Ruling for Starr International Companies Win for Barclays Digital
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July 2015 REPORT Ruling for Starr International Companies Digital Music Trial Boies, Schiller & Flexner Chairman David Bernanke and former Treasury Secretary Major publications reported on one of the Boies and a team of lawyers from the Firm Timothy Geithner, the Boies, Schiller most impressive antitrust trial wins of the won what many had considered an against- & Flexner team also shed light on the year in December 2014, when Apple Inc. the-odds victory in a case against the U.S. inner workings of the government in the fought off accusations that it had used an government for illegally taking over insurer financial crisis. Bloomberg News said “the iTunes software update to create a monopoly AIG at the height of the financial crisis of ruling solidifies Mr. Boies’s reputation for in the digital music market. As noted by those 2008. Judge Thomas Wheeler ruled on June winning long-shot cases,” while the Wall publications, the jury verdict for the defense 15, 2015, that the government violated the Street Journal described Mr. Boies as “one ended a decade-long dispute in which the law when it took a controlling stake in AIG. of the best trial lawyers in the country.” plaintiffs sought more than $1 billion in treble “The government’s unduly harsh treatment The court denied plaintiffs’ claims for damages under the Sherman Act. Apple’s of AIG in comparison to other institutions damages, based on a legal ruling that is lawyers repeatedly pointed out the plaintiffs’ seemingly was misguided and had no now on appeal. The trial team included Bob side lacked any actual iPod customers saying legitimate purpose,” Judge Wheeler wrote in Silver, Alanna Rutherford, Amy Mauser, Bob they were harmed, the NewYork Times reported. his ruling for Starr International Companies. Dwyer, Jeremy Vest, William Bloom, Abby “There’s not one piece of evidence of a single Early in the case, many legal observers Dennis, Julia Hamilton, Laura Harris, James individual who lost a single song, not even a anticipated an easy win for the government, Kraehenbuehl, Ilana Miller, John Nicolaou, complaint about it,” the Times quoted Boies, but Mr. Boies and his team overcame that Matthew Schmitten, Mat Schutzer, Matt Schiller & Flexner partner Bill Isaacson as during a trial before Judge Wheeler in Shahabian, David Simons, and Craig Wenner. saying in closing arguments. Mr. Isaacson and the U.S. Court of Federal Claims last fall. Also Carl Goldfarb, Bill Dzurilla, Aaron co-counsel Karen Dunn were honored by Questioning former Fed Chairman Ben Marcus, and Bret Vallacher. Litigation Daily as Litigators of the Week. Win for Barclays INSIDE THIS ISSUE INTERNATIONAL ARBITRATION 02 Boies, Schiller & Flexner won a resounding business purchased by Barclays did not Wendy Miles on the growing use of victory for its client Barclays in a six-year include more than $4 billion in margin arbitration in cross-border disputes. battle over the bank’s purchase of the assets and a further $1.9 billion in other LITIGATION 04 Lehman Brothers Inc. brokerage business so-called clearance box assets. The U.S. A $663 mln judgment for highway safety, a at the height of the financial crisis. Lehman Court of Appeals for the Second Circuit win for United Therapeutics, and decisions for agreed on June 5, 2015, to pay Barclays issued two rulings last year, on August 5 holders of Spanish notes and Florida children. an additional $1.28 billion to end the and September 24, upholding lower court INTERVIEW 03 dispute, and Barclays said it would book rulings in Barclays’ favor, and the U.S. Bill Isaacson talks about his historic trial a $750 million pre-tax gain as a result of Supreme Court in May declined to hear a against “amateurism” in college sports. the settlement. “Barclays fought hard and petition by the trustee. The Firm’s work for WOMEN LAWYERS HONORED 05 responsibly through six years of litigation to Barclays was led by Mr. Schiller; along with Three Best in Business Law awards, two secure approximately $8 billion of purchased partners Hamish Hume, Jonathan Shaw, Outstanding Women Lawyers, and one partner in the Top 250 Women in Litigation. yet disputed assets, and today’s settlement Jack Stern, Tricia Bloomer, Todd Thomas, brings that effort to a successful conclusion,” Bill Dzurilla, Chris Green, Heather King, CORPORATE UPDATE 06 Managing Partner Jonathan Schiller told the and Amy Neuhardt; counsel Jon Davenport; When are an investment manager’s fees subject to self-employment tax? Wall Street Journal. Lehman’s bankruptcy and associates Camille Oberkampf and trustee had claimed that the brokerage Randall Ewing. 1 July 2015 Recent Developments in International Arbitration By Wendy Miles QC The recent $50 billion arbitration award continue to provide relevant and up-to-date against Russia in its dispute with Yukos support to meet ever-evolving needs. In Asia, shareholders has focused attention on Hong Kong’s 2011 Arbitration Ordinance international arbitration as a means of requires arbitrators to avoid delays and resolving major foreign investment disputes. expense, while Singapore has proposed to set It is the latest and largest in a number of up an International Commercial Court with billion-dollar arbitration awards that have been wide jurisdiction over dispute resolution. made public in the last few years. Many more remain confidential. Increasingly, multinational The increasing popularity of international corporations and investors are looking to arbitration to resolve cross-border disputes both international commercial arbitration and expansion, reported to involve some $1.6 can be attributed to at least four factors. investment treaty arbitration to protect their billion, are being heard by the Miami The first is that arbitration agreements overseas investments and positions. International Arbitration Society. and awards are enforceable under the New York Convention, which requires courts in The Yukos case began in 2005, when former Beyond the headline-grabbing public cases, signatory states to recognize valid private shareholders of Yukos Oil Company started there are other signs that arbitration is arbitral agreements and enforce valid an investment arbitration before an arbitral enjoying a surge in popularity. One is the arbitration awards made in other signatory tribunal administered by the Permanent Court rise in caseloads reported by the major states. The second is that arbitration is usually of Arbitration (PCA) in The Hague, alleging international arbitration institutions, including conducted in private, allowing participants that Russia had broken its obligations under the ICSID, which comes under the auspices to protect confidential business information the Energy Charter Treaty by expropriating of the World Bank; the ICC’s International from the public scrutiny that can accompany the company’s assets. The arbitral tribunal Court of Arbitration; the London Court of litigation in court. The third factor is the held unanimously that Yukos was the object of International Arbitration (LCIA); and the flexibility of arbitration, with a choice of a series of politically motivated attacks by the Singapore International Arbitration Centre seats and governing institutional rules to Russian authorities, and awarded damages of (SIAC). Another sign was the opening of the select from, depending on the particular $50 billion to the former shareholders. ICC’s New York office in 2013, where it now situation. But perhaps the biggest reason to administers many of its North American and choose arbitration is its perceived neutrality. Other large quantum awards include Latin American cases, as well as the opening of A corporation making a major investment in a Dow Chemical Co. v. Kuwait and Occidental the International Arbitration Center facilities foreign state may view the host state courts as Petroleum Corp. v. Ecuador, both in 2012. Dow in New York the same year. potentially hostile. A private arbitral tribunal Chemical brought an International Chamber appointed by the parties, based in a neutral of Commerce (ICC) arbitration claiming As the caseloads increase, arbitral institutions seat, and procedurally governed by a fair damages after Petrochemical Industries Co. have taken a number of steps to streamline arbitration statute and institutional rules is of Kuwait backed out of a joint venture procedures. In October 2014, the LCIA more likely to be acceptable to both parties. agreement during the global financial crisis. issued new arbitration rules aimed at The tribunal awarded Dow, the foreign speeding up proceedings, such as the Clients who are about to engage in foreign investor, $2.2 billion in 2012. In the case of wider use of electronic submissions and a investment or cross-border deals have many Occidental, the investor went to arbitration requirement that arbitrators declare that options when it comes to selecting the best at the International Court for the Settlement they are able to devote sufficient time to forum to resolve disputes that may arise. of Investment Disputes (ICSID) after Ecuador ensure an expeditious arbitration (a step put Home courts may be the most advantageous terminated a contract and seized Occidental’s in place by the ICC Court of Arbitration jurisdiction to the investor but may be wells and drilling equipment. The tribunal some years earlier). In 2012, the ICC Court unacceptable to the foreign state or other ruled that while Occidental was in breach of Arbitration updated its case management counterparty. Under those circumstances, of the agreement, Ecuador’s response was procedures further to improve the speed, international arbitration is likely to be the disproportionate, and it awarded Occidental efficiency, and cost-effectiveness of arbitration. way to go. $1.77 billion plus interest. A number of major arbitral seats have also Wendy Miles QC joined Boies, Schiller & Flexner in Meanwhile, a series of disputes over delays recently taken steps to ensure that their London in September 2014 and heads the Firm’s and cost overruns in the Panama Canal national arbitration laws and judiciary International Arbitration practice.