04 Mar 2022

Houthoff ditches Kremlin as client over ‘acts of war by the Russian Federation in Ukraine’

Instructions have included award-winning work on $50bn Yukos arbitration and cases relating to annexation of Crimea

The Moscow Kremlin on a winter day. Russia

stocknadia; Shutterstock

Leading Dutch law firm Houthoff is ditching the Kremlin as a client in response to Russia’s invasion of Ukraine in a move that will deprive its arbitration team of one of its most high-profile relationships.

The Amsterdam-headquartered firm issued a statement yesterday in which it pledged to ‘terminate its relationship with the Russian Federation as well as with associated persons and companies’, putting the move down to ‘acts of war by the Russian Federation in Ukraine’.

The firm added that 'it will not accept any new instructions from such parties'. 

The firm most notably represented the Russian Federation in its successful bid to persuade the Hague District Court to set aside three Energy Charter Treaty awards that had required Russia to pay $50bn to the former majority shareholders of Yukos Oil Company in compensation for having broken it up in 2006.

That work earned it The American Lawyer’s 2017 Global Dispute of the Year Award and the Global Arbitration Review’s (GAR's) Award for Most Important Published Decision, the firm said in an announcement on its website in 2018

The case is ongoing. The arbitral awards were reinstated in 2020 by The Hague Court of Appeal and Houthoff has previously reported that it has been co-counselling with Belgian firm Hanotiau & van den Berg on a pending appeal before the Dutch Supreme Court.

It is not clear how today’s announcement by Houthoff will impact this work. However, GAR reported on Wednesday that prominent Belgian arbitration practitioner Albert Jan van den Berg had ceased acting in the case.

'Dutch lawyers are subject to strict professional rules of conduct when dealing with a decision of this nature, also when circumstances are as severe as currently the case in Ukraine,' the the Houthoff statement said. 'Houthoff will honour the applicable duty of care in the execution of this decision. It will do so in consultation with the Dean of the Amsterdam Bar.'

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More coverage of the impact of Russia's invasion of Ukraine on the legal profession

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Aside from the Yukos case, Houthoff reported on its website in May 2020 that it was ‘representing Russia in four different set-aside proceedings relating to various investment treaty awards in favour of Ukrainian investors in Crimea who say their investments were seized following the territory’s 2014 annexation’.

Houthoff is not the only Dutch firm to publicly cut ties with Russian clients, with NautaDutilh saying yesterday it would ‘not be accepting any matters for Kremlin-affiliated parties’ or accept work from any clients 'connected to the Kremlin in any way’. 

The firm added that it was ‘taking steps to exit or suspend some engagements with due observance of our professional and legal responsibilities’. 

A growing number of law firms have issued public statements regarding their work with Russian clients in the wake of the country's invasion of Ukraine. UK firm Allen & Overy pledged to refuse new Russian-related instructions and stop all Russia-linked work that goes against its values on Wednesday, while Ashurst is not currently acting for new or existing Russian clients, regardless of whether they are subject to sanctions. 

Hogan Lovells, Slaughter and May, White & Case, Linklaters and Baker McKenzie have also confirmed they are reviewing their Russian client rosters. Norton Rose Fulbright's global chief executive, Gerard Pecht, published a statement on LinkedIn earlier this week expressing the firm's 'unequivocal' opposition to the invasion in a bid to draw a line under controversy surrounding an internal memo telling lawyers not to comment on Russian sanctions. 

Swedish firm Mannheimer Swartling, meanwhile, has pulled all of its Swedish lawyers out of Moscow and ceased all work with Russian clients ahead of plans to exit the Russian legal market altogether ‘in an orderly manner’ with respect to its Scandinavian clients and Russian employees. 

And top 30 UK law firm Kennedys revealed on Tuesday that it was in the process of closing its Moscow office, with the insurance specialist’s global senior partner, Nick Thomas, saying the firm had been quietly winding down its small Moscow arm since last year as it was "uncomfortable with the direction the country was taking".

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