Herbert Smith picked for Virgin/T-Mobile battle

Virgin has chosen Herbert Smith to fight its corner in its ongoing spat with T-Mobile over the ownership of their Virgin Mobile joint venture. The decision has sidelined Ashurst Morris Crisp, which acted for Virgin on drawing up the original joint venture.

Virgin beauty paraded Ashursts and Herbert Smith alongside fellow panel firm Allen & Overy, which lost out at an early stage due to a conflict. Denton Wilde Sapte has also been brought in as separate counsel for Virgin Mobile.

Virgin and T-Mobile are litigating in the High Court as both of them want to take over their fifty-fifty joint venture, Virgin Mobile. Each side has tried to invoke complex contractual triggers to force the other to give up its shareholding in the company.

T-Mobile tried to dramatically cut the payments it makes to Virgin as part of the deal, as it thought this would invoke a termination of the joint venture. The attempt was thwarted by the Commercial Court earlier this month, when Mr Justice Cooke ruled that T-Mobile was not entitled to do this.

Virgin has launched a separate legal action, based on exit clauses in the joint venture agreement, to try to force T-Mobile to sell its stake. T-Mobile filed its defence on 7 March, but no date has been set for the hearing.

This is the first major litigation the Virgin Group has been involved in since Virgin Atlantic won the infamous dirty tricks case against British Airways a decade ago. The partner leading the team for T-Mobile, John Turnbull of Linklaters, also acted for BA when it lost the dirty tricks case.

The dispute over Virgin Mobile is the first time that Herbert Smith has represented Virgin in High Court litigation. It is also the first major London litigation that Damien Byrne Hill, the Herbert Smith partner leading the team, has handled after spending his first five years as a partner in the firm's Hong Kong office.

Virgin head of legal Helena Samaha said that after realising that it was going to be a bloody battle, she chose Herbert Smith because of its litigation expertise and because Ashursts had a minor conflict. “When the disputes started, we weren't actually sure it would go as far as litigation, but when this became clear we realised we needed a firm like Herbert Smith,” she said.

An Ashursts spokesperson said it was “no big deal” that the firm had not been chosen for this case. “Virgin pitches work around all the time,” she said, adding that the partner who looks after Virgin, Nick Angel, was not in the office when the beauty parade was going on.