Three Law Firms Collect Millions for Arbitration Cases of Bulgaria, Tseko, Kovachki and Peevski

In the last few days, very intensive talk has begun in the public domain about the future arbitration case against Gazprom. We don’t pretend to be energy experts, so we’re not going to talk about it. Already spoke “Sulyo, Pulyo, Atanas and Me” (after George Ganchev). Including caretaker Minister of War (?!) Dimitar Stoyanov,
unclear
in what capacity and on what grounds. We consider it important, however, to offer another perspective and a look from a new angle – namely, who are the law firms that already play (and will play) a key role in this critical case for Bulgaria. And yes – if we have to speak as citizens, Putin’s “Strahprom” (after Rado
Bimbalov
) deserves to be condemned. Whether, how and when, however, this will become possible depends precisely on the law firm that will be engaged to protect the Bulgarian interest.

And here we immediately hit a rather large underwater stone. Because the law firm has already been selected – and it’s called White & Case LLP. At first glance – a large, fatty, solid American law firm, with annual revenues of nearly $ 3 billion and about 5 thousand employees. There is no bad, someone might say, there is no way now in such a critical case to hire the Mondeshki

Law Office (for example), or Petyo’s office the Euro (even more for example). Although if it were up to Geshev, it could have done so too. Thank goodness it doesn’t depend. So, as we said above, things are OK only at first glance… because this is exactly the law firm with which we lost the case for Belene NPP and Bulgaria was ordered to pay over BGN 1 billion for “one corruption pool” (as B. Borisov himself said).

20 million lawyers’ fees for the “corruption gyol”

So right now it is right and necessary, in our opinion, to recall this unfortunate deed – and above all the role of White & Case in it. On June 14, 2016, Bulgaria (actually NEK) was ordered to pay EUR 620 million by a three-member arbitration panel at the International Chamber of Commerce (Paris). From BIRD we were able to access only a Bulgarian(?!) version of the arbitration award, without it being clear by whom it was translated and on what grounds, nor how authentic and correct the translation into Bulgarian is. But still, better than nothing. Here someone would say – yes, but there is never a guarantee that even such a solid law firm can win your case. Basically, that’s true, but… There’s a big BUT. Because this is the same law firm that defends the Russian Federation in the largest arbitration case in history – namely, the case in which in 2014 foreign shareholders in Yukos
ordered
Russia to pay over $ 50 billion due to the expropriation of the company and its assets in 2006.

Therefore, we would ask the question: can the law firm that defends Russia in a case worth tens of billions of dollars be expected to work just as conscientiously against Russia in a case of material interest not even one billion dollars?! We leave the conclusions to you, dear readers – but we will help with a few numbers. According to our information, in the multibillion-dollar case, Russia has paid at least $ 200 million in fees to White & Case – and only to date. And since Russia still continues to dispute and try to avoid paying this 50 billion, the payments will continue for at least a few more years! At the same time, we understand from the decision on Belene that NEK has paid “barely” about 20 million euros in lawyer’s fee. That is, the difference is (at least) tenfold! Decide for yourself which case the American law firm has tried harder. And what’s even more important, is there a conflict of interest for these people? How can you fight against Russia, when in another case it pays you hundreds of millions in fees?! Go find out.

But that’s not all, dear readers. Although the decision of the Paris tribunal was unfavorable for Bulgaria, there was still an option to appeal it. We would like to point out that not all arbitral awards are subject to appeal. But this particular decision was subject! Bulgaria had 3 months to file a complaint with the Federal Tribunal of Switzerland – i.e. the Swiss Supreme Court (because the actual proceedings took place on Swiss territory, albeit under the rules of the Paris ICC). And now the work is getting thick – White & Case “advises” us to NOT appeal. Borissov’s government (and Goranov in particular) hid the motives behind this “council” – if there were motives at all – and Bulgaria (NEK) obediently waited for the deadline for appeal to expire. Then he also obediently
paid
the Russians, with interest. NEK did not have so much cash, of course, so they had to borrow from the state budget for the full amount. Whether and when this loan is repaid – and at what interest – a devil knows. Goranov never revealed anything about it.

White&Case, Arnold&Porter, Tomov&Tomov – subscribed to a state feeder

White & Case is not accidental. It turns out that she enjoys a special relationship with the state. BIRD surveys show that it is practically subscribed to “government procurement”. Because he represents Bulgaria in almost every arbitration case ever brought against our country. BIRD found and counted at least 7 such cases in which Bulgaria has paid quite salty fees. There are exceptions, such as the lawsuit filed by Oman over the bankruptcy of Corpbank AD – where it was never clear what exactly Goranov promised the Omanians to persuade them to withdraw their claim for $ 200 million. Allegations were heard that they were promised, for example, to participate in the “vertical” highway Ruse-Tarnovo-Svilengrad. If this is true, however, it seems that the Omanians will remain spent – because this project is unlikely to be implemented in the foreseeable future. The other – and more crucial – exception is the case filed by CEZ against Bulgaria, which has been pending in Washington for 6 years. The law office in the case is called Arnold & Porter (remember this name). There, CEZ claims a total of 1 billion euros, with about 400 million of this claim being formed because of TPP Dogan, pardon TPP Varna. We recall that the Honorary Doner bought this strategic asset from CEZ for several thousand leva. That’s a sweet deal, isn’t it? Now, however, it may be that we taxpayers will pay the Falcon dearly-and-dearly. The price of borisova stability, you see. Together with the Russian-Turkish Stream and a whole host of expensive and overpriced schemes and misery, with which the coalition partners Borisov and Dogan charged us.

A few days ago, by a decree of the Council of Ministers of the Service Dove, another BGN 50 million was allocated

under the budget item protection of Bulgaria in arbitration claims. We can make a reasonable assumption that this money will go again and only to White & Case and Arnold & Porter. However, they will also go to a third, little-known Bulgarian law firm, Tomov & Tomov – which turns out to be a subscribed participant in absolutely every arbitration case ever brought against Bulgaria. To wonder how every time a single Bulgarian company is chosen – again, and again, and again. Food for thought… Either way, it is important to add and note that both American and Bulgarian law firms are not elected according to the rules of public procurement – but are selected on the principle of direct negotiation. That is, you can negotiate whatever you want fees, “overhead”, additional costs and so on. And no one finds out about it. The Ministry of Finance, as the legal representative of the State in these cases, refused information about the costs paid in the cases. Some time ago they half-heartedly shared that because the Omani case was won, the other party would pay the costs. However, this is not true on a purely principled basis, on the contrary. Our review of a number of arbitral awards shows that even the winning party is often ordered to pay 50% of all fees and costs. However, we are not in the Sofia City Court, where another logic under the Bulgarian Civil Procedure Code operates.

Enter the “heroes of the transition”

But back to the fat law firm. Further studies by BIRD have shown that it also figures in the RICO case. We recall that this lawsuit was filed in the US by an American investor, from whose accounts in Corpbank AD mysteriously disappeared over BGN 100 million. Money with which the Corpulent somehow manages to recredit himself to another bank… Which, of course, is FIB. The scheme is quite complicated and complex, so we only sketch it without dragging our readers into financial and accounting recesses. The fact is, however, that such a lawsuit has been filed under the so-called. The Racketeer Influenced and Corrupt Organizations (RICO) Act has been pending for three years. In it, the defendants are a bouquet of Bulgarian VIPs: the personally successful non-(young) Peevski, Tseko Todorov and Ivaylo Mutafchiev in his personal capacity, FIB as a legal entity and – for luxury – the BNB.

And here’s what we found. White & Case defend BNB (surprise!), while Arnold & Porter defend Tseko, Ivaylo and FIB. Cool, isn’t it? Obviously, there is something like a “merger” of the interests of Bulgaria and FIB, and even the specific names of some of the lawyers coincide. It’s nice, isn’t it?

But we didn’t stop there. Since there is such an “overlap” in the legal services and interests of the state and its prominent oligarchs, is there no such overlap in other non-accidental characters and heroes of the transition? It turned out that there was – in the face of Kovachki. The “Coal Emperor of the Balkans”, as
described
by Greenpeace,
has been conducting
an arbitration case against Serbia since 2019. It is interesting where the “modest consultant” (in his own words) has found money for this, as these cases are very expensive, as we have already told you. Perhaps the reason lies in the bewilderment
sale
in 2018 of Municipal Bank to Joro Insa (Georgi Samiulov), a businessman with fame as a Peevsko proxy. From this deal, Kovachki collected some very good money. Either way, guess which law firm Kovachki is in this case – that’s right, the same White & Case. In the end, it turns out that this office is not just subscribed to the state feeder. Oh no – it also “breads” from Tseko, Ivaylo, Kovachki, Peevski and who knows how many other non-random people. At least for these characters, we’ve found evidence — but we’ll keep looking, so more surprises will probably pop out of the closet. Sorry, from the drawer.

And for dessert – again Peevski

We mentioned above the still pending RICO case, which was recently transferred to jurisdiction from New York to Texas. At which the media, which supposedly are no longer Peevski’s, joyfully spewed out the brown news of how the case was terminated. No, dear comrades Blaskov, Nedyalkov and other media servitude is not terminated. Read exactly what the judge wrote, instead of relying on the retelling of lawyer. Alexander Angelov. Here,

for example, things are well explained. Oh, when we said adv. Angelov, let’s not forget to praise him – it was thanks to this Peevski proxy that in 2017 Sofia Airport was finally
ordered
to pay BGN 72 million to a Kuwaiti construction consortium. According to people familiar with the matter, “Sashko” did not even bother to attend the meetings. But
he took
a hefty fee state money for his “labor” (part of the money, quite likely, then goes to his master Peevski).

At the beginning of the year, we talked about

Corpulent’s efforts to “magnetize” itself by paying large sums to lobbyists like Tony Podesta. Last year, as soon as Peevski was sanctioned by the United States,
we also highlighted
how “Sashko” Angelov himself actively lobbied in the US – and spent serious money there – in order to launder his Lord (some of this money was apparently drained by the state-owned BDB). Obviously, however, all these pushes did not work, because the State Department refused to lift sanctions. Therefore, about a month ago, the Successful (Un)Young Man filed an administrative lawsuit against these sanctions. BIRD will follow the case and inform you in detail, dear readers. Now, the judge has sent summonses to the Secretary of State and the Ministry of Finance, so there are not many developments. It should be noted, however, that history knows of no case in which a US federal court has annulled, lifted or annulled sanctions imposed under the global Magnitsky Act. If Peevski really believes that with his case he will achieve some precedent, or a cardinal turn in the jurisprudence… Well, then we can only tell him the following: Comrade Peevski, this is not your SCC of Vladimira
Yaneva
. Nor is your Stefan’s SAS Dalton. Nor is it YOU to Joro
Cholakov
. So… We wish you “success”. Bon voyage!

***

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