Clients facing complex, high-value international business disputes are increasingly looking to international arbitration to resolve them. Paul, Weiss positions companies and investors to secure the most favorable decisions possible, drawing on our team’s experience and prowess as courtroom advocates, and a specialized knowledge of the major arbitration bodies’ rules and procedures.
Paul, Weiss Wins Injunction in Aid of Arbitration
Practices
On July 23, Paul, Weiss won an important victory for clients Invar International, Inc. and Talex International, LLC in an ongoing dispute against their joint venture partner, a major Turkish power company. Our clients and the Turkish company are partners in an enterprise to build the first privately owned power plants in Russia.
Paul, Weiss obtained an injunction in aid of arbitration that orders the respondent to prevent its affiliate from foreclosing on a $780 million project finance loan pending an arbitration in Switzerland. Foreclosure would likely cause our clients to lose their interest in the power plants. The arbitration, which Paul, Weiss has taken over from our clients' former counsel, involves claims that our clients' partner fraudulently induced our clients to enter into the loan by claiming that the lender was an independent third party, when in fact the lender was affiliated with the joint venture partner.
The hearing over the motion for injunctive relief raised significant issues relating to the intersection of state law and the Hague Convention on International Service of Process. Paul, Weiss had obtained permission from New York Supreme Court Justice Bernard Fried to serve the Order to Show Cause on respondent's counsel, White & Case, since service on the respondent in Turkey through the Hague Convention could not be completed before our client could be said to be in default on the loan, and thus subject to potential foreclosure. White & Case argued that service was improper and needed to be effected in Turkey pursuant to the Hague Convention.
Justice Fried, in a written memorandum opinion, adopted all of Paul, Weiss's arguments to find that service on White & Case was proper on the grounds that the Hague Convention does not preclude domestic service on a foreign corporation if domestic service is permitted under state law, and since New York state law, under CPLR 311(b), permits a judge to fashion an alternative means of service where service is otherwise impracticable, the Hague Convention did not apply. In addition, Justice Fried found that there were sufficient contacts with New York to confer personal jurisdiction over the respondents, and that the requirements for a mandatory preliminary injunction were otherwise met.
The Paul, Weiss team consists of partners Moses Silverman, who argued the motion, and Robyn Tarnofsky; associates Tara DiBenedetto and Yael Fuchs; summer associate Clark Freeman, who was an invaluable member of the team; and paralegal Shauna Kramer.