Thursday, March 29, 2012

Law Firm Mergers, Conflicts & ICSID Arbitration Rules

[via ABlawg.ca] Do Global Law Firm Mergers Expand an Arbitrator’s Continuing Obligation to Disclose Conflicts of Interest Under the ICSID Arbitration Rules?
  • "Venezuela filed a formal proposal to disqualify Mr. Fortier on October 5, 2011, one day after Mr. Fortier made a disclosure to the ICSID Secretary-General regarding the upcoming merger of Norton Rose OR LLP (”Norton Rose”), the firm in which he was a partner, and Macleod Dixon LLP (”Macleod Dixon”). Macleod Dixon was a Canadian-based law firm with international offices in, among other regions, South America. Venezuela’s proposal to disqualify Mr. Fortier arose out of concerns related to Macleod Dixon’s Caracas office. Specifically, Venezuela had concerns about “the extent and depth” of that office’s representation of ConocoPhillips (the Claimant in this arbitration) and other clients in matters adverse to Venezuela, its state-owned petroleum company and/or affiliates."
  • "While it is clear that global law firm mergers inevitably result in potential conflict of interest situations for counsel with active arbitration practices, it is not certain if the ultimate remedy has to be resignation from the partnership. In this case, Mr. Fortier decided to answer that question, as have others in similar circumstances, by resigning from his long-time law firm. It remains to be seen if an arbitrator could sustain a disqualification challenge on the grounds that the arbitrator would maintain appropriate ethical screens, including restricted access to file and information systems, with lawyers in the same firm albeit located in different countries thousands of miles apart. Until this question is answered, it seems likely that a lawyer practicing principally as an arbitrator may find it safest to resign from his or her partnership prior to a pending merger. This will be a more difficult decision for those who try to maintain a practice both as an arbitrator and as counsel within the context of a global law firm."

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