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Russian Arbitration Association
Newsletter
Issue 3 // September 2014
www.arbitraons.ru
13
The Role
of In-House Counsel
in Internaonal
Arbitraon
23
Interviews with
Leading In-House
Counsel – William
Spiegelberger
39
and Evgenia Loewe
RAA40 Meeng:
Sancons
and Arbitraon
– October 2014

Table of Contents
Welcome from Co-Chairs
Courts and Arbitraon in Russia
Overview of Essenal Cases (May – September 2014)
Cases to Watch in Russia and Abroad
Breathtaking Developments
New LCIA Rules
Courts and Arbitraon Abroad - England
Diag Human SA v Czech Republic 2014
Rochester Resources Limited 2014
Main Theme: IHC in Arbitraon
The Role of In-House Counsel in Internaonal Arbitraon
English Law Privilege
Interview with William Spiegelberger (RUSAL)
Interview with Evgenia Loewe (Renova Group)
Some comments by Christer Soderlund
Lawyers talk
Arbitraon Events to Aend
RAA40 Events
RAA40 Meeng: Sancons and Arbitraon – October 2014
RAA40 and LCIA YIAG Tulney Hall Seminar – 10 November 2014
RAA40 New Year and Christmas Drinks – December 2014
Become a Member of RAA40
Acknowledgements
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02

Welcome from Co-Chairs
Dear friends and colleagues,
We are pleased to present to you the third issue of the RAA40 Newsleer, which is a special issue devoted to
the role of in-house counsel in internaonal arbitraon. The idea of this issue would not be born and realized
if not the efforts and experse of Rosne Oil Company in-house counsel and our learned co-chair Anna
Shumilova.
We believe in any discussion of the arbitraon praconers one cannot ignore or underesmate the role of
in-house counsel. In most cases they are important contributors and can make a real difference to the process
and, most importantly, the outcome.
The best way to understand the role of in-house counsel is to discuss it with them and other actors involved
in arbitraon. Two very experienced in-house counsel Evgenia Loewe of Renova Group and William Spiegelberger
of UC Rusal kindly agreed to be interviewed. We have also asked to parcipate in the discussion the
other side – external counsel and arbitrators including Alexei Dudko of Hogan Lovells, Noah Rubins of Freshfields
Bruckhaus Deringer, Julia Popelysheva of Clifford Chance, Christer Soderlund of Vinge, Alexey N. Zhiltsov
of the Private Law Research Center, Nick Marsh of DLA Piper and Taana Minaeva of Jones Day. Taking this
opportunity, we would like to thank them for their me and willingness to share their insights.
We do hope that having read this issue of the Newsleer, you will learn something new about the profession
and enrich your understanding of an in-house counsel’s role in arbitraon and how in-house counsel themselves
see that role.
Finally, we would like to note that a year passed since we started as the RAA40 co-chairs. Although it took us
some efforts to arrange under-forty arbitraon events in Moscow on a regular basis and involve as many
people therein as we could, we really enjoyed every opportunity to interact with all of you and would like to
thank you for your support. We have some more ideas and will try to make this new year in office even more
interesng for the Russian arbitraon community!
As always, please, do not hesitate to contact us at raa40@arbitraons.ru should you have any queries about
the acvies of RAA40, wish to share with us your ideas or submit a contribuon to the newsleer.
Yours sincerely,
RAA40 Co-Chairs
Sergey Usoskin Anna Shumilova Olesya Petrol Ivan Chuprunov
03

Courts
and Arbitration
in Russia
Overview of Essential Cases: May–September 2014
by Sergey Usoskin, Advocate, RAA40 Co-Chair
1. Public Procurement Disputes Not Arbitrable
State Establishment Proizvodstenno-Tekhnicheskoe Ob'edinenie Kapitalnogo Remonta i Stroitelstva … v. LLC
Arbatstroy
(Case No. A40-148581/12, Presidium of the Supreme Commercial Court, Resoluon No. 11535/13 dated 28
January 2014 (published in June 2014)
The Presidium of the Supreme Commercial Court ruled that disputes arising from public procurement
contracts are not arbitrable. On this basis it set aside an award rendered by a domesc arbitral tribunal in a
dispute between a private contractor and a state establishment. The dispute concerned the failure of the
private contractor to complete construcon work on me.
Russian law treats most contracts for the supply of goods or services to a state authority, state enterprise or
state establishment (but not a state-owned company) as public procurement contracts. Most of these
contracts are awarded on the basis of public bidding.
The Supreme Commercial Court explained that only private law disputes are arbitrable under Russian law.
Disputes arising from public procurement contracts are public rather than private, because such contracts
are entered into to sasfy public interests rather than private ones.
The court further noted that transparency is a central principle of the Russian public procurement regime,
and that subming disputes arising from public procurement contracts to confidenal arbitraon is incompable
with this principle.
2. Arbitral Tribunal Entled to Rely on Apparent Authority of Party's Representave
Autorobot-Strefa Sp. z.o.o. v. LLC Sollers-Elabuga
(Case No. А65-30438/2012, Presidium of the Supreme Commercial Court Resoluon No. 1332/14 dated 24
June 2014)
The court permied the enforcement of an LCIA award in favour of Autorobot. It was not open to the
respondent to challenge the authority of a person that purported to act on the respondent’s behalf in the
arbitraon, because that person’s authority had been apparent from the circumstances of the case. Nor was
it open to the respondent to dispute the receipt of correspondence delivered to an address that the person
acng under apparent authority had earlier provided.
04

Autorobot commenced arbitraon to recover sums due for the goods it supplied to Sollers-Elabuga. Shortly
thereaer the head of legal of the respondent’s parent company sent an email to the LCIA requesng all
further arbitraon-related correspondence to be forwarded to his address. The arbitrator sent all further
correspondence to this address. Eventually, he rendered in award in favour of Autorobot.
The respondent argued that it had not authorised the person that corresponded with the LCIA to represent
the respondent in the arbitraon and had not issued a power of aorney to him. The Supreme Commercial
Court disagreed with this argument and held that the arbitrator had been entled to rely on a communicaon
which made reference to the arbitraon and which was sent by a senior legal officer of the respondent’s
parent company.
3. Effect of Respondent’s Insolvency on Arbitraon Remains Uncertain
LLC Terminal-Vostok v. Vincia Establishment
(Case No. А40-166263/13, Presidium of the Supreme Commercial Court Resoluon No. 5940/14 dated 15 July
2014)
In the previous newsleer we covered a decision of the Federal Commercial Court for the Moscow Circuit in
the same case. The court held that once the first stage of insolvency proceedings – supervision
(«наблюдение») – commences all claims against the debtor company, including those heard in an ongoing
arbitraon, should be referred to the court supervising the insolvency. It set aside an award rendered by an
arbitral tribunal sing under the ICAC at the Russian CCI rules, because the tribunal rendered the award aer
the court had put the respondent company under supervision.
The Presidium of the Supreme Commercial Court reversed this decision, but on a very narrow ground. It held
that the tribunal had in fact rendered the award before the respondent was put under supervision. It was only
the reasoned award that was produced aer the cut-off date. However, the Presidium failed to address the
more general queson of insolvency’s effect on arbitraon.
While the Presidium’s failure to tackle the issue is troubling, it should not be given too much weight. Earlier
the Supreme Commercial Court held that an arbitral tribunal should terminate the proceedings once an insolvent
company is put into liquidaon («конкурсное производство») as from this moment disputes seize to be
arbitrable. In fact, the law expressly provides that the creditors are entled to pursue a case before state
courts against a debtor put under supervision if ligaon was commenced beforehand.
4. Respondent’s Failure to Promptly Invoke the Arbitraon Clause Amounts to a Waiver
Demesne Investments Limited v. CJSC Metropolis
(Case No. А60-5127/2014, Commercial Court for the Ural Circuit, Resoluon dated 19 August 2014)
The court refused to refer the dispute to arbitraon. It held that the respondent had abused its rights by
invoking the arbitraon clause only aer parcipang in two court hearings without objecon.
Demesne commenced proceedings before the Sverdlovsk Region Commercial Court seeking recovery of the
monies Demesne had lent to Metropolis. Metropolis’ counsel took part in two court hearings in the case without
making any submissions in relaon to the merits of the case. Before the third hearing Metropolis submitted
an applicaon asking the court to refer the pares to LCIA arbitraon as provided for in the loan agreement.
The court rejected the applicaon. It noted that Metropolis’ counsel had reviewed the case-file which, in the
court’s opinion, meant that counsel had the opportunity to become aware of the arbitraon clause in the
loan agreement. Metropolis had then parcipated in a hearing without invoking the arbitraon clause and
only raised the issue before the next hearing. In these circumstances, the court concluded that the
respondent’s conduct was an abuse and therefore it was no longer an opon to invoke the arbitraon clause.
05

5. Arbitrability of Concession-Related Disputes Le Unresolved
St. Petersburg Commiee for the Management of City Property v LLC Nevskaya Concession Company
(Сase No. A56-45107/2013, Commercial Court for the North-Western Circuit, Resoluon dated 14 August
2014 and Thirteenth Appellate Commercial Court Resoluon dated 21 April 2014)
The claimant commenced proceedings before the St. Petersburg Commercial Court to recover rent allegedly
due under lease agreements with the respondent. The respondent invoked the arbitraon clause incorporated
into the lease agreements by reference to the dispute selement clause in the concession agreement
between the respondent and the city of St. Petersburg. In the concession agreement the pares agreed that
any disputes between them shall be resolved by arbitraon under the UNCITRAL Rules by an arbitral tribunal
seated in Moscow.
The first instance appellate and cassaon instance courts both held that the dispute should be referred to
arbitraon. However, their reasoning differs.
The claimant relied on the invalidity of the arbitraon clause. It argued that under the Russian law on concession
agreements any disputes under such agreements shall be submied to either state courts or domesc
arbitral tribunals (“третейские суды”). A UNCITRAL arbitral tribunal is an internaonal arbitral tribunal and
therefore it cannot resolve disputes under a concession agreement.
The appellate court tackled the arbitrability of the concession agreement-related disputes heads on. It held
that the law on concession agreements permits the pares to refer disputes to arbitral tribunals
(“третейские суды”). The court held that a tribunal seated in Moscow fell within this category even if the
proceedings were to be governed by the UNCITRAL Rules and the arbitraon in queson was an internaonal
arbitraon as a maer of the Russian law. The appellate court added that, in any event, the dispute between
the pares concerned the lease agreement rather than the concession agreement.
The cassaon instance court chose not to address the restricons imposed by the law of concession agreements;
the court limited itself to agreeing that the dispute concerned the lease agreements.
06

Cases to Watch
in Russia and Abroad
Case: LLС Omsk-Steklotara v. Sklostroj Turnov CZ s.r.o. (No. A46-12418/2013)
Forum: Commercial Court for the Western-Siberian Circuit (potenal)
Significance of the Case: The case is significant in two respects. Firstly, the lower courts rejected the
claimant's argument that it should be permied to ignore the arbitraon clause due to its inability
to cover arbitraon-related costs. Secondly, before the lower courts the respondent successfully
invoked the arbitraon clause clarificaon mechanism provided in the European Convenon on
Internaonal Commercial Court. In the contract the pares agreed to submit all disputes to arbitra-
on in Vienna. The President of the Austrian Chamber of Commerce acng under the European
Convenon clarified that the disputes should be submied to the Vienna Internaonal Arbitraon
Center.
Case: Serbian Privazaon Agency (Agency) v. OJSC Avtodetal-Service (No. А72-15958/2013)
Forum: Uljanovsk Region Commercial Court
Significance of the Case: Agency sought enforcement of an arbitral award rendered in Serbia arising
out of a privasaon agreement between the pares. The first instance court rejected the applica-
on. It noted that privasaon is a public law maer and therefore such disputes are not arbitrable.
The court further stated that privasaon-related disputes are generally not arbitrable in Russia. An
appeal is currently pending before the Federal Commercial Court for Povolz'e Circuit.
Case: Victor Melnik v Omnilightstar Limited (No. А40-135118/13)
Forum: Ninth Appellate Commercial Court
Significance of the Case: Mr Melnik sought to enforce an arbitral award rendered in a dispute arising
out of a shareholders agreement between the shareholders of a Russian joint-stock company. The
tribunal ordered the respondent to pay RUR 150'000'000 in compensaon for breach of the agreement.
The Moscow Commercial Court refused to enforce the award. It held that a dispute arising out
of a shareholders agreement that governs the pares’ exercise of their rights as shareholders is a
“corporate dispute”. The court then confirmed that “corporate disputes” are not arbitrable by virtue
of Arcle 225.1 of the Russian Commercial ProcedureAppellate Commercial Court.
Case: Kyrgyzstan v. Li John Bek, Central Asian Corporaon for Development Corporaon
(No. А40-19518/14)
Forum: Commercial Court for the Moscow Circuit
Significance of the Case: Kyrgyzstan seeks annulment of an award rendered by a tribunal sing
under the rules of the Arbitraon Court at the Moscow Chamber of Commerce and Industry. The
tribunal relied as the basis of its jurisdicon on Arcle 11 of the Convenon on the Protecon of
Investor's Rights (the ‘Convenon’), which provides that investment disputes are to be resolved by
naonal courts, Economic Court of the CIS or by internaonal arbitraon. Both the arbitral tribunal
and the Moscow Commercial Court agreed that this provision contains Kyrgyzstan's consent to
submit investment disputes to any internaonal arbitraon forum chosen by the claimant.
07

Case: In re Arcle 11 of the Convenon on the Protecon of Investor’s Rights
Forum: Economic Court of the Commonwealth of Independent States
Significance of the Case: Kyrgyzstan requested an advisory opinion from the court on the interpreta-
on of the above cited provision. Kyrgyzstan argues that this provision does not amount to the
consent of signatories to the Convenon to submit investment disputes to arbitraon. A hearing is
scheduled for 19 September 2014.
08

Breathtaking Developments
New LCIA Rules come into force on 1 October 2014
by Deliya Meylanova, Eleni Polycarpou MCIArb, Withers LLP
In July the LCIA adopted the final version of the new LCIA Rules which come into force on 1 October 2014.
This is welcome modernisaon of those rules which have been in place since 1998, and arriving hot on the
heels of new rules having been adopted by a number of other instuons in the last 2 years, including the
ICC in Paris (‘ICC’) and the Internaonal Centre for Dispute Resoluon (‘ICDR’).
The wording of the rules has been thoroughly reworked, with at least cosmec changes to most paragraphs.
In general, the rules have been expanded and made more detailed. For instance, there are now clearer provisions
on the permied methods of "delivery" of documents to pares in Arcle 4 (the word ‘service’ which
may cause confusion by its implied reference to Court procedures has been removed).
There are also some more substanve changes which, on the whole, make the rules more user-friendly and
flexible. The aim seems to be to reduce procedural costs by removing uncertainty and to promote efficiency.
The change which has been most discussed aer the publicaon of the dra of the new rules is the addion
of ethical guidelines for legal counsel. These are included in an annex to the rules and comprise what are
essenally the basics of an English solicitor’s or barrister’s duty to the Court in ligaon, that is, not to make
false statements, conceal documents, knowingly prepare false evidence, or try to influence the arbitrators
(on the last point see also Arcle 13). To English eyes these maers are standard, but, possibly in view of the
fact that there are no restricons on the rights of audience before an arbitral tribunal (ie a wide variety of
lawyers may be involved), the LCIA have decided to spell these maers out. However, the dra provision
which expressly permied the LCIA to report legal advisors who infringed this code to any relevant professional
body has not survived into the final version. Instead, the LCIA may issue a wrien reprimand, a wrien
cauon and impose “any other measure necessary to fulfil within the arbitraon the general dues required
of the Arbitral Tribunal” to conduct the arbitraon fairly, expediously, imparally and efficiently.
The new rules impose slightly shorter deadlines on the pares – 28 day periods instead of 30 day periods
(which on a praccal level should mean that deadlines will now not fall on non-business days) and 14 days
where 15 days was previously permied (which again should have the same effect). The calculaon of deadlines
now expressly takes into account the difference between me zones. Various provisions deal in detail
with the diligence required of arbitrators and ways of dealing with arbitrators that are not carrying out their
responsibilies.
The rules now include an ability to appoint an emergency arbitrator before the tribunal is constuted (even
if it is constuted in an expedited manner). This mirrors a change recently adopted in the ICC, the ICDR and
the Stockholm Chamber of Commerce rules. However, given the wide use in England of interim relief from
the Courts in support of impending arbitraon proceedings, it remains to be seen whether pares will elect
to use these provisions instead.
There are other important changes, such as the fact that late objecons to jurisdicon and claims that the
Tribunal has exceeded its powers are permied if there is a good reason, and also that the choice of seat is
deemed to be London in the absence of express agreement, and the ability to appoint more than 3 arbitrators.
Arcle 16.4 expressly provides that, unless the pares provide otherwise, the law of the arbitraon
agreement (as well as the law of the arbitraon) shall be that of the "seat" of the arbitraon. These are just
some of the main changes: the number of amendments means that the new rules repay careful study.
09

Courts
and Arbitration
Abroad - England
Diag Human SA v Czech Republic [2014] EWHC 1639 (Comm)
by Robert Dougans, Nabeel Osman, Maria Gritsenko, Bryan Cave LLP
Arbitral proceedings took place in the Czech Republic resulng in an award against the government of the
Czech Republic in favour of Diag Human. Diag Human applied to enforce this award in the Austrian
courts. The Austrian courts refused to enforce the award, holding that the award was not final and binding
because an arbitral appeal process had not yet run its course. Diag Human then applied to enforce the
award in England.
The Czech government argued that the award should not be enforced in England due to the doctrine of issue
estoppel, which prevents the same pares ligang an issue that they have already brought before another
court. Diag Human argued that issue estoppel should not prevent an arbitral award from being enforced, and
that even if it did, no issue estoppel in fact existed.
Mr Jusce Eder held that there was no reason why issue estoppel should not apply to the enforcement of
arbitral awards under the New York Convenon. He held that issue estoppel did exist on the facts, because
the Austrian court’s decision that the award was not final and binding was the same issue to be decided
before the High Court. In parcular, he dismissed the argument that the Austrian court’s decision was based
on the New York Convenon whilst the High Court must apply secon 103 of the Arbitraon Act 1996 (the
“Act”); he stated that this was a "disncon without a difference" given that the Act gives the relevant provision
of the New York Convenon legal effect in England.
This is understood to be the first case in which the English Court has refused to enforce an award on the basis
of issue estoppel. It has proved controversial, with a number of commentators arguing that as the New York
Convenon and the Act provide for a limited number of excepons to enforcement which do not include
issue estoppel, the High Court should not have acted on that basis. Alternavely, it may be argued that issue
estoppel is a maer of English public policy, and therefore a failure to apply this defence in an arbitraon
context would have been contrary to English public policy.
However, Diag Human did not appeal the decision, and therefore the judgment is likely to be followed by the
High Court if and when it is required to consider the same queson.
Therefore, the effect of this decision is that any person seeking to enforce an arbitral award should take great
care when considering in which state to enforce that award. As well as considering the commercial prospects
of enforcement, pares should also consider whether the law and procedure of a parcular state means that
there is a risk that the court will refuse to enforce the award. If so, pares should consider inially applying to
enforce the award in jurisdicons which are not bound by the same legal and procedural constraints, before
an aempt to enforce is made in a state where maers are less certain.
10

Rochester Resources Limited, Viktor F. Vekselberg, Leonard v. Blavatnik
v Leonid L. Lebedev and Coral Petroleum Limited [2014] EWHC 2926 (Comm)
by Robert Dougans, Nabeel Osman, Maria Gritsenko, Bryan Cave LLP
AThe English High Court refuses to grant an an-suit injuncon in relaon to proceedings in the New York
court. In its decision rendered on 9 September 2014, Jonathan Hirst QC sing as a Deputy Judge of the
High Court found that one of the Defendants, Leonid Lebedev was not a party to the arbitraon agreement
contained in an acquision agreement entered into in 2003 by Rochester Resources Limited
(“Rochester”) and Coral Petroleum Limited (“Coral”) (“Acquision Agreement”).
The dispute arose from Leonid Lebedev’s investment in Tyumen Oil Company (“TNK”) prior to its joint venture
with Brish Petroleum (“BP”). Around 1997, when the Russian Government sold an interest in TNK, Lebedev
made a deal with Viktor Vekselberg and Leonard Blavatnik consisng of a transfer of his stake in TNK and
payment of $25 million to enes owned and affiliated with Vekselberg and Blavatnik. When the joint
venture was negoated by Vekselberg and Blavatnik as shareholders of TNK, Lebedev agreed to surrender his
right to income under the joint venture and a promissory note in the amount of $200 million for the sum of
$600 million (“Promissory Note”). This arrangement was the background to the Acquision Agreement which
was entered shortly before TNK entered into its well-known joint venture with BP. The Acquision Agreement
contained an arbitraon clause. The Acquision Agreement was expressed to bind “affiliates” of the pares
as well as the pares themselves.
In March 2013, Rosne acquired TNK-BP for $55 billion. The sum of $13.8 billion is believed to have been
received by Vekselberg and Blavatnik as their joint share of the purchase price.
In February 2014 Lebedev brought proceedings in New York against Vekselberg and Blavatnik on the basis
that he had not received any payment for his equity stake in the BP joint venture.
On 9 May 2014, Rochester, Vekselberg and Blavatnik applied to the High Court in London for an an-suit
injuncon to prevent Lebedev from proceeding with the New York proceedings. They claimed that the New
York proceedings involve disputes which ought to have been resolved pursuant to the arbitraon agreement
in the Acquision Agreement, by which Lebedev is bound.
The Claimants alleged that Coral was controlled by Lebedev and that it contracted throughout as the agent
for Lebedev. Further, they alleged that Rochester entered into the Acquision Agreement as agent for
Vekselberg and Blavatnik who are entled to enforce the Acquision Agreement against Lebedev. Alterna-
vely, the Claimants asserted that if Rochester contracted as principal and only for itself, it can enforce the
Acquision Agreement, including the arbitraon clause, against Lebedev for the benefit of Vekselberg and
Blavatnik. This was argued on the basis that as its ulmate beneficial owners, Vekselberg and Blavatnik are
affiliates of Rochester and are entled to enforce the rights conferred on them under secon 1 of the
Contracts (Rights of Third Pares) Act 1999 and to invoke the arbitraon clause against Lebedev under either
secon 8(1) or (2) of that Act.
The Defendants’ posion was that Coral was independent of Lebedev and that it did not contract as agent for
him; nor did Rochester contract as agent for Vekselberg and Blavatnik. They asserted that the only pares to
the Acquision Agreement were Rochester and Coral and that Rochester had no right to enforce the arbitra-
on agreement against Lebedev on their behalf. Further, even if Vekselberg and Blavatnik were to be treated
as “affiliates” of Rochester, they were not entled to invoke the arbitraon clause because secons 8(1) and
(2) have no applicaon and, in any event, it was not intended that the relevant clauses of the Acquision
Agreement should be enforceable by affiliates. In their argument, the Claimants were not entled to an
injuncon under secon 37 of the 1981 Act and Secon 44 of the 1996 Act was inapplicable.
11

The Court first considered whether Lebedev was bound by the arbitraon clause which it indicated was the
crical starng issue.
In respect of the nature of Lebedev’s relaonship with Coral who was the signatory to the Acquision Agreement,
the Court noted that that although it would probably not make much difference, it was not clearly
established that Coral is owned by Lebedev. Further, there was no evidence that Lebedev was running Coral’s
business.
Further, the Court indicated that Lebedev’s involvement in the negoaons of the Acquision Agreement and
its rights under the Promissory Note did not make him a party to the arbitraon agreement contained in the
Acquision Agreement. Under the Acquision Agreement the Pares were defined as Coral and Rochester
only. The Court therefore concluded that Coral had contracted to the Acquision Agreement as principal and
that it was more likely that Lebedev was intended to be treated as an affiliate of Coral.
Even if it could be demonstrated that Lebedev must have authorised Coral to enter into these engagements
on his behalf and therefore Coral was contracng as Lebedev’s agent, that would not make him a party to the
arbitraon agreement. The pares had made it clear that the arbitraon clause covers disputes “arising
between the Pares”. The Court noted that had they not included these words, it might have been easier to
conclude that the arbitraon clause was intended to apply also to affiliates. Based on the terms of the arbitra-
on agreement in relaon to which the Court indicated “there are limits as to what a Court can properly do
to improve a carefully draed and (at least in this respect) reasonably clear wrien agreement”. The Court
concluded that Lebedev was probably not bound by the arbitraon clause and that it has certainly not been
established to a high degree of probability that he is bound. Accordingly, the Court found that the Claimants
had failed to meet the an-suit injuncon test and its applicaon under secon 37 of the 1981 Act for an
an-suit injuncon must fail. Equally, the Court found that the applicaon under secon 44 of the Arbitraon
Act 1996 must fail on that basis that it was also dependent upon Lebedev being party to the arbitraon agreement.
This case arose out of complex issues. It does show that whilst the High Court is willing in some circumstances
to make an an-suit injuncon against a person who is formally a non-party to an arbitraon agreement,
these will only be made if the facts jusfy it. Here they did not.
12

IHC in Arbitration
The role of in-house counsel in international arbitration
The IHC's role in an arbitraon starts with the selecon of external counsel and the negoaon of an appropriate
fee structure. The choice of counsel is crucial, as in Western jurisdicons, and in parcular England, the
experience and talent of a party's representaon in legal proceedings is vital for achieving success. This is
where the IHC can add genuine value - by finding a law firm which understands the business, its strategic
needs and the importance of working efficiently with the IHC, whilst appreciang the need to agree to flexible
fee arrangements which are not unduly burdensome on the client's budget. It is therefore essenal for IHC to
know and understand the market for legal services and the fee arrangements available in the jurisdicon of
interest. For this purpose, it would be advisable for IHC to regularly aend legal conferences and to keep
abreast of any developments in areas of interest. Recent developments include the ICC's Guidelines on "Effecby
Nick Marsh, DLA Piper
and Taana Minaeva, Jones Day
In the fast-moving and demanding world of internaonal arbitraon, in-house counsel ("IHC") plays a
pivotal role. An essenal interface between external counsel and the business, an IHC helps prepare and
review informaon, evidence and documents, as well as being responsible for formulang case strategy
and managing costs. An efficient and well-organised IHC can make the difference between success and failure
in a dispute. Nick Marsh, partner at DLA Piper, and Taana Minaeva, Of Counsel at Jones Day, consider the
features of the role of an IHC and how, in their experience, IHCs contribuon is integral to the success of an
arbitraon.
An IHC's role in internaonal arbitraon differs from jurisdicon to jurisdicon. In Russia, this depends on the
IHC's personal experience as well as their employer's internal policy with regards to the resoluon of
disputes. In certain cases, the IHC may even represent the company without the assistance of external counsel,
although this is mainly the case in low value domesc arbitraons. In complex internaonal arbitraons,
the role of the IHC is central and they should be acve in each stage of the process. This ensures beer monitoring,
fewer surprises and, most importantly, yields tailor-made soluons that can influence the arbitral
process to fit the client's needs without compromising the likelihood of a successful outcome. Below we
share our views on the role of the IHC in each stage of an arbitraon.
Selecng legal counsel
Recent developments include the ICC's Guidelines on "Effecve
Management of Arbitraon – A Guide for In-House Counsel and
Other Party Representaves" whose purpose is to increasethe cost
and efficiency of the arbitral process
13

ive Management of Arbitraon - A Guide for In-House Counsel and Other Party Representaves" , which
were published on 5 June 2014, whose purpose is to increase the cost and efficiency of the arbitral process
and which we consider further below.
Defining strategy
Aer counsel is instructed, it is essenal that IHC provides external counsel with relevant informaon and
instrucons from the outset of the arbitraon and acvely parcipates in discussions regarding case strategy.
An IHC who understands the arbitral process (whether based on previous experience or academic studies)
will be much beer placed to fix case strategy and ensure that it is implemented in accordance with the
client's needs. To streamline the process and ensure that a comprehensive and accurate strategy is formed,
IHC should have discussed strategic goals with the business from the outset and, in turn, communicate them
to external counsel. Different procedural stages in an arbitraon coupled with unexpected commercial developments
make up the ever-changing reality of a dispute, and strategies may need to be re-evaluated and
updated throughout the course of an arbitraon. Parcular strategies may need to be adopted in respect of
specific maers such as document producon or metabling. To ensure that both the business and external
counsel are kept aware of, and are able to contribute connuously to, changes in the case strategy, it is vital
for IHCs to appropriately and effecvely manage their communicaons.
In parcular, IHC will oen ask external counsel to provide advice on strategy, prospects of success and risks.
To ensure that this advice is provided in a mely and appropriate fashion, and that it is in a format which IHC
can understand and, if required, translate or summarise it for the business, IHC will need to carefully and
acvely communicate specific business goals to counsel so that the advice can be tailored as a set of recommendaons
and appropriate acon points rather than pure legal advice.
The ICC Guidelines provide a useful starng point for IHCs who may not yet be familiar with the intricacies of
the arbitral process and the key steps involved. They encourage IHCs to consider case strategy at the outset,
including early analysis of the prospects of success, the benefit and risks of selement discussions and the
possibility of early (and cost-effecve) determinaon of key issues through proacve case management. The
guidelines are, by their own admission, necessarily general in nature and cannot take into account the
parcular issues in a given dispute or comprehensively cover all appropriate strategies and consideraons.
Wrien submissions
The IHC will also review and comment on leers, filings or documents prepared by external counsel. The role
of IHC is important at this stage, parcularly in verifying the accuracy of facts. However, an experienced IHC
should maintain confidence in its external counsel and give them a broad degree of discreon when making
filings. An IHC which requires external counsel to let him or her approve each and every word of every filing
may slow down the process unnecessarily and end up doing more harm than good.
Arbitral tribunals oen fix demanding metables which suit their own, but not necessarily the pares',
diaries. An effecve IHC will ensure that external counsel prepares dras of documents in sufficient me to
allow the IHC and, where necessary, the business to comment - a dra document which is only provided to
the IHC for their review on the day of a deadline is probably too late! The IHC should also manage the
business's expectaons and ensure that key decision makers are available.
Document producon
The IHC's role is vital during the document producon phase, which requires the pares to produce documents
which are requested or ordered. It is therefore important that IHC understands the document produc-
on or discovery process applicable to the arbitraon. IHCs are necessary to help external counsel idenfy
14

elevant holders or controllers of potenally relevant or responsive documents and to undertake appropriate
internal searches and reviews of those documents. This is oen a very me consuming process. Because this
procedure requires the party to either submit the ordered documents, or explain why they cannot produce
them, the IHC needs to carry out internal due diligence and collect responsive documents. If documents
cannot be found, the IHC should explain to counsel why this is the case so that, if necessary, explanaons can
be provided to the other party and the tribunal.
This stage requires the IHC to know whom in the business to address about the documents in queson. This
is oen only half the bale: persuading the business to share documents and informaon for strategic
reasons, even if will not be shared with opponents, is an equally important part of the IHC's role. In our experience,
Russian business people will oen be reluctant to share informaon for fear it will be leaked to opponents.
An IHC which has the confidence of the business will be beer placed to explain the importance of this
informaon being released and, where appropriate, disclosed to the opponent. Developing an understanding
of the business and its people, and developing a relaonship of trust and confidence with them, is therefore
essenal.
Document producon can be a very costly exercise and should be carefully managed by IHC. A suitably qualified
IHC can somemes undertake an inial document producon review himself to remove obviously
irrelevant documents, organise potenally relevant documents and help save cost, parcularly where the IHC
understands the business or where documents are in Russian.
Witnesses
In internaonal arbitraon, parcularly ones based on common law systems, findings of fact can be heavily
dependent on witness tesmony, which is first submied in wring and then assessed by the tribunal aer
cross-examinaon of the witness. Whilst the interviewing of witnesses and preparaon of witness statements
is oen principally a maer for external counsel, the IHC should be closely involved in the idenficaon of
potenal witnesses from the business. The IHC's aendance at witness interviews will oen facilitate the
sharing of informaon and documents between the witness and external counsel. Finally, the IHC may be
required - with or without external counsel - to brief witnesses before they give live evidence to ensure they
understand the process and feel at ease. In certain jurisdicons, such as USA, the witnesses can be coached
by specialised trainers. In others, this is prohibited.
Aending hearings
The ICC Guidelines encourage
an IHC to consider selement at
an early stage of the proceedings
It is essenal that IHC takes part in final hearings,
as well as key interim hearings, as an acve
observer. Somemes it is necessary to provide
informaon quickly, so that it can be used to make or defend urgent applicaons. Parcipang in hearings
also allows the IHC to get a clear first hand impression of how the case is progressing, to discuss prospects
with external counsel, to update the business and, where appropriate, to iniate selement discussions.
Selement
In certain cases, selement can be the best outcome for a party. The ICC Guidelines, for example, encourage
an IHC to consider selement at an early stage of the proceedings as part of the IHC's assessment of overall
case strategy and prospects. As selement negoaons progress and a dra selement agreement is
prepared by external counsel, the IHC should ensure that the business understands the consequences of the
selement terms, including financial exposure, the prospects of any future claims and whether, for example,
the business will be permied to comment to the press.
15

Managing the costs of an arbitraon
Any experienced praconer will tell you that the costs of an arbitraon are difficult to predict, given that
they depend to a large extent on the approach adopted by third pares. Controlling legal costs and agreeing
budgets with the business and external counsel is, even with this uncertainty, an essenal part of an effecve
IHC's role. A good IHC will carefully manage external counsel and ensure that the legal team is not too large,
that it works efficiently and that it does not spend me on unnecessary tasks. Where costs are parcularly
sensive, IHCs can also consider the possibility of third party funding, which is becoming more common in
internaonal arbitraon.
The ICC Guidelines, for example, include a number of helpful quesons, criteria and recommendaons whose
purpose is to help an IHC ensure that costs during the key stages of the arbitral process (such as costs of
wrien submissions, witness statements, expert reports, final hearings and selement discussions) are
considered strategically, managed carefully and, where possible, only incurred where necessary and propor-
onate to the value and importance of the issues in dispute.
Conclusion
All of the above tasks require an IHC to act as a proacve interface between the business and external counsel.
An IHC who understands the arbitral process and who invests me in their relaonship with the business
and external counsel will be beer placed to meet the many logiscal and strategic challenges which both
claimants and respondents inevitably face in arbitraons. Even if the IHC is not experienced, they should not
be afraid to communicate with external counsel and to ask quesons to ensure that they, and through them
the business, have a clear understanding of the process. A good rapport between the IHC and external counsel
is an essenal ingredient for success.
The authors
Taana Minaeva is Of Counsel in internaonal dispute resoluon group of Jones Day with special focus on CIS
disputes. In her professional career she has worked as in-house at a major Russian company where she was
responsible for internaonal disputes.
Nick Marsh is a partner at DLA Piper's London office who specialises in Russian and CIS disputes. Nick regularly
works with in-house counsel in arbitraons involving Russian and CIS interests.
16

English Law Privilege
by Maria Gritsenko, Counsel, Bryan Cave
In common law jurisdicons, legal professional privilege (“privilege”) entles a client to withhold certain
documents and other communicaons from disclosure in legal proceedings. This arcle provides an overview
of the English law rules on privilege, which are relevant to parcipants in internaonal arbitral
proceedings in London as well as internaonal ligants before the English courts.
I. LEGAL ADVICE AND LITIGATION PRIVILEGE
There are two main types of privilege under English law:
I. Legal advice privilege protects confidenal communicaons between a lawyer and his client if such communicaons
are for the purpose of seeking and receiving legal advice in a relevant legal context;
II. Ligaon privilege protects confidenal communicaons between a lawyer and his client and/or a third
party or between a client and a third party, if such communicaons have been created for the dominant
purpose of obtaining legal advice, evidence or informaon in preparaon for actual ligaon, or ligaon that
is “reasonably in prospect”.
Confidenal Communicaons
The term “communicaons” includes actual lawyer/client communicaons as well as evidence of such communicaons.
This would encompass the majority of work undertaken by lawyers: a communicaon will be
protected if it is “part of that necessary exchange of informaon of which the object is the giving of legal
advice as and when appropriate” (Balabel v Air India [1988] Ch 317 at 330). Similarly, any notes made by the
solicitor of what he learns as a result of his professional relaonship with the client, will also be privileged:
“…Notes or memoranda made by the solicitor are placed on the same foong as communicaons between
the solicitor and the client.” (Ainswroth v Wilding [1990] 2 Ch 315 at 323).
Privilege can only be claimed if the communicaon is confidenal. What that means is that if confidenality
is lost, privilege will also likely be lost.
Between a lawyer
English law privilege applies to advice given by professional legal advisors, which include both external
lawyers and in-house lawyers. Solicitors would need to hold a current pracsing cerficate. In-house lawyers
have to be qualified to pracce under the Solicitors Regulatory Authority or by the Bar Standards Board and
act in their capacity as a legal advisor (see Secon II for a more detailed analysis of the privilege regime for
in-house counsels). Privilege extends to employees such as legal execuves, trainee solicitors and paralegals
provided that they are properly supervised by qualified lawyers.
Privilege will also extend to the advice given by foreign lawyers based abroad provided that they are qualified
to pracse under their own regulatory body and to foreign lawyers based in England & Wales qualified to
17

pracse under their own regulatory body and to foreign lawyers based in England & Wales qualified to prac-
se under the Solicitors Regulatory Authority, irrespecve of whether they are advising on foreign or English
law. For example, the court in the IBM case held that:pracse under the Solicitors Regulatory Authority,
irrespecve of whether they are advising on foreign or English law. For example, the court in the IBM case
held that:
“The fact that the advice given [by American aorneys] related predominantly
to English law is irrelevant. It was advice of foreign lawyers, acng as lawyers, to
be used by Phoenix to decide what strategy to adopt in carrying on business...
The correct approach is to look at the substance and reality of the document,
the circumstances in which it came into existence and also its purpose. It was
advice given by lawyers in circumstances where ligaon was contemplated to
enable the recipient to decide what strategy to adopt, both from a legal and
business standpoint. Such a document is privileged.” (IBM Corp v Phoenix Internaonal
(Computers) Ltd [1995] 1 All. E.R. 413 at 429.
Privilege does not, however, apply to other professionals, such as accountants, who give legal advice. This has
been confirmed by the English Supreme Court in the 2013 Prudenal case. The case concerned tax advice
given to Prudenal by its external accountants, disclosure of which had been sought by the tax authories.
The court ruled that because the advice was given by non-lawyers, Prudenal was not entled to claim privilege.
This meant that all relevant communicaons were fully disclosable, even though the advice was indisputably
legal in nature. (R. (on the applicaon of Prudenal Plc) v Special Commissioner of Income Tax [2013]
UKSC 1.
And his client (Legal advice privilege)
“Client” does not include everyone within the company or the department seeking legal advice. In Three
Rivers (No. 5) the Court of Appeal gave a restricve definion of “client” for the purpose of legal advice privilege,
including only those employees of an organisaon who are responsible for obtaining or receiving legal
advice. Therefore, communicaons between legal advisors and employees outside the client team will not
generally be privileged. (Three Rivers District Council v Bank of England (no 5) [2003] QB 1556 at [21], 1575-
76).
It is important to remember that this disncon only maers for the purposes of Legal advice privilege. Liga-
on privilege covers communicaons with third pares and therefore the concerns arising out of the defini-
on of “client” should not arise in the ligaon context.
For the purposes of providing legal advice in the relevant legal context (Legal advice privilege)
Legal advice privilege is not confined to advice on the law, but also covers “advice as to what should prudently
and sensibly be done in the relevant legal context” (see Balabel at 330, endorsed by the House of Lords in
Three Rivers District Council v The Bank of England (No 6) [2005] 1 AC 60 at 330). This will cover presenta-
onal, commercial or strategic advice provided that it relates to a client’s legal rights, liabilies, obligaons
and remedies. It will not apply to advice of a purely strategic or commercial nature which is not provided in a
“relevant legal context”. As this was put by Lord Carswell,
18

“all communicaons between a solicitor and his client relang to a transacon
in which the solicitor has been instructed for the purpose of obtaining legal
advice will be privileged, notwithstanding that they do not contain advice on
maers of law or construcon, provided that they are directly relevant to the
performance by the solicitor of his professional duty as legal adviser of his
client.” (Three Rivers (No. 6) [2005] 1 A.C. 610 at 679, [111]).
Or for the dominant purpose of ligaon (Ligaon privilege)
“Ligaon” refers to adversarial proceedings and therefore will exclude, for example, internal disciplinary
proceedings and invesgaons.
Ligaon has to be actual or “reasonably in prospect”, i.e. more than a mere possibility. It is not sufficient that
there is a disnct possibility that sooner or later someone might make a claim.
Finally, since the 1979 ruling in the Waugh case, the use in or in connecon with ligaon must be the “dominant
purpose” of the communicaon for which the ligaon privilege is claimed (even if the document may
have been created for more than one purpose) (Waugh v Brish Railway Board [1980] AC 521). In a recent
case, the Court of Appeal held that reports prepared by accountants were not protected by ligaon privilege,
as they seemed to have two purposes of the nature of the accounng treatment of the loan transacons
and the ligaon strategy, and it was not shown that the dominant purpose was for ligaon (Tchenguiz v
Director of the Serious Fraud Office (Non-Party Disclosure) [2014] EWCA Civ 136).
II. APPLICATION OF PRIVILEGE TO IN-HOUSE COUNSEL
Under English law, in-house lawyers are treated in the same way as lawyers in private pracce for the
purposes of legal advice privilege (Alfred Compton Amusement Machines Ltd v Customs & Excise Commissioners
(No 2) [1972]). Lord Denning M.R. explained the posion as follows:
“I have always proceeded on the foong that communicaons between the
legal advisers and their employer (who is their client) are the subject of legal
professional privilege. I speak, of course, of their communicaons in the capacity
of legal advisers. It does somemes happen that such a legal adviser does
work for his employer in another capacity, perhaps of an execuve nature. Their
communicaons in that capacity would not be the subject of legal professional
privilege.” [1972] 2 Q.B. 102 at 129.
Lord Sco in Three Rivers confirmed that the advice had to be given in a “relevant legal context” in order to
aract privilege:
“If a solicitor becomes the client’s ‘man of business’… responsible for advising
the client on all maers of business, the advice may lack a relevant legal →
19

context. There is, in my opinion, no way of avoiding difficulty in deciding in marginal
cases whether the seeking of advice from or the giving of advice by lawyers
does or does not take place in a relevant legal context so as to aract legal
advice privilege. In cases of doubt the judge called upon to make the decision
should ask whether the advice relates to the rights, liabilies, obligaons or
remedies of the client under either private law or under public law. If it does
not, then, in my opinion, legal advice privilege would not apply.” [2004] UKHL
48, [2005] 1 A.C. 610 at 651, at [38].
It should be noted that in-house counsel is treated differently in common law and civil law jurisdicons. In
many European countries (including France and Switzerland) in-house counsel is considered as a company’s
employee who would lack sufficient independence for his communicaons to benefit from privilege.
Similarly, EU legal privilege (relevant for the specific context of the EU compeon invesgaons) applies only
to correspondence with an independent lawyer not bound to a client by a relaonship of employment. This
was recently confirmed by the Court of Jusce in Akzo Nobel v European Commission (C-550/07). Communicaons
with in-house counsel are not protected by legal privilege irrespecve of in-house counsel’s status
under naonal law. The Court of Jusce held that an in-house counsel’s relaonship as an employee of the
company by its very nature does not allow him to ignore the commercial strategies pursued by his employer.
By reference to the English law posion, an in-house lawyer must take care to ensure that he disnguishes
clearly between advice which is legal and that which is commercial in nature. His advice will only be privileged
to the extent that it is legal advice; where he is providing business advice or advice relang to administraon
or management affairs, it will not be possible to claim privilege.
If an in-house counsel has to disclose his or external lawyers’ legal advice to the company’s board, this will not
result in a loss of privilege. Board minutes solely summarising or aaching a copy of legal advice will be privileged;
however a discussion of the commercial issues arising from the legal advice received will not be privileged.
III. LOSS OF PRIVILEGE
Privilege will be lost if a document is circulated widely or is made publicly available. If a privileged communicaon
is disclosed to a third party for a limited purpose and on strict terms as to confidenality, it may be
possible to maintain a claim to privilege in that document as against the rest of the world. (B v Auckland
District Law Society [2003] UKPC 38)
Where privilege is waived in respect of one document in a sequence of documents (or one part of a document),
then the class of documents (or rest of the document) will have to be disclosed unless the document
(or part of the document) disclosed deals with an enrely different issue or subject maer. This is to prevent
pares from “cherry picking” among the privileged material. (Great Atlanc Insurance Co v Home Insurance
Co [1981] 1 WLR 529; Dunlop Slazenger Internaonal Ltd v Joe Bloggs Sports Limited [2003] All ER (D) 137.)
Common interest privilege may be construed as a defence to claims that privilege is lost/waived by circulang
a document. When the disclosing party and the receiving party both share a common interest in the subject
maer of the privileged document or in ligaon in connecon with which the document was created, the
document will remain privileged. The common interest must exist at the me of disclosure to the receiving
party.
20

When a party mistakenly allows a privileged document to be inspected, the court will examine whether it was
obvious that the disclosure was mistaken in deciding whether to allow the recipient to use the document. If
it was either obvious to the recipient, or alternavely would have been obvious to a reasonable solicitor in
the same circumstances, the court will prevent use of the document. (ISTIL Group Inc v Zahoor [2003] EWHC
165 Ch).
The privilege will also be lost if the client is engaged in a “strategy of concealment and deceit”, as this was held
over a month ago by the Commercial Court in a case involving Mr Mukhtar Ablyazov’s interests. In that
maer, BTA Bank sought disclosure of certain documents which would normally aract privilege and which
were held by solicitors or former solicitors of Messrs Ablyazov and Shalabayev. BTA Bank had brought a
number of acons against Mr Ablyazov alleging a mul-billion pound fraud, and sought disclosure of documents
for the purposes of enforcing judgments. BTA Bank argued that Messrs Ablyazov and Shalabayev lied
and deliberately misled the court about the extent and nature of the assets of which Mr Ablyazov was the
ulmate beneficial owner and sought to put those assets outside of BTA Bank’s reach.
The Commercial Court granted disclosure, on the basis that privilege would protect communicaons made
for the purposes of legal advice or ligaon, in which the solicitor was acng in the ordinary course of the
professional engagement of a solicitor. Where solicitors are deceived and used as an instrument to perpetrate
a substanal fraud on the other party and the court, the normal client/ lawyer relaonships would be abused
and privilege would be negated. (JSC BTA Bank v Ablyazov [2014] EWHC 2788 (Comm) at 93).
The Ablyazov decision is one of a number of recent decisions where the English court has ordered the disclosure
of privileged informaon. It appears that such orders, although sll unusual, are being granted more
readily.
IV. PRIVILEGE AND ARBITRATION
The confidenal nature of communicaons between a client and his is universally recognized; however the
scope and regimes of the privilege rules vary from one jurisdicon to another, especially when we compare
common law and civil law jurisdicons. For these reasons, applicaon of privilege presents parcular
challenges in the context of internaonal arbitraon.
Party autonomy and discreon of the tribunal remain the main principles. Most arbitral rules would contain
a wording to the effect that the arbitrators shall determine the admissibility, relevance, materiality and
weight of the evidence offered by the pares (see UNCITRAL Rules Arcle 27(4), LCIA Rules Arcle 22.1(vi),
AAA Rules Arcle 20(6)).
More specifically on the issue of privilege, Arcle 9(2)(b) of the 2010 IBA Rules on Taking of Evidence in Internaonal
Arbitraon provides that:
“The Arbitral Tribunal shall, at the request of a Party or on its own moon,
exclude from evidence or producon any Document, statement, oral tesmony
or inspecon for any of the following reasons: (b) legal impediment or privilege
under the legal or ethical rules determined by the Arbitral Tribunal to be applicable…”
Arcle 9(3) also contains a “checklist” of issues which a tribunal “may take into account” when assessing
whether a document is privileged:
21

“In considering issues of legal impediment or privilege under Arcle 9.2(b), and
insofar as permied by any mandatory legal or ethical rules that are determined
by it to be applicable, the Arbitral Tribunal may take into account: (a) any need
to protect the confidenality of a Document created or statement or oral communicaon
made in connecon with and for the purpose of providing or obtaining
legal advice; (b) any need to protect the confidenality of a Document
created or statement or oral communicaon made in connecon with and for
the purpose of selement negoaons; (c) the expectaons of the Pares and
their advisors at the me the legal impediment or privilege is said to have
arisen; (d) any possible waiver of any applicable legal impediment or privilege
by virtue of consent, earlier disclosure, affirmave use of the Document, statement,
oral communicaon or advice contained therein, or otherwise; and (e)
the need to maintain fairness and equality as between the Pares, parcularly
if they are subject to different legal or ethical rules.”
The IBA Rules sll fail to provide any specific guidance as to what privilege regime should apply – the one of
the law of the contract, or of the place of the arbitraon, or of the jurisdicons to which the pares’ counsel
belong or where the document was created? Most oen the counsel in arbitraon proceedings will proceed
according to the rules of the jurisdicon in which they are trained. If an issue arises – for example, when a
party requests disclosure of a document which the other side sees as privileged – the tribunal will have to
resolve in a way that ensures that each party has a reasonable opportunity to present its case.
In doing so, and as reflected in Arcle 9(3) quoted above, the tribunal will take care to ensure the fairness and
equality between the pares, while having regard to any mandatory ethical rules the respecve counsel may
be subject to. The tribunal may also choose to apply a combinaon of the privilege regimes of the pares’
lawyers- either applying the most extensive or the least extensive privilege rules. The tribunal will also oen
be guided by the lex fori – for example, by the generally applicable principles of English law, if the arbitraon
is seated in London.
Most importantly, the concept of “fairness” would imply considering the pares’ expectaons when they
were requesng and receiving legal advice and/or preparing for the arbitraon proceedings. It is therefore
essenal for the pares to adopt, from the outset, an approach consistent with the rules applicable in the
jurisdicons of their legal advisors. A prudent in-house counsel would also consider the dispute resoluon
clauses typically used by his company (including the governing law and forum) and keep in mind the privilege
regime which may eventually become relevant to the dispute.
22

Interview with William Spiegelberger – UC Rusal
William Spiegelberger
Posion: Director of Internaonal Pracce Department of Legal
Directorate
Industry / Company: the world's largest producer of aluminium
Number of employees: about 75,000
External law firms: mainly Ashurst, Sidley Ausn, Egorov Puginsky
Afanasiev and Partners
Brief CV: William R. Spiegelberger is Director of the Internaonal
Pracce Department at Rusal Global Management B.V. in Moscow
(since 2007), where he manages, among other things, the corporate
group’s major ligaons and arbitraons outside the CIS states. He
was formerly Co-Head of the Disputes Group at White & Case LLC in
Moscow (2003-7), associate in the ligaon department of Milbank,
Tweed, Hadley & McCloy LLP in New York (1998-2003), and associate
in the arbitraon and ligaon group of White & Case LLP in New York
and Paris (1994-1997). The author of The Enforcement of Foreign
Arbitral Awards in Russia (Juris, 2014), and several arcles on arbitra-
on and internaonal legal pracce, he holds a J.D. degree from
Columbia Law School and is a member of the Naonal Advisory Council
of the Harriman Instute at Columbia University in New York.
Willem Vis Experience 1st Moot (1994), Columbia University
2 1 3
Second best
oralist prize
(Marn Domke Award)
First team prize
(Frédéric Eisemann
Award)
Third team prize
for a brief
Why did you choose to concentrate mostly on dispute resoluon? Has your specializaon changed over
me? Did parcipaon in Willem C.Vis moot influence your choice of pracce?
I found dispute resoluon most interesng, the least monotonous, as each dispute is different, whereas one
loan agreement is much like another. I also enjoyed oral argument, moot court, etc. I was parcularly inspired
by my mentor at Columbia law School, the late Hans Smit. The Vis Moot confirmed my career choice of
arbitraon: the compeon was an excellent experience, intellectually very sasfying, and a lot of fun.
Could you please tell us how your in-house career started and has developed over the years? Why have you
decided to move from one of the top internaonal law firms to the in-house department? Was the decision
difficult one?
I was hired by a friend who had started at Rusal
a few months earlier as general counsel. I
decided to move in-house because the posion
appeared to present a lot of interesng problems,
with a steady stream of high-profile and
In a word: I changed jobs and went
in-house for the adventure
big-money disputes. It was not a difficult decision, as I was then ready for a change, and quite interested in
learning how a large Russian corporaon operated. In a word: I changed jobs and went in-house for the
adventure.
23

What are your main responsibilies? Do you see yourself to be more a manager or a legal advisor?
I oversee the company’s major ligaons and arbitraons outside the CIS, and deal with other legal risks
outside of the CIS. I see myself performing a hybrid role, part business manager, part legal advisor. Much
depends on the nature of the case vis-à-vis my personal abilies. Some cases I only manage; with others, I will
dra the submissions myself. In both cases I act as intermediary between management, which has certain
policies and goals, and the outside counsel who will
help us implement those policies and achieve those
goals.
Law firms are like an extension
of the university. One can
almost always go from a law
firm to an in-house posion,
but the reverse is more difficult
Are there people that are more suited for a posion
in-house as opposed to private pracce and vice
versa? What qualies a disputes lawyer needs to
have to succeed as an in-house counsel?
Private pracce lawyers must first and foremost be
able to find new clients and generate fees; they make
money from the clients. In-house counsel, in
contrast, must first and foremost solve problems, formulate policy, help achieve the company’s goals, coordinate
the work of counsel in various jurisdicons when a given case is being fought in more than one jurisdic-
on. In-house counsel try to keep costs (legal fees) as low as possible.
In the US in most cases lawyers move to in-house posions aer spending some me in private pracce,
while in Russia many graduates join in-house departments immediately. Which pathway is beer in your
view?
I think it best to spend a few years at a law firm, as an apprence so to speak, where one can expect to work
very long, very hard hours, on a range of cases, plead before judges, etc. Law firms in this sense are like an
extension of the university. Also, one can almost always go from a law firm to an in-house posion, but the
reverse is more difficult.
Is internaonal arbitraon the preferred choice for you company?
Not necessarily. Arbitraon is preferable when (1) there is no neutral or fair court, (2) it is unclear whether a
court judgment would be enforceable, and (3) some parcular experse is desirable in the arbitrators. Judicial
proceedings are generally preferable if (1) one has a very strong case, (2) the court is acceptable, and (3)
one can expect the judgment to be enforceable. In general, however, arbitraon is chosen merely because
the pares cannot agree on any other forum.
What factors influence the decision to iniate arbitraon proceedings? Who makes the ulmate decision?
Management decides whether to commence arbitraon upon the advice of in-house counsel, which necessarily
includes an esmate of the chances of success, of the costs, and of the expected duraon of the
proceedings. In short: an informed cost-benefit analysis is necessary, which is the joint responsibility of management
and counsel.
Peter Rees QC, ex-Shell legal director, said in his interview: “If you look at most corporaons these days,
ligaon and compliance is the biggest risk. No corporaon will go down because of a failed M&A deal.”
Do you agree with this statement?
In countries with a strong/honest legal culture, yes. In countries with a weak/corrupt legal system, no. In the
laer countries, the greatest risk is polical: outright expropriaon, creeping expropriaon, bribes and illegal
payments, undue pressure, bureaucracy, unrest and revoluon.
24

How do you see the role of in-house counsel in internaonal arbitraon? Does it have any specific features
in Russia and CIS countries?
I personally do not deal with CIS/Russia maers
directly, as there is a separate department for
those cases. My role is to manage non-CIS
maers. With regard to those maers, I see my
main tasks as 1) forming company policy with
regard to the dispute, that is: helping management
to decide whether to commence as case
or how best to defend one or sele, 2) coordinang
work among the various outside counsel
in different jurisdicons when a dispute spills into more than one forum; 3) controlling costs and fostering
efficiency, and (4) ensuring outside counsel and the company collaborate effecvely, as in the case of choosing
witnesses, preparing witness statements, and collecng documents.
Having pracced both in the US and Russia do you think Russian/CIS companies are different from US (or
European) companies when it comes to their approaches to arbitraon? Does it have any effect on the role
of an in-house counsel?
I have not noced any big difference.
Outside counsel focus narrowly on
the parcular dispute; in-house
counsel focuses broadly on policy
and strategy
How would you recommend to split the tasks up between in-house and outside counsel?
Outside counsel are expert in the parcular field of law and have the personnel resources to accomplish large
tasks. In-house counsel act as liaison between management and outside counsel, help formulate company
policy, manage expectaons, control costs, and review submissions for conformity with company policy and
goals. In short; outside counsel focus narrowly on the parcular dispute; in-house counsel focuses broadly on
policy and strategy.
Do you believe that in-house counsel can represent the company in arbitraon proceedings? Does it work
in case of small-scale disputes?
Yes and yes. We have the capability of represenng the company ourselves in suitable disputes. The liming
factor is how much me we can afford to spend on any given dispute. As a rule, therefore, we can represent
the company ourselves only in relavely small, convenonal disputes, and disputes within our competence.
Some say that an in-house career creates fewer opportunies for further professional/career development
in comparison with the one in private pracce. Do you agree with that? Would you ever consider moving
to private pracce?
An in-house career has its own possibilies that differ from those available in private pracce. As an in-house
lawyer one can, for example, rise to the top of the legal department or take on more business responsibilies
and perhaps transfer to the finance or capital markets department. There is no such opon at a law firm. At
a law firm, the general model is “up or out,” that is: one rises through the ranks of associates in the hope of
becoming partner. If one does not become partner, one is typically asked to leave the firm. There are, it seems
to me, fewer opons at a law firm, where the career path is narrower.
It happens that external counsels underesmate level of IHCs’ experience telling them things they already
know and offering them services they do not need. Have you ever faced this?
Somemes. External counsel can be condescending toward in-house lawyers and view them as lawyers who
failed to succeed at law firms. In my experience, I have not perceived a marked difference in ability between
in-house lawyers and law firm lawyers in terms of their experse and professionalism. In fact, I pity many law
firm lawyers, as many of them do not seem to enjoy their work or their life, such as it is.
25

What are the most influenal factors for you in selecng outside counsel? Do you find rankings of law firms
in directories a good source of informaon?
First, trustworthiness in the sense that they will not betray our confidence and will treat the company’s interests
as a priority. Second, basic competence and responsiveness. Third, familiarity with the general subjectmaer
of the dispute, the facts and background, as this saves a lot of me and money that would otherwise
be spent bringing them up to speed.
Which one of the following factors is more important in choosing an outside counsel: the understanding of
each parcular client’s business or general procedural skills and proficiency?
I think they are equally important.
Who is ulmately responsible for the outcome of arbitraon proceedings?
I am not sure what this queson means. If it means “whose task is it to ensure a certain outcome,” then the
answer is: it is in-house counsel’s task. If an in-house counsel lawyer loses too many cases, he or she will get
fired, as he or she works for the company, whose own money is at stake. If outside counsel loses too many
cases, he or she will not generally get fired, because outside counsel gets paid, as a rule, whether he or she
wins or loses. In short: in-house counsel works for the company and answers to the company; outside counsel
works for a law firm and answers to the law firm. As the company’s money is at stake in a dispute, it is the
in-house lawyers who stand to reap the gain from winning (geng a bonus), or endure the pain or losing
(geng fired).
You are the author of The Enforcement of Foreign Arbitral Awards in Russia (2014), what's your opinion on
Russian courts' approach to arbitraon? Are there ways Russia can become more aracve as a seat of
arbitraon?
The conclusion reached in my book is that the Russian courts appear to be enforcing
foreign arbitral awards at an acceptable rate, one probably comparable to the
rate found in other developed counes. There are, however, certain inconsistencies
in the court judgments, which makes predicng the outcome of a given
award enforcement proceeding more difficult in Russia than in some other
jurisdicons. Russian judgments also tend to be quite succinct – at least by the
standards of common law courts – and do not always set out all the facts necessary
to render the judge’s reasoning fully comprehensible to an outsider. No
doubt this is owing to the fact that Russian judgments have no precedenal
effect, thus they need not serve as an “instrucon,” for want of a beer word, to
non-pares to the case. Rather, they generally contain only enough informaon
to inform the pares to the case, who do know all the relevant facts, why the
judge ruled as he or she did. The above points render Russia somewhat less desirable
as a place for arbitraon because non-Russian pares will find it difficult to understand precisely how the
Russian courts will address this or that arbitraon-related issue. It is precisely this “fear of the unknown” that
I tried to dispel in my book.
26

Interview with Evgenia Loewe – Renova Group
Evgenia Loewe
Posion: Head of Internaonal Ligaon
Reporng to: Chief Legal Officer
Industry / Company: Leading Russian investment group with diversified
interests in natural resources, energy, telecoms, nanotechnology,
and other sectors across the globe
Brief CV: Evgenia Loewe graduated from Internaonal University in
Moscow in 2002 with a bachelor’s degree in Civil Law. Received LLM
in American Law from Boston University School of Law in 2002.
Admied to NY State Bar. For the past 11 years have been with the
legal department of the Renova Group.
Сould you please tell us how your in-house career started and has developed over the years?
My career with Renova started in 2003 when I joined the legal department of the Renova Group’s management
company, which had then just been established. I joined as a generalist and, since at the me, our team
was comprised of only three lawyers, we were responsible for all legal maers that the group faced across the
spectrum of its varied business interests. This meant that we dealt with a very diverse pool of issues that, for
the most part, had an important foreign or internaonal law aspect. My worked included anything from
corporate governance and compliance to providing legal support in handling the M&A acvity of the group.
Given the small size of the team inially and the group’s very acve investment strategy, our work was structured
on a project basis with each lawyer responsible for providing full legal support in relaon to a number
of investments allocated to him/her. This structure has worked well over the years, even as our department
grew, since there has tradionally been very lile movement in our team and most of our lawyers, including
myself, keep their ‘legacy’ projects, which they tend to know in-depth. This is also why, despite taking on the
foreign ligaon funcon in 2007, I have remained responsible for the legal oversight on the legacy investments
that I have managed on the M&A side beforehand.
As the needs of the Group grew so did our department, and at various mes I have headed corporate and
M&A sub-departments within the larger legal team of the Renova Group run by our Chief Legal Officer. I have
held my current posion since 2007 when it was recognised that the growing foreign ligaon acvity of the
group required a dedicated team. The posion as head of foreign ligaon allowed me a great degree of
anatomy and flexibility and I have since then worked in Switzerland, New York and now London, handling
Renova and other engagements. This has worked well with the geography of the cases, whose venues are
usually common law jurisdicons but also including ligaon and arbitraon proceedings in the EU. I have
been fortunate to work on diverse maers spanning from complex mul-jurisdiconal disputes (some of the
more prominent and reported ones are VSMPO-AVISMA, TNK-BP and RUSAL shareholder disputes) to such
fascinang cases as London High Court ligaon against Chrise’s in relaon to authencity of a Russian
painng.
Why did you choose to concentrate mostly on dispute resoluon? Has your specializaon changed over
me?
I have been interested in internaonal arbitraon since my year in Boston University Law school where I was
27

fortunate enough to study it under the accomplished Professor William Park. At the me many of us signed
up for a course vaguely tled “Internaonal Business Transacons” not expecng to receive an excing
semester-long discourse in internaonal arbitraon, the New York Convenon and enforcement of foreign
judgements. Later, in my earlier years at Renova, I was in charge of a project that became ligious as Renova
sought to exit the parcular investment. I enjoyed the fast pace and the strategic work involved in managing
a large shareholder dispute, as well as the adversarial nature of the process and the dynamics this imposes.
The challenge, however, was combining this me consuming work - one cannot ligate “in spare me” - with
my primary M&A funcon, so when in 2007 the group recognised the need for a dedicated foreign ligaon
funcon I was excited to have the opportunity to head it. While my specializaon has not changed since then,
the nature of the job and the diversity of the cases we have handled since then has certainly allowed me a lot
of room for professional growth. That said, my prior
transaconal experience has been very helpful when
In order to be successful as a
disputes lawyer you need a
healthy dose of paence, a high
stress tolerance, and the ability
to maintain long-term perspec-
it comes to grasping commercial raonale behind the
deals that oen eventually culminate in a dispute, or
interpreng the intent behind commercial contracts
at the me of draing. In these situaons, it is
extremely helpful to be inmately familiar with the
draing and negoaon process of deal-making
when you need to interpret this documentaon in
the framework of a dispute. Conversely, I have found
that my ligaon experience has affected my own
transacon draing as it has made me more
conscious and meculous in the choice of words in draing and I oen find myself reviewing every sentence
using a “what if this goes wrong” test.
Are there people that are more suited for a posion in-house as opposed to private pracce and vice versa?
What qualies a disputes lawyer needs to have to succeed as an in-house counsel?
I believe that in order to be successful as a disputes lawyer you need a healthy dose of paence, a high stress
tolerance, and the ability to maintain long-term perspecve and focus. Unlike transaconal work, disputes
are marathons stretching several years. At the same me, you must have the ability to distract from pure
academics and keep a focus on the long-term commercial and strategic goals behind any dispute and adapt
to the needs and expectaons of your company and management. I believe it all boils down to these personal
qualies and skills, and both in-house and private pracce praconers can be successful at the job.
In the US in most cases lawyers move to in-house posions aer spending some me in private pracce,
while in Russia many graduates join in-house departments immediately. Which pathway is beer in your
view?
Both approaches have their pros and cons. The former will probably suit a wider pool of graduates as it
provides an opportunity for structured and supervised growth. In a way, it is a less risky approach to career
development. Starng off in-house may be a slower track with a narrow industry specializaon. On the other
hand, the right in-house posion in a dynamic company oen allows for fast professional growth - in a small
legal department, such as was the case when I joined Renova, there is necessarily a lot of learning on the job
and such posions may be best for those who to do not shy away from taking independent decisions and
taking responsibility. I would recommend anyone considering a career in-house to do as much due diligence
as possible on the composion and dynamics of the legal department: what is the level of responsibility
assigned to more junior staff, how does it interact with other departments within the company and with
outside counsel, what are the growth and promoon opportunies, what are the personalies that you will
be working closely with, etc.
Is internaonal arbitraon the preferred choice for you company?
Yes, in most cases, we prefer to deal with disputes through arbitraon to take advantage of confidenality
and flexibility, as well as enforcement mechanisms that it allows for. We provide for this through an arbitra-
28

aon clause, which we insist on including in all our transaconal documentaon. Historically, we tend to have
more arbitraons under the Rules of the LCIA with a seat in London than that of any other instuon. The
LCIA arbitraon clause was inially one we inherited in some of the earlier shareholder agreements, and
experience showed that LCIA is reliable instuon with a good pool of experienced arbitrators providing
efficient support of the process along the way. Being able to rely on the London courts for interim measures
is another aracve feature.
What factors influence the decision to iniate arbitraon proceedings? Who makes the ulmate decision?
The ulmate decision rests with the management and shareholders, who make them on the basis of recommendaons
we put forward, considering (as you would expect) the prospects, the ancipated length and cost
of the proceedings and recovery/enforcement challenges.
Peter Rees QC, ex-Shell legal director, said in his interview: “If you look at most corporaons these days,
ligaon and compliance is the biggest risk. No corporaon will go down because of a failed M&A deal.”
Do you agree with this statement?
I would agree, although this does not take the responsibility off the transaconal teams: many disputes start
with poor draing or failure by counsel to communicate to their clients all the intricacies of the rights and
obligaons they are signing up to. However, these are far more manageable challenges than ligaon risk. It
is not only that an unfavourable award is the final point in many disputes, but along with legal costs it can be
catastrophic for the company. Moreover, ligaon, being an organic process itself, opens the company to
disclosure of sensive informaon, regulatory invesgaons, and other factors that may adversely affect its
value even before the final judgement/award is rendered.
Does your company have a dedicated in-house
disputes team? Do you find it feasible to have
someone within legal department dealing
solely with internaonal dispute resoluon?
How oen are outside counsel retained?
Renova has a dedicated disputes team covering
both Russian court proceedings and those in
foreign jurisdicons. Since in foreign tribunals
alone we have four to six ongoing proceedings
at any given moment, we also rely heavily on
outside counsel for all our foreign law disputes.
While having a dedicated in-house interna-
The role of in-house counsel in
internaonal arbitraon is to formulate
a legal strategy that will
enable the company to meet its
the commercial goals, and to then
oversee its implementaon
onal dispute specialist is certainly feasible, it is only warranted if the company has the sufficient
ligaon/arbitraon workload. I think this should be the primary consideraon and, if a company only deals
with internaonal disputes occasionally, it may be beer served by pairing up its legal deal team with outside
ligaon counsel to handle a given dispute. While this will lead to a higher cost for a specific case, as the
outside team will have to take on a lot of managerial responsibilies, it will make more economic sense in the
long run.
We engage outside counsel for every foreign law dispute and tend to do so from the outset so as to have a
realisc assessment of the prospects and can tailor the overall strategy and steps to be taken from the early
stage.
How do you see the role of in-house counsel in internaonal arbitraon? Does it have any specific features
in Russia and CIS countries? How would you recommend to split the tasks up between in-house and
outside counsel?
As a principal maer, the role of in-house counsel in internaonal arbitraon is to formulate a legal strategy
that will enable the company to meet its the commercial goals, and to then oversee its implementaon,
amending it as needed as the case develops and ensure the company’s resources are not wasted on unviable
29

outes and its acons do no bring on unjusfied risk. A secondary role for the in-house counsel is more praccal
and that is to act as the primary liaison for the outside legal team to both coordinate the pre-ligaon and
ligaon stages and be the gateway to the company’s management. Specifically, the in-house counsel is there
to ensure our outside counsel team has access to all the informaon they need (and this includes documents,
witness etc.) and has a thorough understanding of the factual background and the internal funconing of
your company, to deliver the best result. Such individual as in-house counsel has to be a manager, liaison and
interpreter. The laer is a parcularly prominent role when it comes to so-called Russia/CIS disputes, where
a lot of effort oen goes into, on one hand, marrying the commercial perspecve and expectaons with the
legal realies of foreign jurisdicons, and on the other hand, explaining the workings of Russian businesses to
foreign counsel. Finally, a parcularly challenging responsibility for the in-house counsel is to manage costs.
The difficulty is that one must budget for both the foreseeable and the unpredictable costs involved in a
highly dynamic and evolving process, which can include a complex disclosure process, iniaon of new parallel
proceedings, injuncve relief etc. Other challenges include managing disclosure process, which oen me
involves foreign IT specialists, with all the confidenality and security concerns it entails, not to menon
generally geng all departments within the company involved and engaged in the process and invested in its
outcome.
These roles are reflected in the split of tasks between in-house and outside counsel working on the team.
Do you believe that in-house counsel can represent the company in arbitraon proceedings? Does it work
in case of small-scale disputes?
An in-house counsel may very well be suited to present his/her company and thus dispense with an outside
team. However, as a praccal maer, unless he/she has the support of a dedicated in-house team, I do not
believe it feasible to manage a case, at least not
the kind of mul -jurisdiconal shareholder
disputes we usually see on the Russian market,
from beginning to end without the assistance of
the outside counsel. There are several stages of
a dispute where the workload is extremely
heavy, such as document producon, expert
and factual witness statements, that oen run
in parallel and require very detailed coordina-
on from in-house counsel. So already for that
reason, most in-house legal teams would be
overwhelmed by the sheer workload. In addi-
I am happy with having stayed inhouse,
this is where I think I add
the most value and enjoy the specific
challenges an in-house job has
to offer
on to this, the in-house counsel should first and foremost be an advisor to the company and, as such,
inmately familiar with the company, the deal that lead to the dispute, management’s goals etc., while the
outside counsel should first and foremost be an expert in the law and in conducng proceedings. These are
therefore highly complementary roles and difficult to unite under one umbrella.
Some say that an in-house career creates fewer opportunies for further professional/career development
in comparison with the one in private pracce. Do you agree with that? Would you ever consider moving
to private pracce?
This is a debate similar to whether or not it is best to start legal career in private pracce or in-house. It all
depends on the in-house posion: I appreciate that many may be less excing and challenging than private
pracce experience. When it gets to senior posions however, the balance oen ps in favour of in-house
because it invariably includes management responsibilies, which for many would be one of the most important
catalysts for propelling their career to its peak. I have in earlier years of my career considered going to
private pracce, but Renova’s M&A acvity at the me was so fast-paced and excing that luckily I did not
have too much me to pounder that choice. I am happy with having stayed in-house, this is where I think I
add the most value and enjoy the specific challenges an in-house job has to offer, while growing more holiscally
and developing skills within management, strategy, finance etc.
30

It happens that external counsels underesmate level of IHCs’ experience telling them things they already
know and offering them services they do not need. Have you ever faced this?
It has happened and it is natural for a first me engagement, as both sides need to go through a learning
period in order to have a beer idea of each other’s capabilies and approaches to structuring client-counsel
communicaon. Personally, I like to be involved in the process in detail. It is not a maer of control - I usually
work with teams I know well and trust my advisers - but rather a maer of professional interest and development.
I try to add value and act as a member of the team, rather than just being a supervising client, and I
would like to think that the outside firms I work with enjoy this level of cooperaon and involvement from my
side - at the end of the day managing a dispute is a collaborave process.
What are the most influenal factors for you in selecng outside counsel? Do you find rankings of law firms
in directories a good source of informaon? Which one of the following factors is more important in choosing
an outside counsel: the understanding of each parcular client’s business or general procedural skills
and proficiency?
Fortunately, there are a number of firms whose arbitraon teams possess both qualies and for me the
choice have not been presented quite this way. However, if the issue is whether to choose a firm with a higher
ranking over commitment and understanding of Renova’s business, I will always choose the laer. All disputes
are stressful marathons and having a loyal outside counsel as your partner who can provide calm support
regardless of how the case develops, along the way is what oen makes all the difference at the end.
In general, when it comes to rankings, I find them quite useful when researching firms in areas of law or
jurisdicons that I am not very familiar with. I also frequently use ranking entries when compiling counsel
profiles for management. However, when it comes to choosing an arbitraon counsel I do my own due
diligence and prefer to rely primarily on our own market intelligence.
Who is ulmately responsible for the outcome of arbitraon proceedings?
Undoubtedly, the in-house counsel – unfortunately for me, this is where sharing of responsibility ends!
31

Some comments on the role of in-house counsel in contentious work
by Christer Söderlund, Advokairman Vinge
The role of in-house counsel
There is no doubt that the way in which in-house
counsel supports and engages in any contenous
maer, be it domesc ligaon or internaonal
arbitraon, is of a fundamental importance for
success in the pursuit or defence of any ligious
maer.
Choice of in-house counsel
In-house counsel has a vital role to play when it
comes to the selecon of outside counsel or a
legal team to represent the company in conten-
ous maers. Companies with extensive and
far-flung operaons may get entangled in legal
hassles in a number of venues under a wide
variety of laws and regulatory regimes. Disputes
may be heard in different languages and involve
parcular industrial sectors or technical experse.
All of this impinges on the selecon of outside
counsel. I believe that in-house counsel should be quite acve and meculous in performing due diligence in
respect of counsel selecon.
In maers of certain economic (or policy) significance, in-house counsel could well include in its selecon
process personal interviews. This occurs rarely, but I think it could be recommended as a helpful screening
tool.
Coming up with the facts
The most important part in preparaon and pursuing any ligious maer is a process of laying bare all pernent
facts which may have a bearing on the case. A relevant and consistent presentaon of facts supporng
the company’s case is of fundamental importance in any dispute. No elegant legal theories, however astutely
conceived, can patch over any incorrect or misstated presentaon of the underlying facts. A credible and
verifiable account for the facts is also a prerequisite for maintaining credibility in any arbitraon which is a
sine qua non for the success of any parcular acon.
In this mission of fact-finding, there is a really important mediang role for in-house counsel to play, i.e. to
assist outside counsel to gain access to pernent company records and to individuals within the organisaon
who have first-hand knowledge of the disputed maers.
How should in-house counsel manage a case?
In-house counsel’s management of any parcular case presents a delicate balancing act. It is certainly so that
in-house counsel is responsible to his or her organisaon for the proper conduct of the parcular acon. It is,
therefore, necessary to discuss submissions and me schedules with outside counsel on an on-going basis
and also to connuously follow up that maers proceed smoothly. (Likewise, it is of course important for
outside counsel to ensure that planned as well as performed acvies are promptly and connuously
reported to in-house counsel in order to ascertain that things are on the right track.)
32

In-house counsel takes on a parcularly challenging aspect when it comes to the strategic decisions that have
to be taken, parcularly at the outset of any acon, but also during its course of contenous proceedings.
Such quesons may concern whether to pursue a disputed claim or not aer selement aempts have failed,
whether to appeal or seek invalidaon of any court judgment, whether to reconsider ligaon prospects at
any point of the proceedings and whether to consider alternave dispute opons if they are available.
In-house counsel will also normally have oversight of the financial aspects of arbitraon. This may include the
agreement on hourly rates for different members of the legal team involved in the parcular acvity, whether
to include any conngency fees, success fee or the like and, not least, to require a cost esmate for defined
parts (or the enrety) of proceedings, based on assumpons concerning the parcular requirements of the
dispute. It happens (in my experience) that in-house counsels may, although rarely, be prone to involve themselves
in the niy-gries of the legal handling of the dispute. I believe that it is necessary for in-house counsel
to have trust in the experience and insights of outside counsel and leave maers of legal argument and shaping
of the pleadings very much to the decision of the outside counsel. I would even say that if in-house counsel
too rigorously intervenes in the actual proceedings, this can, in the odd case, jeopardise the outcome.
Quite another maer is that in-house counsel should not shy away from adopng an inquisitorial approach
to outside counsel and ask for explanaons, when felt necessary, of certain procedural steps taken or lines of
argument pursued. If outside counsel cannot explain such maers to in-house counsel in an intelligible way,
he or she may well have difficules explaining them to the arbitral tribunal!
Any horror story that I could tell in the in-house/outside counsel relaonship?
There is no doubt that nowadays in-house counsel of any company of significance is highly versale in dealing
with ligaon management, involving outside counsel. As a consequence, I can recall no horror story of
recent date. However, in the beginning of the ninees, things were quite different. I recall where in-house
counsel peremptorily demanded that I “start arbitraon” without caring much to explain what the thing was
about. When I aer a lot of prodding managed to have the reluctant in-house counsel yield some documents
pertaining to the “dispute”, I could easily see that there were no prospects of winning the case at all. I
informed in-house counsel of this, who explained in a very annoyed fashion: “The boss has said: Start arbitra-
on”. This made me understand that I had to deal with the boss directly to explain the hopelessness of the
case. So, I asked to have the opportunity to do so. The in-house counsel reacted in an even more annoyed
fashion and exclaimed in a very upset manner: “Are you out of your mind? Do you think that you, a lowly
external counsel, may have the privilege of talking to our boss?”
This was in the days of strict top-down management. Nothing came of it.
33

Lawyers Talk
A
number of disnguished arbitraon praconers kindly agreed to share with us their thoughts on three
quick quesons on the role of an in-house counsel in arbitraon. With their kind permission we now
share their thoughts with our readers.
Aleksei N. Zhiltsov
Member of Presidium of
the ICAC at the RF CCI,
Head of Department,
Private Law Research
Center, General Editor,
Internaonal Commercial
Arbitraon Review
Noah Rubins
Partner, Freshfields Bruckhaus
Deringer
Alexei Dudko
Partner, Hogan Lovells CIS
Julia Popelysheva
Counsel, L&DR Department
of Clifford Chance CIS,
FCIArb
Q1. How is in-house counsel's contribuon integral to the success of an arbitraon?
Aleksei N. Zhiltsov:
Speaking of the role of in-house counsel in arbitraon proceedings I have seen three major situaons: 1)
in-house counsel takes part in the arbitral proceedings on its own, without any external assistance from law
firms; 2) in-house counsel takes part in the proceedings together with external counsel; 3) in-house counsel
does not take part in the proceedings at all, these being fully entrusted to the external counsel.
It goes without saying that the choice of a parcular model of parcipaon in arbitraon depends on whether
the respecve company has sufficient resources to employ an in-house counsel with experse in arbitraon
and company’s involvement in arbitraons jusfies retenon of such an expert.
Irrespecve of whether the company decides to instruct an external counsel to deal with arbitral proceedings,
having internal counsel closely follow and control the proceedings is highly advisable. The most sophiscated
and highly professional external counsel may not be aware of all the intricacies of complex business
relaons between the pares to the arbitraon. And knowledge of these is decisive parcularly once selement
becomes feasible. It is advisable that in-house counsel directly takes part in the proceedings side by side
with aorneys that are entrusted with the conduct of the proceedings.
Noah Rubins:
Obviously, everything depends on the nature of the case, and the nature of the relaonship with in-house
counsel. One area where the client’s internal lawyers are always essenal is in the gathering of facts, idenfi-
34

caon of witnesses, and ensuring that the business side understands the importance of thoroughness and
accuracy in the formulaon of a case theory. But in-house counsel in my experience can do a great deal more,
and contribute in many other ways to the success of an arbitraon. Perhaps most importantly, in-house counsel
can form a bridge to management to help the client company as a whole arculate its goals, interests and
priories. Also essenal is working closely with in-house counsel to communicate the strengths and weaknesses
of the client’s case, so that expectaons can be managed on an on-going basis as the arbitraon develops
and the contours of argument and defence become clear. And finally, the best in-house counsel are able
to contribute their own experse and ideas to tesng the case theory and arguments – while preserving trust
in outside counsel’s ability to use this input in a final recommendaon that is the opmal one for the client.
Alexei Dudko:
IHC's role is indeed very important to the success of an arbitraon. Strategically, all major issues are agreed
with IHC and unless IHC really understands the case and specifics of arbitraon, it could turn into a mission
impossible for outside counsel to successfully navigate the maer without IHC's support, apart from the
situaon where IHC opts not to intervene at all, which, of course, generates certain risks for IHC himself. Then,
IHC ensures that the arbitraon should have enough resources, both human, technical, operaonal and
financial, internally and externally, to ensure a win. Next, IHC at the start has beer knowledge of the maer,
IHC should ensure there is no informaon asymmetry for the outside counsel both in terms of the factual
preparaon for the maer as well as achieving the client's specific objecves in the arbitraon. Last, not least,
IHC has to pick the arbitraon team that has the maximum potenal to win the case.
Julia Popelysheva:
The role of in-house counsel in a successful outcome of arbitraon cannot be overesmated. An external
counsel almost never has the final say over case strategy - it is ulmately for the client to decide how the
arbitraon should go, whether the pares should sele, and how extreme the posion should be on procedural
issues and the merits.
The in-house counsel is a key element to all the thinking that goes into resolving the above quesons. He or
she either ulmately makes the relevant decisions or communicates the pros and cons to the client's management
- an indispensable role in both cases.
Q2. To what extent should in-house counsel manage an arbitraon?
Aleksei N. Zhiltsov:
As is seen from my answer to the first queson, in all situaons the acve role of internal counsel in the
conduct of the proceedings is decisive for the successful outcome of arbitraon. Extensive experience in
arbitraon and the related legal issues of external counsel should be coupled with the in-house counsel’s
understanding of business realies and details.
Noah Rubins:
Much will depend on the in-house counsel’s resources and work load. In my experience, many general counsel
are overwhelmed by non-contenous work, and will not be praccally able to “manage” an arbitraon.
The most important thing for such counsel is to understand their own posion and not to try to manage the
arbitraon, because this will create dangerous delays and bolenecks in the approval process for various
necessary steps, dras, and filings. Other in-house counsel have as their primary job precisely the management
of several ligaon processes, and they need to be able to verify and approve each step that outside
counsel is going to take. This can be very helpful, because it provides a second check on the common sense
of acons being taken, and also maintains the interests and priories of the client fully in view for outside
counsel. But again, it’s very important that if in-house counsel is charged with “managing” the arbitraon,
that he make me and internal resource available for that purpose, and provide a freer hand to outside coun-
35

sel during periods when he is going to be under pressure on other maers. On the whole, the most important
thing is communicaon between inside and outside counsel at the outset of a mandate, so that the in-house
counsel’s contribuon can be used to full potenal without simply adding an extra layer of management.
Alexei Dudko:
I think that IHC should not micromanage the procedural aspects if he has trust in the outside counsel. IHC has
to effecvely co-manage the most important issues together with the outside counsel and be in control of the
process. The sphere where IHC has to manage exclusively is costs.
Julia Popelysheva:
An easy answer would be, it really depends. Normally, a skilful external counsel would expect to be given
broader management powers (subject, of course, to a proper reporng chain established with the client's
in-house team). There may be cases, however, where this arrangement is unpraccal for a number of strategic
or economic reasons. Clearly, in this case the in-house counsel will be expected to play a more prominent
role in the case management (and, quite possibly, in handling the case altogether).
Q3. What is the most memorable experience you had with an in-house counsel in arbitra-
on?
Aleksei N. Zhiltsov:
In one case heard under the Rules of the Internaonal Commercial Arbitraon Court at the Russian Chamber
of Commerce and Industry in-house counsel represented one of the Russian banks. The amount at stake was
not significant, the bank was not among the biggest Russian banks, but the case appeared to be very complicated.
Inially, I was uncertain to what extent the tribunal will be assisted by counsel in this case, given that
the bank was not represented by a renowned professional counsel and that parcipaon of inexperienced
counsel in complex arbitraons frequently creates considerable difficules for the tribunal. However, the
in-house counsel conducted the case in a very professional manner, cing abundant volume of Russian and
foreign legal authories, making mely procedural moons and perfectly reacng to all the difficult issues
arising in the course of the proceedings. This case convinced me that one cannot draw skepcal conclusions
from the mere fact that a minor company in a small case is represented by an internal counsel and not by a
well renowned internaonal law firm.
Noah Rubins:
I have many memorable experiences. Most recently, I worked very closely with in-house counsel from a major
oil company in relaon to the damages phase of an arbitraon arising out of a producon-sharing contract in
Africa. This in-house counsel is very deeply involved in every aspect of the cases for which he is responsible.
This parcular damages case was quite unique and conceptually complex, with no precedents that anybody
could idenfy. We also had a number of experts, some of which were on technical geology maers, the detail
of which were beyond the understanding of any of the lawyers (despite extensive experience in oil and gas
arbitraon). The in-house counsel worked as part of the outside counsel team to develop an economic
approach to the core damages issues that would make sense and be acceptable to his management (and that
of several co-venturer companies). He also drew on resource from his geology department to find people who
could work directly with the technical experts up unl the draing of an inial report for review by the
lawyers. In the end, we were able to be ready to file in a very short period of me, despite all the moving parts
and technical issues. This was a truly synergisc experience.
Alexei Dudko:
When IHC forbade me to contact the potenal witness with whom their CEO had a personal conflict. The
person later turned to be the star witness in the arbitraon, I managed to persuade IHC but had a hard me
before it was accomplished as my credibility was at stake.
36

Julia Popelysheva:
Several years ago our firm represented a major shipyard in a mul-million dollar dispute against a Scandinavian
shipowner. The in-house counsel who was in charge for collecon of documents for a document produc-
on exercise revealed to me that he had bought a new pair of running shoes in order to promptly pick up the
documents from different departments of the client scaered across a very large territory of the shipyard.
One could say that it is a trivial example for the Digital Millennium, but in that parcular case a pair of running
shoes (and a very dedicated in-house counsel) really made a difference.
37

Arbitration Events to Attend
19 September 2014
19-20 September 2014
16 October 2014
19-24 October 2014
3-4 November 2014
6-7 November 2014
11 November 2014
26 November 2014
28 November – 1 December 2014
ABA Moscow Dispute Resoluon Conference
Organiser: American Bar Associaon
Locaon: Moscow, Russia
hp://www.americanbar.org/
Global Conference of the Co-Chairs’ Circle
Organiser: Co-Chairs’ Circle (CCC)
Locaon: Berlin, Germany
hp://www.co-chairs-circle.com/
On-line Arbitraon
Organiser: Russian Arbitraon Associaon
Locaon: Moscow, Russia
hp://www.arbitraons.ru/
IBA Annual Conference
Organiser: Internaonal Bar Associaon
Locaon: Tokyo, Japan
hp://www.ibanet.org/
Internaonal Dispute Resoluon in Sweden
Organiser: Arbitraon Instute of the SCC
Locaon: Stockholm, Sweden
hp://www.sccinstute.com/
Kiеv Arbitraon Days 2014: Think Big!
Organiser: Ukrainian Bar Associaon
Locaon: Kiev, Ukraine
hp://www.uba.ua/
LCIA European Users' Council Simposium
supported by the Russian Arbitraon Associaon
Organiser: LCIA and RAA
Locaon: Moscow, Russia
hp://www.lcia.org/Conferences/Conference_Schedule.aspx
Freshfields Arbitraon Lecture 2014
Organiser: Freshfields Bruckhaus Deringer LLP
Locaon: London, UK
hp://www.freshfields.com/
ICC Lex Mercatoria
Organiser: Belarus State University
Locaon: Minsk, Belarus
hp://www.law.bsu.by/site/?64
38

RAA40 Events
RAA40 Meeting: Sanctions and Arbitration – October 2014
In October 2014 RAA40 will organize a meeting
to discuss various ways in which sancons
may have an effect on arbitraon. We will
announce the exact date shorty: stay tuned.
Topic
Sancons may become relevant for an arbitra-
on praconer in many different ways.
A party may claim that it can no longer perform
the contract due to the sancons or that the
contract needs to be adjusted to take into
account the sancons (e.g. by changing the
currency in which payments are effected). In the context of cross-border contracts any disputes between the
pares are likely to be resolved by arbitraon, raising many challenging issues including applicable law, applicaon
of mandatory rules etc.
Sancons may influence the conduct of arbitraon as well. If a person is sanconed this may restrict the
person's access to counsel or indeed ability to parcipate in the arbitraon (e.g. deposit advances, use the
services of an arbitral instuon).
Finally, sancons may influence enforcement of the award. For example, the losing party may argue that it
may not perform the award due to the sancons. In alternave, it may argue that the enforcement of the
award would be contrary to the public policy as it frustrates the sancons regime.
RAA40 meeng
We propose to discuss various effects sancons may have on an arbitraon, including the above-described
aspects. In doing so we propose to look specifically at the exisng precedents (such as Iran-related cases) and
issues and jurisdicons most relevant for the Russian praconers.
The experts in the field are invited and expected to speak at the meeng.
39

RAA40 and LCIA YIAG Tulney Hall Seminar – 10 November 2014
RAA40 and LCIA Young Internaonal Arbitraon Group are organizing a joint seminar preceding the LCIA
European Users' Council held in Moscow on the same day.
The seminar will adopt the tradional LCIA Tulney Hall format with discussion centred on the key issues
proposed by the seminar’s parcipants before the seminar. The discussion will be led by arbitraon experts
from Russia and other jurisdicons.
RAA40 will separately circulate a call for proposals of the topics for discussion and further informaon about
the seminar.
RAA40 New Year and Christmas Drinks – Mid December 2014
RAA40 invites young arbitraon praconers to celebrate the very special holidays –
the New Year and Christmas together in mid December. The event gives an opportunity
to meet informally and discuss topical arbitraon issues as well as to share
past experiences and the plans for 2015.
The date and the venue will be announced in due course.
40

Become
a Member
of RAA40
R
AA40 goes back to 2008, when Anton Asoskov, Francesca Albert and Richard Chlup established the
Moscow Arbitraon Forum 40 (MAF40). In September 2013 MAF40 became RAA40 joining forces with
the Russian Arbitraon Associaon.
RAA40 is a forum for the young arbitraon praconers in Russia to exchange ideas, meet renowned experts
in the field and each other, share their experience and learn from the experience of others. To achieve this
purpose RAA40 organizes regular seminars and other events to address the most pressing and current issues,
publishes a newsleer and parcipates in other projects.
Membership in RAA40 is open to anyone interested in arbitraon. There are no registraon or membership
fees and you do not need to be a member of RAA to become a member of RAA40. However, to become a
member you need to possess either a degree in law or have praccal experience in arbitraon. As suggested
by the name RAA40 members should be 40 or less.
Members of RAA40 gain the following advantages:
the first to learn about RAA40 events and other projects and have priority access to them;
a periodic newsleer covering arbitraon-related developments in Russia;
aend some the arbitraon-related events on special terms.
To become a member please complete a form available at hp://www.arbitraons.ru/en/raa-40/enter.php.
41

Acknowledgements
Co-chairs of RAA40 wish to express their special gratude to:
Robert Dougans (Partner), Nabeel Osman (Associate) and
Maria Gritsenko (Counsel) of Bryan Cave for the assistance
provided in proof-reading certain materials in this Newsleer.
White & Case LLP and personally David Goldberg (Partner) for
allowing to use the firm's facilies for producon of the hard
copies of the Newsleer.
Dechert LLP and personally Francesca Albert (Partner) for
allowing to use the firm's facilies for producon of another
poron of the hard copies of this Newsleer.
42 Design by Yuriy Obodnikov (fancy13work@gmail.com)

For Notes
43

Newsletter #3