White & Case hit with £250k SRA fine for breaching conflict of interest

White & Case has been hit with a record fine of £250,000 by the Solicitors Regulation Authority (SRA) over a $2bn oligarch battle.

The firm has been fined for failing to identify a conflict of interest and for failing to protect the confidentiality of its clients in the $2bn oligarch litigation between Ukranian industrialist Victor Pinchuk and his rivals Gennady Bogoliubov and Igor Kolomoisky.

The Solicitors’ Disciplinary Tribunal (SDT) also ordered the partner on the case, David Goldberg, to pay a fine of £50,000.

The SRA’s decision read that the firm admitted it allowed work to be carried out for clients without necessary precaution to ensure no conflict or risk of conflict of interest existed between the interest of clients, in what amounted to a breach of a clause of the SRA’s code of conduct.

White & Case further admitted that it “acted recklessly” in allowing instructions to be accepted to undertake further work for clients without causing adequate steps to be taken to ensure the confidentiality of information provided to the firm by clients was protected.

In January 2014, White & Case was disqualified from acting on the flagship case after Mr Justice Field handed down his judgment granting a permanent injunction debarring White & Case from acting for Pinchuk in the commercial court battle.

The disqualification centred on White & Case’s internal conflicts checking procedures, which were highlighted after it emerged that the firm had been advising Bogoliubov and Kolomoisky in the US on a corporate restructuring and potential IOPO and Pinchuk in London on the dispute involving the former pair.

The court heard that White & Case decided internally there was no conflict of interest between its acting for the claimants and also acting for Pinchuk and did not establish any information barriers separating the teams for two years.

Enyo Law successfully acted for the claimants, a group of companies whose majority shareholders are Bogoliubov and Kolomoisky, while legacy Olswang partner Richard Bamforth instructed Bankim Thanki QC and Tamara Oppenheimer of Fountain Court Chambers to represent White & Case.

Goldberg admitted that he acted in such a way that there was a risk of conflict of interest between clients and that he had provided confidential information concerning work undertaken on behalf of a client in one matter to a partner in the firm involved in acting on a matter, thereby giving rise to a conflict of interest.

The SRA did not accuse the firm of Mr Goldberg of acting dishonestly or for acting without integrity.

A spokesperson for White & Case said: “While it would not be appropriate to comment until the Solicitors Disciplinary Tribunal has published its judgment, we have been cooperating fully with the SRA and accept the orders which will be made by the SDT. We are committed to upholding the legal industry’s highest standards at all times, in all of the jurisdictions where we operate.”

The fine imposed of White & Case supersedes that imposed by the regulatory watchdog on Clyde & Co in April this year, when the firm was hit with a £50,00 fine for breaching accounting and money laundering rules.

As part of the fine, three Clyde & Co partners – Christopher Duffy, Simon Gamblin and Nick Purnell – each received a £10,000 fine.

The partners admitted breaching SRA rules when they allowed a client bank account to be used as a banking facility. The tribunal also found that the partners failed to act in accordance with their obligations under the Money Laundering Regulations 2007.


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Mishcon loses diamond compensation claim in High Court

Mishcon de Reya has failed to throw out a claim for compensation against its Belgian client, the diamantaire Pluczenik, in the High Court.

The claim arose after Pluczenik terminated its relationship with international diamond dealer Willie Nagel, following its decision to move its global sale (‘sight’) from London to Botswana four years ago. In total, Nagel has claimed £3,547,546 in compensation.

Beginning his judgment with the memorable line “diamonds are not forever”, Mr Justice Popplewell accepted the arguments of Nagel’s firm, W Nagel, that it had lost substantial sums through commission due on sales prior to the termination of the contract it enjoyed with Pluczenik.

DWF associate Ben Griffin acted for the claimant, instructing Oliver Segal QC from Old Square Chambers, while Mishcon de Reya partner Adam Rose acted for Pluczenik. Rose instructed Robert Anderson QC and Peter Head at Blackstone Chambers.

Nagel, a Hatton Garden trader who is known to have offered donations to Labour party and Conservative party candidates in the past, became a DTC broker in 1959, following his decision to move to England to study as a lawyer.

By the 1960s he had firmed a close relationship with De Beers diamond jewellers in London as a DTC broker, which preceded Pluczenik appointing Nagel as its DTC broker in order to acquire a sight in London. Nagel argued this constituted a formal arrangement whereas Pluczenik argued this was no more than a formality.

The contract between Nagel and Pluczenik was terminated when the diamantaire moved the sight to Gabrone, Botswana. It instead decided to enter into a direct relationship with the selling arm of De Beers which did not require the intervention of a broker. Pluczenik wrote to Nagel in August 2013 to confirm the termination of the contract and that the “commercial relationship has ended”.

In about 1994, the year in which Isaac Pluczenik died, W Nagel’s commission was reduced from 1 per cent to 0.5 per cent which, according to Nagel, was on the condition that W Nagel would remain Pluczenik’s broker for as long as Pluczenik held a sight with the De Beers. There was a further agreement that the rate would not be reduced further in the future, which was disputed by Isaac Pluczenik’s son, Chaim.

W Nagel also claimed that it deserved compensation for Pluczenik for its failure to give three months’ notice in the termination of the contract.

Popplewell J said: “I have little hesitation in rejecting Chaim Pluczenik’s [Isaac Pluczenik’s son] evidence, which had internal inconsistencies and was of a piece with his generally unreliable testimony. As Willie Nagel convincingly said, it would not have been in keeping with his long relationship for Isaac to have asked Chaim to deal with a matter of such importance as this. I accept Willie Nagel’s evidence that there was a commitment given to him by Isaac Pluczenik in return for the reduction.”

Popplewell J was also critical of the way in which evidence was presented to him, saying Chaim was ” not a satisfactory witness”.

He continued: “He regularly found himself retreating from what he had said in his witness statement and indeed saying the opposite whilst vainly pretending that there was no departure form the former. He was prone to exaggeration and evasion in equal measure, and was so anxious to advance his company’s case that he sought to diminish the functions performed by Willie Nagel and W Nagel in a way that was both unrealistic and controverted by the documents.

“He would have me believe that Pluczenik received no benefit from having Wille Nagel or W Nagel as a broker, and that their role was solely administrative in the sense of preparing invoices and arranging shipment. This is not only contrary to the evidence of Willie Nagel and Marcus Schwalb, but is demonstrated by the documents to be a travesty of Nagel’s role. His combative and careless approach to giving evidence gave rise to a justifiable sense of mistrust on the part of W Nagel that there were a number of “hidden purchases” concealed by Pluczenik on which W Nagel had been denied commission.”

During the course of the hearing, Pluczenik accused W Nagel of filing the wrong CPQ [configured price quote] of another client, Smolensk Diamonds NV, instead of Pluczenik, an allegation that Popplewell J found to be “unfounded”.

A further consequentials hearing will determine the amount W Nagel will receive in compensation.

The legal line-up:

For the claimant, W Nagel

Old Square Chambers’ Oliver Segal QC, instructed by DWF associate Ben Griffin

For the defendant, Pluczenik Diamond Company NV

Blackstone Chambers’ Robert Anderson QC and Peter head, instructed by Mishcon de Reya partner Adam Rose

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PwC legal enters Indonesia via Squire Patton Boggs’ former local ally

PwC has entered Indonesia adding local law firm Melli Darsa & Co (MDC) to its network, through which the accountancy giant can offer legal services in South East Asia’s largest economy.

The Indonesia move is PwC’s latest expansion in to its legal services business in the South East Asia region.

MDC is established in 2002 by corporate lawyer Melli Darsa, who is the firm’s senior partner. It currently has six partners. The firm entered into an association with legacy Squire Sanders in 2013, but the relationship ended in 2015 following a team exit from the local firm.

As a member of PwC’s global network, the MDC remains an independent local firm and works closely with other Indonesian member firms of PwC that offer services in assurance, tax, financial advisory and business consulting.

“Business and legal issues today are more intertwined than ever before. Multinational corporations operating in Indonesia and the region see the value in working with a global professional services leader,” said Irhoan Tanudiredja, senior partner of PwC Indonesia.

“As a member firm of the PwC network, Melli Darsa & Co will provide a competitive edge for clients who appreciate the benefits of working with a global brand. It also gives Indonesian businesses, and those seeking to enter the Indonesian market, a wider choice and the ability to access the reach of a global professional services network,” he added.

For MDC, the ability to provide multidisciplinary solutions to clients is a driver behind its decision to join PwC.

“We are seeing more and more companies looking for forward-looking practical and efficient multidisciplinary solutions, often with a single point of contact,” said Darsa.

“In this respect, MDC joining the PwC network sets a new bar in corporate legal and financial/business advisory service in Indonesia that allows us to better support clients in achieving their competitive advantage through a broader multidisciplinary and more integrated approach.”

There has been a string of changes in international firms’ relationships in Indonesia in the past few years. For example, Hogan Lovells ended its previous tie-up with local firm Hermawan Juniarto after three and a half years in 2015 and entered into a new association with newly established Dewi Negara Fachi & Partners (DNFP) last year. DLA Piper separated from its ally Ivan Almaida Baely & Firmansyah (IAB&F) three years after it teamed up with the domestic firm. Norton Rose Fulbright switched its local ally from Susandarini & Partners to TNB & Partners in January 2016. Clifford Chance has also recently called it time with its exclusive association with Linda Widyati & Partners.

Prior to the Indonesia legal move, PwC Legal has expanded into key South East Asia markets such as Singapore and Vietnam. In Singapore, the accountancy giant hired two partners from international firms, real estate partner Natalie Breen from Norton Rose Fulbright and former Ashurst Singapore managing partner Keith McGuire, and subsequently launched a foreign law practice under the banner of PwC Legal International to focus on regional transactions and projects.

In Vietnam, it hired Gide Loyrette Nouel Vietnam head Nasir Dao to boost its operations in the country last year.

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Morgan Lewis boosts diversity efforts with $40k scholarship

Morgan Lewis has begun providing what it describes as “material financial support” to summer associates as part of the firm’s commitment to promoting diversity and inclusion.

London managing partner Frances Murphy said the firm had launched a scholarship programme in its US offices, in which two and three-year associates are offered $40,000 a year if they accept full time employment offers and can also demonstrate academic excellence as well as financial need.

“In London we now also have a particular focus on the career development of women lawyers, lawyers of colour, and LGBT lawyers,” said Murphy, “while for all lawyers regardless of gender, creed, colour and sexual orientation we monitor their progress closely to ensure that they are progressing on merit and not according to a formalistic, box-ticking approach, or are not progressing for some reason that is without merit.”

The London office of Morgan Lewis has introduced an LBGT team, headed by corporate partner Tim Corbett. Murphy said this was “not just a forum for people to get together” but was aimed at ensuring that through talking and receiving feedback, the London office was “doing all that it can to attract, retain and promote talent on the basis solely of merit”.

To that end the US firm has also recently launched a training programme headed by partner David Bowman aimed at reducing levels of implicit bias.

The moves suggest that firms are not simply paying lip service to issues such as diversity and inclusion but are investing in fostering longer-term change with a view to garnering tangible firm-wide benefits.

“We have always been a diverse firm, our chair [Jami McKeon] is female and that gains attention,” said Murphy. “But these days firms are being required by clients to account for what is done on a diversity and inclusion basis. This has brought everything into focus. It used to be more acute in the US but now we’re seeing it here. When we’re pitching, clients want to know the make-up of your team as well as what diversity programmes the firm has. They want to know if we have a meeting of minds.”

This year’s US Top 50 report focused on the growing trend for US firms in London to make significant investments in areas such as training and development in a bid to recruit and retain the market’s top talent. The report also included more specific data on a range of diversity and inclusion-related metrics across all of this year’s top 50 US firms.

For example, in Morgan Lewis’ London office 21 per cent of its current associates are first generation university attenders. Of those, 12 per cent are from ethnic minority backgrounds while 6 per cent identify as LGBT. The firm also reported that 1 per cent of its current associates is disabled.

For more information about the content of the report  contact Matt Byrne at matt.byrne@centaurmedia.com or on 0207 970 4558. For sales enquiries please contact Letitia Austin on 0207 970 4662 or Gilberto Esgaio on 0207 970 4191.

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Matrix Chambers CEO leaves for 39 Essex Chambers

Matrix Chambers CEO Lindsay Scott is set to join 39 Essex Chambers as its new chief executive officer.

Scott: firms are negotiating ‘much harder’ on fees

Scott led Matrix Chambers for 11 years, and in that time her team won the Chambers of the Year award at The Lawyer Awards 2015. Her replacement at Matrix has yet to be announced.

Former 30 Essex Chambers David Barnes is currently on gardening leave, after stepping down earlier this year to rejoin Atkin Chambers

30 Essex Chambers’ heads of Chambers Neil Block QC and Alison Foster QC said: “We are very much looking forward to working with Lindsay who will enable us to continue our role as a leading international set, and spearhead our drive to provide excellent, efficient service to all our clients.”

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Walder Wyss advises on joint venture deal between Swiss tech firms BOBST and Radex

Two Swiss technology companies BOBST and Radex have entered into a joint venture arrangement.

The joint venture called Mouvent aims to refine digital printing technology and develop revolutionary new machines for a wide variety of markets.

Walder Wyss acted as adviser for setting up the joint venture in all legal aspects.

The Walder Wyss team was led by Markus Vischer (partner, corporate/M&A) and included Urs Gnos (partner, corporate/M&A), Samuel Lieberherr (associate, corporate/M&A), Vera Krüttli (associate, corporate/M&A), Linda Bieri (trainee, corporate/M&A), Thomas Meister (partner, tax) and Mélanie Giger (associate, employment).

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Walder Wyss advises Flokk over purchase of ergonomic chairmaker Giroflex

Flokk, formerly known as Scandinavian Business Seating, a portfolio company of the Triton Fund IV, has acquired all shares in Giroflex, including all its legal entities.

Giroflex is the Swiss producer of perfectly structured, high quality and ergonomic swivel, conference and visitor chairs – seating, tailored to the human anatomy. Giroflex products are available worldwide.

Walder Wyss advised Flokk as Swiss legal adviser in this transaction and was coordinating all foreign counsels.

The team was led by Urs Gnos (partner, corporate/M&A) and included Lukas Wyss (partner, finance), Samuel Lieberherr (associate, corporate/M&A), Janine Corti (counsel, tax), Daniel Zimmerli (managing associate, competition), Michael Kündig (associate, corporate/M&A), Sylvia Anthamatten (associate, IPIT), Gaurav Bhagwanani (associate, employment) and Tina Hurni (associate, real estate) as well as Christine Glättli (managing associate, corporate/notary public).

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William Fry advises Glanbia Co-op on acquisition of 60% share in Dairy Ireland

Glanbia Co-operative Society recently completed its acquisition of a 60 per cent interest in Dairy Ireland which comprises of two business units, Glanbia Consumer Foods Ireland and Glanbia Agribusiness, from Glanbia plc.

This represents an expansion of the existing joint venture between the Society and the plc, now known as Glanbia Ireland.

Glanbia Ireland brings together the Glanbia Group’s Irish ingredients, dairy and agri-businesses under single ownership.

As part of the transaction, the Society sold approximately 8.7 million of its shares in the plc, equivalent to 3 per cent of the issued share capital of the plc, by way of a share placing. The proceeds of the share placing were used to part finance the transaction and create a €40m Member Support Fund.

Additionally, the Society plans to distribute approximately 5.9m plc shares to over 14,000 individual Society members by way of a share spin-out.

The William Fry team advising Glanbia Co-op on the acquisition of Dairy Ireland, the share placing and the spin-out is led by David Fitzgibbon, who is assisted by Paul White, John Magee, Cormac Little and Liam Connellan.

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Shoosmiths advises on redevelopment of The Old Dairy, London

Shoosmiths has advised Citygrove Securities and its subsidiary Albemarle Developments throughout the lifecycle of redeveloping The Old Dairy, an award-winning mixed use scheme in South Ruislip.

The mixed-use scheme – which recently won the RICS Award for Regeneration – comprises of 162 residential properties, a Cineworld cinema, an Asda foodstore and family-themed restaurants and will create over 500 jobs and a new heart of South Ruislip.

Specialists from across Shoosmiths’ national real estate team provided expertise and advice to Citygrove throughout the project’s lifecycle. The team was led by real estate partners, Steve Wiltshire and Alex Jones with support from real estate associate, Brain West; construction senior associate Heidi Brennanand planning senior associate, Matthew Stimpson.

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Schoenherr advises Kronberg International on acquisition of Mall Varna

Schoenherr advised Kronberg International on the acquisition of Mall Varna from Raiffeisen Bank International.

Closing took place in Q2 2017 and the parties have agreed not to disclose the purchase price.

Mall Varna is a landmark property, not only in the region, but also on the Bulgarian retail market. Mall Varna is located in the centre of Varna, the third largest city and seaside resort in Bulgaria. It is a shopping centre with 32.000 m2 gross lettable area (GLA). The total built-up area is 65.000 m2 with around 150 retail stores, international food chains, multiple cinemas, a popular family entertainment centre, and a fitness club.

The shopping centre features five above-ground floors including one floor with office spaces and three underground levels with a total of 600 parking spaces.

Founded in 1989, Kronberg International invests alone or with national and international investment partners in real estate projects. The investments entail individual properties, real estate portfolios, real estate companies in the residential and commercial markets, as well as on non-performing loans.

The Schoenherr team which advised Kronberg International consisted of Alexandra Doytchinova (partner, corporate/M&A); Elena Todorova (attorney at law, real estate); Ivelina Vassileva (attorney at law, labour & employment); and Stela Pavlova (attorney at law, corporate/M&A).

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