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Law360 reports on the latest proceedings pertaining to LLC Energoalliance v. Republic of Moldova. Representing Moldova, GST LLP urged the court to pause a $58MM award enforcement considering the recent European Court of Justice's ruling on the arbitration provision found in the Energy Charter Treaty.

In this feature story, Law360 writes about GST LLP and its new partner and of counsel hires. Domenico di Pietro will be the firm's first London partner, boosting the firm's presence overseas while enlarging and strengthening its commercial and investment arbitration capabilities. Di Pietro told Law360 that in addition to the firm's high-profile team and fast-paced growth, he was attracted to the character and values of its lawyers, who he said are "devoted to offering the highest standard of assistance in international dispute resolution while bearing in mind the challenges currently faced by the entities that we assist."

In this expert analysis, a look at the Energy Charter Treaty and how recent arbitration decisions are likely to ripple through other energy economies. As Central and Latin America pivot toward renewable energy, GST LLP recommends governments reshape bilateral investment treaties to allow incentives for new technologies and improve dispute settlement mechanisms, while also providing both new and established energy companies with certainty and fair treatment.

Law360 reports on Teco Guatemala Holdings LLC v. Republic of Guatemala. Represented by GST LLP, Guatemala filed an emergency motion to nix a freezing order on nearly $16 million being held by Bank of New York Mellon as a Teco Energy subsidiary tries to enforce a $35 million arbitral award. According to GST, "because of Teco's flawed legal strategy, the funds that were intended to satisfy Guatemala's bond obligations are currently restrained at [BNY Mellon]. And while Guatemala no longer owns or possesses those funds, the bondholders may very well declare a default on the bonds and cause grave financial consequences for the state."

The ICSID unanimously decided to annul an arbitral award issued against Spain because of the improper constitution of the tribunal, namely that the investors’ appointed arbitrator had a conflict of interest. Said conflict of interest was first discovered and disclosed by GST LLP while representing Pakistan in the proceeding with the Australian joint venture, Tethyan Copper Company Pty Ltd in 2017. When asked to comment on the ruling, GST LLP’s Diego Gosis explains, “there is increased momentum for concerns relating to the integrity of tribunals.”

GST LLP partners Diego Gosis, Ignacio Torterola and Quinn Smith contribute an article to Law360’s Expert Analysis column that suggests that lessons for responding to Covid-19 may be learned from Argentina’s financial crisis. Refering to the “doctrine of necessity” that permits emergency action taken by states to ameliorate crises, the attorneys suggest that abandonment of international commitments is unwise, as is the preferential treatment of domestic investors over foreign investors.

GST LLP Partners Quinn Smith, Ignacio Torterola and Diego Gosis report that they are pleased with the “amicable resolution” of a dispute between Pakistan, their client, and Turkish energy company Karkey Karadeniz Elektrik Uretim AS over their corrupt dealings to obtain a contract for a barge-mounted rental energy project in Karachi.

GST LLP is pleased with an apparent settlement and termination of litigation between Pakistan and Turkey achieved by the two governments over a dispute regarding the lease of floating power plants by Turkish company Karkey to Pakistan during an energy crisis in 2006

Quinn Smith of GST LLP argues that appointments to the board of Citgo made by temporary or interim President of Venezuela Juan Guiado are not legitimate.

GST LLP’s Quinn Smith and Katherine Sanoja are acting as attorneys for Venezuela as US glassmaker Owens Illinois moved against it to collect on US$500 million awarded in 2015.

Quinn Smith of GST LLP agrees with move by US District court to pause litigation filed by a Turkish energy company against Pakistan, so that a World Bank arbitral institution considers allegations of corruption, namely a scheme to influence the award of the contract.

As a Delaware-based Chancery Court hears arguments, Quinn Smith of GST LLP asserts that the letter of Venezuelan law states that only the President of Venezuela has the right to name board members to Citgo in that country. He said, “Reading powers outside the text in dangerous. That word [interim] is crucial.”

Quinn Smith of GST LLP defends Venezuela’s Ministry of Defense in a matter involving an award in favor of shipbuilder Huntington Iingalls because the tribunal did not comply with the terms of the agreement specifying that arbitration take place in Venezuela. The dispute dates back to a 1997 deal for Huntington Ingalls to modernize two warships for Venezuela’s navy.

A Washington DC Federal court judge ruled that an earlier Mississipi district court retains jurisdiction over a dispute involving US shipbuilder Huntington Ingalls and Venezuela’s Ministry of Defence. Quinn Smith of GST LLP approved of the judge’s decision to “...dismiss the case, without ordering its transfer.”

A tribunal has declared that Clorox España is disqualified from seeking damages against Venezuela, due to the fact that it is a shell company created to take advantage of a bilateral investment treaty (BIT) in place between Spain and Venezuela. The Clorox company owned its Venezuelan investments through an American subsidiary, explained GST LLP Partner Diego Gosis. He applauded the ruling, saying the decision confirms the long-standing view in international law that “to access the protections granted by the investment arbitration system, a meaningful, qualified investment must actually have been made.”

GST attorneys for the Maduro government Quinn Smith and Katherine Sanoja rejected the suggestion by opposition leader Guaido’s attorneys that a summary judgment be issued due to “The fundamental disagreement over who has the authority to represent Venezuela.” They further explained that parallel arbitration proceedings by Owen Illinois subsidiaries are underway for the same alleged misdeeds, further complicating the matter.

A Washington DC federal judge granted Pakistan’s request for interrogatories related to its allegations of corruption by Turkish energy company Karkey.

Maduro-selected attorneys Quinn Smith, Diego Gosis and Katherine Sanoja of GST LLP assert that attorneys for opposition leader Juan Guaido never received permission from the Washington DC court to substitute as counsel for Venezuela, and that GST LLP never consented to such a substitution. This is one instance of an ongoing power struggle between the two Venezuelan leaders before several US courts over which government has the right to appear in litigation filed against the crisis-stricken nation.

Pakistan, represented by GST LLP attorneys Quinn Smith, Gary Shaw and Derek Womack, argues that Turkish energy company Karkey’s bid to confirm a prior award should be denied, that it had not been properly served, that the court lacked jurisdiction under the Foreign Sovereign Immunities Act, and importantly, that the award is suspect, as the tribunal did not permit access to evidence demonstrating corruption by Karkey.

A recent decision to dismiss an arbitration against Venezuela after the country denounced an underlying treaty has provoked speculation that other countries will be incentivized to do so. Diego Gosis of GST LLP confirms that previous tribunal findings on denunciation of treaties also apply to ICSID conventions, which Venezuela denounced in 2012.  

GST LLP argues that Pakistan was deprived of its due process in proceedings awarding Turkish energy company Karkey an award of nearly US$846 million. They assert that documents proving corruption were refused consideration by the ICSID tribunal.

In arguments on behalf of the Ministry of Defense of Venezuela, GST LLP attorneys claim that a US federal court lacks subject-matter jurisdiction because the contract at issue is military, rather than commercial in nature, and treaties invoked by US shipbuilder Huntington Ingalls apply to commercial matters. They also declared that an award in favor of Hungtington Ingalls is unenforceable due to arbitrations occurring in venues other than Venezuela, which had been stipulated in the parties’ arbitration agreement.

Quinn Smith, representing the Ministry of Defense of Venezuela asserted that the ICSID tribunal abandoned the terms of the contract between Venezuela and US shipbuilder Huntington Ingalls by sending arbitration to Rio, and then further erroroneously refering to arbitration having taken place in Washington, DC. He stated, “We trust that the court will agree that the arbitral tribunal did not apply the will of the parties.”

As Miami grows in popularity as a venue for international law, Law360 speaks to experts, including GST LLP Partner Diego Gosis, about the city’s status as a hub for International Arbitration.

Diego Gosis of GST LLP, also working with Guglielmino & Asociados, questions the impartiality of an ICSID ad hoc committee member after he made derisive references to Venezuela. Venezuela requested that committee member Alvaro Castellanos Howell be removed while the committee is deciding whether to revive or annul a claim by Blue Bank International of Barbados against Venezuela.

Washington DC federal judge Amy Berman Jackson paused a glassmaker’s petition to enforce a $500 million arbitration award issued against Venezuela for expropriating two production plants. GST LLP partner Quinn Smith noted that several arbitrations launched by OEIG regarding the same asset ought to warrant dismissal, but he was pleased with the judge’s order to stay.

Responding to several actions by glassmaker Owens-Illinois subsidiary OIEG to pursue an award from Venezuela in multiple arbitration jurisdictions, US District Court Judge Amy Berman Jackson ordered that the matter be stayed, pending regular review. Quinn Smith of GST LLP, representing Venezuela, reports that OIEG has launched two separate arbitrations, and that he believes a dismissal is the right course.

Diego Gosis of GST LLP applauded the ICSID tribunal’s finding of lack of jurisdiction in an arbitration against Venezuela over its expropriation of glass production plants, saying that “The case was in many ways a speculative attack against the rule of law.”

GST LLP’s Diego Gosis and Ignacio Torterola reported that a stay in execution of an award to Turkish energy firm Karkey would ultimately convert to annulment, given the strong grounds put forward in their defense of Pakistan.

Regarding an $800 million award that the ICSID issued to Turkish energy firm Karkey against Pakistan, GST LLP attorneys were quoted saying they have “never seen an award with flaws that are so numerous.” They immediately filed a petition to annul, with Gosis stating further “Arbitrators failed to apply the applicable law, exceeded their jurisdiction and decided on things not at issue resulting in inflated damages.”

Venezuela’s Ministry of Defense told a New York federal judge Friday that Canadian mining company Crystallex can’t seize funds from a Bank of New York Mellon account, arguing that the money belongs entirely to another company. Quinn Smith of GST LLP, counsel for Venezuela, further elucidated that the move by Crystallex to establish a New York judgment against the Ministry goes against “the trust and its language that states’ assets are immune under US and customary international law.”

After discovering that glassmaker OIEG concealed the fact that it sold the right to enforce a US$500 million award to an unnamed Irish investment fund, GST LLP attorneys are quoted as saying that the company is essentially foisting “...a flawed award on this court that takes advantage of an arbitrator’s misconduct, continues to exploit a weakness of the investment arbitration system and conceals the owner of the award and true party in interest.” Quinn Smith noted the “significant doubts” arising and further suggested that it wasn’t even clear whether the sale of the award actually took place. Law360 notes the “stiff opposition” mounted by GST LLP which asserted that federal law prohibits arbitral awards being granted in the proceedings in NY and that OIEG had also brought a parallel complaint in DC.

The bid to disqualify an arbitrator who Pakistan alleges has a conflict of interest in deciding a dispute with Tethyan Copper Company will go to an outside arbitral institution for an opinion. GST LLP partner Diego Gosis submitted on behalf of Pakistan that an arbitrator appointed by Tethyan uses the same experts and methods of valuation used by that company and would have an interest in defending their validity.

Diego Gosis confirmed on behalf of his client, Pakistan, that there exists a single publicly available case in a claim against Peru by a Canadian mining company in which aritral committee member Alexandrov relies on a “very peculiar” form of discounted cash flow-based valuation to quantify damages. This method is proposed by the Canadian claimants Tethyan in its current proceeding against Pakistan. He stated “The fact that some arbitrators are making the same arguments as counsel that they are accepting to decide on as arbitrators is very problematic in this sense, and any failure to make all necessary disclosures of those overlaps puts the feasibility of the entire system at risk.”

In response to Venezuela’s fourth dismissal in an effort to unseat an arbitrator involved in a dispute by US glassmaker Owens Illinois, GST LLP attorney Diego Gosis responded that the standard set in this dismissal would “make challenging conflicted arbitrators virtually impossible, and departs from established rules and principles in international arbitration.”

An ICSID tribunal acknowledged that it made an error by previously deciding that it lacked authority to rule on claims made by US real estate investors in Costa Rica. “The tribunal applied an improper test using erroneous information. Correcting the information does not cure the improper test,” states GST LLP partner Diego Gosis. Attorneys for Costa Rica have asked the tribunal to terminate proceedings.

Argentine Ignacio Torterola brings the “T” to boutique Miami firm Gomm & Smith, now named GST. Torterola has a proven track record as defender of Argentina amid an overwhelming tide of investment arbitration cases there. Torterola states that “personalized services and competitive pricing” are on trend in this field. He spent eight years in Argentina’s Office of the Treasury Attorney General, alongside fellow GST LLP attorney Diego Gosis. The law firm has formed a team of dedicated attorneys defending countries including Venezuela in arbitration and related litigation.

OIEG case against Venezuela stymied by GST LLP’s claim that federal law prohibits arbitral awards from being granted in New York federal court proceedings. Quinn Smith of GST LLP noted that his firm will represent Venezuela in actions taking place in Washington DC where it is relevant.

The risk of conflicting decisions and/or double recovery rendering any award by a NY federal court unenforceable is cited by GST LLP attorneys representing Venezuela, who faces glassmaker Owens Illinois there.