate the terms of standard US BITs so as to best protect US investors in their investments in other countries.
International commercial arbitration may involve virtually any kind of commercial dispute in any industry. Steptoe has extensive experience in handling international commercial arbitrations in a broad range of industries, including, in particular, the construction, energy, telecommunications, and high-tech industries.
International commercial arbitrations are typically administered by an arbitral institution specializing in this field. In recent years, Steptoe’s lawyers have handled cases before tribunals established under the rules of all of the major international arbitration institutions, including:
- International Chamber of Commerce (ICC)
- London Court of International Arbitration (LCIA)
- International Centre for Dispute Resolution (ICDR)(the international division of the American Arbitration Association)
- Stockholm Chamber of Commerce (SCC)
- Zurich Chamber of Commerce (ZCC)
- China International Arbitration and Trade Center (CIETAC)
- Hong Kong International Arbitration Centre (HKIAC)
- Singapore International Arbitration Centre (SIAC)
- Swiss Chambers’ Arbitration Institution
- US-Canada Free Trade Agreement binational panels
- Cairo Regional Centre for International Commercial Arbitration
- WIPO Arbitration and Mediation Center
- International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation
Steptoe also has experience with arbitrations conducted on an ad hoc basis, typically under UNCITRAL Rules.
Steptoe has represented clients in recent years in arbitrations held in, among other venues: London, Paris, New York, Washington, Geneva, Vienna, Zürich, Stockholm, Mexico City, Hong Kong, Singapore, Shanghai, Beijing, Moscow, and Cairo. Our lawyers have conducted arbitrations, in whole or in part, in Spanish, Portuguese, French, Russian, and Mandarin Chinese, and are capable of handling arbitrations in a number of other languages.
Steptoe’s experience in international commercial arbitration is too extensive to enumerate in detail, and many matters remain confidential, but the following may serve as recent examples:
- Represented a US parts supplier in a US$80 million ICDR arbitration with an Indian manufacturer held in New York
- Served as co-counsel for a large Russian metals producer in a multi-billion dollar LCIA arbitration arising out of a shareholders' dispute
- Served as counsel for a government electricity agency in a US$775 million ICC arbitration in Mexico City, Mexico, against an electric company in a dispute involving power generation facilties; Steptoe conducted the arbitration, including direct and cross examination and oral argument, in Spanish
- Defended an Asian government and its national oil company against US$120 million in multi-party claims in an LCIA arbitration arising from sponsorship, construction, and operation of a 1300 MW power project
- Represented a major telecommunications provider in a £375 million product liability dispute under a GSM frame contract involving alleged defects in one of Europe’s largest GSM/GPRS networks
- Advised a system supplier concerning software development claims arising from a joint venture with a major international oil company for development of North Sea drilling systems. The arbitration was conducted under UNCITRAL Rules
- Obtained an LCIA award on behalf of three investor companies against a Bermuda-based affiliate of a leading Russian investment bank following the market crisis of 2008
- Represented a Swiss trading company in an SCC arbitration in Stockholm arising from a shareholder dispute and consequent fraud under various agreements associated with the Russian aluminum industry where claims of US$380 million were in dispute
- Defended the EU subsidiary of a Russian group in a LCIA arbitration against a fraud claim brought by a state-owned bank in the former CIS; damages exceeded US$500 million
Steptoe lawyers have also served on commissions within leading arbitration institutions, including the Commission on Arbitration of the International Chamber of Commerce in Paris and its Task Force on Arbitration Involving States or State Entities and the Shanghai Arbitration Commission.
Arbitrators in International Commercial Arbitrations
Steptoe partners have served as both chairs and party-appointed arbitrators in a broad range of international commercial arbitrations held under ICC, LCIA, AAA, UNCITRAL, SIAC, ICAC, SCC, and CPR Rules.
Enforcement of Arbitral Awards
In both investor-state and commercial arbitration it is frequently necessary to enforce the award against a recalcitrant award debtor. Most enforcement actions are made pursuant to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards as adopted and implemented in the state of enforcement. Among our notable successes, Steptoe has:
- Represented ExxonMobil Corporation in the enforcement of an ICC award in favor of ExxonMobil’s affiliate Mobil Cerro Negro (MCN) for Venezuela’s expropriation of MCN’s assets. Steptoe succeeded, first, in freezing funds pending arbitration of MCN’s claims, then obtained an order from the United States District Court for the Southern District of New York releasing US$305 million of those funds to MCN in partial satisfaction of a December 2011 award. The successful enforcement efforts are described in a chapter in Private Empire: ExxonMobil and American Power (S. Coll, 2012).
- Represented claimants in the successful enforcement of a US$130 million ICSID award that was the largest award ever issued to an individual. (Siag & Vecchi v. Arab Republic of Egypt, Case No. ARB05/15).
- Succeeded in having the United States District Court for the District of Delaware confirm a 2011 ICC award in favor of Steptoe’s client SEI Societa Esplosivi Industriali, an Italian defense contractor, against another defense contractor.
State-to-State and IGO Disputes
Disputes between the governments of different states or involving Inter-Governmental Organizations (IGOs) are governed by Public International Law and are sometimes submitted to state-to-state arbitration or adjudication by the International Court of Justice (ICJ), which follows rules and procedures similar to those followed in international arbitration. Steptoe lawyers have:
- Represented the United States Government in the Nicaragua v. United States case before the ICJ
- Represented the International Fund for Agricultural Development, a UN specialized agency, in the Global Mechanism case before the ICJ
- Represented Palestinian interests in advisory proceedings in the Wall case before the ICJ
- Advised the International Finance Corporation in connection with ICJ litigation affecting its lending program
- Acted as counsel to Saudi Aramco in claims before the United Nations Compensation Commission in connection with claims against Iraq arising out of the First Gulf War
- Represented numerous US energy, engineering, and consumer products companies in connection with filing claims with the UN Compensation Commission for damages arising from the Persian Gulf Conflict
- Represented the US Government in more than 130 arbitrations with the Government of Iran, totalling more than US$30 billion in claims, before the Iran-US Claims Tribunal
International trade disputes are also heard in World Trade Organization (WTO) panel and Appellate Body proceedings which are governed by public international law and closely resemble international arbitration, both substantively and procedurally. Steptoe has represented or advised the governments of China, Korea, Argentina, and Canada and private sector interests in nearly two dozen WTO panel and Appellate Body proceedings and on matters related to international trade policy and international trade negotiations. Read more about Steptoe’s experience in International Trade Law.
Further, Steptoe lawyers have served as chair or co-chair of the Annual Meeting of the American Society of International Law, the International Courts Committee of the American Bar Association’s Section of International Law, and the Committee on Settlement of Intergovernmental Disputes of the International Law Association’s American Branch.
- Ranked, Chambers USA 2008, America’s Leading Lawyers; International Arbitration (National)
- Ranked at the top the list of the “Ten Big Awards” in Focus Europe magazine’s 2007 Arbitration Scorecard and listed among the Top 30 Firms Appearing as Arbitration Counsel in the scorecard
- The Telsim Team Effort: One example of Steptoe’s ability to advance effectively our clients’ interests, around the world and across the spectrum of legal fora, is the recent matter arising from our client Motorola’s investment in the Turkish cellphone enterprise Telsim. When it became apparent that the Turkish investors, the Uzan family, had diverted hundreds of millions of dollars due to our client, we initiated a civil case in Southern District of New York, in which we obtained a $2.13 billion judgment for our client, a judgment which we successfully protected through proceedings in the 2nd Circuit Court of Appeals and US Supreme Court. In connection with this case, we successfully froze Uzan-owned assets worldwide, including bank accounts, luxury apartments and jets in the United States and other property in Switzerland, France, England, and Germany to the value of value of approximately $125 million. We simultaneously litigated a parallel international commercial arbitration in Zurich between Telsim and Motorola, which resulted in a $2.5 billion award in favor of our client. When the government of Turkey seized the direct and indirect assets of the Uzan family, including Telsim, and prevented payment to our client, we brought an investor-State arbitration against Turkey before ICSID. These arbitrations were settled by Government of Turkey and Telsim with an initial payment to our client of $500 million in cash, plus a share of proceeds of the sale of Telsim, which will bring the total settlement close to $1 billion.
Select News & Events
- London Super Lawyers Recognizes Steptoe Partners
- CDR Quotes Matthew Coleman on Investor-State Mediation
- Dow Jones Quotes Susan Munro on China Due Diligence
- Chambers UK 2013 Recognizes Steptoe Practices and Lawyers
- "Drafting, Negotiation, Renegotiation, and Termination of the Investment Treaties" Investment Law and Arbitration Conference
- Design of Investment Arbitration System: Consistency and Precedent, Harvard International Law Journal Symposium
- Latest Developments in Arbitration of Banking and Financial Disputes, Conference in China
- CIETAC: Institution, Rules and Achieving Best Result from CIETAC Arbitration in Generations in Arbitration Conference