We talk to Brenda Horrigan, international arbitration partner in our Shanghai office, about how she came to speak fluent French and Russian and her journey from American transactional lawyer to Shanghai arbitration practitioner.
You speak both French and Russian fluently. How and why did that come about?
I studied languages and political science at university as an undergraduate. I did one semester of French, but then switched to Russian because it was more unusual. I then did a summer program in Leningrad studying Russian, which only heightened my longstanding interest in Russia. When I went to law school at Columbia University, I decided to also study for a certificate in Russian law at the Harriman Institute there. Part of the Harriman certificate requirement was proof of fluency in Russian, so I added a year onto my law school program, which I spent at Moscow State University, writing a thesis on land privatisation while also clerking at an international law firm. By the time I was done, Russian was pretty well entrenched – and then I lived in Moscow for another few years a bit later as well. As for the French, when I left Moscow the second time, I moved to Paris, where I wound up spending 11 years. In retrospect, studying French at university in addition to Russian probably would have been a good idea – instead, I had to just pick it up “on the ground”! And now there is Mandarin to learn…
“... one day I found myself in Ukraine trying to negotiate a large privatization deal with one party while at the same time negotiating with another”
You are recognised as one of the leading arbitration practitioners in Greater China, but after law school ended you didn't start off specialising in arbitration. Can you tell us a little of how you came to specialise in this area and why?
During my clerkship in Moscow in 1990-91, I became enamoured with the challenges of emerging market transactional work. That was a fascinating time to be in Russia, as it was rapidly undergoing a transition from the world's largest state-controlled economy into a market-oriented economy. When I first started studying Russian law at Harriman, the entire foreign investment law of the then-Soviet Union consisted of one decree that was 6 pages long - everything else was being made up as the lawyers went along. Plus, the legal system was changing rapidly – for example, I very vividly remember sitting down at the negotiation table in 1990/91 with Russian lawyer counterparts on the other side and having to explain what “ownership” was and the concepts of shares in a company.
After I graduated from law school I went to work for a firm in Washington DC for three years. They had a general commercial group which covered both transactional work and litigation. Lots of my time was spent doing due diligence and contract drafting, but I also had the rather extraordinary experience of seeing a securities fraud class action suit through from start to finish in Virginia in six months and winning on summary judgment.
During those three years my work was heavily Russia-related and I was frequently flying in and out. I was closing deals in some fairly unlikely circumstances. I helped close a deal for a very large automotive joint venture which involved a trip to the wilds of southern Russia. I had planned ahead and called to check that they had a computer, printer and photocopier, but didn't quite think to ask if the computer had an operating system, the printer was linked to the computer and the photocopier had paper... The closing was being televised and we ended up with all the parties having to make hand-written changes to the documents and then initialling those changes. It was a somewhat fraught experience but it worked in the end.
I ended up moving back to Moscow in 1995 and stayed there (having moved firms) until early 1998 when I moved to Paris. Then in August 1998 the Russian financial crisis hit. One of my clients at the time was a multilateral financial institution that had lent a lot of money to Russian banks. Many of these Russian banks went bankrupt, and I spent my time shuttling back and forth between Paris and Moscow working to seize assets, restructure portfolios and put in place additional protections. Disputes ensued, both with the banks and with other companies affected by the crisis. Many of those resulted in arbitrations. My firm's arbitration practice needed help from another Russian speaker to manage this spate of disputes and I volunteered. Some of these arbitrations were real eye-openers: one was against a Siberian bank which politely informed us there was no money, but they were very happy to pay their debt with shoes (which they apparently did have) rather than cash!
For a few years I managed to run my transactional and arbitration practices side by side. Then one day I found myself in Ukraine trying to negotiate a large privatization deal with one party while at the same time negotiating with another party a settlement to an on-going arbitration. At that point I decided that enough was enough, and that I needed to choose to focus on one or the other. I chose arbitration.
“... and I spent my time shuttling back and forth between Paris and Moscow working to seize assets, restructure portfolios and put in place additional protections”
After 11 years in Paris and becoming co-head of my firm's global arbitration group, it was time for something new and I volunteered to help my firm start up in Asia. I moved to Shanghai in 2009 and eventually over to Herbert Smith Freehills in April 2012 to be part of the Greater China arbitration team.
Is your practice in Greater China very different from your practice in Russia?
I have spent my career focusing on younger economies and the issues I had encountered working in the Russian and Central/Eastern European markets are many of the same issues I encounter now in Greater China. Both jurisdictions have young legal systems in terms of the sort of commercial transactions that we are involved in and the disputes that arise from them. In the early years in particular, there were often gaps in the legislation as well as gaps in understanding for the parties who negotiate or agree to those transactions. That is hardly surprising in such an extraordinary period of compressed development: if I look back on my time in Russia, in 1990 I was having to explain the concept of “ownership”, by 1995 I was negotiating on relatively equal terms with counterparties wearing Armani suits and Rolex watches, and by 2000, was discussing complex structures devised within the jurisdiction on which I needed expert advice from colleagues. That same process of rapid change has also been happening in China.
While there are cultural differences, in terms of my day to day work, I actually notice more similarities than differences. A truly international arbitration is pretty much the same beast wherever you are, whether that is China, Russia, London or New York. That said, in younger economies the domestic arbitral institutions can be more domestic in their outlook and procedures even if international parties are involved. This is true in China just as it was in Russia and Central/Eastern Europe.
In both settings, there has been and still is a real lack of document retention. Emails are kept on laptops that are wiped when people leave the business. I also notice that similar types of disputes arise in China and Russia that you would not tend to see in, say, Western Europe or the US. For example, I see quite a few disputes arising out of joint venture projects where one party provides the land plot and the other the facilities on it. As the JV becomes profitable the land partner shuts off water, sewerage and electricity to the property and effectively bars the other party from access.
What recent trends are you seeing out of Greater China in terms of arbitration?
Chinese parties are becoming increasingly involved in the arbitral process. Ten years ago, a Chinese party was often an absent respondent. There was a palpable sense that arbitration was something “foreign” and that the outcome of the process didn't apply and wouldn't be enforced in China. That attitude has shifted and Chinese parties are now actively participating, both as respondents and, increasingly, as claimants. The approach is also far more sophisticated, with Chinese clients looking for representation from international firms like ours in international disputes. About half of our clients in Greater China are now Chinese, which is a big shift in our client base over that period. This trend has shown no sign of abating and I anticipate that Chinese clients will continue to choose arbitration for resolution of their disputes, especially as the legal and institutional framework, in particular in Hong Kong and Singapore, becomes increasingly robust and responsive to user demand.