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Herbert Smith Freehills sues client San Leon over £500k legal bill

Often considered a risky move for a law firm, Herbert Smith Freehills (HSF) has successfully sued longstanding client San Leon Energy at London’s High Court for payment of nearly £500,000 in unpaid fees.

Filed at the Queen’s Bench Division by litigation partner Anna Pertoldi, the action was taken after the Ireland-based San Leon instructed HSF to defend it in a £13m dispute initiated by Dutch investment group Avobone at the International Court of Arbitration (ICA) regarding a Polish gas field, the Siekierki asset, in 2013.

Avobone had alleged that it was owed money by San Leon’s subsidiary, Aurelian Oil & Gas, due to a guarantee relating to a 10% share of the Siekierki asset that Avobone owned. Aurelian and Avobone were previously partners in the venture and the latter demanded payment relating to the stake.

San Leon lost at the ICA and unsuccessfully appealed the award to the UK commercial court.

HSF subsequently invoiced the client for nine separate fee payments spanning from June 2014 until September 2015. The total principal amount outstanding accumulated to £482,409.14 including VAT and contractual interest. Interest on the principal sum accrued at a daily rate of £44.60 from 8 April this year.

A court order handed down in May ordered San Leon to pay HSF £483,925.54 plus £10,100 in costs.

According to court documents seen by Legal Business, the client did not raise issues or complaints in respect of the claimant’s service nor did it apply to the court for assessment. In early April, HSF’s Pertoldi and San Leon’s executive chairman, Oisin Fanning, came to a settlement by way of an exchange of emails and agreed to pay the full amount by 8 April. San Leon failed to do so and Pertoldi subsequently sought redress through the courts.

The firm has a longstanding relationship with both San Leon and Aurelian and previously advised on the former’s acquisition of the latter in 2012, a deal which would enable San Leon to become the largest foreign holder of shale licenses in Poland. Travers Smith was drafted in at the time to advise Aurelian due to conflict for HSF.

Both HSF and San Leon refused to comment.