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Foreign Nations Not Immune to Fee Dispute Litigation

September 29, 2015 | Posted in : Fee Agreement, Fee Dispute, Fee Dispute Litigation / ADR, Fee Jurisprudence, Hourly Rates, Unpaid Fees

A recent NLJ story, “Dentons’ Fee Suit to Proceed,” reports that the Republic of Guinea must face allegations in the U.S. court that failed to pay the law firm Dentons more than $10 million in legal fees, a federal district judge in Washington ruled last week.

Dentons claims the Republic of Guinea never paid the firm for thousands of hours it spent working on a large-scale mining and construction effort known as the Simandou Project.  U.S. District Judge Royce Lamberth rejected Guinea’s arguments that it was protected against the lawsuit by sovereign immunity and the terms of its contract with the firm.

Foreign governments generally are immune against litigation in U.S. courts under federal law.  However, there are a few exceptions, such as cases that involve “commercial activity.”  Lamberth found that the type of business Guinea hired Dentons to perform fell under the commercial-activity exception.

Dentons released a statement saying that it was pleased with Lamberth’s decision but was open to settlement talks.  “While we would prefer to resolve this fee dispute outside of litigation, we will continue to advocate on behalf of the work done by our team,” the firm said in the statement.

Dentons claimed in court papers that it spent more than 10,000 hours on the Simandou Project between May 2012 and June 2013.  The firm said that Guinea paid $2 million of the $12 million it owed, but then the payments stopped.  At no time did Guinea contest the reasonableness of the fees that Dentons charged, the firm said in its suit.

According to a copy of the retainer agreement filed with Dentons’ complaint, the firm charged hourly rates between $700 to $1000 for partners in Washington, London and Paris; $700 to $850 for senior advisers in Washington; $600 to $700 for of counsel in Washington and Paris; and $200 to $550 for associates in Washington, London and Paris.