‘Even two weeks ago no-one predicted such a catastrophic impact from the coronavirus. Things have turned very quickly.’ This City restructuring partner’s words carry some irony, given that the restructuring and insolvency community has for years waited in vain for a sequel to the global financial crisis of 2008/09.
GC: What do you see as the main points that differentiate TNB & Partners from your competitors?
Kresna Panggabean (KP): We are one of the few international firms operating a disputes practice in Indonesia. Most international businesses know that Indonesian courts can be notoriously challenging to navigate and that the legal market for dispute resolution is dominated by local players. While we are happy to provide clients with a full service offering, we do not focus on matters in the local courts. Instead, we focus on cross-border corporate disputes where we can plug into the strength of the Norton Rose Fulbright network to add value.
Benny Bernarto (BB): Norton Rose Fulbright has been an established presence in Indonesia for nearly 30 years from its Australian connection and has, through various forms of associations and incorporations, acquired longstanding expertise in the Indonesian market. While the core strength of our practice in Indonesia has been handling corporate and banking and finance transactions, over the last three years we have been putting a lot of effort into building our dispute resolutions offering, working hard to increase the capacity of the firm to serve clients on a broader range of matters.
We (Kresna and I) are corporate lawyers by background, which helps a lot in understanding the nature of corporate disputes. In my experience, there are not many disputes lawyers in the Indonesian market who have a strong corporate background or understand complex, cross-border corporate transactions. We have knowledge of how international companies operate and can follow what our partners across Norton Rose Fulbright have seen in other jurisdictions and bring that expertise to bear on matters in Indonesia.
As a rule, clients want to work with the same firm or lawyers. If a dispute arises in connection with an M&A they want to stay with the same firm. Likewise, clients who deal with Norton Rose Fulbright offices outside Indonesia want to keep the same firm if they end up facing a dispute elsewhere. Because these clients are based outside Indonesia they are often unfamiliar with the very unique market dynamics
GC: What are some of the trends facing the dispute resolution landscape in Indonesia?
BB: Business is becoming more disputatious and client demand for dispute resolution services is increasing. This will certainly continue. As the global market becomes more sophisticated we will naturally see more disputes. Market sophistication leads to disagreement and dispute, new regulations lead to disputes, and cross-border trade is almost inevitably going to be followed by cross-border disputes.
KP: Indonesia is an incredibly disputatious market. In the last couple of years, we have received an increasing number of enquiries from clients facing disputes, so it is important for us to have a strong disputes offering. There are really two main sources of these disputes. We are seeing more disputes related to M&A or joint ventures, but we are also seeing an increase in things like anti-bribery and corruption investigations. That means disputes are evolving and a disputes lawyer can no longer focus only on the sorts of matters which end up in court. We have worked hard to help clients when things go wrong by specialising both in the fast-moving nature of cross-border investigations, which are typically being driven from the US, while also integrating our disputes offering more closely with the corporate practice.
GC: What are some of the issues international clients need to be aware of when it comes to facing a dispute with an Indonesian counterparty?
KP: My first advice would be to settle disputes before they go to court or arbitration wherever possible. Of course, this is not always possible, but it is certainly worth exploring any avenues that can lead one away from a dispute to reach a mutually agreeable solution.
Mediation and other forms of ADR are recognised here but are neither common nor effective, and it can be a challenge to get an Indonesian party to consider settling. However, we work closely with our clients to explore all options and examine the likely costs of each course of action.
BB: Most disputes are driven by business teams. The commercial view is that if you can’t get what you want you go to court and try to win. We like to remind them that in order to do that they will need to spend time and money. Clients understand that disputes are expensive, but they rarely appreciate how time consuming and expensive they can be.
There can be a tendency for business to see things like employment-related matters as “not real disputes”, but even these can become very expensive if they are not handled properly. There is a temptation to think, “it’s just an employee, let’s go to court”, but the costs and timelines can spiral unpredictably.
Similarly, we advise businesses to be proactive when it comes to investigations as the processes can be quite unpredictable. For example, we were instructed by an oil and gas contractor based in the US to conduct an investigation into suspected bribery involving several of its employees. We teamed up with our colleagues in Singapore to interview their staffs and establish a case for termination. However, we quickly discovered that the alleged practices were not confined only to those employees facing investigation but were in fact prevalent across most of the sales division. What started as a relatively contained FCPA compliance investigation became a systemic problem for the business involved.
KP: The next most important consideration is to determine whether you are going for litigation or arbitration. Our position is generally to push for arbitration, particularly when advising entities based outside Indonesia, as it is less complex and has a more certain timeframe. It is also safer – arbitral awards can be enforced in Indonesia while court judgements generally cannot be enforced.
In terms of selecting a seat we recommend that our clients based outside of Indonesia push to have their disputes settled at the Singapore International Arbitration Centre (SIAC) or Indonesia’s arbitration centre – Badan Arbitrase Nasional Indonesia (BANI). Both have a good list of arbitrators, including many who are internationally recognised, but it is often preferable for international businesses to seek a neutral jurisdiction.
The UK Treasury and Bank of England (BoE) have called in their go-to counsel Slaughter and May and Freshfields Bruckhaus Deringer as they iron out details of the multibillion-pound support scheme to underwrite British business through the coronavirus crisis.
Knights board members and staff earning more than £30,000 face pay cuts of at least 10% and some staff will be made redundant, while Ince has followed Gateley in slashing its interim dividend due to the impact of coronavirus.
The listed law firms today (26 March) provided trading updates to the London Stock Exchange, citing increased economic uncertainty brought by the Covid-19 pandemic and responding with measures ranging from pay cuts and redundancies to dividend cancellations and warnings around collecting fees.
The Legal 500 is pushing back its research schedule in response to the coronavirus pandemic, suspending all client contact for the next four weeks.
At a time when law firms and their clients are under unprecedented pressure, we have taken the decision not to add to the burden. All client feedback surveys for the UK Solicitors Guide, the UK Bar and Latin America will be suspended for four weeks, until the end of April. For the UK this will affect first-time contact with London clients and client survey re-sends for everywhere outside London. Continue reading “Coronavirus update: The Legal 500 pushes back research schedule to ease pressure on clients and firms”
The Commercial Court is going fully virtual on a case worth over $500m this week, with Linklaters and King & Spalding among those acting remotely as a result of the coronavirus lockdown. Meanwhile, insurers and claimants have reached an accord, with the groups set to work together throughout the pandemic to ensure a continued access to justice.
The Commercial Court’s ‘virtual courtroom’ will be in place from tomorrow (26 March) for a case where Linklaters will represent Bank of New York Mellon while King & Spalding is representing the other defendants The Statis, Ascom Group and Terra Raf in a ‘substantial multi-party litigation’, with The National Bank of Kazakhstan and The Republic of Kazakhstan acting as claimants. The case had originally been scheduled for seven days in the court with witnesses from America, Belgium and Kazakhstan all set to be called before travel restrictions were laid down due to the spread of Covid-19.
Allen & Overyhas again thrown itself behind its strategy to accelerate investment in its US business after fruitless merger talks with O’Melveny & Myers, having hired a pair of federal enforcement partners from Orrick Herrington & Sutcliffe in Washington DC.
The addition of Billy Jacobson and Jonathan Lopez, both veterans of the fraud section of the US Department of Justice, is another shot in the arm for the City giant’s lofty stateside ambition to redouble investment in DC and New York at a time of leadership transition for the firm. It also comes at a time when firms are scaling back strategic recruitment as the global coronavirus pandemic unfolds.Continue reading “A&O bullish on US investment drive with hire of federal enforcement firepower in DC”
Towards the end of 2019, Legal Business remarked that the issue at the heart of Allen & Overy (A&O)’s looming leadership election was if the process would resolve whether the winners could achieve the right to genuinely lead the City giant. Now that the election has concluded, with the re-election of Wim Dejonghe (pictured) as senior partner and the elevation of projects and energy head Gareth Price as managing partner in place of Andrew Ballheimer, it is far from clear that the point has been settled.
That is not a criticism of the calibre of the candidates and winners. Generally regarded as the best managed of the Magic Circle’s four internationalists, A&O certainly attracted a line-up of heavyweight candidates, by no means a given in law firm leadership run-offs. This was most obvious in the contest between Dejonghe and banking co-head Philip Bowden for senior partner and Price and litigation head Karen Seward for the managing partner brief. Continue reading “Allen & Overy’s election delivered an all-star line-up but have the big issues been resolved?”
COVID-19 continues to wreak havoc with the global economy, disrupting all manner of business throughout the world. Stock markets have plummeted and many companies are having to grapple with economic damage that seemed unimaginable at the start of the year.
For the first time in its history, the Supreme Court conducted a case entirely through video conferencing this morning (24 March), after taking the decision to close its building to the public due to the spread of Covid-19.
Freshfields Bruckhaus Deringer has suffered yet another setback after disputes partner Tom Snelling was dismissed from the partnership following an internal investigation.
Law firm leaders have responded positively to the UK chancellor of the exchequer Rishi Sunak’s ‘unprecedented’ level of state protection in response to the coronavirus but warn it will need to be the tip of the iceberg. With the pandemic showing no sign of being contained, the economic impact is predicted to be much deeper than in the last financial crisis.
As cases of the coronavirus accelerate, law firms including Mayer Brown, Eversheds Sutherland, Allen & Overy (A&O), Mishcon de Reya, Hogan Lovells and Fieldfisher have established COVID-19 working groups to help clients.
The moves come after swathes of firms ordered employees to work from home in the City and around the world in an attempt to contain the spread of the disease, which has so far racked up 244,553 confirmed cases globally and claimed 10,031 lives. Cases in the UK have ratcheted up at an alarming rate, with 2,716 cases and 137 deaths reported at the time of writing, with the UK government poised imminently to impose a lockdown to stem the spread. Continue reading “‘No crown jewels’ but firms rally with coronavirus advice to steer clients through crisis”
The longer you do this job, the more your mind wanders to the big moments – recessions, terrorist attacks, political shocks, wars. Yet as I sit here typing this leader in a near-deserted London office, the majority of our team working from home as we try to put this issue to bed, it is a struggle to recall anything that compares to the coronavirus pandemic spreading through the world.
Courts in England and Wales have made changes to their practices as the Lord Chief Justice joins those dismissing claims the courts can operate as normal as the spread of coronavirus widens.
City blueblood Slaughter and May has promoted seven partners in the City and one in Hong Kong following an increased promotion round, with corporate receiving the lion’s share.
