A team from Squire Sanders has won a €300 million international arbitration for Italian utility, Edison S.p.A., in its arbitration against Algerian oil and gas company Sonatrach. This is the third case in which the Squire Sanders team has represented Edison. The first successfully settled for a significant price reduction in favor of Edison, and the second resulted in a €450 million victory for Edison in August 2012.
Edison’s dispute with Sonatrach arose over a long term gas contract agreed by both parties in 2003. Edison commenced the arbitration before the ICC International Court of Arbitration in March 2011 when the parties failed to agree a reduction in the amount payable for the supply.
The price reduction decided by the Court is confidential, but Edison has announced that it estimates the award will have an impact of about €300 million on its earnings before interest, tax, depreciation, and amortization.
Commenting on Squire Sanders’ involvement in the decision, George von Mehren, Lead Counsel and Global Practice Group Leader for International Dispute Resolution, said: “We are delighted once again to have assisted Edison on this award which will have a favorable financial impact on the company.”
The dispute with Sonatrach is one of a number of gas price arbitrations that Edison brought against its suppliers in North Africa and the Middle East in 2011. The Squire Sanders team previously represented the company in its arbitration against Rasgas, in a dispute which arose over a 25 year sale and purchase agreement for the supply of liquid natural gas to an Adriatic regasification terminal. The ICC International Court of Arbitration in Paris awarded Edison a €450 million discount
This award followed Edison’s successful settlement of a different arbitration with Russian-owned PromGas in 2011 on the price payable on another long term LNG agreement. The arbitration, involving the same Squire Sanders team, resulted in a settlement for more than €200 million in favor of Edison.
Squire Sanders is recognized as one of the top 30 international arbitration firms in the world by leading industry journal Global Arbitration Review (GAR). The firm is noted in the GAR guide for its track record in energy and construction matters, and has attracted plaudits for its gas price review work for clients such as Gas Natural and Edison SpA.