On the occasion of the 40th anniversary of Shearman & Sterling’s Abu Dhabi office, leaders of the global law firm reflect on the firm’s storied history in the region and legacy of client service. One of the first law firms to establish a presence in the Middle East, Shearman & Sterling has advised clients throughout the region since 1965.
“This is a significant milestone in a relationship between Shearman & Sterling and the Middle East that now spans 50 years,” said Creighton Condon, the firm’s Senior Partner. “Our experience, built up over the past half century and including our 40-year history in Abu Dhabi, delivers a depth of local knowledge and experience that is unsurpassed. Today, we continue to expand upon this tradition of leadership, creativity and extraordinary service and look forward to serving our clients for many more years to come.”
From Algeria to the Middle East
Shearman & Sterling’s path to the Middle East was forged through North Africa. In 1965, the Algerian Government invited the firm to advise national oil company Sonatrach in negotiations with the French government to amend the Accords d’Evian that governed Algeria’s oil and gas reserves. The firm’s lawyers introduced an innovative legal infrastructure for Algeria’s oil and gas concessions. In 1971, Abu Dhabi, also seeking advice on how to regain control over its national resources, retained Shearman & Sterling to help create Abu Dhabi National Oil Company (ADNOC).
Building the Infrastructure to Sustain Growth
Shearman & Sterling lawyers were instrumental in structuring the first independent power and water projects (IWPP) aimed to service a growing population attracted by opportunities in the region. The firm advised international developers and financial institutions alike on the successful formation and financing of more than 50 of these pioneering projects, which have been adopted successfully throughout the Middle East. Some prominent IWPPs include Al Taweelah A2 (Abu Dhabi), Sadaf (Saudi Arabia) and Hassyan (Dubai).
Beyond Oil to Diversification
As the petroleum-based economy of the UAE matured, the country sought opportunities for diversification. Shearman & Sterling lawyers provided strategic counsel on projects such as the Dolphin Energy Gas Project in Qatar, which brought together Abu Dhabi-owned Mubadala Development Company, French energy company Total and Occidental Petroleum from the US, in one of the largest energy-related ventures ever undertaken in the Middle East. The project, combining wells, sea lines, a processing plant, export pipeline, receiving facilities and a distribution network, was the first example of an international bond used in a Middle East project financing.
In 2008, Shearman & Sterling advised Abu Dhabi United Group Investment and Development Limited on its landmark acquisition of Manchester City Limited, the holding company of Manchester City Football Club. The high-profile deal shifted the spotlight on Abu Dhabi from the business pages to the sports pages.
Shearman & Sterling’s important role in a growing Middle East-European investment connection can also be seen in the firm’s central role in major real estate investments by Qatar Investment Authority and subsidiary Qatar Holdings in the UK's Canary Wharf project and Milan’s Porta Nuova redevelopment project, respectively.
The firm has been representing Middle Eastern States, State-owned companies and private companies in large-scale construction and energy arbitrations, as well as M&A and joint venture disputes, since the early 1970’s. Of particular note, the firm’s track record in the Middle East includes the ICC arbitration arising from the failed joint venture between Dow Chemical Company and Kuwait’s Petrochemical Industries Company. After advising Dow on the original transaction, Shearman & Sterling represented the company in the arbitration and secured a US$2.47 billion award in the client’s favor – the largest commercial award ever rendered by an arbitral tribunal at that time.
“This victory solidified our reputation as a preeminent law firm handling high-stakes and sensitive international arbitrations,” said Emmanuel Gaillard, founder and head of Shearman & Sterling’s international arbitration practice. “Our activity throughout the Middle East and North Africa has always been an important part of our practice. It has strongly expanded in recent years, as we have a team on the ground in Abu Dhabi which represents clients on the largest disputes in the region, by value and by complexity.”
The firm has notably been advising Egyptian State-owned energy companies regarding the management of the gas supply situation resulting from the Egyptian revolution of 2011 as well as negotiating on their behalf with their major upstream and downstream counterparties.
An Expanding Role in Mergers and Acquisitions and Joint Ventures
As M&A fever spread worldwide, Shearman & Sterling played a significant role in shepherding high-profile transactions in the region to completion. For example, in 2007, the firm represented Saudi Basic Industries Corporation (Sabic) in its acquisition of General Electric Company’s plastics business in an US$11.6 billion deal. In the UAE, the firm helped Mubadala establish a commercial finance joint venture with General Electric and a joint venture with AMD to build computer chips and then to acquire a Singaporean semiconductor manufacturer. We also advised on investments by Middle East clients in Glencore, Virgin Galactic, Daimler and Barclays Bank, to mention only a few.
More recently, Shearman & Sterling advised the Supreme Petroleum Council of Abu Dhabi and Abu Dhabi National Oil Company on the grant of interests in the new 40-year onshore oil concession in Abu Dhabi to Total SA and INPEX Corporation. The concession was described as “a major, historic concession agreement”—its expected production in 2015 is around 1.6 million barrels of oil per day (Mb/d), with an objective to increase output to 1.8 Mb/d from 2017.
Putting Capital to Work
Shearman & Sterling, with more than a century of advice to financial institutions, was poised to help the region in its next step—the development of a financial and commercial center with capital to invest. The firm served on a number of high-profile projects that showcased the newfound financial strength of the region, including the ERC refinery project in Mostorod, the largest-ever private sector project financing project, and Dow Chemical Company on all aspects of the US$20 billion Sadara Integrated Chemicals Project, the largest industrial project ever built in a single phase in history.
Most recently, the firm’s work helping Abu Dhabi Global Market (ADGM) establish a financial free zone is another milestone that has contributed to Abu Dhabi’s ascension as one of the world’s premier financial centers.
“Shearman & Sterling’s long history in the Middle East has been a series of impressive achievements,” said Marwan Elaraby, Managing Partner of the firm’s Middle East practice, “and we look forward to the next chapter in our continuing history in the region.”