This trend generally escapes wide notice, because arbitration is traditionally secret. Our first survey ruffled feathers in June 2003 when it publicized 40 disputes with stakes above $200 million. The secretary-general of the International Chamber of Commerce International Court of Arbitration voiced objections to the survey at that year's meeting of the International Bar Association. But, once started, the momentum of public disclosure is unstoppable. Our aim is to map an uncharted universe, to capture its drama and identify its main players.

This issue of Focus Europe charts the top 50 contract arbitrations and the top 50 treaty arbitrations in our new survey--including an astonishing 41 entries with stakes of $1 billion or more. (Because multiple entries tied for fiftieth place, the charts include 51 treaty arbitrations and 52 contract arbitrations.) In all, we have assembled information on 130 disputes, divided into two groups: 71 contract arbitrations with stakes of at least $300 million, and 59 treaty arbitrations with stakes of at least $100 million. (Arbitrations are listed individually even if they are part of a related dispute). The survey covers international arbitrations (not limited to Europe) that were resolved between January 2003 and June 2005, or that continue to be disputed. Many cases covered in 2003 are updated.

Treaty arbitration, which is the faster-growing category, is largely a matter of public knowledge because it involves nations. While most contract arbitration remains secret, very large contract arbitrations often leak out: through securities disclosures, local or trade press coverage, or challenges in domestic courts.

We relied primarily on information supplied by one or more lawyers involved in each arbitration, supplemented in some cases by arbitration or court papers, securities disclosures, and press clippings. We should caution readers that because arbitrations are usually confidential, in many cases we have had to rely on information from only one side in the dispute. The cooperating lawyers are not identified. The "amount in controversy" in a case represents the sum of claims and counterclaims.

Among the firms that serve as advocates in arbitration, the 12 most mentioned [see "Top 12 Law Firms," right] are all large global law firms based in the United States or the United Kingdom. Shearman & Sterling and Freshfields Bruckhaus Deringer are tied at the top of the list, followed by White & Case and Debevoise & Plimpton. All four leaders have excellent practice groups in Paris and New York. Freshfields and Debevoise also field arbitration stars in London; Shearman in Singapore; and White & Case in Washington, D.C. Law firms that narrowly missed the top-12 honor roll include Arnold & Porter, Jones Day, Norton Rose, Vinson & Elkins, and Watson, Farley & Williams.

Among the lawyers who appear as arbitrators, L. Yves Fortier of Montreal's Ogilvy Renault repeats handily as the most-mentioned individual, with 12 appointments. Despite the image of arbitrators as lone rangers, the top ten practice in a full range of settings, from large global firms to midsize national firms, boutiques, one-man offices, and universities [see "Top Ten Arbitrators," right].

Arbitration holds a mirror to international business. The sectors most represented are energy, with a quarter of the survey entries, and telecommunications, with about 16 percent. A striking number of the telecom cases feature a fight over ownership of a mobile phone joint venture (in Brazil, Ghana, Italy, Lebanon, Mexico, Poland, and Russia), reflecting the recovery of asset values in that sector. Other fields that reliably generate arbitrations are mining, insurance, and construction. Random items in dispute range from budget beer to depleted uranium.

The most active region in the survey was Eastern Europe, which generated roughly 20 percent of the sample. Eastern European cases reflect the history of their region. Some flow from the privatization of Communist enterprises, such as Czech and Slovak banks. Others feature Russian oligarchs--like Oleg Deripaska of Rusal or Mikhail Friedman of LV Finance Group Ltd.--who aim to consolidate their holdings.

Argentina is by far the most active nation in the survey, with 16 currency crisis claims valued at $8.4 billion. Typically, investors in an Argentine enterprise complain that, when Argentina converted the payments they were owed from dollars to pesos in early 2002, it rendered their investment worthless, in violation of the bilateral investment treaties (BITs) signed with the investors' nations. Under BITs, nations essentially guarantee a good investment climate, promising to protect investors against unfair or discriminatory treatment and the expropriation of their assets. Investors can sue states for allowing such treatment to occur, whether or not the state is directly responsible. At press time parties in the Argentine disputes were eagerly awaiting rulings in the bellweather cases.

Topping both the contract and treaty lists are entries arising from the travails of OAO NK Yukos. The Russian oil firm, whose main production unit was seized by the state in 2004 for nonpayment of taxes, is trying to hold its rival OAO Siberian Oil Company (Sibneft) to the terms of a $13 billion merger negotiated before its troubles began. Simultaneously, Yukos investors are trying to hold Russia liable under international law for what they see as their company's expropriation, in a troika of claims collectively valued at $33 billion [Global Lawyer, The American Lawyer, June 2005].

Just below the Yukos cases, the largest active claims on both lists flow out of project financings. General Electric Company and Bechtel Group, Inc., joined with Enron Corp. in the late 1990s to build a $6.4 billion power plant in Bombay, known as Dabhol. GE and Bechtel are together bringing a pair of treaty arbitrations, jointly valued at $5.3 billion, to hold India responsible for the project's failure. (Settlement negotiations are ongoing.) Meanwhile, Germany has filed a $6 billion arbitration against a group including DaimlerChrysler AG and Deutsche Telekom AG, for failing to build a toll road on time. The German toll road case could be the first of many based on public-private partnerships, which has been a fashionable form of project finance in recent years. Predictably, the two largest projects in history--the British Channel Tunnel and the Taiwan High-Speed Rail--have also generated disputes on the list.

Although big arbitrations often start with joint ventures in developing nations like India, several of the bigger entries in the survey stem from cross-border merger activity within Western Europe. Perhaps most notable are the fight over ElectricitŽ de France stake in Italy's Edison S.p.A. and the fight over Elf Aquitaine S.A.'s stake in Spain's Compañía Española de Petróleos, S.A. In merger activity as in project finance, the amount at stake can reach a billion dollars in a hurry.

Listing the size of claims is the only uniform way to convey a sense of the stakes in a survey that includes ongoing arbitrations. But at the end of the day, some claims are fool's gold.

In the most extreme case of hype, a claim of nearly $10 billion against Ukraine by Generation Ukraine, Inc., a would-be American real estate developer, turned into a negative award. On September 16, 2003, arbitrators judged the company's claim worthless, and ordered Gen-U to pay Ukraine's attorneys' fees for its reckless argument. (Among other things, Gen-U relied on decisions that had been annulled).

Then there's the case that led our list of unresolved arbitrations in June 2003. After a deal to encircle South America with undersea cable failed in 2000, IDT Corporation filed a claim for $3.15 billion, and Telefónica S.A. counterclaimed for $4.5 billion. The arbitrators, however, refused to calculate the asset values based on technology-bubble prices. In late 2003 they awarded a mere $21.5 million to IDT, and zero to Telefónica. IDT attorney David Rivkin of Debevoise & Plimpton says his client is pleased with the result. But readers of this survey should beware of all that glitters.

At the other extreme are demands that turned out to be pure gold. There are no asterisks attached to the award won by CSOB, formally known as Ceskoslovenská obchodní banka, A.S. CSOB sought $1.3 billion from Slovakia at the International Centre for the Settlement of Investment Disputes, based on a 1993 guarantee that the state extended when CSOB's loan portfolio was restructured to prepare for the bank's privatization. In December 2004, White & Case's Charles Brower and Abby Cohen Smutny won about $867 million for CSOB, plus $10 million in costs and fees. In February, Slovakia passed on its option to seek an annulment, and agreed to pay the judgment in full. White & Case believes it to be the largest award ever rendered by a World Bank arbitration panel, as well as the largest award in investor-state arbitration.

Collecting those awards isn't always easy, though. Take Karaha Bodas Company, the vehicle used by the American utilities Caithness Energy, LLC and FPL Group, Inc., to invest in an Indonesian power project. If Karaha Bodas wins an affirmance in the U.S. Court of Appeals for the Second Circuit, it will have taken about five years to collect on its $261 million award against the Indonesian state oil company, known as PT Pertamina (Persero).

The prize for most dramatic collection goes to Charles Adams, Jr., of Winston & Strawn in Geneva, who in March 2004 won an $89 million award on a very large claim by the Eurotrain Consortium (comprising Siemens AG and ALSTOM) against the Taiwan High Speed Rail Corporation. The deep pocket in the losing consortium was the giant shipping company Evergreen Marine Corporation (Taiwan) Ltd.

In his efforts to collect the award, Adams discovered that the EVER DEVOTE, an Evergreen container ship measuring more than three football fields in length, planned to anchor for 12 hours off Le Havre, France, on Monday, November 22. At 9 a.m. that Monday, Winston associate Alexandre Bailly ambushed the court clerk at the Tribunal de Grande Instance de Paris and obtained an execution judgment. Bailly leapt into a waiting Parisian taxi for a 200-kilometer drive up the autoroute to Normandy. There he met with the harbormaster, the port police, and the local bailiff, who had prepared the papers needed to "arrest" the ship. By 6:15 p.m., the EVER DEVOTE was held in cuffs, freighter-style. Each additional day would cost the shipowner millions of dollars in fees.

Lawyers for the respondents received the news while meeting in Kuala Lumpur to negotiate a settlement with attorneys for the Eurotrain Consortium. Only days earlier, Taiwan High Speed Rail had offered a mere $35 million. After a quick, vain effort to resist in the French courts, the respondents cut checks for $66 million a few days later. In Adams's words, "[They were] very quickly brought to see the virtue of compliance with international law."

The Yukos investors, who registered their ten-figure claims against Russia in February, lead a long list of parties who can only dream of that magical day when the check is cut. In time, some record-setting claims will turn into record-setting awards and some will turn into goose eggs. All will keep the arbitration lawyers busy.

Top 10 Monetary Awards
Arbitration	Award	Date of Award	Counsel to the Party Receiving the Award
Sompo Japan Insurance Inc. (Japan) v. Fortress Re, Inc. (U.S.)	$1.12 billion	December 2003	Cliff Schoenberg of Cadwalader Wickersham & Taft in New York on behalf of Sompo
Ceskoslovenská obchodní banka, A.S. (Czech Republic) v. The Slovak Republic	$877 million	December 2004	Charles Brower and Abby Cohen Smutny of White & Case in Washington, D.C., on behalf of CSOB
ABN Amro Bank N.V. (Stockholm branch) v. Telsim Mobil Telekomünikaysion Hizmetleri A.S. (Turkey)	$800 million	February 2004	Rudolf Tschäni of Lenz & Staehelin in Zurich on behalf of ABN Amro
First Eagle Funds (U.S.), et al. v. Bank for International Settlements Switzerland)	$500 million	September 2003	Donald Donovan of Debevoise & Plimpton in New York on behalf of First Eagle
Hutchison 3G Italia SpA (Italy), et al. v. Cirtel International S.A. (Luxembourg)	$500 million (in favor of Cirtel)	November 2004	Sergio Erede and Paolo Daino of Bonelli Erede Pappalardo in Milan and Iain Milligan QC of 20 Essex Street in London on behalf of Cirtel
Kingdom of the Netherlands v. Nederlandse Aardoliemaatschappij B.V. (Netherlands)	$500 million	January 2005	Bert-Jan Houtzagers of Pels Rijcken in The Hague on behalf of the Netherlands
CME Czech Republic B.V. (Netherlands) v. The Czech Republic	$350 million	March 2003	John Kiernan of Devbevoise & Plimpton in New York on behalf of CME
Republic of Lebanon	$266 million	February 2005	Peter Turner of Freshfields Bruckhaus Deringer in Paris on behalf of France Telecom
Karaha Bodas Company (Cayman Islands) v. Perusahaan & tamPerbangan Minyak Dan Gas Bumi Negara (Indonesia), PT PLN (Indonesia), and Republic of Indonesia	$261 million	December 2000	Christopher Dugan, formerly of Jones Day, now of Paul Hastings Janofsky Walker in Washington, D.C., on behalf of Karaha Bodas
Kia Motors Corporation (Korea) v. Chong Jin Jeon, et al. (Brazil)	$205 million plus declaratory relief	July 2004	Michael Goldberg and Jay Alexander of Baker Botts in Houston and Washington, D.C., on behalf of Kia Motors