A Journey Through International Arbitration: Insights from a Leading Counsel
Stephen Jagusch KC.
Stephen Jagusch KC’s journey through the world of international arbitration is a testament to the power of adaptability and ambition. From his beginnings as a law student in Auckland to becoming a celebrated King’s Counsel in London, Jagusch has built a remarkable career defined by high-stakes cases and groundbreaking achievements. With over thirty years of experience, he has not only represented some of the most influential clients in global business but has also contributed to the evolution of arbitration practices. In this article, we explore Jagusch's insights, the challenges he’s faced, and the pivotal moments that have shaped his extraordinary career in international arbitration.
Describe your journey to becoming a King's Counsel and specialising in international arbitration?
Growing up in Auckland, New Zealand, I never imagined I would become a lawyer, let alone a London-based international arbitration counsel and arbitrator. My initial interest was in business and management, and I applied to law school on a whim, inspired by my best friend. Once accepted, my parents encouraged me to pursue law, as I was the first in the family accepted into law school. To my surprise, I enjoyed it. I won an advocacy prize, qualified, and worked in the litigation practice of a leading local law firm and mentored by a masterful Senior Litigation Partner, Michael Cole. Five years and a Master’s degree in Commercial Law later, I left New Zealand with my best friend to explore the world, never expecting I wouldn’t return as a resident.
I fell in love with London and decided to seek employment. My father lent me £400 to buy a suit which I needed to interview at Clifford Chance and Freshfields. I chose Freshfields, where I eventually moved to Paris to work with Jan Paulsson, a doyen of international arbitration. He introduced me to the field and many renowned arbitrators and arbitration lawyers. I built lasting friendships and developed a reputation for handling significant cases while expressing often provocative but forthright views on international arbitration.
In 2000, I returned to London to work with David Sutton and Judith Gill (now KC) at Allen & Overy (now A&O Shearman). I went on to become their Global Head of International Arbitration. After a decade as a partner at Allen & Overy I was drawn to an incredible opportunity to lead the international arbitration practice at Quinn Emanuel. I joined as Global Chair in 2013 and focused on expanding its worldwide presence by recruiting top practitioners in key jurisdictions. In just a few years we became recognised as a leading practice globally. I became Queen’s Counsel in 2016 and am now celebrating over a decade at Quinn Emanuel.
My journey to taking silk began with my qualification as a barrister and solicitor in New Zealand. Wanting to be a disputes lawyer, I entered a litigation practice. By the end of my first week I was in bankruptcy courts then frequently arguing civil and criminal matters across New Zealand's courts.
I have the rare distinction of arguing a case in the District Court, appealing to the High Court, and then to the Court of Appeal—and losing all three times! Thankfully, those losses were outweighed by enough successes to sustain my passion for courtroom advocacy. When I arrived in London in 1994, I quickly qualified as a solicitor advocate. It was after joining Freshfields’ arbitration group that advocacy truly became my passion, and my efforts were highly-regarded by clients, arbitrators, and peers. Soon, I was the lead advocate in major billion-dollar international disputes and began serving as an arbitrator alongside many respected figures in the arbitration world. Of course, this recognition and these success have only been possible with the incredible support of my team over very many years. Key among them in almost all of my big cases have been my friends and partners Dr Anthony Sinclair and Epaminontas Triantafilou, both of whom are among the finest strategists and advocates of their generation and well worthy of taking silk.
I have been ranked among the top five international arbitration counsel globally and as one of the top 20 most sought-after arbitrators. At one point, I was recognised as one of the world's notable “double-hatters,” a dubious accolade given the rising concerns over conflicts in the investor-state arena.
Few experiences hone advocacy skills better than sitting as an arbitrator and deciding cases argued by esteemed contemporaries. My growing docket of case wins as well as my leadership roles at Allen & Overy and Quinn Emanuel led many to believe my skills would impress the (then) Queen’s Counsel Appointment Selection Panel, and I was encouraged to submit for consideration. Initially I resisted but as some peers took silk before me I worried people might assume I had been rejected. To avoid that speculation I took silk in 2015, with a memorable ceremony in early 2016 at Westminster Hall, attended by my amazing and supportive wife Rachel, my totally awesome daughters Annabel, Clara and Miranda, and my ever supportive parents-in-law John and Carr. It was undoubtedly the proudest moment of my professional career, made even more special by sharing it with my family who have endured the sacrifices of an often-absent and overworked international arbitration advocate.
International Arbitration
Can you highlight some of the most notable cases you have worked on in international arbitration?
Choosing specific cases from over 30 years of practice with countless cases as counsel and arbitrator is challenging. Some cases stand out as ‘firsts,’ like the first arbitration I ever argued which was in Cyprus, concerning whether sanctions against Iraq terminated obligations under a substantial contract or merely suspended them. Another early case involved advocating claims before the esteemed Karl-Heinz Bockstiegel, before whom I would later argue many cases and eventually sit with him as a co-arbitrator.
I will never forget successfully defending the UAE in treaty proceedings by demonstrating that the claimant did not possess the Italian nationality he claimed, despite Italy continuing to issue him passports. I also defended Azerbaijan in two cases with a combined claim value exceeding $2 billion. These cases settled after my cross-examination of the claimants’ trust director revealed he was operating the claimants’ investment companies illegally. This case also led to a unique dispute about whether the settlement was binding, requiring me to give evidence before the same tribunal where I was lead counsel—an extraordinary development.
Another notable achievement was commencing the first-ever arbitration under the Energy Charter Treaty in 2001, and I have since conducted many of the subsequent 160 or so ECT cases. In one instance for a sovereign client, I successfully settled a substantial claim, only to later face allegations from a new government claiming I had conspired with the former administration to procure an illegal compromise. Surprisingly, the new government shortly thereafter appointed me as an arbitrator in an investor-state claim.
In two high-value ICSID mining claims I initiated under an investment treaty, I was particularly pleased to convince a distinguished tribunal that “may” in an arbitration agreement meant “must,” based in part on a previous commercial case where I had also been counsel.
No list of notable cases would be complete without mentioning my claims for a Ukrainian bank against Russia for expropriation following Russia’s 2014 invasion of Crimea. This was the first claim that resulted in an award finding Russia liable under the Ukraine-Russia bilateral investment treaty, ultimately awarding my client over $1.1 billion in compensation.
All of these cases presented unique challenges, but none more so than a commercial arbitration against one of Russia’s largest banks. Despite numerous contracts we could not identify any specific breach, so we pleaded breach of an implied term and succeeded. Several billion dollars were at stake.
I have been appointed as arbitrator on many cases both commercial and investor-state. Perhaps the most notable ongoing case involves a claim to a share of the value of the largest treasure cache ever found at sea.
Navigation Challenges
How do you handle the challenges posed by differing legal systems and jurisdictions in international arbitration?
The practice of international arbitration is fascinating due to the many challenges presented by differing legal systems. In a typical case, there are parties, counsel, arbitrators, witnesses, and experts trained in diverse legal systems and accustomed to various dispute resolution practices. Experienced participants quickly adapt to the needs of the key decision-makers, the arbitrators, and this also requires careful client management to align their expectations with the processes and procedures the tribunal is likely to require.
Legal and cultural differences can be categorised as substantive or procedural. Striking the right balance in approach is crucial for effective strategy and advocacy. Misunderstanding procedural nuances can lead to missed opportunities that enhance or weaken a case before and during the final hearing, as well as in post-hearing submissions. Failing to grasp the details and nuances of the governing law will very likely be fatal. With experience in hundreds of cases involving various laws, I have developed keen instincts. In cases where the applicable law is not English law, I often co-counsel with qualified foreign lawyers or engage them as expert witnesses on the governing law.
High-Stake Disputes
How do you manage client expectations, especially in high-stakes international disputes?
Clients rarely enjoy the process of litigating international disputes, which can take years and cost millions in legal fees while demanding significant time from management and witnesses. The best way to manage client expectations is to be open and honest about the process, outlining the likely path to an award while explaining the timing and magnitude of expected demands based on the specific circumstances of their case. Clients appreciate understanding the various interlocutory measures available, how they might benefit from them, and the likely strategies of their opponents.
Routine scheduled meetings with clients to discuss the case's progress and what's on the horizon (so they know who is doing what and why) is critical to ensuring client buy-in. These meetings should involve key decision-makers and those responsible for the case’s conduct, minimising what clients dislike most—surprises.
Evolving Arbitration
How do you anticipate the field of international arbitration evolving in the next decade?
I believe international arbitration will continue to thrive due to its unmatched advantages. It produces final awards that are generally unchallengeable (except in limited circumstances) and widely enforceable globally as if they were domestic court judgments. It is private, flexible, and allows parties to choose their arbitrators. Its popularity is evident in the fact that almost every law firm now boasts specialist international arbitration practitioners, unlike when I began when only a few firms were involved.
There is always room for improvement in international arbitration, which is influenced by both local laws and international treaties, and conducted by lawyers from various jurisdictions with differing backgrounds and preferences. This complexity, coupled with the parties’ ability to seek court support varying by jurisdiction, presents opportunities many for enhancements.
What international arbitration needs now is participants who are honest and respect basic ethical norms, of which there are none that are codified and binding. The system is vulnerable to abuse by indifferent or lazy actors—be they parties, counsel, witnesses, or arbitrators. I often witness the erosion of integrity in international arbitration and have frequently written about it and addressed audiences about the dangers of bad faith conduct. It’s concerning that instances of misconduct are now emerging in courts at an alarming rate. Given that many abuses are hidden, we must question how many cases are wrongly influenced by undiscovered bad faith conduct. I believe this issue will gain increasing attention, leading to efforts to create binding and enforceable standards for participants that are transparent and capable of being policed.
Preserve and Enforce
What do you find most rewarding about working in international arbitration?
It is rewarding to play a role in preserving and enforcing clients’ rights and defending them against unmeritorious claims. Winning complex, high-value, or prominent cases in the public domain is particularly gratifying. I also find it fulfilling to manage teams of exceptionally talented young lawyers in my firm. Clients are often highly intelligent and masters of their respective industries, making interactions rewarding. Many cases involve domain-specific experts from whom I can learn about new subjects and industries—a bonus in my practice area.
Perhaps the most rewarding aspect is strategising with clients on how to win their cases, considering the many moving parts and pressure points that often lie outside the arbitration. Navigating bad facts is a skill in itself, and every case has them. Delivering strategy through written briefs and presenting it orally to experienced arbitrators is stimulating and satisfying—it's where the adrenaline and excitement kick in. I love it.
Life Balance
How do you balance the demands of high-profile arbitration cases with personal life and well-being?
I wish I could say I have mastered the balance between work and family pressures, but I haven’t. Few understand the pressures of representing or opposing sovereigns, blue-chip corporations, or ultra-high-net-worth individuals. I've faced threats and challenging situations more times than I would like. High stakes often lead individuals to stop at nothing for an advantage, creating corrupting influences that international arbitration could do without. These pressures are often overlooked by those not regularly engaged with the most complex and challenging cases in this relatively unregulated field.
To maintain some balance I employ coping mechanisms such as double-partnering my largest cases to ensure clients have access to partners even when I’m unavailable. I also rely on the younger team members who consistently rise to the occasion.
A sense of humour helps alleviate stress and I find that developing personal connections with clients is crucial. Enjoying their personalities and building strong teams fosters a collaborative environment, significantly enhancing my job satisfaction.
Quinn Emanuel Urquhart & Sullivan, LLP is an American white shoe law firm headquartered in Los Angeles, California. The firm employs approximately 1,000 attorneys throughout 35 offices around the world.
Stephen Jagusch KC is Global Chair of Quinn Emanuel's International Arbitration Practice
