Zurich, Switzerland – (Sept. 8, 2004) LAWFUEL – Best for law, law news, legal news, legal research – The Czech Republic can argue its case that Japanese investment bank Nomura is liable for billions of crowns in damage, according to an interim award issued Sept. 7 by an UNCITRAL arbitral tribunal seated in Zurich. Squire, Sanders & Dempsey L.L.P. represents the government in the landmark arbitration.
The Czech Republic and the National Property Fund seek damages estimated at CZK103 billion to 263 billion, or $US3.3 to $8.5 billion, respectively. The government claims it is owed billions to cover losses stemming from the privatization and failure of Investiční a Poš Banka, or I.P.B, once the third largest bank in the Czech Republic. The matter is being heard by an arbitral tribunal of the United Nations Commission on International Trade Law.
“This is a significant decision in a landmark case involving privatization in cross-border transactions which are becoming more prevalent in our global economy,” said George von Mehren, lead lawyer for the Czech Republic and the National Property Fund. Von Mehren also is co-leader of the International Dispute Resolution practice for Squire Sanders.
Von Mehren said the decision has legal significance because the Swiss tribunal will hear the Czech government’s claim for damages even though the government was not a party to the arbitration agreement made during the 1998 sale and purchase agreement that gave Nomura shares in I.P.B. and the agreement under which the government is making its claim.
In the arbitration claim filed in 2002 against Nomura and its subsidiary Saluka Investments B.V., the Czech Republic and the National Property Fund allege that Nomura breached the agreement and engaged in other illegal acts arising out of or in connection with the agreement.; causing damages by participating in the fall of I.P.B. and by benefiting from transactions that preceded the bank’s fall.
“More importantly, this interim award means that the Czech Republic, which placed the bank under forced administration just two years after the sale, will be able to tell the tribunal about the major financial challenges the government has had to face as a result of the failure,” von Mehren said. “We are extremely pleased that the tribunal will let the story of Nomura’s involvement in I.P.B. be heard in a single forum.”
Lawyers from Squire Sanders offices in Brussels, Cleveland, London, Prague and Washington DC participate in the government representation.
Squire Sanders also represents the Czech Republic in a $US1 billion claim brought against the Czech Republic by Saluka under the bilateral investment treaty between the Netherlands and the Czech Republic.
Squire, Sanders & Dempsey L.L.P., founded in 1890, is one of the largest US-based international law firms with more than 700 lawyers who represent the interests of clients throughout the world. The firm’s offices in the Americas are in Cincinnati, Cleveland, Columbus, Houston, Los Angeles, Miami, New York, Palo Alto, Phoenix, San Francisco, Tampa, Tysons Corner, Washington DC and Rio de Janeiro. In Europe, offices are in Bratislava, Brussels, Budapest, London, Madrid, Milan, Moscow and Prague. The firm also has associations with legal firms in Bucharest, Dublin and Taipei.