x Abu Dhabi, UAEThursday 18 January 2018

Billion-dollar deals help US law firms find foothold in Middle East

A number of US law firms have enabled lucrative business deals in the UAE, helping to reshape the infrastructure of the Middle East.

Richard Pretorius, Correspondent John Lonsberg led the team of lawyers handling claims worth US$100 billion (Dh367bn) for the government of Kuwait against Iraq after the 1991 war. Chris Sioufi advised an Islamic investment bank on setting up a $250-million, Sharia-compliant Mena private equity fund. Benjamin Newland represented Jadwa Investment Co in its bid to acquire a 30-per-cent interest in the Saudi Aramco Lubricating Oil Refinery.

Mr Lonsberg, a partner at Fulbright & Jaworski, Mr Sioufi at Dewey & LeBoeuf, and Mr Newland at King & Spaulding are among the hundreds of attorneys from prestigious US-based law firms whose work has helped reshape the Middle East in everything from oil drilling to power plants to Sharia-compliant financing. These lawyers work out of their firm's offices in Dubai, where many US and British firms have their regional headquarters because of the central location and attractive lifestyle.

"If you are in Dubai, you are servicing the region," said Mr Newland, whose firm also has an office in Abu Dhabi because, he said, if you want to be a player in the UAE, you have to have a presence where the federal government is. "Dubai is the regional platform, very convenient, easy to recruit people here," Mr Sioufi said. "US firms wanted to market themselves as an alternative to the UK firms," which have been in the Middle East far longer.

While expanding business opportunities is a large part of why US-based law firms set up shop in Dubai, Doha and elsewhere in the region, they also have come because, as Mr Newland said, the work "takes specialised expertise and knowledge"and the "deals that are structured are quite sophisticated". "It takes years to learn their system," Mr Lonsberg said, referring to the work of defence contractors and the US government's export-control laws specifically, but also the whole gamut of issues Fulbright and other international law firms deal with.

Middle East countries that purchase US-made weapons have to navigate a maze of rules and regulations. These law firms help them do that. To do business, you have to know the industry, Mr Lonsberg said, and the cultures of the countries in the Middle East. "They are all different, fundamentally, categorically different. We know the industry. You are talking huge contracts, very complex business," he said.

A brief look at some of Mr Sioufi's advisory work alone explains the magnitude of what his and other law firms do: a $2bn infrastructure fund in Bahrain; a Middle Eastern investor group on a $300m acquisition bid in Africa; a North American public company on a $100m acquisition in Bahrain; an Abu Dhabi-based investment bank on a $150m private equity fund and a $150m Mena public equity fund. Mr Sioufi said his firm's work could be divided into three basic areas: advising Middle East clients, be it a company or government, on transactions within the Middle East; advising them on interests outside the region; and representing interests of US clients within the region.

"A lot of what we do is help US and European businesses to set up business here," Mr Newland said, mentioning as an example his firm's assisting United Parcel Service in a joint venture with a package delivery company in Turkey. One of Fulbright's roles both in the Middle East and elsewhere has been negotiating the often intricate procedures of getting oil out of the ground. "We work with people - putting the deal together, dealing with the politics, parliament and legislation," Mr Lonsberg said, as he explained the complexities involved in horizontal drilling.

Dewey & LeBoeuf, a 2007 merger of two New York law firms, has had a connection to the Middle East since the 1980s, when several of its lawyers in New York and London represented Saudi clients. In the early 1990s, Saudi Arabia hired LeBoeuf to settle a boundary dispute with Yemen. "One example of the important role LeBoeuf played in landmark Middle East projects was the Saudi Natural Gas Initiative, which began in 2001. This project was historic because it was the first time, since the nationalisation of energy companies in Saudi Arabia in the 1970s, that the Kingdom had allowed international oil companies to return to Saudi Arabia through direct investment," Thomas Freeman, the firm's director of communications in London, said in a statement.

Today, Dewey & LeBoeuf represents the Saudi Basic Industries Corp, one of the world's largest manufacturers of chemicals, fertilisers, plastics and metals. All three firms do extensive work in advising their clients on Sharia-compliant financing, which "exploded exponentially with the oil boom", Mr Sioufi said. The lawyers agreed that among the biggest differences in practising law in the Middle East than in the United States are, as Mr Newland said, "the culture here is not a litigious one" and it demands more "face time" with the clients.