Matthew Secomb discussed the rise of arbitration in Asia.

The 2015 International Arbitration Survey is available at whitecase.com/arbitration-survey-2015.

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2015 White & Case LLP

Our strategy is focused on:

Targeted, profitable growth, particularly in the United States and London. We will strengthen our industry approach generally and specifically nurture growth in four key industries—financial institutions, private equity, technology and oil & gas—and three key practices—M&A, capital markets and disputes—that play to our strengths in handling complex, cross-border work.

Creating a more engaged Firm. That means attracting people who share our values and want the opportunities of working at a global law firm, including advising global clients and working in other parts of the world. It means making each of our offices a great place to work and offering all of our people opportunities to grow and develop their careers. We will continue to embrace diversity, which is a great strength of our Firm.

Strengthening our global client relationships. We know our clients want real industry capabilities, they want us to be strong in the markets that matter to them and they want value beyond the legal work we do. We must provide world-class service, which requires quality legal work and seamless coordination by lead partners and lawyer teams. We will build and support practices that assist large clients in their most important matters. And we will continue to listen to our clients and act upon their feedback.

Leading the implementation of our strategy is Hugh Verrier, who was reelected to his third, four-year term as Chairman, and the other members of our Executive Committee – Donald Baker, Oliver Brettle and David Koschik – who took up their roles on 1 September 2015.

Verrier was interviewed about the Firm's new strategy by Legal Week. Below is the full text of the interview, published 12 November 2015 reprinted with the kind permission of Legal Week.

'It's about targeted profitable growth' - White & Case chair Hugh Verrier lays out firm's new strategy

US and London earmarked for significant growth as firm focuses on four core sectors in new 2020 strategy intended to build position in global elite

White & Case has recently made headlines with the news that it is cracking down on performance in some of its European offices. In this set-piece interview, the US firm's chairman, Hugh Verrier, talks to Legal Week editor Georgina Stanley about ramping up in London and the US, profitable growth and keeping its staff happy.

Georgina Stanley: The firm has just devised its new five year strategy - what is the focus for the coming years?

Hugh Verrier, White & Case: Profitable growth. Over the last five years our strategy has been focused on driving profitability and that's been very successful - PEP is up 36%. We've achieved that partly by keeping headcount flat at all levels, in keeping with the times and the period of recession that followed the financial crash. Now we've taken another look at our strategy and decided to change course.

GS: What are the priorities now?

HV: It's about targeted profitable growth, specifically in the US and London, and it will not be insignificant growth. It is not the case that we'll stop growing everywhere else - we just opened a new office in Seoul, for example - but we want to push ourselves to grow faster in those two key markets because it will benefit the whole firm - by improving our overall profitability and driving work to our other offices.

GS: Why those two regions specifically and what targets do you have for them?

HV: They are the largest most profitable financial centres in the world and are the most important to many of our global clients, so we want to be market leading in both of them. I think if our London growth trajectory continues to accelerate we can present an even stronger challenge to the magic circle and other elite global law firms. But that means that we need to be substantially larger than we are now. I would expect that within five years we'll have more than 500 lawyers in London compared with about 350 now.

If our London growth trajectory continues to accelerate we can present an even stronger challenge to the magic circle and other elite global law firms

GS: And what about the US?

HV: More than two thirds of our lawyers are currently outside the US, and we want to see the proportion of lawyers in the US grow. Like London I would expect there to be over 500 lawyers in New York by 2020. Right now, less than half the firm's lawyers are currently based in either the US or London, and I would expect that proportion to rise to around 60% as a result of our new strategy. It could mean opening new offices in other US markets, but there's nothing imminent.

GS: What are the other key strands of the growth strategy?

HV: We are focusing not only on particular markets, but also on four global industries: financial institutions; private equity; technology and oil & gas. The idea is to strengthen our industry approach generally and to specifically nurture growth in these four.

GS: What will that mean in practice?

HV: It means giving more weight to these global industries and making sure we drive growth in them. We've chosen them because they are inherently global and well suited to the firm's strength in advising on cross-border matters.

GS: You're focusing on growth in two regions and four sectors. What else?

HV: We're also focusing on growth in three key practices - M&A, capital markets and disputes. These three practices are at the core of White & Case and play to our strengths in handling complex, cross-border work. They're also important to our clients in the four global industries we're targeting. This does not mean we won't grow in other practice areas.

GS: Are there aspects of the new strategy which go beyond growth?

HV: Yes. The second strategic goal is to create a more engaged firm. That means making each office a great place to work and attracting the kind of people who want to work in a global firm, not a national firm. We've started taking a more global approach to recruiting. We want people who understand our firm and share our values and who want the opportunities of working at a global law firm, such as spending time in our other offices around the world.

GS: What does a great place to work look like?

HV: There are many elements. We need to look deeply at what people want from their careers. It could be highly transformative - it's about looking at everyone and making sure they're achieving their ambitions. It means revisiting everything that's important including technology, working hours, flexible working and diversity, because we need to reflect the world around us.

It means revisiting everything that's important including technology, working hours, flexible working and diversity

GS: What's the third and final part of the strategy?

HV: A shift towards global client relationships. This is a continuation of our focus on large, global clients that we started five years ago. We've interviewed 200 clients in the past two years, and these conversations help us shape our business. We know our clients want real industry expertise, they want to us to be strong in the markets that matter to them and they want value beyond the legal work we do.

GS: Given the focus on the US and UK, what does it mean for everywhere else? Does this new strategy explain the changes this year in CEE? [White & Case has seen a number of exits in Poland and the departure of its Budapest office to Dentons.]

HV: Focusing on growth in the US and in London does not mean we won't grow in other markets. It's where we will focus our efforts because it will benefit the entire firm.

Each region goes through its own journey and has its own logic. We want to have global clients and serve them globally. At some point there will always be people who feel that they want to be part of a domestic practice. Everyone in the firm knows where we're going and can decide for themselves whether they want to be part of our journey. The changes in CEE have only an oblique connection to our strategy. CEE is an important market for White & Case. We established offices there at the start of the 1990s and there's no question that we have a market leading practice there today.

The changes in CEE have only an oblique connection to our strategy. CEE is an important market for White & Case.

GS: Would you expect to see further exits in regions besides the US and London? Asia, for example?

HV: Asia is an exciting and important market for us. Last year we put in place a new strategy for Asia and Eric Berg, a senior leader of the firm, relocated to lead our business there. We've brought in some new partners, for example in private equity, and just opened a new office in Seoul. There have been some departures in Asia but we expect to see growth going forward.

GS: What made the last five years successful for White & Case?

HV: In a nutshell, growing revenue and profitability while keeping headcount flat, focusing on global client relationships and cross-border work, and embedding innovation and a one-firm culture.

GS: Did it mean tough targets for individuals?

HV: Being a partner at a leading global law firm is a tough job and we expect our partners to contribute to our business in meaningful ways. We measure partner performance across a number of criteria, including client impact, teamwork and talent development. We also look at quantitative measures, such as their impact on our financial performance.

GS: Looking to the new strategy, how will you be measuring the firm's success?

HV: If the strategy is successful, we will see accelerated growth in London and the US. We think that our strategy will appeal to people who want to work in a global firm. We also expect growth in revenue and profitability, and increased engagement among our people. And of course we will continue to listen to our clients to make sure the firm is moving in the right direction.

GS: A lot of firms say they are global, what will set White & Case apart?

HV: We are an elite global firm that's neither UK nor US, we're integrated globally and strong in G20 markets. We already have 50 years' experience building a global, integrated firm, which is a lot more than most of the firms we compete with.

GS: When it comes to global, US firms have made far greater inroads penetrating London than the other way round, do you think that will ever change?

HV: I think it's only a matter of time before the magic circle firms build practices in the US that make them global. They can't be truly global without credible practices in the US, so whether it's this year or in ten years, they'll get there. The question is whether they'll build organically over time, or catapult via a merger.

I think it's only a matter of time before the magic circle firms build practices in the US that make them global 

GS: What, in your opinion, are the key challenges facing the legal market and how well positioned do you think you now are to meet them?

HV: First of all, the legal industry is consolidating, by which I mean the total legal spend for law firms is not growing and law firms are combining. A second challenge is transatlantic competition. Third, the gap between the elite global law firms and the global mid-market firms is widening. The elite firms will be in a better position to attract the top talent and as a result attract clients' complex, higher-value work. And a fourth challenge is new entrants. By that I mean growth in in-house legal teams, the accounting firms providing legal services, and legal process outsourcing firms chasing lower-end work.

The elements of our strategy - profitable growth, people engagement and global client relationships - are aimed at addressing these challenges and strengthening our firm for the future.

Download a copy of the article as it originally appeared here.

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Reprinted with permission by The Reprint and Licensing Centre (http://www.rl-centre.com/ / 0207 501 1085).

Evgeny Letunovsky is an associate in our Dispute Resolution practice in Moscow. He focuses on commercial litigation and international arbitration. Evgeny has respresented clients in investment, commercial, insolvency and corporate disputes, including disputes involving various jurisdictions.

White & Case Partner Joshua Siaw is among Britain's 100 most influential people of African or African Caribbean heritage, according to the 2016 Powerlist announced by Powerful Media on November 23.

First published in 2007, the annual Powerlist profiles the top 100 most influential black people in Britain, selected by an independent panel and chosen because of their "ability to alter events and change lives." More information about the list is available at www.powerlist.co.uk.

Siaw joins influential public figures such as Formula 1 champion Lewis Hamilton, billionaire telecommunications tycoon and philanthropist Mo Ibrahim, journalist Sir Trevor McDonald OBE and the UK's first non-white High Court female judge, Dame Linda Penelope Dobbs, DBE, all of whom have been featured on the prestigious nationwide list.

Siaw is a partner in White & Case's Global Banking Practice and Director of the Firm's Africa practice. He advises corporates, governments, banks and other financial institutions on cross-border finance transactions in Africa. In 2014, Siaw was named by Forbes as "one of Africa's most influential young business leaders" and identified by Euromoney as one of Africa's “Rising Stars,” a list of individuals and power brokers who are transforming the financial, investment and business landscape in Africa. In the same year, Siaw was also named a "Young Business Leader of the Year" by the African Union.

White & Case LLP’s London-based partner, David Goldberg, has joined the Board of Directors at The London Court of International Arbitration (LCIA).

"It is an honour to be joining the LCIA Board of Directors," said David Goldberg. "I am excited to work closely with highly respected prominent arbitration practitioners and I look forward to this opportunity to contribute to the growing success of the LCIA."

Goldberg's three year term begins this month (December 2015) and runs until December 2018.

As well as his position on the board of LCIA David is a founder, trustee and the Secretary General of the Anglo-Russian Law Association and a founder and Deputy Chairman of the Board of the Russian Arbitration Association.

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Global law firm White & Case LLP announced today the promotion of 16 of its lawyers to counsel and nine to local partner

"Spanning 17 offices and nine practices, these promotions reflect the truly global and diverse nature of our business," said White & Case Chairman Hugh Verrier. "While the focus of our strategy is on growth in the US and London, our capabilities around the world enable us to serve our clients in their most complex, cross border legal challenges, wherever they are."

In addition to the internal promotions the Firm has hired 14 counsel and 12 local partners during 2015.

At White & Case, counsel is a role for senior lawyers with significant experience in a particular practice area. The title is used across the Firm, in all offices, as an alternative career path to partnership but does not preclude consideration for promotion to partner.

The position of local partner is offered in select White & Case regions and locations where it is common market practice. At present this includes offices in Asia, Central and Eastern Europe, Germany, Belgium, Turkey, Saudi Arabia and Mexico. The title of local partner is given to senior lawyers of exceptional ability and is a recognized career step towards admission into Firm partnership.

The promotions are effective January 1, 2016 except where noted.

AMERICAS

Anna Andreeva has been named counsel in our Global Project Finance Practice. Based in Miami, she advises on bank and project finance, equipment leasing and finance transactions, as well as general corporate work.

Heather Borthwick has been named counsel in our Global Banking Practice. Based in New York, she advises financial institutions, private equity sponsors and corporate borrowers on a wide range of leveraged, corporate finance and M&A transactions.

Binoy Dharia has been named counsel in our Global Banking Practice. Based in New York, he advises financial institutions, private equity sponsors and corporate borrowers on a wide range of leveraged, corporate finance and M&A transactions.

Brody Greenwald has been named counsel in our Global International Arbitration Practice. Based in Washington, DC, he advises companies and sovereign states on cross-border disputes concerning foreign investment in a wide range of industries.

Seth Kerschner has been named counsel in our Global Mergers & Acquisitions Practice. Based in New York, he advises on environmental law, including corporate transactions, regulatory compliance and climate change issues. Seth represents a broad range of domestic and international clients from the public and private sectors.

John Kim has been named counsel in our Global Mergers & Acquisitions Practice. Based in New York, he advises on M&A, private equity and general corporate matters representing corporate clients, private equity funds and commercial banks.

Wendi Schepler has been named counsel in our Global Intellectual Property Practice. Based in Silicon Valley, she advises on technology litigation and patent prosecution, including strategic patent counseling and preparing patent-related legal opinions.

EUROPE, MIDDLE EAST AND AFRICA

Derin Altan has been named local partner in our Global Mergers & Acquisitions Practice, effective August 1, 2015. Based in Istanbul, he advises on both equity and debt capital markets transactions, including public offerings, private securities issues as well as public mergers and acquisitions.

Piotr Bytnerowicz has been named counsel in our Global International Arbitration Practice, effective October 1, 2015. Based in Warsaw, he advises on construction and real estate related commercial disputes before state and arbitration courts.

Ladislav Chundela has been named a local partner in our Global Mergers & Acquisitions Practice. Based in Prague, he advises on corporate law, M&A, real estate and construction matters, litigation, arbitration and foreign investments.

Pavel Cížek has been named a local partner in our Global Project Finance Practice. Based in Prague, he advises on construction and energy law and public procurement.

Amanda Cowell has been named counsel in our Global Commercial Litigation Practice, effective October 22, 2015. Based in London, she advises on domestic and international commercial litigation and arbitration, primarily working with corporate and banking clients.

Dmitry Donov has been named counsel in our Global Mergers & Acquisitions Practice. Based in Moscow, he advises on M&A transactions and joint ventures, representing clients in banking, transportation and natural resources industries on domestic and cross-border transactions in Russia.

Daniel Eckstein has been named a local partner in our Global Commercial Litigation Practice, effective July 1, 2015. Based in Berlin, he advises on conducting civil litigation proceedings and alternative dispute resolution procedures, representing national and international companies and financial institutions.

Petr Hudec has been named a local partner in our Global Banking Practice. Based in Prague, he advises on financing and capital markets transactions, representing lenders, underwriters, corporate borrowers and issuers.

Luka Kristovic Blazevic has been named counsel in our Global International Arbitration Practice, effective May 1, 2015. Based in Doha, he advises on international commercial arbitration and specifically complex construction disputes, representing a broad range of clients.

Sara Nordin has been named counsel in our Global Trade Practice. Based in Geneva, she advises on export controls and sanctions, advising trade associations, multinational institutions and corporations on matters relating to relevant EU law and policy and Member State enforcement for trade restrictions.

Emre Ozsar has been named local partner in our Global Mergers & Acquisitions Practice, effective August 1, 2015. Based in Istanbul, he advises on M&A, private equity transactions and joint ventures, representing clients in various sectors in domestic and cross-border transactions in Turkey.

Jean-Lou Salha has been named counsel in our Global White Collar Practice. Based in Paris, he advises on criminal and regulatory investigations, advising clients on compliance with anti-money laundering, anti-tax fraud and anti-bribery regulations and practices.

Bartosz Smardzewski has been named counsel in our Global Capital Markets Practice. Based in Warsaw, he advises on corporate and capital markets transactions, including acquisitions of shares and enterprises, mergers, privatization schemes, public offerings and bond issues.

Christian Theissen has been named a local partner in our Global Commercial Litigation Practice, effective July 1, 2015. Based in Frankfurt, he advises on technology-based industries, including the automotive industry, and encompasses contract advice and negotiations as well as international arbitration and litigation.

ASIA

Jane Huston has been named counsel in our Global Banking Practice. Based in Singapore, she advises on banking, structured finance and restructuring transactions throughout Asia.

Karl Pires has been named a local partner in our Global Mergers & Acquisitions Practice. Based in Tokyo, he advises on a broad range of corporate and commercial matters, with an emphasis on cross-border M&A, joint ventures and reorganizations.

Chiho Saito has been named counsel in our Global Mergers & Acquisitions Practice. Based in Tokyo, she advises on all aspects of real property in Japan, including real estate finance.

Lucy Xu has been named a local partner in our Global Mergers & Acquisitions Practice. Based in Shanghai, she advises on cross border M&A, divestitures and private equity transactions, representing multinational corporates and venture capital and private equity funds investing and doing business transactions in China.

During 2015, 14 counsel and 12 local partners have joined the Firm.

AMERICAS

Luiz Aboim, Counsel, Global Commercial Litigation Practice, London

Calvin Cheng, Counsel, Global Mergers & Acquisition Practice, Silicon Valley

Jared Danilson, Counsel, Global Mergers & Acquisition Practice, New York

Jeff Ii, Counsel, Global Mergers & Acquisition Practice, Silicon Valley

Helen Lee, Counsel, Global Banking Practice, Washington, DC

Elisa Evangelina Marquez Romero, Counsel, Global Commercial Litigation Practice, Mexico City

Michele Meises, Counsel, Global Financial Restructuring & Insolvency Practice, New York

Karalyn Mildorf, Counsel, Global Trade Practice, Washington, DC

Victoria Rosamond, Counsel, Global Mergers & Acquisition Practice, New York

Robert Wann, Counsel, Global Banking Practice, New York

EMEA

Kabelo Dlothi, Local Partner, Global Mergers & Acquisition Practice, Johannesburg

Leonardo Graffi, Local Partner, Global Mergers & Acquisition Practice, Milan

Jiri Herczeg, Counsel, Global Commercial Litigation Practice, Prague

Guido Hermeier, Local Partner, Global Mergers & Acquisition Practice, Düsseldorf

Scott Maesch, Counsel, Global Financial Restructuring & Insolvency Practice, Düsseldorf

Alexandre Mazuranic, Counsel, Global International Arbitration Practice, Geneva

Claudio Medeossi, Counsel, Global Capital Markets Practice, Dubai

Jana Michaelis, Local Partner, Global Mergers & Acquisition Practice, Düsseldorf

Hendrik Roehricht, Local Partner, Global Mergers & Acquisition Practice, Frankfurt

Kristin Spiekermann, Local Partner, Global Mergers & Acquisition Practice, Düsseldorf

Christina Will, Local Partner, Global Mergers & Acquisition Practice, Düsseldorf

Kirill Zenin, Local Partner, Global Mergers & Acquisition Practice, Astana

Florian Ziegler, Local Partner, Global Banking Practice, Frankfurt

ASIA

Jonathan Bowden, Local Partner, Global Mergers & Acquisition Practice, Singapore

Prady Mysoor, Local Partner, Global Mergers & Acquisition Practice, Hong Kong

Jessica Zhou, Local Partner, Global Capital Markets Practice, Hong Kong

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As the world's energy dynamic is changing in response to powerful economic, security of supply, and environmental forces, investment in and deployment of power infrastructure is becoming increasingly focused on emerging markets.

However, infrastructure investment, especially in emerging markets, can be a risky business. This paper will aim to identify the main risks that are particularly pertinent in power projects (with a focus on generation projects) in emerging markets and will then consider the main ways in which such risks may be mitigated.

emerging markets offer the prospect of higher rates of return;however, with such potential rewards come potential risks.

It should be noted that although this paper's focus is on generation, many of the risks discussed would generally also be applicable to distribution and transmission assets. In addition, this paper does not deal with those risks that arise in the context of power projects generally, irrespective of whether such projects are located in an emerging market or otherwise.

This paper is divided into three sections:

1. Part A summarises some key risks relevant to emerging markets.
2. Part B includes a template risk matrix the purpose of which is to identify emerging market key risks and how such risks may be mitigated.
3. Part C sets out how international arbitration can be utilized in international commercial and investment disputes particularly in emerging markets.

Power Sector in Emerging Markets – New Opportunities?

In emerging markets, governments and utility companies (which companies are often state-owned) have often turned to the Independent Power Producer ("IPP") model. This model has proved successful in attracting new sources of capital that would otherwise not have been available to such markets and ensuring power projects are constructed efficiently and quickly. The IPP model also brings new expertise, skill sets and training opportunities to such markets.

Typically new IPPs sell electricity into the state-dominated power system under a long-term power purchase agreement ("PPA"). A PPA is entered into between the project company and the offtaker (again typically a state owned entity), where the offtaker undertakes to make "availability based" payments with smaller payments made for energy output.

A PPA structure provides a degree of certainty with respect to revenues, a certainty that is typically missing in merchant assets. By tapping private capital, governments no longer need to raise the financing for new capacity themselves - an attractive option for governments that are attempting to manage financial crises and cash-poor state finances. From an investor/developer perspective, emerging markets offer the prospect of higher rates of return, however with such potential rewards come potential risks.

Part A – Emerging Markets – Key Risks

1. Currency Risk

Many of the cost components for IPPs such as debt, capital, equipment and fuel are made in a hard currency (e.g. US Dollars, Pounds Sterling or Euros), whereas PPA payments, the main source of revenue, are typically (and often times it is a legal requirement that such payments are) made in local currency. This gives rise to currency risk within the project.

Currency risk can be subdivided into three main component parts:

• Exchange rate fluctuations
• Convertibility Risk
• Repatriation / Transfer Risk

"Exchange rate fluctuation" is the risk of devaluation in a local currency, which is a particular problem where the local currency is not pegged to another harder currency e.g. US dollars.

"Convertibility Risk" refers to the risk that insufficient quantities of hard currency are available to convert the local currency to hard currency – essentially a liquidity risk or some other interference in the ability to convert local currency into hard foreign currency.

"Repatriation / Transfer Risk" refers to the ability to take hard currency out of the local jurisdiction and place it into an offshore account ready for distribution to equity investors and lenders to the project.

2. Revenue Risk

By "Revenue Risk" we are referring to circumstances where actual project revenues are less than initially anticipated either through a reduction in the demand for power or a reduction in the price payable for the power generated.

Over the lifetime of a power project, the demand for the output can diminish due to a number of factors including the construction of additional new generation capacity which is more efficient or "greener" reducing the demand for power from older, less environmentally friendly plants. In addition, an economic downturn may reduce the demand for power generally. Revenue risk is particularly relevant in the absence of a long-term sales contract such as a PPA or in arrangements where the tariff is not structured on an ‘availability/capacity' basis i.e. payments are simply made for the power generated.

Private equity firms that have invested in emerging markets have been able to benefit from international arbitration, particularly international investment arbitration.

Additionally in many emerging markets, the price at which electricity has traditionally been sold does not generally reflect the actual cost of generation, with governments subsidizing power and shielding the ultimate consumer from high power prices. In the event a government stops providing subsidies or indeed reduces the level of subsidy, the power price will increase and may no longer be affordable to the end user. The issue of government subsidies creates uncertainty as a government's commitment to provide subsidies for the whole duration of the PPA cannot be guaranteed.

3. Participant Risk

Offtakers are key participants in power projects, with payments for power often providing the major revenue stream for the project. In emerging markets particularly, the credit worthiness of offtakers may be questionable putting at risk this key revenue stream.

Many offtakers in emerging markets are state-owned or state controlled entities, which do not prepare independent accounts and may rely largely or wholly on state subsidy and credit in order to operate and fund themselves. Any deregulation or privatisation process resulting in the restructuring of the power sector (something which is being seen in many emerging markets) and a corresponding reduction in government support or of the asset base of the new entity, may have a material adverse effect on the creditworthiness and financial stability of the offtaker.

4. Consents and Permitting

As part of the construction and operation of a power project, various consents and permits (including land rights) need to be obtained and maintained. This process involves interface with various stakeholders including government ministries, public and private land owners as well as local municipalities. Bureaucratic processes and procedures can be difficult to navigate in developing countries resulting in potentially significant delay to the project. Corruption risk is also potentially a particular sensitivity.

5. Transmission and Infrastructure Risk

The underlying or connection infrastructure is crucial for any IPP. "Infrastructure" here refers to transportation (road, rail), ports and also transmission grid systems. Power projects in emerging markets may be dependent on other infrastructure being developed, maintained or reinforced to accommodate new generating assets. It is important to clearly identify where the responsibility lies with respect to the construction and operation of the infrastructure and the transmission network to ensure that the project's output flows smoothly from the IPP to the grid network and on to the end user. The reliance on the construction or improvement of other infrastructure gives rise to what is often referred to as "project on project" risk.

6. Change in Law Risk

Change in law (including change in tax law) is a particularly pertinent issue in emerging markets. In all projects there is an expectation that offtakers and local participants in any IPP will observe the terms of the agreements entered into (i.e. offtake arrangements) and the economic model presented. However, the danger lies in the terms of the offtake agreement and the project model being static vis-à-vis the laws and regulations of the host government. For example, when greater efficiencies arise as a result of greater market competition, governments may wish to migrate their projects to a model that benefits from such market competition and this might not always be compatible with the terms of the PPA and offtake arrangements signed at the time of the project's inception. Governments may change the taxation or royalty regime seeking to increase the government benefit from a project. Additionally, increasing focus on environmental issues as emerging markets mature, further increases the change of law risk, which may indeed require a modification to the plant, a change to operating costs or an adjustment to the tax treatment.

7. Political Risk

The political regime of emerging markets may be less stable as compared to more developed and established jurisdictions. In today's climate of an ever-changing geo-political map, the politics of developing countries can be a cause of great uncertainty. A change of government may result in a change in government policy and this may have knock-on effects on the laws and regulations of the country. Political regime change may result in increased violence. Additionally, the risk of political change is directly linked to the extent of government support to infrastructure projects, including the provision of subsidies in the utilities sector.

Finally, the risk of expropriation and nationalization is a type of political risk which is a real sensitivity in emerging markets.

8. Bribery and Corruption

Many emerging markets suffer from bribery and corruption issues, particularly those markets where there is a wealth of natural resources. Corruption potentially harms the state itself and also all participants engaged in business activities in the state. One key mitigant in terms of corruption risk is the promotion of transparency.

Part B – Template Risk Matrix for Power Project

Certain key terms used in the Risk Matrix are worthy of note:

"Government Support" can take many forms ranging from soft support, e.g. a comfort letter to more binding arrangements, typically contained in a concession type agreement.

"Stabilisation clauses" is a reference to contractual provisions which seek to protect and maintain the legal environment and regime that was in place as at the time the contract was entered into for the duration of the contract. If the legal regime in fact changes a stabilisation clause typically triggers a government compensation obligation.

"Insurance" can be provided by public e.g. MIGA, IFC, World Bank, or private sources to cover currency repatriation and convertibility risks. It should be noted that insurance will not typically cover exchange rate / devaluation risk.

"Currency swaps" are arrangements which hedge the risk of currency devaluation.

"Bilateral Investment Treaties" are agreements between countries which establish the terms and conditions applicable to private investment from one country into another. Such treaties provide certain protections e.g. in the case of expropriation.

View the Template Risk Matrix for Power Project chart

Part C – Importance of International Arbitration and Bilateral Investment Treaties in Emerging Markets

International Arbitration for Resolving International Disputes

International arbitration is a binding form of alternative dispute resolution, and the preferred method for resolving international commercial and investment disputes, particularly in emerging markets. Parties often perceive international arbitration as more neutral than litigation due to the concern that local courts may favor local companies or the host State, especially in developing States where the rule of law often is weak. In addition, in international arbitration, the parties generally are the ones who select the arbitrators, which enables them to choose decision-makers whose judgment they trust and who have the relevant expertise, such as language capabilities, legal background, and subject-matter knowledge. International arbitration also is generally private, and the parties can agree to make it confidential. Privacy means that only the parties may participate in the proceedings, attend the hearings, and receive the award, while confidentiality imposes an obligation on the parties not to disclose information concerning the proceedings to third parties.

Unlike litigation, international arbitration is not subject to appeal. While it is possible for a court at the "seat of arbitration," i.e., the legal place of arbitration, to set aside an arbitral award, the grounds for doing so are limited and the threshold is high, particularly in arbitration-friendly jurisdictions, such as England, France, Switzerland, and the United States. Parties tend to pay adverse arbitral awards voluntarily, but, if they refuse to do so, the prevailing party may initiate enforcement proceedings in domestic courts throughout the world. Under the New York Convention, 156 States have agreed to recognize and enforce foreign arbitral awards, subject to certain limited exceptions.

International Investment Agreements

Because international arbitration is based on party consent, the parties must have agreed to arbitrate through, for example, an arbitration clause in a contract or a concession agreement. An investor also may be able to arbitrate against a host State based upon an arbitration clause in an international investment agreement.

International investment agreements are agreements between two or more States for the promotion and protection of foreign investment. In these agreements, the State agrees to protect certain investments and investors of the other State. The protected "investment" generally is broadly defined to include, among other things, shares, licenses, contracts, concession agreements, and liens. The substantive protections offered by such agreements generally include protections against unlawful expropriation, unfair and inequitable treatment, and arbitrary and unreasonable treatment.

International investment agreements exist in three primary forms: (1) bilateral investment treaties ("BITs"); (2) multilateral investment treaties ("MITs"); and (3) free trade agreements ("FTAs"). The most common international investment agreement is the BIT, which is an investment promotion and protection treaty concluded between two States. Most States have signed BITs, and approximately 3,000 BITs in total are in force today. The United States, for example, has concluded 40 BITs, India has concluded nearly 70 BITs, and China has concluded over 100 BITs. A notable exception is Brazil, which currently has no BITs in force.

MITs are international investment agreements between more than two States. One example is the Energy Charter Treaty ("ECT"). Nearly 50 European and former Soviet States have agreed in the ECT to arbitrate disputes with foreign investors relating to investments in the energy sector. Other MITs include the 1987 ASEAN Agreement for the Promotion and Protection of Investments between six States in Southeast Asia, and the Investment Agreement for the COMESA Common Investment Area between States in Eastern and Southern Africa. FTAs are international trade agreements between two or more States which often contain investment chapters with arbitration provisions similar to those in many BITs and MITs. Two notable examples of FTAs with investment chapters are the North American Free Trade Agreement ("NAFTA") between the United States, Canada, and Mexico, and the Dominican Republic-Central America Free Trade Agreement ("DR-CAFTA") between the United States and six Central American States.

Strategic Considerations

In drafting an arbitration clause to be included in a contract or concession agreement, the three most fundamental issues that the investor will need to consider are: (1) the applicable arbitration rules; (2) the seat of the arbitration; and (3) the governing law. Investors also need to consider their corporate nationality and whether they qualify for protection under one or more international investment agreements.

In choosing the applicable arbitration rules, parties have many choices. One important choice is between institutional arbitration (where an administrative body administers the arbitration) and ad hoc arbitration (where there is no administrative body). While ad hoc arbitration can work well, administered arbitration is generally recommended in relation to power projects in emerging markets, where there is a risk that the local party may not cooperate in the arbitration and the arbitral institution can help move the process along. One prominent institution for resolving international investment disputes is the International Centre for Settlement of Investment Disputes ("ICSID"), which is the arbitration arm of The World Bank based in Washington, DC and established under the ICSID Convention, a multilateral treaty ratified by 151 States. The International Court of Arbitration of the International Chamber of Commerce ("ICC") in Paris, France is one of the world's leading institutions for administering international commercial arbitrations. The 2010 International Arbitration Survey by White & Case LLP and Queen Mary College – which was based on a questionnaire completed by 136 corporate counsel and interviews of 67 corporate counsel – reported that the ICC is the most preferred and widely used arbitration institution. The same survey reported that the second most preferred arbitration institution was the London Court of International Arbitration ("LCIA"), which is based in London, England.

Other prominent institutions include the Arbitration Institute of the Stockholm Chamber of Commerce ("SCC"), the American Arbitration Association's International Centre for Dispute Resolution ("ICDR"), the Hong Kong International Arbitration Centre ("HKIAC"), and the Singapore International Arbitration Centre ("SIAC"). Finally, some parties – including many States – choose ad hoc arbitration pursuant to the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL").

In drafting an arbitration clause, an investor also must choose the seat of arbitration. The seat is critical, as it will determine which and to what extent domestic courts may support or interfere with the arbitration. If there is concern that the courts of the host State may not be neutral or may be hostile to arbitration, it is critical that the arbitration be seated in a different jurisdiction. There are several examples where an investor in an emerging country was successful in international arbitration only to see the host State or local party obstruct the result through its local courts. While the investor might be able to salvage the arbitral award through recognition and enforcement in a different country, this is usually a lengthy process with an uncertain outcome; the better method to guard against this risk is to seat the arbitration offshore. (Note that the seat plays a less significant role in ICSID arbitrations, which are self-contained and operate outside the realm of domestic courts.)

Investors also must consider which law will govern their contract or concession agreement. Usually, there is no choice and the law of the host State will govern.   

In addition to the terms of the arbitration clause, an investor also should be mindful of its corporate nationality. As mentioned above, international investment agreements protect only certain "investments" of certain "investors." Before any dispute arises, the investor thus must structure its investment so as to ensure that it will benefit from the protections of at least one international investment agreement.

Experience of Private Equity Firms in International Investment Arbitration

Private equity firms which have invested in emerging markets have been able to benefit from international arbitration, particularly international investment arbitration. In AIG Capital Partners Inc. v. Kazakhstan, for example, Kazakhstan's political subdivisions expropriated an AIG private equity fund's investments in a real estate development project. The claimants commenced ICSID arbitration pursuant to the U.S.-Kazakhstan BIT, and the ICSID tribunal awarded the claimants $9.9 million. In Rurelec v. Bolivia, Bolivia similarly expropriated a British company's private equity investment in a power generation company. The claimants commenced an ad hoc arbitration pursuant to the U.S.-Bolivia BIT and UK-Bolivia BIT, and the tribunal ultimately awarded the claimant $35.5 million.

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© 2015 White & Case LLP

The Russian Arbitration Association has named Pavel Boulatov (Moscow) and Artem Doudko (London) among Russia's Top Young Arbitration Practitioners at its 2015 RAA40 Awards. White & Case is the only firm with two winners out of the ten lawyers honored. Doudko was also one of only five Top Young Arbitration Practitioners named for 2014.

The Russian Arbitration Association 40 (RAA40) is a group of young arbitration practitioners and academics who promote arbitration among young lawyers and create opportunities for professional development.

Boulatov focuses on international arbitration, litigation, bankruptcy and insolvency, representing Russian and foreign companies in proceedings before Russian commercial courts in various regions and at all levels, in a wide range of construction, finance, corporate and other business-related matters. He has significant expertise in Russian bankruptcy and insolvency proceedings and has represented creditors, debtors and administrators in large bankruptcy cases.

Doudko is an English solicitor-advocate in the London Dispute Resolution Practice. Doudko specializes in international arbitration with a focus on advising Russian-speaking clients. Doudko has experience in investment as well as commercial arbitrations. He also has significant experience in litigation in the English courts, in particular, in matters related to arbitration.

Alexandre joined White & Case in 2015, and is an associate in the Transactional practice group of our Brussels office and the global Commercial Litigation practice.

He graduated magna cum laude from the Université Libre de Bruxelles and worked for two years at a renowned Belgian law firm. After this first experience as a lawyer, Alexandre graduated from the New York University School of Law, where he specialized in international dispute resolution. After his LL.M, Alexandre passed the New York bar exam.

His practice advises domestic and cross-border clients on all aspects of business law, focussing on the following core areas: commercial litigation, international arbitration, and white collar/investigations.

Morgane joined White & Case in 2015 as an associate in the Transactional practice group of our Brussels office and the global Commercial Litigation practice.

After completing her Bachelor in law at the Facultés Universitaires Notre-Dame de la Paix (Namur), she obtained her Master in Law at the Katholieke Universiteit Leuven. She then pursued an LL.M. at the University of Vienna, from which she graduated with highest honors, specializing in international and European business law.

Her practice advises domestic and cross-border clients on all aspects of business law, focussing on the following core areas: commercial litigation, international arbitration, and white collar/investigations.

Manu Thadikkaran is an Associate in the Firm's International Arbitration Group in Paris, with a focus on commercial and investment arbitration.

Prior to joining White & Case, Manu acquired experience within the international arbitration group of a major Swiss law firm,  as well as litigation training from various law firms and Courts in India. During his time as a student in Geneva, Manu also worked in the area of international trade law as a Research Assistant at the Graduate Institute.

Manu is also involved with the Annual Willem C. Vis Moot Court Competition in Vienna, as a coach and an arbitrator.

The next structural issue facing the European Union

White & Case commissioned independent research to capture views on how senior in-house legal decision makers and senior managers viewed the possibility of a Brexit and what they were doing about it by way of planning and preparation.

It comprised two elements: an on-line survey of German bankers; then telephone interviews with companies from the UK, Belgium, France, Germany, Japan, Switzerland and the US in a wide variety of sectors.

Forty three percent of our telephone respondents are 'very' or 'quite concerned' about a Brexit from a general management point of view. The 43% increases to 52% of respondents who were 'very' or 'quite concerned' from a legal point of view.

However, while there were significant concerns, the threat level is lower than anticipated as Brexit is viewed less as an imminent threat than a potential threat that is some way off.

There was confusion on whether agreed existing regulation would apply post Brexit or whether the UK government would need to start again with its own regime of regulation and trading standards.

The popular myth that once outside the EU, the UK would be able to dispense with its crippling regulation and red tape is roundly dismissed by 84% of our respondents. Interestingly, around 50% of our respondents admitted that as this was not a priority issue, they were not up to speed on the implications of a Brexit for their industry. As a result the strategies and planning around Brexit appear to be thin on the ground. It is on the 'to do' list.

London's pre-eminence as the financial centre of Europe is a given according to respondents who thought London might lose some business round the edges given a Brexit but that its lead was unassailable.

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This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2016 White & Case LLP

Global law firm White & Case LLP has announced that it will retain  87 percent of its London trainees who are due to qualify in March 2016, after 13 of 15 trainees were offered and accepted positions at the Firm.

"We continue to see the growth in demand for English law, not just in London but across our offices globally," said partner and training principal Justin Benson, who heads the trainee solicitor programme in the London office. "As a Firm, we are committed to offering our lawyers the support they need to thrive in their careers. This starts with trainees and continues through our lawyers' careers. We recognise, for many, that making partnership is a career goal and our track record of promoting the very best associates to partner is very attractive."

The Firm's commitment to developing the careers of its lawyers is clearly demonstrated in the 2016 partner promotions. Of the eight London associates promoted to partner earlier this year, four – Ed Attenborough, Rory Hishon, Victoria Landsbert and Ben Wilkinson – joined White & Case as trainees in London.

The Firm retained 100 percent of its London trainees who qualified in 2015. The programme, which has been established in London for 18 years, offers trainees a six-month international secondment.

The newly qualified lawyers join Global Practices including Mergers & Acquisitions, Financial Restructuring and Insolvency, Project Finance, Commercial Litigation, International Arbitration and Capital Markets.

Press Contact
For more information please speak to your local media contact.

Daniel Wilmot is an Associate in the Dispute Resolution Group in London. His practice focuses on international arbitration, advising clients across a variety of geographies and sectors, with particular experience in the energy and technology industries.

Dan's experience includes arbitrations under the LCIA, ICC, UNCITRAL and LMAA rules, as well as ad-hoc arrangements.  He also has experience of investment treaty arbitration, as well as litigation in the English Courts and other methods of alternative dispute resolution.

Dan is a fluent French speaker and a member of a number of professional associations, including the ICC Young Arbitrators' Forum and the LCIA Young International Arbitration Group. He also has an active interest in eDisclosure and related technologies.

Prior to joining White & Case, Dan spent 8 years at another international law firm in London.

Anaïs Harlé is an associate in the International Arbitration Practice in Paris.

Prior to joining White & Case, Anaïs acquired experience in the field of international arbitration and litigation at several international law firms, in Paris and in London, as well as within a major arbitral institution.

Therese Marie Rodgers is an associate in White & Case's Construction and Engineering Group and is based in London. Therese Marie advises owners and contractors on dispute resolution and has experience of international arbitration and litigation, as well as of alternative methods of dispute resolution, including mediation. Therese Marie has advised clients across a variety of industries, including oil and gas (exploration, drilling, processing (e.g. construction of refineries) and distribution), hydropower and transport infrastructure.

Therese Marie joined White & Case in 2016 from an international firm, where she was an associate in the International Dispute Resolution Group, specialising in International Construction Arbitration.

We are delighted to host a panel discussion on the findings of the latest International Arbitration Survey followed by a drinks reception.

Guest Speakers
Chiann Bao, Secretary-General of the HKIAC
Jacomijn van Haersolte-van Hof, Director General of the LCIA
Julian Lew QC, 20 Essex Street
V. V. Veeder QC, Essex Court Chambers

White & Case Speakers
Phillip Capper
Paul Friedland
Andrew McDougall

Date
Wednesday 16 March 2016

Time
6:00 p.m. Panel discussion
7:00 p.m. Drinks reception

Venue
White & Case LLP
5 Old Broad Street
London EC2N 1DW

Contact us to register

The 2015 International Arbitration Survey conducted by Queen Mary University of London is the third survey carried out in partnership with White & Case. The theme of this year's survey is improvements and innovations in international arbitration. The survey examined the effectiveness of past innovations and what could be improved in the future. The report is available here.

Sadie is an associate in the Firm's Washington D.C. office, and her practice focuses on international arbitration and litigation.  She represents foreign sovereigns and private companies in the resolution of disputes before both international tribunals and U.S. federal courts.  She is also actively involved in pro bono matters at the Firm.

During law school, Sadie served as a Business Editor for the Virginia Journal of International Law. Prior to attending law school, Sadie worked at a wireless broadband trade association and as a research assistant intern for a member of the National Assembly for Wales.

For the second year in a row, White & Case has been ranked the top international arbitration practice in the world by Global Arbitration Review, as announced at an awards ceremony held in Shanghai on March 2.

White & Case tied for number one globally in the Global Arbitration Review GAR 30 ranking of the world's leading international arbitration practices. The survey highlighted the Firm's 160-plus arbitration practitioners and its large case load of 325 arbitrations valued at US$86 billion, including 42 pending international treaty cases.

Global Arbitration Review hailed White & Case, noting that the "practice enjoyed another triumphant year" and that "the firm has 'big names', lots of offices and a history as a pioneer in this area…. So how did it get to this enviable position?" The publication cited several key factors:

A Pioneer: "White & Case was one of the first US law firms to do extensive work overseas," dating back more than a century. "Today's international arbitration practice can be seen as growing from those origins. As a result of its early foreign work, international disputes began to arrive on its doorstep."

Depth: "The practice now offers more than 160 lawyers working around the globe (including a number of spots where rivals aren’t on the ground)."

Breadth: "Of the firm’s 40 offices, 20 are home to international arbitration names. As well as the usual centres—London, Paris, New York, DC, Stockholm, Hong Kong and Singapore—the list includes Mexico City, Miami, Frankfurt and Moscow. The practice also now has a presence in Geneva and Seoul."

Quality: "White & Case has a reputation around the market as a fearsome and creative opponent. In fact, in ICSID work, a survey by Credibility International (a damages consulting firm) recently assessed White & Case as the 'winningest' law firm at ICSID."

Clients: "White & Case is blessed with a list full of clients that return." Clients described our practice to GAR as "simply the best" and "superb from the beginning to the end" with "good strategic judgment, strong argumentation and a diligent approach to every matter," and observed that "Nothing was left unchallenged, unattended or not discussed... To say we were pleased would be an understatement."

Results: "Looking at the recent past, big White & Case wins include:

• Establishing jurisdiction for tens of thousands of Italian bondholders to bring a collective ICSID claim against Argentina (the famous Abaclat case), eventually securing them a US$1.35 billion settlement;
• A US$740 million ICSID win for Canadian mining company Gold Reserve against Venezuela;
• Helping the Philippines triumph in a long-running ICSID dispute over an airport terminal, by having the case thrown out twice;
• Winning the complete dismissal of a €322 million ICSID claim against Hungary over a lakeside casino resort that never got built;
• Helping Commisimpex, a Lebanese-owned company, win US$550 million against the Republic of Congo (and defending the award against corruption allegations in the French courts);
• The first dismissal of a treaty claim at ICSID because of corruption (Metal-Tech v Uzbekistan);
• A US$40 million win for SGS against Paraguay thanks to a treaty's 'umbrella clause' (the company had failed in two similar cases against Pakistan and the Philippines, using other counsel); and
• Helping Peru to bring the first ICSID case by a Latin American state, part of a larger dispute that ended with a US$40 million payout to the government."

A complete version of White & Case's GAR 30 commentary can be found here.

The White & Case International Arbitration Practice was established more than three decades ago and has repeatedly been recognized at the top of its field worldwide.

Contact
John Templeman
Global Arbitration Practice Manager
White & Case LLP
+1 646 885 2312
john.templeman@whitecase.com

Andrew is an associate in the Firm's Dispute Resolution group in London. His practice focuses on commercial litigation and international arbitration and covers a variety of sectors, including construction, energy and financial services.

Andrew joined the firm after completing post-graduate studies as a Rhodes Scholar at Oxford. He previously practised as a solicitor in Victoria and served as associate to the Chief Justice of Australia.