Dousing global fires

THE END OF THE COLD WAR AND BREAK-UP OF YUGOSLAVIA HAVE LED TO MORE PUBLIC INTERNATIONAL LAW WORK FOR FIRMS BUT LAWYERS NEED TO BE WARY OF POLITICAL TENSIONS, SAYS STEPHEN WARD The spy plane dispute between the governments of the US and China which threatened all future trade between the two powers reflects how high the stakes can be in international public law cases.

And though public international law is a niche area of the Citys legal work in which only a handful of firms specialise, it is not unusual for the amounts at stake to be vast.

Clifford Chance, for instance, acting for the Kuwait Petroleum Corporation last year, completed a case which won 10.6 billion for the loss of more than two years oil revenue after Iraqs invasion of Kuwait in 1990.

Jeremy Carver, head of the firms international law group, explains that this claim went before the United Nations Compensation Commission, which is funded by a percentage of Iraqi oil sales.

In this case, the commission has a role more like that of a skilled insurance assessor than a judge.

The lawyers had no adversaries, and their task was to use a range of disciplines or professional skills, including loss adjusting, accountancy, and engineering to produce verifiable data.We had to provide evidence on which the commission could say they were satisfied we had met the level of proof necessary, and award compensation, says Mr Carver.

He is regarded as a doyen of this field and was awarded a CBE in 1999 for services to international law.Campbell McLachlan, Herbert Smiths head of private and public international law, predicts an explosion in the volume and importance of international law work in the next few years.He says one reason why public international law is becoming increasingly important in commercial affairs is that the end of the Cold War has made it possible to settle more disputes between states by agreement.

Not only has this led to an increase in the workload of the International Court of Justice in the Hague, it has also led to a proliferation of international tribunals, says Mr McLachlan, mentioning the International Centre for the Settlement of Investment Disputes, the International Tribunal for the Law of the Sea, and the dispute settlement system of the World Trade Organisation.

He adds that businesses are increasingly taking part in formulating disputes brought to these forums by states.

Mr Carver says international law work has been generated by splintering of the former Yugoslavia into its many component states.

Whenever you have a break-up of states, you get quite complicated questions of succession, and theyve been particularly complicated in relation to assets, he says.

His firm has been instructed in relation to component central banks trying to recover assets, asking where they can make claims for them.

If there is a deposit in London, they will want to know if they can sue here, he says.

A characteristic of this branch of work is the depth of research needed in a way which stretches beyond a normal domestic case.

The International Court of Justice has just ruled on a long-standing boundary dispute between the states of Bahrain, represented by Freshfield Bruckhaus Deringer, and Qatar, advised by Eversheds.

Malcolm Forster, Freshfields head of international public law, says: They are always document and fact intensive to the very highest degree.

Take the Bahrain-Qatar case.

It was, in effect, a history of the Persian Gulf.

The evidence was not only political, but social and cultural and sometimes almost religious.

You employ not only lawyers, but historians, philologists, the lot.City law firms possess the capacity to take on this type of work.

These sort of jobs are akin to massive litigation for clients such as British Nuclear Fuels or the Bank of England that firms like this are doing all the time, Mr Forster says.

Even most governments dont have that capacity; nor do the big- name advocates who are expert in this field.

Many cases are also long-running.

Tim Daniel, head of international public law at DJ Freeman, says another border dispute case destined for the International Court of Justice, in which he is representing Nigeria against the Cameroon, has already been going for seven years.

There should be a hearing next year, he adds.Mr Carver says in practice there is frequently a crossover between private and public law.

He says: Traditionally, the subjects were taught as one law was easier in those days.

Inevitably, it has fragmented since then from the middle of the 20th century onwards.

But they do overlap.

International law often provides a different matrix which makes a private practice lawyers analysis of a problem incomplete.

Over the years, a number of times many of our finance and other lawyers have come to me saying they are stuck on a complex international transaction, and Ive been able to look at it and tell them theyve made an analysis which is essentially a domestic law analysis, Mr Carver says.

Theyve ignored certain international law elements, and if you factor those in, you get a different answer and a solution.

Mr Forster says, as an example of the private and public law convergence, that it is increasingly common in oil field and pipeline development to negotiate a treaty to avoid future disputes.

Normally a treaty is negotiated between governments, but the people who are really worried are the investors, so it is a delicate task.Public international law is a relatively amicable practice area, with, according to Mr McLachlan, a small enough number of practitioners involved to allow the various experts solicitors, advocates and other professionals to keep in close touch one with another.Unsurprisingly, given the nature of the subject, there are international public lawyers operating out of cities other than London.

At Freshfields, for example, there is a team in Paris and another in New York almost as large as in London.

But London remains a hub for several reasons.

It has the professional skills, including legal ones, available at a price and convenience to attract clients from around the world.

It scores over the expertise in Washington DC with some clients for the very reason that it is not the capital city of the worlds only superpower, which will have an interest in most world questions.London has been at the centre of international finance and trade for 250 years.

It has not been invaded in that time, and keeps relatively good records of previous international disputes.As Mr Carver says: The archives available in the UK are better than anywhere else in the world, so therefore its a good research place for virtually any sort of historical political problem.

This is an area where unusually lawyers often find themselves taking the moral high ground against some of the governments involved.Mr Forster says: You frequently find yourself caught in political machinery and having to tell governments that one of their fellow governments is producing arguments which are absolute rubbish.

You have to find a way of saying tactfully thats an interesting submission, but heres a different one.And Mr Carver, who played a part in setting up the United Nations Compensation Commission which aims to avoid adversarial lawyers swallowing up damages, says: We (lawyers) have a social obligation not to make ourselves rich but to make sure the law works.In the China spy plane dispute, he contends that even the policymakers in the US did not adequately understand the basis of the Chinese case.

China has been asserting intermittently for 50 years that it has the right to treat the major part of the South China Seas as internal waters.

As internal waters they fall within Chinese air space.Most lawyers would say that China has ratified the UN Conference on the Law of the Sea, so it should accept that its territorial waters end 12 miles from the coast.But, Mr Carver says, all sorts of unresolved territorial claims exist, and you cant expect people to say: Its a bad claim, therefore I abandon it.Stephen Ward is a freelance journalist