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London Remains No.1 for Resolving INTL Commercial Disputes

Reports on London’s Commercial Court and from major arbitration institutions have confirmed London as the most popular forum for international dispute resolution, with English law remaining the top choice for the resolution of international disputes.

English law is commonly preferred for governing law clauses in international contracts because it is based on well-founded principles, transparent and provides predictability of outcome, legal certainty and fairness. English law respects parties’ freedom to contract and is supportive of commerce, which is reflected in its popularity.

The Commercial Court in London deals with complex cases arising out of national and international business disputes commonly relating to insurance and reinsurance, banking and financial markets, commodities, shipping and arbitration. The court’s international appeal was confirmed in the 2020 Portland Report. In the year to March 2020, the Commercial Court heard cases involving parties from 72 countries with the top nationalities being Kazakhstan, Russia, United States, Cyprus and Singapore.

London is also home to well-established arbitral institutions and organizations such as the London Court of International Arbitration (LCIA) and continues to be the most selected seat for International Chamber of Commerce (ICC) arbitrations.

The LCIA is one of the oldest and leading arbitral institutions in the world. A record 406 cases were referred to the LCIA in 2019, by parties from 138 different countries and addressing disputes covering all aspects of international commerce, with the banking and finance, energy and resources, and transport and commodities sectors accounting for almost 70% of cases according to their Annual Casework Report 2019. Over 80% of these new cases had a governing law clause providing for English law and/or England as the arbitral seat, reflecting the predominance of London and the importance of English law in international trade.

Despite being located in Paris, ICC arbitration is commonly conducted in London. The ICC 2019 Statistics Report shows that the disputes are from a wide range of sectors although 40% of disputes come from the construction, engineering and energy sectors. They also record that the parties to ICC arbitrations in 2019 were located in 147 countries, a growing number, but nearly 80% of awards were given in English and as well as London being the preferred seat, English law was the most popular choice of law.

Response to the Global Pandemic

The approach of the English courts to the pandemic, wherever possible, has been “business as usual.” For commercial disputes, this was possible because the English Commercial Court has long had the power to hold hearings remotely, although previously this was generally limited to some witnesses who were abroad, giving video evidence, use of electronic bundles, and for some interlocutory matters. The logistical impact of the pandemic on parties worldwide quickly led to the transition to remote hearings, which has generally been smooth. Almost all of the Commercial Court’s work is said by them to have been conducted on time, with only limited significant adjournments. The first virtual hearing took place in the Commercial Court the same week as the lockdown started in the U.K., illustrating the quick response.

The use of videoconferencing was also not new in international arbitration proceedings, but again arbitral proceedings were not typically conducted with each participant in a separate location. The ICC and LMAA have both now issued guidance to address some of the unique challenges of virtual hearings including their own checklists and guidelines for such hearings. It has been suggested that more arbitrations were postponed than court hearings in response to the restrictions on travel nationally and internationally. This may, however, partly be due to the consensual nature of arbitration, although some adjourned arbitrations are now proceeding virtually due to the ongoing restrictions and the success of remote hearings.

It is also noteworthy that many arbitrations are determined on the documents only (i.e., without a hearing), and so will have been largely unaffected by the pandemic. This approach is particularly popular for London Maritime Arbitration Association (LMAA) arbitrations, which are commonly used by international parties to resolve commercial shipping and shipbuilding disputes as well as disputes related to the offshore oil and gas sector. According to its former president, Ian Gaunt, 80% of LMAA arbitrations are normally dealt with in this manner. 

Future

The Commercial Court and LMAA have both indicated that they expect that, given how well users have adapted to virtual hearings, there will not be a complete return to conventional style hearings in the future. There is no doubt that some aspects of virtual hearings will be considered going forward, and it may be beneficial to have hybrid hearings which could make hearings more streamlined, efficient and cost-effective, although at the expense of not seeing all witnesses in person. While the future remains uncertain in these unprecedented times, parties will hopefully benefit from the lessons learned and will continue to keep London and English law their top choice for arbitration and litigation.

Fiona Cain is counsel in the dispute resolution team of Haynes and Boone in London.

Simpson Thacher Adds To London M&A With Gibson Dunn Partner

Simpson Thacher & Bartlett has made a rare lateral partner hire in London, bringing in private equity partner James Howe from U.S. rival Gibson Dunn.

Howe is set to join Simpson Thacher after four years at Gibson Dunn, which he joined in 2016 from Proskauer Rose.

He is the latest addition for the usually lateral-averse Simpson Thacher in London, though the firm brought on board Linklaters’ former global tax head Yash Rupal as a partner in February.

The firm’s last heavyweight hire prior to that was in 2018, when the firm hired Clifford Chance M&A infrastructure partner Amy Mahon to its ranks following a trend of recruiting from the Magic Circle firm, where the firm’s London managing partner Jason Glover joined from in 2010.

Glover said in a statement: “Given his experience advising many of the most sophisticated private equity sponsors on a wide range of high-profile transactions, James is a perfect fit for the firm.

“His dealmaking prowess further bolsters our existing top-notch global private equity mergers and acquisitions capabilities, adding further depth to our extraordinarily talented bench of lawyers in London.”

Gibson Dunn has seen several exits from its London office in recent months, including leveraged finance partner Amy Kennedy who joined Akin Gump Strauss Hauer & Feld in March, and corporate partner Jonathan Earle, who left the firm at the beginning of 2020.

 

Law Firms Get Creative on London Rent Arrangements

Law firms across London are negotiating with their landlords about ways to ease the rent burden they face during the lockdown, according to several real estate agents.

UK lawmakers vote in favor of EU withdrawal agreement

UK lawmakers voted in favor of the second reading of the EU Withdrawal Agreement on Friday, leading the nation one step closer to leave the EU by January 31.

Parliament voted 358 to 234, a majority of 124, in favor of the Brexit bill. While lawmakers have agreed to the bill in principle, it will now be debated further by both chambers of Parliament in January.

Since its last reading in October, changes to the bill have been seen as controversial. If passed, the new bill would outlaw any extension to the UK’s transition period, which ends on December 31, 2020. Labour Brexit spokesman Keir Starmer warned parliament that refusing any extension beyond 2020 is “reckless and ridiculous” as it puts the UK at risk of “a bare bones deal or no deal at all.”

Since passed, lawmakers will now have another three days to discuss it further, beginning on January 7. The final vote will take place on January 9, and, if approved, the bill will be passed to the UK’s upper house to make a final decision on whether the bill becomes law.

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KPMG legal consultancy arm coming to UK

PMG is to set up a legal consultancy arm in the UK, the ‘Big Four’ professional services firm revealed, as it reported strong growth in its global legal services business.

The legal consultancy is expected to launch in the next few months, though the firm has not yet disclosed further details.

This is but the latest signal of intent from the ‘Big Four’ and follows last month’s news that rival firm Deloitte has hired a former magic circle partner to lead its UK legal arm.

KPMG’s UK consulting arm will be part of the Legal Operations & Transformation Services (LOTS) offering, which KPMG says helps in-house counsel identify ‘technologies, flexible resources and managed services that can support delivery of legal services’.

In a separate announcement this morningm, KPMG said ‘rising demands’ for legal services had resulted in revenue growth for its global legal services arm of more than 30%. The practice now has more than 2,300 legal professionals worldwide, including more than 20 new partners added during 2018, it added.

Jürg Birri, KPMG’s global head of legal services, said: ‘Our approach is different. We’re not a traditional law firm, and we’re not copying the approach of a traditional law firm. We focus on offering our clients integrated legal advice and technology-led solutions and methodologies, in combination with a range of alternative legal managed services.’

He added: ‘We expect continued growth in 2019 as we eagerly meet the evolving needs of clients across the globe. Increasingly, our clients are being asked to implement business transformation programmes that need an integrated approach that combines business and legal methodologies, not just pure legal advice. We understand this and are able to deliver.’

In January, the Gazette reported on the opening of a KPMG affiliated legal practice in Hong Kong. An associated Shanghai office is expected to follow later this year.

London City

Crowell & Moring plans London training contract after Squires hire

Crowell & Moring’s new London managing partner Robert Weekes has set out plans to launch a training contract in the City office, having joined the US firm today from Squire Patton Boggs.

Weekes’ move was revealed by Leaders in Law last November, months after it was revealed that Squires’ global head Stephen Mahon would be relocating from the US to lead operations in London.

As head of Crowell’s London office, Weekes will be filling a similar position as before, having been a former City managing partner of Squires.

Now in his new role, Weekes said he plans to bring in a training contract to the London office from September 2021. His plans for the London office also include a pledge to triple its headcount by the end of 2022; Crowell currently has nine partners in London and six fee-earners.

To grow, Weekes has highlighted expansion in litigation, followed by the corporate group and regulation practices. Banking, insurance and financial regulation will be part and parcel of this growth plan. Weekes himself is a litigator, specialising in the financial disputes and investigatory work.

Litigator Weekes will take over from partner Jim Regan, who shares his time between the London and Washington offices. Regan had served as the point of contact between the firm’s head quarters and the London office.

Founded in 1979 by a group of 53 breakaway lawyers from Jones Day, Crowell totals more than 500 lawyers around the world.

Weekes said: “The firm wouldn’t have hired me if it didn’t want to grow. I have a reputation for expansion. I see myself as a person who knows how to grow teams that work well together across practice groups to find innovative and commercial solutions for clients.”

Crowell currently counts Microsoft, BMW, Siemens and BlueCross BlueShield among its clients.

London City

Another $10m scalp for Kirkland as Freshfields star Maguire quits

Freshfields Bruckhaus Deringer’s Adrian Maguire is understood to be joining his former boss David Higgins at Kirkland & Ellis, over a year after the US firm made a concerted push to expand its corporate credentials in the City.

 

London City

White & Case’s London rampage continues with finance hire

White & Case has continued its hiring spree in the City, this time calling in Taylor Wessing’s financial services regulatory head Jonathan Rogers. This is the first US firm Rogers has worked at, having spent 10 years at Taylor Wessing, and seven years as an associate at Hogan Lovells before that.