Sullivan & Cromwell. Photo: Jason Doiy/The Recorder

A former Skadden, Arps, Slate, Meagher & Flom associate has sued Sullivan & Cromwell in New York state court for $13 million, accusing the firm of double-dealing in an international arbitration matter in which a partner served as chair of the panel.

Andrew Delaney, a New York attorney who has represented clients in Southeast Asia since 1993, represented a Thai company that developed a coal-fired power plant in Laos that was expropriated by the country's government. According to the complaint, after an arbitration panel chaired by a Sullivan partner awarded his client $56 million, the firm then represented the government of Laos to fight the award.

"Sullivan & Cromwell, after serving as the chairman of the arbitration and after signing the arbitration for nearly $60 million, then became the … losing party's representatives in opposing all steps to enforce that award worldwide," said attorney Christopher Beres, who will be representing Delaney in the matter. "The facts scream impropriety."

Delaney is initially representing himself pro se in the case, which was filed in Manhattan civil court Wednesday. But Beres, who like Delaney has a lengthy history of representing parties in Southeast Asia, said he would be filing an entry of appearance next week to serve as Delaney's counsel.

According to the complaint, Delaney worked in Skadden's foreign practice group in New York and Hong Kong after graduating law school in 1988, and then in 1992 he began representing several arms of a Thai company that sought to develop an 1,800-megawatt coal plant in Laos.

Those two businesses, Thai-Lao Lignite Co. Ltd. and Hongsa Lignite Co. Ltd., later inked a joint venture agreement with Thailand's largest private energy company, Banpu Public Co. Ltd., which then allegedly terminated the agreement and used confidential and proprietary information to take over the project.

In response, Delaney advised the two businesses on contingency in an investor-state arbitration against the Laos government. The project development agreement mandated three panelists, and Delaney's clients picked an attorney from Skadden while the Laos government picked an attorney from Jones Day. Those two agreed to bring on Sullivan partner James Carter, now senior counsel at Wilmer Cutler Pickering Hale and Dorr, to chair the panel.

Delaney said in the complaint that he was on board with Carter's selection, as he believed Sullivan's sterling international reputation would be helpful in enforcing an award if his client won.

In 2009, Delaney's clients, who had sought $1 billion in the arbitration, were awarded $56.2 million along with 9% interest, according to the complaint. But the Laos government has fought the award across the world, allegedly spending $1 million on lawyers between 2010 and 2016. In 2017, the highest court in Malaysia, where the arbitration was seated, overturned the award, concluding the arbitrators had erred.

At some point after the award was issued, Delaney discovered that Sullivan & Cromwell had been representing Laos' central bank in order to fight its enforcement. The firm's lawyers in New York vacated a judgment against the Laos government in New York federal court, and lawyers in London succeeded in blocking an enforcement action there.

The complaint also said Sullivan & Cromwell attorneys had filed an amicus brief with the U.S. Supreme Court in a case challenging the enforceability of foreign arbitration awards. Among the names on that brief was Joseph Neuhaus, who represented Bank of the Lao.

Delaney said in the complaint that he had suffered $3 million in damages from his clients' failure to collect the arbitration award, adding that they had informed him they would no longer work with him. He's also seeking $10 million in punitive damages, arguing that Sullivan acted in bad faith by representing the Laos government in dodging an award that the firm's partner had issued and signed.

A spokesman for Sullivan & Cromwell did not immediately respond to a request for comment.

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