An International Focus In A Texas Venue

Monday, August 30, 2010 - 01:00

Editor: Mr. Smith, you were one of the pioneers in opening King & Spalding's Houston office in 1995. Refresh our memories as to why King & Spalding chose to open an office in Houston.

Smith: The general counsel of Texaco asked us to open an office in Houston in 1995 to service the litigation needs of the company. We previously had a longstanding relationship with Texaco, principally being served by our Atlanta office.

Editor: How many practice groups do the Texas offices (both Houston and Austin) have today and how many lawyers are employed? What is the geographic scope of this practice?

Smith: Currently, the number of lawyers in Houston and Austin combined is 115, 94 of whom reside in the Houston office. We have six principal practice areas - domestic litigation and arbitration relating to matters arising in the U.S; an international arbitration practice and a global transactions practice; a restructuring practice; an IP practice and also a healthcare practice. In terms of their reach, our international arbitration and global transactions practices are truly international in scope. For example, our energy transactional practice served as a key motivation to open offices in the Middle East - Dubai, Abu Dhabi and Riyadh - as well as for our recent announcement of our intention to open an office in Singapore.

Editor: Tell us about the evolution of your own practice.

Smith: When I came to Houston in 1995, my background was in complex business litigation. I had done a substantial amount of work for Texaco, which was one of the reasons I was chosen as one of three partners to open the office in Houston. Upon moving to Houston, partly because of the limited number of lawyers that were present in the early days of our Houston office as well as the expansive nature of the litigation that we had for Texaco, my practice expanded to include not only business litigation but also mass and complex tort disputes. More recently, my practice has gravitated back toward being principally a business litigation practice, with a healthy amount of work in the international arbitration area, including both investor-state arbitrations and international commercial disputes.

Editor: Are the Houston office's clients primarily energy-related businesses or do they include other industrial companies?

Smith: It would be fair to say that given the nature of the economy in Texas, a principal focus of our practice is in the upstream, downstream and midstream sectors of the energy business - both on the transactional side as well as on the litigation and arbitration sides. We also have a substantial healthcare practice group that joined us two years ago led by Gary Eiland and Dennis Dunn. We also have litigation and transactional clients who are not involved in the energy or healthcare sectors. For example, we do a substantial amount of work for the Miller Brewing Company, as well as for Aon and other non-energy companies.

Editor: International arbitration appears to be a dominant practice area. Before what tribunals does the firm practice? How much of this practice area is shared with your London, Paris and other offices?

Smith: It would be fair to say that our international arbitration group has handled arbitrations under all of the major international arbitration rules, institutional as well ad hoc. The list is too long to recite, but some of the principal bodies before which we have conducted arbitrations include the International Center for the Settlement of Investment Disputes, the International Chamber of Commerce, the InterAmerican Commercial Arbitration Commission, the American Arbitration Association and its International Center for Dispute Resolution. We've also prosecuted matters before the China International Economic Trade Commission, the Singapore International Arbitration Center, the London Court of International Arbitration, the Arbitration Institute of the Stockholm Chamber of Commerce, the World Intellectual Property Organization and the United Nations Commission for International Trade Law as well as the Iran-U.S. Claims Tribunal.

We have 40 lawyers practicing in our international arbitration practice who reside in Houston, Paris, New York, London, Atlanta, Washington, San Francisco and, once our office is licensed, in Singapore. We work on a cross-office basis, not only with our London office but also with our Paris office, and the same will be true of Singapore. We view the practice as truly global in nature where we cross-staff and cross-market among our many offices.

Editor: I guess the office in Singapore is going to open an even wider vista for you since I understand that Singapore has long been a center of arbitration and one where people doing business in Southeast Asia take their disputes.

Smith: That is correct. When we evaluated expanding our practice to include Asia, we looked at a number of different locations, including Hong Kong. Ultimately, we settled on Singapore as an emerging center for resolving commercial disputes that affect countries in the Indian subcontinent, in southeast Asia and in Australia. We have practiced arbitration in Singapore and Hong Kong in the past, but we thought it important to have boots on the ground in Asia. Singapore seemed to be the logical place for that practice to be sited.

Editor: Your roster of outstanding "wins" includes many international arbitration awards outside the Texas context. Please describe some of the most noteworthy victories you have won for clients over the past few months.

Smith: We've had a number of very significant arbitration wins over the past several months involving cross-office teams. Houston partner Doak Bishop and New York partner Ed Kehoe led a team that achieved a victory in March 2010 for Chevron in a bilateral investment treaty arbitration against the Republic of Ecuador. The tribunal has issued a partial award on the merits, finding that Ecuador violated the bilateral investment treaty between the U.S. and Ecuador, with damages calculated to be approximately $700 million.

In addition Doak Bishop in Houston along with Houston partners John Bowman and Jennifer Price and Washington, D.C. partner Kevin Sullivan obtained an important victory on behalf of BP America in a commercial arbitration against Repsol of Spain. After winning the liability case for BPAmerica, the case settled on favorable terms for the client.

On the commercial side, Houston partner Bobby Meadows and San Francisco partner Charles Correll, after lengthy arbitration, won an award in January of this year totaling over $350 million on behalf of KBR. They filed the arbitration on behalf of a KBR subsidiary against the construction arm of Mexico's national oil company, Pemex, regarding a natural gas infrastructure dispute.

Those are but a few recent examples of arbitration victories in both investor-state disputes and commercial disputes.

Editor: As of June 11, 2010 the firm's international arbitration practice has been declared the winner of the Chambers USA Award for Excellence 2010. What outstanding accomplishments over the past year account for this high honor?

Smith: There are two principal factors. First, it is the results we have obtained for our clients. We've had an enormous record of success for our clients in investor-state arbitrations - a particular strength of the firm - as well as in the commercial area. The other factor, which is why we are able to obtain these results, is our talent. The firm has an extremely talented roster of international arbitration practitioners - including our Houston partners Doak Bishop, John Bowman, Jennifer Price, Craig Miles, Roberto Aquirre Luzi, and Wade Coriell, Ed Kehoe in New York, and Eric Schwartz, James Costello and Ken Fleuriet in Paris. Another very talented international arbitration partner is John Savage, who is joining our office in Singapore. I think the Chambers recognition is largely a reflection of both the talent that the firm has amassed in the international arbitration area as well as the results our lawyers have accomplished.

Editor: Your career in business litigation includes defending energy companies in various actions. Could you describe some of these litigations?

Smith: It would be fair to say that the firm's oil and gas litigation practice is centered principally in Texas and Washington, D.C., with strong strategic capabilities domestically in New York, Austin, Atlanta, Charlotte and San Francisco as well as internationally in the Middle East, Paris, London and now Singapore. Over the years our clients have included the vast majority of the major oil and gas producers and refiners as well as a substantial number of independent oil and gas producers and countless service companies and oilfield contractors. As a result of the expanse of our oil and gas practice, we have functioned as a thought leader in areas of advice and defense of FERC and CFTC regulatory matters and investigations, the Gulf of Mexico Deepwater Horizon oil spill, climate change issues, royalty disputes, environmental disputes, offshore property evaluations, operating agreement disputes and property damage and remediation claims stemming from oil and gas operations.

Editor: Also, you represented a major energy company in a qui tam action relating to royalty payments on oil and gas production on federal leases. Perhaps you could tell us about your representations in qui tam actions and investigations on behalf of clients.

Smith: We've represented the energy industry for a number of years in claims both under the False Claims Act as well as more recently the Fraud Enforcement Recovery Act of 2009. The most recent example was our representation of Chevron, and its legacy affiliate Texaco, in a qui tam case in the Eastern District of Texas, alleging underpayment of royalties on all natural gas produced from federal and Indian leases over a 20-year period. Although the DOJ had intervened in the case against certain defendants, we succeeded in defeating the relaters' efforts to have the government intervene against the Chevron entities. Ultimately the case settled on highly favorable terms. Our work in the qui tam area is an example of the synergies between our regulatory advisory practice in Washington and our oil and gas litigation practice in Houston.

Editor: What plans does the Houston office have for future growth?

Smith: We are looking for opportunities to grow in areas that have been the strategic focus of our practice in Texas, including international arbitration, domestic litigation, healthcare, restructuring, intellectual property and global energy transactions. Over the next several years, we would expect to see an emphasis on further developing our energy transactional practice in Texas.

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