Publication Details

Hoguet Newman Regal & Kenney, LLP Wins 3.5 Million Euro for a Hedge Fund Client in an International Arbitration

In an international arbitration award dated November 9, 2010, a three-member Tribunal unanimously awarded 3.5 million euro to a European hedge fund against an asset management subsidiary of a large international bank holding company. 

Under a Project Agreement concluded in May 2008, the asset management company was to have invested 30 million euro in the hedge fund for a period of two years, starting from the date that it made the investment. However, the contract did not provide any specific date for the asset management company to make the investment. The asset management company only invested a fraction of the 30 million euro, and, after the collapse of Lehman Brothers in September 2008, the company withdrew its investment. 

At the arbitration, the asset management company contended that because it had never invested the full 30 million euro, it had no obligation to lock up any amount for two years, and, in any event, the financial crisis nullified the Project Agreement under its material adverse change clauses. However, Hoguet Newman persuaded the Tribunal that the partial investment was sufficient to trigger all the obligations under the Project Agreement, and the financial crisis did not relieve the asset management company of its obligations.

The Tribunal awarded the hedge fund the full amount of profits it would have made on 30 million euro over two years, the cost of the arbitration, and 90% of attorneys' fees and expenses.

The Hoguet Newman team was comprised of Tai-Heng Cheng, Sheryl Galler, Kathleen Lowden, Lisa Weitz, Aleksandr Gelerman, Nora Regis and Lee Heyer.