Executive Summary

Selecting counsel is a critically important part of the investment treaty dispute process. Great care and planning should be taken to identify and develop a pool of qualified candidates, establish the proper criteria (and their appropriate weight) and then select the most appropriate lawyer, or team of lawyers, for the entire dispute resolution process.

1.0 Introduction

An individual, company, or state involved in an investment treaty dispute should take particular care in selecting its counsel, both internal (if any) and external. External (or “outside”) counsel is engaged to provide specialised and experienced representation. Specialised advice is important in any high-stakes dispute, but even more so in international investment disputes where complex substantive and procedural legal and political issues arise, the claims are often very sizeable, and where appellate remedies are extremely limited. Strategies and approaches used in domestic court litigation are often ill-suited for international investment arbitration proceedings, and selecting counsel should reflect this reality.

2.0 Developing a Pool of Qualified Candidates

The first step in selecting outside counsel is to identify and develop a pool of qualified potential candidates (both individuals and law firms). Depending on the laws of the jurisdiction and the particular status and needs of the client (e.g., for the defending state), it may be necessary to solicit “Requests for Proposal” through a formal announcement and publication. Alternatively, informal Requests for Proposal may be solicited through email or conversations with potential candidates.

A key part of this first step is to identify a broad pool of candidates by including attorneys from one’s local jurisdiction and attorneys from other jurisdictions with specialised experience in international investment disputes. The pool may include attorneys or firms with whom the client has an existing relationship (if possible) and new counsel who have been identified through individual referrals and through review of leading legal directories such as Chambers, Legal 500, GAR 100, and Who’s Who, among other sources. The process of developing a pool of candidates is, of course, heuristic and will not end once the initial list is created.

3.0 Criteria for Selection

Once you have identified the initial pool of candidates, the second step is to establish the selection criteria and a rough hierarchy for those criteria. Some of the key factors that should be considered include:

  • Relevant experience, including previous experience with international arbitration generally and international investment law (representing claimants and respondents), the applicable local law (if any), the industry in dispute, the seat of the arbitration, the country in which the investment is located, the language of the arbitration, the nationality of the parties (including the “home” jurisdiction of the claimant, respondent, or key decision-makers), the potential arbitrators, the particular client, arbitration or litigation against the opposing counsel in the particular dispute, press and public relations issues that may surround the arbitration, and existing or potential parallel litigation in national courts;

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  • The proposed team, including the seniority and skills of each proposed team member and whether an international firm, if selected, will team with a local firm to represent the client and how responsibility will be allocated;
  • Proposed strategies for resolving the dispute, wherever possible, and arbitrating the dispute, if resolution cannot be reached; and
  • Estimated fees and costs, including the possibility of alternative fee arrangements and third-party funding (see Chapter 16), to the extent applicable law allows (as civil law countries are generally stricter on fee arrangements).

No single set of attorneys or single firm will, of course, meet every criterion in the preferred hierarchy. For example, it is highly unlikely that the team that meets the most criteria under the first bullet above will also be the least expensive under the last

4.0 Making the Choice

The third step in selecting outside counsel is for inside counsel (if any) or other members of the client’s staff, whether it is the claimant or the state, to apply the selection criteria to narrow the field of candidates with the goal of arriving at the client’s preferred choice. Assessment of these criteria should be through both written materials (“marketing” materials, individual firm biographies, writings, and perhaps analysis of the issues in the case) and interviews by phone, videoconference, and, wherever possible, in person. Sometimes many of these criteria will be met with a single, international law firm, and sometimes a trusted local firm combined with an international law firm will provide the best team and resources for the investment dispute in question.

During those interviews, or soon after counsel is engaged, the potential client (or the client, as the case may be) should discuss with outside counsel options and potential approaches for:

  • Settling the dispute early (and if the dispute is not settled, strategies for winning the arbitration);
  • Selection of the party-appointed arbitrator and chair (including rationale for their selection and due diligence concerning their prior decisions, writings, professional positions and relationships);
  • The themes of the case for both “offense” and “defence”;
  • Preservation and collection of documents;
  • Key witnesses to be interviewed;
  • Engaging consulting and testifying experts;
  • Communicating with the client and the client’s internal team;
  • Advocacy with opposing counsel and the tribunal;
  • The milestones in the arbitration and the timing for the same; and
  • Establishing a budget and assessing costs and benefits to the approaches above.

Even the most knowledgeable and experienced outside counsel will not have immediate and final answers to all — or even most — of these questions. However, selecting the most appropriate counsel for an investor-state arbitration requires understanding these issues and developing potential approaches.

The most appropriate counsel to handle a dispute will not only meet the “hard” criteria set forth above, but also best demonstrate that they can identify and achieve the client’s short, medium, and long-term goals.

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