The case of the day is Orange Middle East & Africa v. Republic of Equatorial Guinea (D.D.C. 2016). Orange and the Republic of Equatorial Guinea were the shareholders of a telecommunications company providing service in Equatorial Guinea. The government was the majority shareholder. After some disputes arose, the parties entered into a settlement agreement, which required the government to purchase Orange’s shares if it granted a telecommunications license to a third party. The agreement provided for arbitration of disputes in Paris under the ICC rules.
In 2011, the government granted a third party a license, but it failed to purchase Orange’s shares. Orange demanded arbitration. The arbitrators awarded Orange more than € 131 million. The government sought to set aside the award, but the Court of Appeals in Paris authorized enforcement of the award.
Orange sought to confirm the award in Washington. The government moved to dismiss for insufficient service of process.
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The case of the day is Redeemer Committee of Highland Credit Strategies Funds v. Highland Capital Management, LP (S.D.N.Y. 2016). Highland Capital Management was the manager of Highland Credit Strategies Master Fund, LP, a Bermuda mutual fund company. The Master Fund invested money received from two feeder funds, Highland Credit Strategies Fund, LP and Highland Credit Strategies Fund, Ltd. When the feeder funds decided to liquidate in 2008, Highland Capital Management and the investors agreed on a plan for distributing the assets of the Master Fund, to be overseen by a Redeemer Committee. They agreed to arbitration of any disputes that arose, to be held in New York and administered by the AAA. According to Highland Capital Management, the plan of distribution was “implemented in Bermuda in relation to Highland Credit Strategies Fund, Ltd. (a Bermuda company) by way of a scheme of arrangement under the Bermuda Companies Act 1981.” The plan of distribution had confidentiality provisions that were incorporated into the scheme of arrangement. The scheme of arrangement was approved by the Bermuda court and could not be changed without court approval.
A dispute arose, and the parties arbitrated in New York. The arbitration resulted in an award, which the Redeemer Committee moved to confirm. As required by the confidentiality provisions of the plan, the Redeemer Committee sought and received leave to file its petition for confirmation under seal. For its part, Highland Capital Management moved to vacate the award. Later, the parties agreed that the petition itself need not be sealed, but Highland Capital Management insisted that the award itself, and other materials, should remain under seal. The main argument was that Bermuda law applied and required sealing, and that therefore considerations of comity overrode the usual policy favoring public access to judicial records and proceedings.
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The case of the day is In re Application of the Government of the Lao People’s Democratic Republic (D.N.M.I. 2016). The Laotian government was partners with Sanum Investments Ltd. and Lao Holdings N.V. in the Savan Vegas casino, which was located in Laos. As part of the deal, Laos had given tax benefits and a monopoly to the casino, but due to disagreements, Sanum and Lao Holdings brought a claim in arbitration under the BITs between Laos and China (Sanum was a Macau company) and Laos and the Netherlands (Lao Holdings was a Dutch company). The parties settled the claims in 2014, but Sanum and Lao Holdings unsuccessfully sought to reopen the arbitration on the grounds that Laos had breached the settlement agreement. Laos initiated its own arbitration at the SIAC pursuant to the settlement agreement. Laos also began an investigation of criminal bribery and tax evasion on the part of Sanum and Lao Holdings, which it had discontinued as part of the settlement agreement.
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