Quinn Emanuel Urquhart & Sullivan‘s Alex Gerbi and Stephen Jagusch have secured a $150m award for Danish engineering firm Core Carbon, with Baker Botts suffering another defeat on behalf of its Russian client base, this time Rosgaz, after recently being on the receiving end of a $50bn award against Russia for the state’s destruction of Yukos.
Core Carbon struck a deal in 2005 with Rosgaz, which is 50% owned by Gazprom, and Centregasservice to repair leaking gas pipes. With leaks of methane gas from the aging Russian pipelines, the Danish group repaired more than 150,000 parts to reduce emissions by around 8 million tons a year.
However, relations between the parties soured and a three-man tribunal at the Stockholm Chamber of Commerce agreed with Core Carbon that the Russian parties had broken the contract by refusing to finalise documentation. This meant that Core Carbon was unable to claim carbon credits, an international market set up under the UN’s Kyoto agreement, for its work.
As a result, an arbitral tribunal made up of One Essex Court’s Peter Leaver QC, Swedish firm Setterwalls’ Per Runeland and sole arbitrator Professor Michael Reisman awarded Core Carbon $150m in damages. A final hearing in late July and the recent award also ordered the two Russian companies to pay all of Core Carbon’s legal costs. Enforcement of the award will now commence.
Rosgaz, in its defence, alleged that Core Carbon had fraudulently obtained the contract and instigated criminal proceedings in the Russian courts. The tribunal did not accept this argument, leaving Baker Botts again on the losing side for a Russian client.
Earlier this year, Shearman & Sterling’s head of arbitration Emmanuel Gaillard and partner Yas Banifatemi triumphed over Baker Botts’ London-based co-head of international arbitration Jay Alexander and Texas-based partner Michael Goldberg in the record $50bn award against Russia in July for the destruction of bankrupted oil group Yukos.