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Category: Interest on Fees

London Arbitration Firm Recovers Costs from UAE Fee Dispute

March 13, 2017

A recent Law 360 story by Jimmy Hoover, “London Arbitration Firm Recovers Costs From UAE Fee Spat,” reports that a London-based international arbitration firm won back nearly all of the costs it spent pursuing around $2 million in legal fees from its representation of a wealthy United Arab Emirates (UAE) family in a commercial contract dispute, when a U.K. court found the family was drawing out the appeal process to delay payment of the fees.

The England and Wales High Court ruled that Shackleton and Associates Ltd., a firm founded by sole shareholder and solicitor advocate Stewart Shackleton, is entitled to 80 percent of the costs incurred from a proceeding to enforce the fee award against the Bin Kamils, a wealthy business family in Sharjah, United Arab Emirates.  The fee award, handed down by a London tribunal of the International Court of Arbitration in 2013, stems from Shackleton’s representation of the family in an earlier ICC proceeding over a cement plant joint venture gone bad in the Arab nation.

The evidence in the case suggests that “the defendants lacked any realistic defence to the enforcement of the [fee award] and that the steps they took in the proceedings were taken not in pursuit of a genuine defence but solely for the purpose of delaying payment to the claimant of the fees to which it had been held to be entitled,” Justice Nigel John Martin Teare said in a judgment.  “That takes the case out of the norm and is a very significant level of unreasonable conduct which undoubtedly justifies an order for indemnity costs.”

The underlying ICC arbitration involved a joint venture between the Bin Kamils and Cypriot company Terna Bahrain Holding Co. WLL involving a cement plant with a capacity of up to 1.8 million tons.  Terna, which purchased a 40 percent stake in an entity holding a 25-year lease of the property in Hamriyah Free Zone in Sharjah where the plant was being built, alleged that the Bin Kamils failed to procure permits to allow the construction of a cement import-export terminal.

A previous decision from the High Court maintained that Shackleton “had been most heavily involved in conducting the case on behalf of the Bin Kamils in the arbitration” but was “was not available to assist” with the Terna arbitration award after a falling-out with the firm Galadari & Associates in 2011.  On Monday, Shackleton disputed the court's characterization of a falling out with Galadri & Associates, insisting in an email to Law360 that the non-payment of fees was "the only reason" that his firm ceased acting in the summer of 2011.

Shackleton won an award for £1.4 million ($1.76 million) in fees plus interest from the ICC tribunal in 2013 after the Bin Kamils refused to participate in the proceeding other than to say that the tribunal lacked jurisdiction over the claims.  Challenging a Paris appeals court’s order granting “permission” to enforce the award, the family unsuccessfully applied to set aside the award, but the Cour de Cassation dismissed the application in March 2016.

“The impression one gains from this history is that the defendants were intent on delaying payment into court as long as was possible,” Justice Teare said.  The court did not assess Shackleton’s costs but noted that his normal hourly rate of £800, or roughly $1,000, was “more than double” of what appears to be the “guideline rate.”  Though the court can exceed the guideline rate for sufficiently complex cases, “proceedings to enforce an arbitration award do not fall into that category,” the judge said.

Interest on Attorney Fees Mount in Florida Citrus Standoff

January 26, 2017

A recent Daily Business Review story, “Attorney Fees Mounting in $21M Broward Citrus Standoff,” by Samantha Joseph reports on the growing legal fees in the Broward citrus standoff.  The story reads:

Here's the $21 million question at the center of a standoff between Florida's agriculture department and thousands of Broward homeowners: Can the legislature prevent judicial enforcement of the state constitution?

The owners of at least 55,000 Broward properties are betting it can't.  They've been fighting Florida's Department of Agriculture and Consumer Services for 16 years after the agency destroyed about 133,000 uninfected trees in a failed bid to stop the spread of citrus canker.  Meanwhile a judgment to the homeowners is growing by $2,424 in daily interest, while attorneys' fees have mounted into millions on about $538 in interest per day.  The long-running class action involved so much legal maneuvering that District Judge Melanie May once dubbed the case "The Book of Citrus Canker.”

After years of wrangling, the homeowners returned to court Jan. 23 with a writ of mandamus to compel the department and agriculture Commissioner Adam Putnam to pay two judgments that have ballooned to more than $20.6 million, thanks to statutory interest accumulating at a rate of about $3,000 daily, or $91,800 per month.  They want judicial enforcement of a constitutional provision, but the agency says their only recourse is with the legislature.

"The plaintiffs have never invoked the claim bill process," Florida Department of Agriculture spokesman Aaron Keller said.  Now the parties are at an impasse, each clinging to separate laws they say govern their rights and protection.

The homeowners say they're owed millions of dollars under the "takings clause" of Florida's constitution, which requires government agencies to provide fair compensation for private property taken for public use.  They've won two judgments to replace the trees and cover attorneys' fees, and insist the agency has a constitutional obligation to pay the debt.

After two trials to determine liability and compensation, retired Broward Circuit Judge Ronald Rothschild in 2008 awarded more than $8 million plus post-judgment interest.  He then granted nearly $4.4 million in attorneys' fees four years later.  Both awards survived challenges in the Fourth District Court of Appeal, but the Department of Agriculture blocked the court's issuance of a writ of execution by citing two sections of state law that require creditors with judgments against the state or its agencies to seek legislative appropriation as the "sole remedy."