Alb sep 2014

AML BLOW: STANCHART FINE HURTS HONG KONG ’S CLE ANUP EFF ORTS

SEPTEMBER 2014 ASIA EDITION

MICA (P) 055/02/2014 issn 0219 – 6875 KDN PPS 1793/07/2013(025520)

OUTWARD HO!

Japanese companies follow Suntory abroad

GOOD VIBES

A positive feeling returns to India

SUKUK PUSH

Indonesia gives Islamic finance a boost

INSIDE n BIG STORY

3

n DEALS

4

n GC INTERVIEW

PAGE 30

PAGE 34

PAGE 38

n APPOINTMENTS

8 12

CELEBR ATING LEGAL EXCELLENCE IN INDONESIA

S E AT AN D TA B L E SAL E S N OW OPE N Please visit http://www.legalbusinessonline.com/indonesia-law-awards-2014 for more details and to reserve your seats Seats available at US$320; tables at US$2,500 – group table discounts available To nominate or for more information, please contact Trang at chuminh.trang@thomsonreuters.com, or call +65 6870 3711 * * * Finalists to be announced on 1st October – please visit the official website for updates. * * * ALB SUPPORTS

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CONTENTS

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1

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REUTERS/Yuya Shino

“FOLLOWING SOME SUCCESSFUL MID-SIZED ACQUISITIONS IN THE ASIAN MARKET, MORE JAPANESE COMPANIES ARE NOW WILLING TO GO FURTHER TO ACQUIRE BIGGER TARGETS IN DEVELOPED REGIONS LIKE THE U.S. AND EUROPE.”

COVER STORY

ALB M&A Rankings 2014

This year’s M&A rankings is a mixture of the usual suspects and surprising new entrants. Some notable law firms making the upper tiers include Fried, Frank, Harris, Shriver & Jacobson in Hong Kong, Melli Darsa & Co in Indonesia, Weerawong, Chinnavat & Peangpanor in Thailand and WongPartnership in Singapore.

16

FE AT URES Journeying abroad

With growth grinding to a halt at home, more Japanese companies are expected to follow the likes of Suntory Holdings in acquiring companies overseas to gain a foothold in faster-growing markets. The country’s banks and government agencies, awash with cash, are helping fuel this expansion. Many mid-sized companies too are looking overseas for the first time, with Southeast Asia as a prime target. Japan’s law firms are responding to this trend, and the so-called ‘Big Five’ firms are investing heavily in their outbound plans. Kanishk Verghese reports

Growing optimism

India’s new Prime Minister Narendra Modi has infused optimism in the country’s business environment prompting foreign investors to reconsider the country’s prospects and revive their shelved projects. Sensing the upbeat mood, Indian law firms too are expanding faster than ever before. Raghavendra Verma reports

30

A booster shot for Islamic finance

38

Islamic finance in Indonesia is still the ‘step child’ of the country’s banking sector, even with the country’s population of 210 million Muslims. Yet with Jokowi coming on as president in October, and a new blueprint from the Ministry of Finance due at the end of the year to expand the sector, there could be no better opportunity for Islamic finance to finally go mainstream in Southeast Asia’s largest economy. Aviel Tan reports

34

Constitutional Court of Korea to host WCCJ’s 3rd Congress

The world’s top leaders of Constitutional Courts are to assemble in Seoul to attend the 3rd Congress of the World Conference on Constitutional Justice (WCCJ) scheduled for Sep. 28 to Oct. 1, 2014. The topic of the Congress will be “Constitutional Justice and Social Integration.”

Jiro Toyokawa, Baker & McKenzie (Gaikokuho Joint Enterprise)

30 NEWS 44

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The Big Story Deals Spotlight: North Asia Southeast Asia Financial Graphic GC Interview League Tables Appointments Updates

3 4 5 6 8 10 12 13

2

EDITORIAL

ASIAN LEGAL BUSINESS SEPTEMBER 2014

BUYING

MANAGING EDITOR Ranajit Dam ranajit.dam@thomsonreuters.com DEPUTY EDITOR Kanishk Verghese kanishk.verghese@thomsonreuters.com CONTRIBUTORS Aviel Tan Raghavendra Verma COPY EDITOR Vasundhara Chatterjee vasundhara.chatterjee@thomsonreuters.com SENIOR DESIGNER John Agra john.agra@thomsonreuters.com TRAFFIC / CIRCULATION MANAGER Rozidah Jambari rozidah.jambari@thomsonreuters.com ACCOUNT MANAGERS Amantha Chia Head of Media Sales, SE Asia (65) 6870 3917 amantha.chia@thomsonreuters.com

SPREE T

he year 2014 has been a great one for M&A so far. According to Reuters, announced M&A volume in the Asia-Pacific region in the first half of the year rose 67 percent from a year ago to $378 billion, the highest volume on record for the equivalent period. The record comes amid a boom in global M&A as improving CEO confidence and strong cash positions held by corporations drove a spate of megadeals in pharmaceutical industries. Much of this has been driven by China’s tech sector, including Alibaba’s $1.2 billion investment in the merged video platform Youku Tudou , and JD.com’s almost $2 billion investment in Alibaba rival Tencent Holdings.

With work increasing at this pace, law firms excelling in M&A are very much in demand. Keeping this in mind, ALB has selected the best M&A law firms across Asia in its annual M&A rankings. The rankings throw up an interest mix of players: international heavyweights come up against regional contenders, and firms with hundreds of lawyers across the region come up against much smaller outfits. But they all have one thing in common. Generally they are very, very good; the quality is higher and the competition is more intense. With Asia developing as the world’s engine of growth, the region is finally getting the law firms it deserves.

Jessie Cheung Senior Sales Director, North Asia (852) 3762 3267 jessie.cheung@thomsonreuters.com Yvonne Cheung Account Director, China (852) 3762 3266 yvonne.cheung@thomsonreuters.com Noreen Gamayo Inside Sales Account Manager (63) 2 789 5184 joynoreen.gamayo@thomsonreuters.com Na Young Noh Advertising Sales Manager (82) 2 2076 8039 nayoung.noh@thomsonreuters.com

RANAJIT DAM Managing Editor Asian Legal Business Thomson Reuters ranajit.dam@thomsonreuters.com

MARK YOUR CALENDARS! ALB is co-organising the annual Asia Ethics Summit in Singapore on Dec. 3 and 4.

Please email amantha.chia@thomsonreuters.com for more details.

DIRECTOR, EVENTS Colin Carter colin.carter@thomsonreuters.com CONFERENCE AND MARKETING MANAGER Trang Chu Minh chuminh.trang@thomsonreuters.com

ASIAN LEGAL BUSINESS is available by subscription. Please visit WWW.LEGALBUSINESSONLINE.COM for details.

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as ALB can accept no responsibility for loss.

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09.2014

BRIEFS

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INSIDE DEALS 4 / FINANCIAL GRAPHIC 6 / GC INTERVIEW 8 / LEAGUE TABLES 10 / APPOINTMENTS 12 / UPDATES 13

the big story

AML blow HONG KONG’S EFFORTS TO CLEAN UP ITS IMAGE TAKE A HIT WITH THE STANCHART PENALTY

By MICHELLE PRICE of Reuters

A staff member walks inside a priority banking service area of a Standard Chartered bank in Hong Kong. REUTERS/Bobby Yip

H

ong Kong’s de facto central bank has moved to defend itself after a New York regulator penalised Standard Chartered Plc for what it described as anti-money laundering failings in its United Arab Emirates and Hong Kong businesses.

The New York State Department of Financial Services said last month that it had identified deficiencies in the surveillance system of Standard Chartered’s New York branch that failed to flag high-risk transactions relating to clients based in the UAE and Hong Kong.

Standard Chartered has agreed to pay a $300 million penalty and will suspend the processing of dollar-denominated payments for high-risk business clients at its Hong Kong unit, the New York State Department of Financial Services said.

The U.S. watchdog’s allegations come at a critical time for Hong Kong as authorities look to clean up the city’s image and clamp down on money laundering ahead of a makeor-break review by international anti-money laundering regulators in six months.

In an unusually punchy statement, the Hong Kong Monetary Authority said its anti-

money laundering rules are in line with international standards, and that it could not be responsible for enforcing such rules in other jurisdictions. The U.S. anti-money laundering rules are widely regarded as the toughest in the world.

“This is disappointing for the regulators, given it’s such a prominent bank in the territory,” said Philippa Allen, chief executive of Hong Kong consultancy ComplianceAsia.

“The regulators have been raising standards, they have introduced new powers to rectify some of the problems ... I think we will see prosecutions as a result of this, they are going to be under pressure now.”

The Hong Kong authorities have been working hard to restore the city’s reputation after a 2008 review by international antimoney laundering watchdog Financial Action Task Force (FATF) found several major weaknesses in the city’s overall anti-money laundering oversight.

The next FATF inspection, scheduled for March and April, is seen as a crucial test for Hong Kong since a bad mark could undermine its status as a financial centre.

“This doesn’t look good for Hong Kong,” said Keith Pogson, senior partner, financial

services, Asia-Pacific at EY. “Anti-money laundering is a very big focus of the government, and the regulators and banks have done a huge amount of work on this.”

The HKMA said it takes anti-money laundering and counterterrorist financing work “very seriously,” and has doubled its supervisory resources in this area in the last two years.

“The HKMA conducts frequent risk-based examinations on banks to ensure their compliance with these requirements,” it added.

The Hong Kong government introduced new anti-money laundering legislation in 2012. Since then, the HKMA and the Securities and Futures Commission have stepped up scrutiny of banks’ anti-money laundering controls, according to bankers and regulatory experts.

The FATF noted these improvements, but regulatory experts said the city still has some way to go.

“The last FATF review wasn’t favourable for Hong Kong, and there are other issues on the table this time, including issues around tax information. Hong Kong has to make sure it is not on any blacklist, as this could be an economic disaster,” Pogson said.

4

briefs

ASIAN LEGAL BUSINESS SEPTEMBER 2014

NORTH ASIA DEALS: YOUR MONTH AT A GLANCE DEAL NAME

$500 MILLION M&A PRICELINE GROUP’S INVESTMENT IN CTRIP.COM • The investment, through a convertible bond, expands an existing commercial agreement between the online travel firms.

Customers of both firms can select from Priceline’s offering of 500,000 hotel options outside Greater China, and Ctrip’s portfolio of 100,000 in Greater China.

• Shares from the convertible bond, together with an agreement that allows Priceline to purchase Ctrip’s shares on the open market, would see the world’s largest online travel service provider own up to 10 percent of Ctrip.

$1.05 BILLION M&A BRIGHTOIL PETROLEUM’S PURCHASE OF THE CHINA UNIT OF ANADARKO PETROLEUM CORP • Brightoil will acquire Anadarko’s 40 and 29 percent stake in two oil-mining blocks in Bohai Bay in Northeast China.

• The two blocks produced about 32,000 barrels of crude oil a day in 2013.

$2.05 BILLION IPO WH GROUP’S HK IPO • The offering, which debuted on Aug. 5, came after WH Group’s first attempt at an IPO in April where the firm tried to raise $5.3 billion, but scared off investors with high valuations, overly generous executive compensation and mismanaged marketing that saw 29 banks involved in the deal.

• Proceeds from the IPO will help WH Group manage its debt after it acquired Virginia-based Smithfield Foods Inc in 2013 for $4.9 billion, the largest acquisition of a U.S. company by a Chinese firm.

Priceline Group’s investment in Ctrip.com

EQT’s sale of its stake in Gala TV to Yung Tsai Investment Co

Export-Import Bank of Korea’s bond issuance

Development of a new LEGOLAND® theme park in Japan

iDreamSky Technology’s IPO on the Nasdaq

Brightoil Petroleum’s purchase of the China unit of Anadarko Petroleum Corp

Fosun International’s investment in Ironshore

Greenland Hong Kong Holdings’ notes issuance

WH Group’s HK IPO

VALUE (US$ MLN)

DEAL TYPE

China, U.S.

500

M&A

Sullivan & Cromwell

China, U.S.

500

M&A

Maples and Calder

China, U.S.

500

M&A

Baker & McKenzie

Taiwan

N/A

M&A

Lee and Li

Taiwan

N/A

M&A

Cleary Gottlieb Steen & Hamilton

Korea, U.S.

1,000

Debt

Davis Polk & Wardwell

Korea, U.S.

1,000

Debt

Lee & Ko

Korea, U.S.

1,000

Debt

Ashurst

Japan

320

Projects

Clifford Chance

Japan

320

Projects

Davis Polk & Wardwell

China, U.S.

115

IPO

Kirkland & Ellis

China, U.S.

115

IPO

Haiwen & Partners

China, U.S.

115

IPO

Han Kun Law Offices

China, U.S.

115

IPO

Maples and Calder

China, U.S.

115

IPO

Herbert Smith Freehills

Hong Kong, China

1,050

M&A

Vinson & Elkins

Hong Kong, China

1,050

M&A

Cahill Gordon & Reindel

China, U.S.

464

M&A

DLA Piper

China, U.S.

464

M&A

Davis Polk & Wardwell

China

500

Debt

Linklaters

China

500

Debt

AllBright Law Offices

China

500

Debt

Conyers Dill & Pearman

China

500

Debt

Cleary Gottlieb Steen & Hamilton

Hong Kong, China

2,050

IPO

Paul Hastings

Hong Kong, China

2,050

IPO

Commerce & Finance Law Offices

Hong Kong, China

2,050

IPO

Haiwen & Partners

Hong Kong, China

2,050

IPO

Jingtian & Gongcheng

Hong Kong, China

2,050

IPO

Maples and Calder

Hong Kong, China

2,050

IPO

FIRM

JURISDICTION

Skadden, Arps, Slate, Meagher & Flom

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$1 BILLION

SOUTHEAST ASIA DEALS: YOUR MONTH AT A GLANCE

M&A

DEAL NAME

ITOCHU CORP’S TIE-UP WITH CHAROEN POKPHAND GROUP • As part of the tie-up, Itochu will sell 102.4 billion yen ($1.01 billion) of shares, equal to a 4.9 percent stake, to two units of Charoen Pokphand.

The transaction will make the Thai group Itochu’s third-biggest shareholder.

• The funds raised by Itochu will mostly be used to buy a 25 percent stake in Hong Kong-listed C.P. Pokphand Co from Charoen Pokphand Foods PCL for about $850 million. Both companies are units of Charoen Pokphand Group.

$2 BILLION

Tata Steel’s bond offering

Itochu Corp’s tie-up with Charoen Pokphand Group

Japfa’s Singapore IPO

5

VALUE (US$ MLN)

DEAL TYPE

India

1,500

Debt

Milbank, Tweed, Hadley & McCloy

India

1,500

Debt

WongPartnership

India

1,500

Debt

Ashurst

Japan, Thailand

1,000

M&A

Mori Hamada & Matsumoto

Japan, Thailand

1,000

M&A

Morrison & Foerster

Japan, Thailand

1,000

M&A

Assegaf Hamzah & Partners

Indonesia, Singapore

159

IPO

Clifford Chance

Indonesia, Singapore

159

IPO

Rajah & Tann

Indonesia, Singapore

159

IPO

Luthra & Luthra Law Offices

India

344

M&A

Vaish Associates

India

344

M&A

Allens

Japan, Myanmar

2,000

JV

Linklaters

Japan, Myanmar

2,000

JV

Squire Patton Boggs

Japan, Myanmar

2,000

JV

Rahmat Lim & Partners

Malaysia, Turkey

275

M&A

Slaughter and May

Malaysia, Turkey

275

M&A

White & Case

Malaysia, Turkey

275

M&A

Allen & Gledhill

Singapore

2,700

Equity

Clifford Chance

Singapore

2,700

Equity

Allen & Gledhill

Japan, Singapore

606

IPO

Allen & Overy

Japan, Singapore

606

IPO

Mori Hamada & Matsumoto

Japan, Singapore

606

IPO

Rajah & Tann

Japan, Singapore

606

IPO

FIRM

JURISDICTION

AZB & Partners

JV KDDI-SUMITOMO CONSORTIUM’S TIE-UP WITH MYANMAR POSTS & TELECOMMUNICATIONS • The partnership will involve investing $2 billion over the next decade to expand telecommunications services in one of the world’s least-connected countries, where only 10 percent of the 65 million population use mobile phones.

• KDDI and Sumitomo will spend on telecoms infrastructure and jointly operate mobile and broadband services with the state-owned MPT – currently the sole telecoms operator, and the industry regulator in Myanmar.

JSW Steel’s acquisition of Welspun Maxwell from Welspun Enterprises

KDDI-Sumitomo consortium’s tie-up with Myanmar Posts & Telecommunications

Malaysia Airport Holdings’ acquisition of a 40 percent stake in Turkey’s ISG and LGM from India’s GMR Group

$2.7 BILLION EQUITY OVERSEA-CHINESE BANKING CORP’S RIGHTS ISSUE • Oversea-Chinese Banking Corp’s rights issue will strengthen the firm’s capital after its recent $4.95 billion acquisition of Hong Kong’s Wing Hang Bank.

• The capital raising comes after investors were concerned that the Wing Hang deal would significantly reduce OCBC’s Tier 1 capital. HSBC analysts had estimated the Tier 1 capital would have fallen to 11.2 percent from 14.7 percent.

Oversea-Chinese Banking Corp’s rights issue

Accordia Golf Trust’s Singapore IPO

6

briefs

ASIAN LEGAL BUSINESS SEPTEMBER 2014

FINANCIAL GRAPHIC

As China flexes maritime muscle, SE Asia builds homegrown defence industry

S

purred by tensions with China, Southeast Asian nations are building up their own defence industries, channeling fast-growing military budgets to develop local expertise and lower their dependence on big U.S. and European arms suppliers.

While countries such as Indonesia, Thailand and Malaysia won’t do away with bigticket imports from giants like Airbus Group NV or Lockheed Martin Corp, they are increasingly encouraging domestic defence firms to manufacture hardware locally. With regional defence spending seen rising to $40 billion in 2016, 10 percent higher than last year, some countries are already developing their own exports.

A domestic defence industry is a longterm economic as well as security goal of varying degree for the 10 countries in the Association of Southeast Asian Nations (ASEAN), spending more on modernising ageing equipment partly to retain the region’s military balance. The goal has been given urgency by China’s moves in recent months to press disputed claims in oil- and gas-rich waters of the South China Sea, security analysts say.

ASEAN members have stopped short of explicitly citing Beijing as a reason for beefing up military capability. At a meeting in Myanmar last month, ASEAN foreign ministers again appealed for “self-restraint” in the face of heightened tensions, with no mention of China in a formal communique.

“This drive to ensure sovereignty is now at the foremost of all governments’ minds in the region,” said Jon Grevatt, Asia-Pacific defence industry analyst with IHS Jane’s. “Obviously, the activity of China has raised the issue of protecting, securing territory.”

China, whose military spending topped $145 billion last year according to U.S. estimates, claims about nine-tenths of the South China Sea. It has alarmed Southeast Asian diplomats this year with assertive moves like planting a giant, $1 billion oil rig in waters claimed by Vietnam.

A buildup in China’s coastguard fleet has also allowed Beijing to beef up its maritime presence without deploying warships. Some in the region have sought to counter that like-for-like: Vietnam has set aside 11.5 tril-

MILITARY BALANCE IN ASIA

5.00

PERSONNEL

4.50

Active and reserve, in millions

Active 2.33

1.49

1.19 Reserve 0.51

0.60

0.65

0.84 0.48 0.06

EQUIPMENT Personnel Main battle tank Light tank/Recce AIFV APC Artillery Air defence (missile) Personnel NAVY Aircraft carrier Cruiser Destroyer Frigate Submarine PCC Aircraft* AIR FORCE Personnel Aircraft*

ARMY

China 1,600,000 6,840 750 3,450 4,350 13,014 278 235,000 1 n.a.

15 54 70 216 332 398,000 2193

N. Korea 1,020,000 3,500 560 n.a.

2,500 21,100 n.a.

60,000 n.a. n.a. n.a.

3 72 382 na 110,000 603

S. Korea 522,000 2,414 n.a.

290 2,790 11,038 780 68,000 n.a.

3 6 13 23 110 16 65,000 568

Vietnam 412,000 1,270 620 300 1,380 3,070 n.a.

40,000 n.a. n.a. n.a.

2 2 68 na 30,000 97

0.25

Japan 151,050 777 n.a.

68 803 1,773 700 45,500 4 4 32 11 18 6 78 47,100 552

0.13 0.13

Philippines 86,000 n.a.

7 36 299 254 n.a.

24,000 n.a. n.a. n.a.

1 n.a.

62 na 15,000 22

U.S. 586,700 2,338 1,928 4,559 25,209 5,899 1,296 327,700 10 22 62 13 72 55 1,089 337,250 1,438

AIFV - Armoured infantry fighting vehicle APC - Armoured personnel carrier PCC - Patrol and coastal combatant * Fighters, bombers and anti-submarine warfare vehicles excluding helicopters. U.S. figures exclude special operation forces and reserve organisations.

Source: The Military Balance 2014 F. Chan; C. Inton, 19/08/2014

lion dong ($543 million) to be used to buy 32 coastguard and surveillance ships.

Southeast Asia’s defence spending grew 5 percent to $35.9 billion in 2013, data from the Stockholm International Peace Research Institute (SIPRI) showed, and is expected to rise to $40 billion by 2016. The region’s defence spending has more than doubled since 1992, according to SIPRI. LOCAL OBLIGATION Defence procurement in Southeast Asia is still dominated by government purchases of big-ticket items like jets or submarines from Western defence suppliers such as Lockheed Martin of the United States, France-based Airbus or Germany’s ThyssenKrupp AG. The region is now the world’s second-largest im-

porter of military equipment and technology after India.

Now, though, from Indonesia radar to Singapore submarines, governments are tilting such purchases to help them develop their own defence expertise. While breaking no records in size or scope, recent deals show a growing trend towards embedding local manufacturing in procurement contracts.

In one example, Malaysia’s shipbuildingto-weaponry group Boustead Heavy Industries Corp is working with French state-controlled naval contractor DCNS on a 9 billion ringgit ($2.8 billion) contract for six coastal combat ships for Malaysia’s navy - to be built locally.

“We expect to achieve well over 60 percent in terms of local content and value,

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and see considerable transfer of technology to ourselves as well as local vendors and suppliers who we work with and cultivate,” Ahmad Ramli Bin Haji Mohd Nor, executive deputy chairman and group managing director of Boustead Heavy, told Reuters.

“Importantly, we will already have IP (intellectual property) rights for the first generation of offshore patrol vessels, and this can provide a platform to tap the international market,” he added.

Known as “defence offset” deals, these partnerships can enable countries to carve out domestic defence industries over time.

Turkey, for example, has successfully used defence offsets to nurture its domestic industry, whose companies now produce half the country’s military equipment.

Indonesia, which has more than doubled its defence spending in the last five years, this year awarded a $164 million air defence system contract to France’s Thales SA. A condition of the deal is that Thales must transfer radar manufacturing skills and knowledge to state-owned Indonesian electronics firm PT LEN Industri.

Similarly, Singapore said late last year it would buy two submarines from ThyssenKrupp Marine Systems in Germany - making the deal conditional on the involvement of local industry in developing combat systems.

SINGAPORE LEADS Singapore has by far the most advanced defence industry in the region, and is one of the world’s biggest arms importers.

The wealthy island state has sold defence equipment to countries from Nigeria to Brazil since its first overseas arms sales to Malaysia in 1971. Singapore Technologies Engineering (ST Engineering), the state’s main arms maker, generated sales of $1.89 billion in 2012 alone, according to SIPRI. In a breakthrough, a unit of ST Engineering also won a S$330 million ($256 million) contract in 2008 to supply armoured troop carriers to Britain - its first such sale to a major Western arms supplier - showing it could compete in the global defence arena in certain product categories.

“Singapore will agree deals with its foreign suppliers that promote the best inter-

7

ests of both parties, and will not be constrained by lots of regulations and unrealistic expectations,” said Ron Matthews, professor of defence economics at Britain’s Cranfield University.

Still, for now, the rise of a Southeast Asia defence industry won’t deter big global players, analysts said. The region’s rising defence spending makes it attractive for weapons makers at a time of tight military budgets in Europe and North America.

The regional firms’ lack of advanced capability also means they are not currently competing head-on with the big players for big-ticket orders.

Instead, they can play a more complimentary role, focusing on areas such as ammunition, small marine vessels and maintenance.

But that could change over time - as Turkey’s experience shows - if Southeast Asian firms start to compete for orders on the global market.

“This is a near-term opportunity for global defence firms and a longer-term challenge,” said John Dowdy, senior partner at McKinsey & Company.

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ASIAN LEGAL BUSINESS SEPTEMBER 2014

GC INTERVIEW

‘Understand, analyse the facts’

RASHMI KATHPALIA Position: Chief Legal Adviser (India) and Senior Counsel Organisation: Bechtel Location: New Delhi, India

Tell us about your career so far and your current role.

I began my career in litigation as an associate with senior lawyer Kapil Sibal. During that period, I dealt with high-stakes litigation and matters related to complicated questions of law. My practice was mainly in the Supreme Court of India and various High Courts and Tribunals. I was also Counsel for the Official Liquidator attached to the Company Court in the High Court of Delhi and the-then Electricity Supply Undertaking.

After about a decade of litigation work, I had the opportunity to gain international law firm experience while I was seconded to Ashurst in London.

Thereafter, I joined the Bechtel legal department as the sole in-house counsel in India as part of its global legal department, comprising of more than 80 lawyers, for all Bechtel entities and projects in India. I am a member of its leadership group in India (consisting of all the department chiefs and senior officers) and its Business Proposal Screening Committee.

Additionally, I act as the compliance officer for enforcement of business ethics, as an instructor for Bechtel University courses on business ethics, as chairperson of the Internal Committee on Sexual Harassment and Disciplinary Committee and as an investigating officer for its Global Internal Audit Department.

Apart from working closely with all the internal departments here in India, I also function closely with other members of the global legal departments in other locations and with global business verticals (i.e. telecom, aviation, power, oil and gas, pipelines, construction, mining and metals, IT and corporate) for Indian and overseas projects.

Does the work experience of an in-house counsel in one industry restrict them from working in other industries?

I work for a company which not only has diverse business verticals, but also has large internal functions for support such as finance, procurement, tax, facilities, HR, IS&T, and so on. I also deal with laws which are applicable to U.S. subsidiaries working outside U.S. with regard to U.S. export sanction laws, FCPA etc. As a result, I believe that providing legal services on a wide range of issues encompassing several statutes and industries helps enhance one’s skill set which then can be easily applied to other industries too.

What are some of the major trends in your industry?

India has continually exhibited a high rate of growth in engineering, procurement and construction (EPC) as it seeks to attract FDI. Many multinationals are vying for a piece of large infrastructure projects. Within the infrastructure sector, another segment that has emerged is that of outsourced engineering services of which India is rapidly becoming a leading provider.

In what ways have you seen this affect the role you are performing?

Due to close competition among Indian and global participants, project bids are no longer based on technical expertise or pricing; there is immense pressure from the business line to be allowed to take on more project liabilities and risks to entice the owner.

One has to strike that critical balance while reviewing project terms so that even if the service provider has to take on more risks, it continues to retain a protective

net of risk-mitigating safety provisions. With the changing scenario, the in-house lawyers’ role in this industry has become even wider and crucial as one who has to defend these boundaries and keep up the wicket-keeping momentum at the same time.

How would you describe your strategy for the legal team?

The strategy for having a topclass legal team is to instill in them the value of knowing the company’s business inside and out so as to astutely apply relevant laws. The more a lawyer knows about the business or project, the easier it is to unravel legal issues, draft or review and negotiate related contracts.

What would you say have your proudest moments as an inhouse counsel?

As an in-house counsel, the closure of each set of project documentation is a proud moment as also when the same project reaches completion. An example was when we achieved the final resolution of the Dabhol Power project settlement saga, in which I was managing counsel, of the entire litigation and arbitration process with a team of more than 30 in-house and external counsel which spanned four continents. Upon the resolution of this matter, I was promoted to the designation of senior counsel in the Bechtel legal department.

What is the best advice you have ever received?

First, understand and analyse the facts; therein lies your whole case.

Second, each contract is only just a story and the provisions are the dialogue. For drafting, maintain continuity of dialogue; for reviewing, read between the lines.

briefs

10

ASIAN LEGAL BUSINESS SEPTEMBER 2014

MERGERS & ACQUISITIONS SNAPSHOT LEAGUE TABLES

I. LEAGUE TABLE - NORTH ASIA LEGAL AND FINANCIAL RANKINGS NORTH ASIA LEAGUE TABLES NORTH ASIA Announced M&A Legal Rankings - Based on Value Value No. of Market Legal Advisor Rank (US$mln) Deals Share CHINA Announced M&A Legal Rankings 1 Freshfields Bruckhaus Deringer 66,435.1 23 15.9 Jia Yuan Law Offices 2 45,277.8 16 10.8 Baker & McKenzie 3 32,693.5 20 7.8 White & Case LLP 4 29,508.5 11 7.1 BRUCKHAUS DERINGER Nishimura &FRESHFIELDS Asahi 5 22,870.2 47 5.5 Kirkland & Ellis 6 22,608.8 12 5.4 King & Wood Mallesons 7 22,533.2 20 5.4 VALUE Cleary Gottlieb Steen & Hamilton 8 20,909.6 3 5.0 ($mln) Sidley Austin LLP 9 17,404.2 11 4.2 10 Mori Hamada & Matsumoto 16,022.2 75 3.8 DEALS: 12 MARKET SHARE: 20.7 (*tie)

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

RANK LEGAL ADVISOR II. LEAGUE TABLE - LEGAL CHINA Announced M&A Legal Rankings 2 Jia Yuan Law Offices 3 King & Wood Mallesons Legal Advisor Rank 4 1 Fangda Partners Freshfields Bruckhaus Deringer Jia Yuan Law Offices 5 2 Clifford Chance King & Wood Mallesons 3 6 Han Kun Law Offices Fangda Partners 4 7 5 Davis Polk Chance & Wardwell Clifford

Han Kun Law Offices 8 6 Haiwen & Partners Davis Polk Wardwell 9 7 Zhong Lun Law&Firm Haiwen & Partners 8 10 9 Skadden Zhong Lun Law Firm Skadden 10

VALUE ($MLN)

DEALS

45,277.8 Value 20,591.4 (US$mln) 8,108.6 49,019.5 45,277.8 7,403.5 20,591.4 7,080.6 8,108.6 6,961.8 7,403.5 7,080.6 6,390.5 6,961.8 6,101.8 6,390.5 5,770.1 6,101.8 5,770.1

16 No. of 19 Deals 31 12 16 9 19 8 31 10 9 18 10 20 1 14 20 14

JAPAN ANNOUNCED M&A LEGAL RANKINGS Value No. of Legal Advisor

Rank (US$mln) 1 Baker & McKenzie 23,565.2 Nishimura & Asahi 2 22,870.2 White & Case LLP 3 21,121.5 Sidley Austin LLP 4 16,696.9 Kirkland & Ellis 5 16,137.6 Mori Hamada & Matsumoto 6 16,022.2 Cleary Gottlieb Steen7&MARKET Hamilton SHARE: 7 15,687.6 DEALS: 27.0 Shearman & Sterling LLP 8 6,709.9 Nagashima Ohno & Tsunematsu 9 6,638.5 VALUE RANK LEGAL ADVISOR Debevoise & Plimpton 10* 5,708.1 ($MLN) Willkie Farr & Gallagher 10* 5,708.1 2 Nishimura & Asahi 22,870.2

Deals 7 47 7 3 2 75 1 9 46 DEALS 2 1 47

BAKER & MCKENZIE

3 (*tie)

19.1 Market 8.7 Share 3.4 20.7 19.1 3.1 8.7 3.0 3.4 2.9 3.1 3.0 2.7 2.9 2.6 2.7 2.4 2.6 2.4

Market Share 27.0 26.2 24.2 19.1 VALUE 18.5 ($mln) 18.3 18.0 7.7 7.6 MARKET 6.5 SHARE 6.5 26.2

White & on Case LLP 7 withdrawn 24.2M&A) Based Rank Value incl. Net Debt of announced21,121.5 M&A deals (excluding

II.4LEAGUE - FINANCIAL SidleyTABLE Austin LLP 16,696.9 3 19.1 CHINA Announced 5 Kirkland & EllisM&A Financial Rankings 16,137.6 2 18.5 Value No. of Market Financial Advisor 6 16,022.2 75 18.3 Rank Mori Hamada & Matsumoto (US$mln) Deals Share 7 1 Cleary Gottlieb 15,687.6 1 18.0 Somerley LtdSteen & Hamilton 46,902.6 12 19.8 CITIC Group CorpLLP 46,313.3 16 19.6 8 2 Shearman & Sterling 6,709.9 9 7.7 China Securities Co Ltd 3 45,381.9 18 19.2 9 Nagashima Ohno & Tsunematsu 6,638.5 46 7.6 Haitong Securities Co Ltd 4 13,711.1 18 5.8 10* 5 Debevoise Plimpton 5,708.1 2 6.5 Morgan & Stanley 11,947.7 11 5.1 JP Morgan 11,346.4 12 4.8 10* 6 Willkie Farr & Gallagher 5,708.1 1 6.5 China International Capital Co 7 9,533.4 8 4.0 Securities Co Ltd 8 8,869.1 15 withdrawn3.8 (*tie) Based onHuatai Rank Value including Net Debt of announced M&A deals (excluding M&A) Northeast Securities Co Ltd 9 6,390.5 2 2.7 Lazard 10 5,241.6 7 2.2 (*tie)

(*tie)

MARKET SHARE

(*tie) Based on Rankon Value Net Debt of of announced M&A deals (excluding (*tie) Based Rankincluding Value incl.

Net Debt announced M&A deals (excludingwithdrawn withdrawnM&A) M&A)

JAPAN Announced M&A Legal Rankings

NORTH ASIA Announced M&A Financial Rankings - Based on Value Value No. of Market Financial Advisor Rank (US$mln) Deals Share Announced M&A53,342.4 Legal Rankings 1 HONG CITICKONG Group Corp 18 12.8 Somerley Ltd 2 52,476.2 19 12.6 Morgan Stanley 3 49,858.3 49 11.9 Goldman Sachs & Co 4 47,377.4 34 11.3 FRESHFIELDS BRUCKHAUS DERINGER China Securities Co Ltd 5 45,381.9 18 10.9 Citi 6 42,626.7 50 10.2 Credit Suisse 7 31,837.9 22 7.6 VALUE JP Morgan 8 26,238.7 32 6.3 ($mln) Bank of America Merrill Lynch 9 26,154.7 19 6.3 10 Nomura 22,169.3 65 5.3 DEALS: 9 MARKET SHARE: 45.5

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

RANK

VALUE ($MLN)

LEGAL ADVISOR

HONG Announced 2 KONG Jia Yuan Law OfficesM&A Legal Rankings42,323.2 Value 3 Sullivan & Cromwell 8,382.4 Legal Advisor Rank (US$mln) 41 Baker & McKenzie 8,034.3 Freshfields Bruckhaus Deringer 55,661.2

52 3 6 4 75 86 97 8 109 10

Jia Yuan Law Offices White & Case LLP Sullivan & Cromwell Clifford Chance Baker & McKenzie Dentons White & Case LLP Clifford Elias Chance Rodrigo & Medrano Dentons Weil Gotshal & Manges Rodrigo Elias & Medrano Cleary Gottlieb&Steen & Hamilton Weil Gotshal Manges

Cleary Gottlieb Steen & Hamilton

42,323.2 7,683.3 8,382.4 7,236.0 8,034.3 7,079.2 7,683.3 7,236.0 7,005.0 7,079.2 6,306.7 7,005.0 5,222.1 6,306.7 5,222.1

MARKET SHARE

DEALS 5 No. of 5 Deals 95

34.6 Market 6.9 Share 6.6 45.5

61 24 1 42

5.9 5.7 5.8 5.2 5.7 4.3 5.2

53 5 6 5 32

34.6 6.3 6.9 5.9 6.6 5.8 6.3

2

4.3

(*tie) BasedBased on Rank including (excluding withdrawn withdrawn M&A) M&A) (*tie) on Value Rank Value incl. Net Net Debt Debt of of announced announced M&A M&A deals deals (excluding

SOUTH KOREA Announced M&A Legal Rankings SOUTH KOREA ANNOUNCED M&A LEGAL No. RANKINGS Value of Market Legal Advisor Rank (US$mln) Deals Share 1 Kim & Chang 12,379.6 52 24.5 Bae Kim & Lee 2 11,307.1 25 22.4 Lee & Ko 3 10,622.5 49 21.0 Simpson Thacher & Bartlett 4 7,730.0 2 15.3 Yulchon LLC 5 5,910.3 23 11.7 VALUE ($mln) Freshfields Bruckhaus Deringer 6* 5,800.0 1 11.5 Sullivan & Cromwell 6* 5,800.0 1 11.5 24.5 26 Shin & Kim DEALS: 52 MARKET SHARE: 8 4,755.0 9.4 Clifford Chance 9* 1,930.0 1 3.8 Latham & Watkins 9* 1,930.0 1 3.8 VALUE MARKET RANK LEGAL ADVISOR DEALS ($MLN) SHARE

KIM & CHANG

2 (*tie)

Bae Kim LeeValue incl. Net Debt of announced M&A 11,307.1 25 withdrawn 22.4 Based on & Rank deals (excluding M&A)

3 Lee & Ko 10,622.5 HONG Announced M&A Financial Rankings 4 KONG Simpson Thacher & Bartlett 7,730.0 Value Financial Advisor 5 Yulchon LLC 5,910.3 Rank (US$mln)

49

21.0

2 No. of 23 Deals

15.3 Market 11.7 Share

6*1 Freshfields Bruckhaus Deringer 5,800.0 11.5 Somerley Ltd 52,028.8 151 42.5 CITIC Group Corp 51,443.8 51 42.0 6*2 Sullivan & Cromwell 5,800.0 11.5 China Securities Co Ltd 3 42,671.0 2 34.9 8 Shin & Kim 4,755.0 26 9.4 Goldman Sachs & Co 4 24,831.0 9 20.3 9*5 Clifford Chance 1,930.0 3.8 Citi 20,414.1 111 16.7 Bank of&America 19,835.4 51 16.2 9*6 Latham Watkins Merrill Lynch 1,930.0 3.8 Credit Suisse 7 12,462.1 6 10.2 8,719.1 11 withdrawn 7.1M&A) (*tie)8BasedNomura on Rank Value including Net Debt of announced M&A deals (excluding Deutsche Bank 9 8,673.1 6 7.1 UBS 10 7,932.4 5 6.5

Based on Rank Value incl.

Net Debt of announced M&A deals (excluding withdrawn M&A) (*tie) on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A) ANY NORTH ASIA INVOLVEMENT ANNOUNCED M&ABased ACTIVITY - QUARTERLY TREND

220 200 180 160 140 120 100 80 60 40

127.2 103.6

193.8

135.8 110.8

114.6

126.3

146.8

125.2 95.3

83.3

114.3

134.4

117.6

128.8

147.5

144.4

3,000 2,500 2,000 1,500

93.9

1,000 500

1Q 10

3Q 10

1Q 11

3Q 11

1Q 12

3Q 12

1Q 13

3Q 13

1Q 14

No. of Transactions

Rank Value US$ Billion

ANY NORTH ASIA INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND

Rank Value US$ billion No. of Deals

0

Notes:League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn NOTES: League tables, quarterly trend, and deal basedbut onwith theno nation of eitherRank the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of at the transaction.

Announced deals.

Deals with undisclosed dollar values are list rankare eligible corresponding Value. Non-US dollar denominated transactions are converted to the US dollar equivalent the time of announcement of M&A terms.transactions North Asia includes China, Hongwithdrawn Kong, Taiwan, SouthDeals Korea,with Japan.

Data accurate as of 26-August-2014 excludes deals. undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. North Asia includes China, Hong Kong, Taiwan, South Korea, Japan

MERGERS & ACQUISITIONS SNAPSHOT

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VALUE ($mln)

DEALS: 4 MARKET SHARE: 19.4

(*tie)

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

II. LEAGUE TABLE - LEGAL VALUE RANK LEGAL ADVISOR SINGAPORE Announced M&A Legal Rankings ($MLN) Value Legal Advisor 2 Clifford Chance 10,556.2 Rank (US$mln) Freshfields Bruckhaus Deringer 11,942.4 3 1 Allen & Gledhill 10,219.8 Clifford Chance 10,556.2 4 2 WongPartnership LLP 8,739.5 Allen & Gledhill 3 10,219.8 5 4 Kirkland & Ellis 4,852.1 WongPartnership LLP 8,739.5 Kirkland & May Ellis 4,852.1 6 5 Slaughter 4,846.6 Slaughter & May 6 4,846.6 7 AZB & Partners 4,203.1 AZB & Partners 7 4,203.1 8 8 Han Kun Law Offices 4,000.0 Han Kun Law Offices 4,000.0 Morrison& & Foerster 3,923.3 9 9 Morrison Foerster 3,923.3 King & Wood Mallesons 10 3,914.5 10 King & Wood Mallesons 3,914.5

DEALS No. of 6 Deals 4 21 6 18 21 2 18 21 1 4 4 11 4 4 4

MARKET SHARE Market 17.1 Share 19.4 16.6 17.1 14.2 16.6 7.9 14.2 7.9 7.9 7.9 6.8 6.8 6.5 6.5 6.4 6.4 6.4 6.4

(*tie) Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A) (*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

INDIA Announced M&A Legal Rankings Rank 1 2 3 4 5 6* 6* 6* 6* 10

(*tie) RANK

Legal Advisor Amarchand Mangaldas INDIA ANNOUNCED Davis Polk & Wardwell AZB & Partners Shearman & Sterling LLP Luthra & Luthra Law Offices SH Bathiya & Associates Crawford Bayley & Co White & Case LLP Weil Gotshal & Manges Khaitan & Co

M&A

Value No. of Market (US$mln) Deals Share 7,188.3 22 28.3 LEGAL RANKINGS 6,427.6 6 25.3 5,902.0 40 23.3 4,328.7 3 17.1 4,113.9 4 16.2 4,068.7 1 16.0 4,068.7 2 16.0 VALUE 4,068.7 1 16.0 ($mln) 4,068.7 1 16.0 3,102.5 24 12.2

BAKER & MCKENZIE

SHARE

DEALS: 5 MARKET SHARE: 9.6

(*tie)

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

RANK LEGAL ADVISOR MALAYSIA Announced M&A Legal Rankings 2* Rank 1 2* 2* 2* 2* 5 2* 65 6 7 7 88 9* 9* 9* 9*

Legal Advisor Stephen Blanks & Associates BakerChambers & McKenzie Corrs Westgarth Stephen Blanks & Associates Sullivan & Cromwell Corrs Chambers Westgarth Rahmat & Partners Sullivan Lim & Cromwell RahmatRose Lim Fulbright & Partners Norton Norton Rose Fulbright Allen & Gledhill Allen & Gledhill Zul Zul Rafique Rafique&&Partners Partners KPMG KPMG Ashurst Ashurst

VALUE ($MLN) Value 598.9 (US$mln) 1,025.1 598.9 598.9 598.9 598.9 410.3 598.9 410.3 368.8 368.8 329.2 329.2 143.4 143.4 143.1 143.1 143.1 143.1

Value No. of Market Legal Advisor (US$mln) Deals Share Rank 1 INDONESIA Simpson Thacher & Bartlett 525.8 Rankings 1 15.4 Announced M&A Legal Herbert Smith Freehills 2 525.2 2 15.4 Allen & Overy 3 517.9 2 15.2 SIMPSON THACHER 114.0 & BARTLETT Torys 4* 1 3.3 Gibson Dunn & Crutcher 4* 114.0 1 3.3 Drew & Napier 6 94.2 2.8 VALUE 1 Ashurst 7 0.0 2.4 ($mln) 1 Lee & Ko 8 14.9 2 0.4 Linklaters 9* 0.0 1 0.0 DEALS: 1 MARKET SHARE: 15.4 Mori Hamada & Matsumoto 9* 0.0 1 0.0 Kim & Chang 9* 0.0 1 0.0 VALUE MARKET RANK LEGAL ADVISOR DEALS O'Melveny & Myers 9* 0.0 1 0.0 ($MLN) SHARE

2

Herbert Smith Freehills

525.2

2

15.4

3

Allen & Overy

517.9

2

15.2

4*

Torys

114.0

(*tie)

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

MIDDLE EAST M&A Financial Rankings 4* Gibson Announced Dunn & Crutcher 114.0 Value 6 Drew & Napier 94.2 Financial Advisor (US$mln) Rank 71 Ashurst 0.0 JP Morgan 5,365.1

(*tie)

(*tie)

Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

MARKET SHARE Market 5.6 Share 9.6 5.6 5.6 5.6 5.6 3.9 5.6 3.9 3.5 3.5 3.1 3.1 1.3 1.3 1.3 1.3 1.3 1.3

INDONESIA Announced M&A Legal Rankings

Davis Polk & -Wardwell 6,427.6 6 25.3 II. 2 LEAGUE TABLE FINANCIAL SOUTHEAST / SOUTH ASIA Announced M&A Financial Rankings 3 AZB &ASIA Partners 5,902.0 40 23.3 Value No. of Market 4 Shearman Financial & Sterling LLP 4,328.7 3 17.1 Advisor (US$mln) Deals Share Rank 5 1 Luthra & Luthra Law 4,113.9 4 16.2 Goldman Sachs & Offices Co 18,924.6 15 17.7

Citi 16,579.5 18 15.5 6*2 SH Bathiya & Associates 4,068.7 1 16.0 Bank of America Merrill Lynch 15,901.8 7 14.8 6*3 Crawford Bayley & Co 4,068.7 2 16.0 DBS Group Holdings 4 15,237.5 13 14.2 6*5 White & Case LLP 4,068.7 1 16.0 Morgan Stanley 13,139.5 17 12.3 JP Morgan 11,592.2 16 10.8 6*6 Weil Gotshal & Manges 4,068.7 1 16.0 Standard 7 9,292.9 13 8.7 Khaitan & CoChartered PLC 10 3,102.5 24 12.2 UBS 8 7,428.5 7 6.9 Nomura 9 7,416.9 12 6.9 (*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A) HSBC Holdings PLC 10 7,227.7 7 6.7

DEALS No. of 2 Deals 51 2 1 1 11 15 5 1 1 33 11 2 2

(*tie) Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A) (*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

DEALS: 22 MARKET SHARE: 28.3

VALUE MARKET Based on Rank ValueADVISOR incl. Net Debt of announced M&A deals (excluding withdrawn M&A) LEGAL DEALS

11

MIDDLE EAST Announced M&A Legal Rankings Value No. of Market Legal Advisor (US$mln) Deals Share Rank 1 Latham & Watkins 2,985.0 8 8.7 Clifford Chance 2 2,770.4 6 8.1 Herbert Smith Freehills 3 2,649.9 2 7.8 M&A Legal White & CaseAnnounced LLP 4 MALAYSIA 2,506.4 Rankings 3 7.3 Linklaters 5 2,342.0 4 6.9 Freshfields Bruckhaus Deringer 6 1,934.6 8 5.7 Blake Cassels & Graydon 7 1,927.1 2 5.6 McCarthy Tetrault 8 1,825.3 2 5.3 Ogier & Le Massurier 9* 1,817.1 1 5.3 Mishcon de Reya 9* 1,817.1 1 5.3 VALUE Charles Russell 9* 1,817.1 1 5.3 ($mln) Mourant Ozannes 9* 1,817.1 1 5.3

AMARCHAND MANGALDAS

($MLN)

briefs

LEAGUE TABLES

I. LEAGUE TABLE - SOUTHEAST ASIA AND MIDDLE EAST SOUTHEAST ASIA / SOUTH ASIA Announced M&A Legal Rankings Value No. of Market Legal Advisor (US$mln) Deals Share Rank SOUTHEAST ASIA LEAGUE TABLES 1 Freshfields Bruckhaus Deringer 13,817.6 8 12.9 Clifford Chance 2 11,644.4 10 10.9 Allen & Gledhill 3 10,219.8 21 9.5 Announced M&A Legal AZB & Partners 4 SINGAPORE 9,902.0 Rankings 41 9.2 Davis Polk & Wardwell 5 8,785.1 7 8.2 WongPartnership LLP 6 8,739.5 18 8.2 Amarchand Mangaldas 7 7,188.3 22 6.7 FRESHFIELDS BRUCKHAUS DERINGER Slaughter & May 8 6,874.0 3 6.4 Weil Gotshal & Manges 9 6,426.2 3 6.0 Herbert Smith Freehills 10 5,839.4 14 5.4

1 1 No. of 1 Deals 61

3.3 3.3 Market 2.8 Share 2.4 15.7

Bank of America Merrill Lynch 4,752.2 82 13.9 82 Lee & Ko 14.9 0.4 Barclays 3 4,388.3 7 12.8 9* Linklaters 0.0 1 0.0 Citi 4 3,264.1 10 9.6 9* Mori Hamada & Matsumoto 0.0 0.0 Deutsche Bank 5 3,247.1 21 9.5 Credit Suisse 6 2,331.2 61 6.8 9* Kim & Chang 0.0 0.0 Morgan Stanley 7 2,170.0 3 6.4 9* O’Melveny & Myers 0.0 1 0.0 Goldman Sachs & Co 8 1,874.0 4 5.5 Strand Partners Ltd 9* 1,817.1 1 5.3 (*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A) QInvest LLC 9* 1,817.1 1 5.3 Based on Rank Value incl. Net Debt of announced M&A deals (excluding withdrawn M&A)

ANY SOUTHEAST ASIA / SOUTH ASIA & MIDDLE EAST INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND Rank Value US$ Billion No. of Deals 71.8

80 70 60

57.3 45.5

50

64.8 53.8

47.4

47.4 36.9

40

66.0

63.3

34.1

42.1

53.2

49.2

45.4

48.1

35.7 24.8

30 20 10

1Q 10

3Q 10

1Q 11

3Q 11

1Q 12

3Q 12

1Q 13

3Q 13

1Q 14

1,600 1,400 1,200 1,000 800 600 400 200 0

No. of Transactions

Rank Value US$ Billion

ANY SOUTHEAST ASIA / SOUTH ASIA & MIDDLE EAST INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND

NOTES: League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn Notes: deals. Deals with undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. Geographic coverage includes SOUTH EAST ASIA: Singapore, Malaysia, Philippines, Thailand, Vietnam, Brunei, Cambodia, Indonesia, Laos, Myanmar, Timor-Leste; SOUTH ASIA: India, Afganistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka; MIDDLE EAST: United Arab Emirates, Saudi Arabia, Qatar, Jordan, Palestine, Bahrain, Iran, Iraq, Israel, Kuwait, Lebanon, Oman, Syria, Yemen. Data accurate as of 26-August-2014

12

briefs

ASIAN LEGAL BUSINESS SEPTEMBER 2014

APPOINTMENTS

LATERAL HIRES NAME

LEAVING

GOING TO

PRACTICE

LOCATION

SAMUEL CHAU

Gide Loyrette Nouel

Eversheds

Banking

Hong Kong

MAE SHAN CHONG

White & Case

Jones Day

Private Equity

Singapore

DEAN COLLINS

O’Melveny & Myers

Dechert

Private Equity, Funds

Singapore

JOEL HORGARTH

O’Melveny & Myers

Oentoeng Suria & Partners

Private Equity, Restructuring

Jakarta

DAVID LIVDAHL

Paul Hastings

Pillsbury Winthrop Shaw Pittman

Corporate

Beijing

GIOVANNI MARINO

DLA Piper

Winston & Strawn

M&A

Hong Kong

BERTIE MEHIGAN

O’Melveny & Myers

Ashurst

Finance

Hong Kong

RATIH NAWANGSARI

O’Melveny & Myers

Oentoeng Suria & Partners

Energy, Infrastructure

Jakarta

FRANK NIU

Baker & McKenzie

Dentons

Corporate

Beijing

HAIG OGHIGIAN

Baker & McKenzie

K&L Gates

International Arbitration

Tokyo

ARISIA PUSPONEGORO

Lubis Ganie Surowidjojo

Linda Widyati and Partners

Finance, Projects

Jakarta

BEN SANDSTAD

DLA Piper

Standard Chartered Bank

Finance

Singapore

SAMUEL SHARPE

DLA Piper

Duane Morris & Selvam

Corporate Crime and Investigations

Singapore

JENNY SHENG

Paul Hastings

Pillsbury Winthrop Shaw Pittman

Corporate

Beijing

ANNA-MARIE SLOT

White & Case

Ashurst

Capital Markets

Hong Kong

NAME

FIRM

FROM

TO

POSITION

NICK DINGEMANS

Norton Rose Fulbright

Moscow

Singapore

Corporate

MATTHEW OSBORNE

Herbert Smith Freehills

Melbourne

Singapore

Infrastructure

RELOCATIONS

UPDATES briefs

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13

REGIONAL UPDATE

SINGAPORE

IMPLEMENTATIONS BY MAS AND SGX TO IMPROVE SECURITIES MARKET STRUCTURE AND PRACTICES

O

n 7 February 2014, the Monetary Authority of Singapore (“MAS”) and the Singapore Exchange Limited (“SGX”) jointly issued a Consultation Paper on the Review of Securities Market Structure and Practices. It proposed a range of policy changes affecting issuers, securities intermediaries and investors. MAS and SGX considered the feedback received and published their response on 1 August 2014 setting out five proposals to be implemented (“Response”).

Given the detailed nature of the Response, this update will only highlight salient features of the five proposals.

1.

Minimum trading price All issuers on the SGX Mainboard must have a minimum trading price of S$0.20 per share. There will be a transition period of 12 months and a cure period of 36 months for any remedial actions to be taken by affected issuers. Affected issuers which fail to take remedial actions may be delisted in accordance with the existing delisting rules. Implementation expected in March 2015.

SGX will also reduce the standard board lot size for all listed shares from 1,000 to 100 shares in January 2015.

2. Collateral requirement for securities trading Securities intermediaries will be required to collect collateral from customers based on a minimum 5% of their net open positions on trading day for trading of listed securities except exempt trades.

Exempt trades include trades by institutional investors, trades settled through delivery-versus-payment mode, and funds from the Central Provident Fund and Supplementary Retirement Schemes.

Implementation expected in mid-2016.

3. Short position reporting requirements Short sellers will be required to notify MAS of their net short positions based on the lower of 0.05% or S$1 million of issued shares. The aggregate short positions will be published on a weekly basis. This requirement does not apply to derivatives.

Implementation expected in mid-2016.

4. Improving transparency of intervention measures The Securities Association of Singapore will develop industry guidelines to promote consistent trading practices and to address the concerns of information asymmetry due to differing practices of trading restriction announcements. Implementation expected in end-2014.

5. Reinforcing the listing and enforcement framework SGX will establish three independent committees, namely, Listings Advisory Committee, Listings Disciplinary Committee and Listings Appeals Committee. They will introduce a wider range of sanctions for breaches of listing rules. These will further strengthen the existing listings process, improve transparency of disciplinary process and enhance SGX’s ability to enforce the listing rules.

Implementation expected in early-2015.

The above five proposed measures will have important implications for Singapore’s securities market.

MR. MARKUS POH LEONG KEE Legal Associate (Corporate Practice) T: (65) 6322 2217 F: (65) 6534 0833 E: markuspoh@loopartners.com.sg Loo & Partners LLP 16 Gemmill Lane Singapore 069254 www.loopartners.com.sg

MS. SARAH LIM Legal Associate (Corporate Practice) T: (65) 6322 2254 F: (65) 6534 0833 E: sarahlim@loopartners.com.sg

REUTERS/Tim Chong

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16

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business

A

sia-Pacific M&A activity has picked up over the last 12 months, with the number and value of deals expected to increase further as the year progresses. In the first half of 2014, announced M&A volume in the Asia-Pacific region in the first half rose 67 percent from a year ago to $378 billion, the highest volume on record for the equivalent period, according to Thomson Reuters data. The record comes amid a boom in global M&A as improving CEO confidence, strong cash positions held by corporations and an increase in risk appetite is driving a broader mix of mega-deals across regions and industry sectors.

In China, growth is slowing. If the country is to meet its GDP growth target of about 7.5 percent in 2014, it will have to take some steps to speed up the economy in the second half of the year. However, lawyers note that outbound M&A, especially in the energy and resources sectors, remains strong. In addition, China’s Internet giants have been on a buying spree in recent months. Top deals include Alibaba Group’s $1.5 billion acquisition of digital mapping and navigation firm AutoNavi Holdings and its $1.2 billion investment in the merged video platform Youku Tudou, as well as Tencent Holdings’ $736 million investment in 58.com Inc. In North Asia, Japanese and Korean companies are increasing their footprint overseas.

Buoyed by strengthening brand images, healthy balance sheets and cheap valuations abroad, these companies are increasingly looking towards Southeast Asia and Europe.

At the forefront of outbound M&A activity are the Japanese and South Korean technology giants, life insurance companies as well as consumer goods companies.

Southeast Asia remains a high-growth area. The region has seen a rise in M&A activity over the past couple of years and a visible

surge in the first half of 2014. The encouraging growth rates, attractive manufacturing costs and burgeoning middle class of several Southeast Asian jurisdictions are likely to further stimulate dealflow in the region.

Meanwhile, India has struggled with sluggish growth for several years, with the current rate below 5 percent. However, the election of the country’s new Prime Minister, Narendra Modi, in May could turn things around, lawyers say. Modi has vowed to revive economic growth and construct new roads, factories, power lines, high-speed trains and even 100 new cities. Lawyers and market watchers are cautiously optimistic about the next 12 months, and expect M&A activity to pick up slowly but surely.

A significant upcoming development is the integration of the 10 members of the Association of Southeast Asian Nations ( A S E A N) into th e A S E A N Eco n o m i c Community (AEC). Expected to launch by the end of 2015, the AEC will create a trading bloc of more than 600 million people with a GDP exceeding $5.6 trillion, which would make it the seventh-largest economy in the world.

Few predict the AEC to be an immediate game-changer in the region, however, as foreign ownership restrictions are not expected OUR RANKINGS Our rankings are based on the following metrics: • Volume, complexity and size of work • Firm’s visibility and profile in the marketplace • Presence across Asia and in individual jurisdictions • Key clients and new client wins ALB drew results from firm submissions, Thomson Reuters M&A data, editorial resources and market suggestions to identify and rank the top firms for M&A in Asia.

COVER STORY

17

to change substantially in the bloc’s early days. Nevertheless, the AEC should provide structural opportunities to those who know how to navigate it, particularly in areas such as financial services, telecoms and consumer goods. Real estate will also be a focus, along with its corollary markets of construction and building materials.

With an average age of around 30 and a middle class of 150 million, ASEAN is poised for sustained economic expansion. This is fueling increasingly fierce competition for deals that benefit from the emerging consumer class.

In addition to the M&A Rankings 2014, ALB has released its first M&A quarterly report. The detailed report, the first in a series of M&A Reviews, provides companies with the insight and analysis to support their strategic investment decisions, and also help law firms identify new business opportunities and develop their practice areas.

Drawing on the extensive data and research of Thomson Reuter s’ Deals Intelligence, ALB’s analysts have identified the countries and industries which are benefiting most from M&A, the primary factors that will continue to fuel this activity, and the risks that exist in the way of successfully securing these opportunities.

Topics covered include: • Surging M&A: Where the growth is happening, and what’s driving it • Volatility in certain markets and the impact it could have • The ASEAN Economic Community: What it entails and how you can benefit • Best practices • Case studies Visit the webpage for more information: http://www.legalbusinessonline.com/news/ alb-launches-quarterly-ma-report/66380

18

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

D OMESTIC

INTERNATIONAL

Tier 1 • Fangda Partners • Haiwen & Partners • Han Kun Law Offices • Jun He Law Offices • King & Wood Mallesons • Zhong Lun Law Firm

Tier 1 • Clifford Chance • Freshfields Bruckhaus Deringer • Linklaters • Skadden, Arps, Slate, Meagher & Flom • Weil, Gotshal & Manges

Tier 2 • AllBright Law Offices • Commerce & Finance Law Offices • Global Law Office • Jingtian & Gongcheng • Tian Yuan Law Offices Tier 3 • Dacheng Law Offices • DaHui Lawyers • Grandall Law Firm • Grandway Law Offices • Guantao Law Firm • Jincheng Tongda & Neal • Llinks Law Offices Firms to watch • AnJie Law Firm • Duan & Duan Law Firm • Liu He Law • Shimin Law Offices

Tier 2 • Allen & Overy • Baker & McKenzie • Cleary Gottlieb Steen & Hamilton • Davis Polk & Wardwell • Herbert Smith Freehills • Hogan Lovells • Kirkland & Ellis • Latham & Watkins • O’Melveny & Myers • Shearman & Sterling • Slaughter and May • Sullivan & Cromwell • Paul Hastings • Paul, Weiss, Rifkind, Wharton & Garrison Tier 3 • Ashurst • Bingham McCutchen • Deacons • Debevoise & Plimpton • Dentons • DLA Piper • Mayer Brown JSM • Milbank, Tweed, Hadley & McCloy • Morrison & Foerster • Norton Rose Fulbright • Orrick, Herrington & Sutcliffe • Reed Smith Richards Butler • Ropes & Gray • Sidley Austin • White & Case Firms to watch • Akin, Gump, Strauss, Hauer & Feld • Berwin Leighton Paisner • Bird & Bird • CMS, China • Eversheds • K&L Gates • Squire Patton Boggs • Stephenson Harwood • Vinson & Elkins • Vivien Chan & Co

WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business

COVER STORY

19

Tier 1 • Assegaf Hamzah & Partners • Hadiputranto, Hadinoto & Partners • Soemadipradja & Taher Tier 2 • Ali Budiardjo, Nugruho, Reksodiputro • Hiswara Bunjamin & Tandjung • Melli Darsa & Co • Soewito Suhardiman Eddymurthy Kardono Tier 3 • DNC Advocates • Ginting & Reksodiputro • Hanafiah Ponggawa & Partners • Lubis Ganie Surowidjojo • Oentoeng Suria & Partners • Susandarini & Partners Firms to watch • Makarim & Taira S • Makes & Partners • Roosdiono & Partners

REUTERS/Beawiharta

KEY AREA OF PRACTICE Capital Market & Securities

Mining & Energy

Mergers & Acquisition

Restructuring

Banking & Financial Institutions

Media & Telecommunication

Corporate Finance

Anti Trust

Project Finance

Property

Corporate Commercial

Commercial Litigation

CONTACT US Melli N. Darsa (melli_darsa@darsalaw.com)

Perdana A. Saputro (perdana_saputro@darsalaw.com)

David Siahaan (david_siahaan@darsalaw.com)

Indra Safitri (indra_safitri@darsalaw.com)

Kuntum Apriella Irdam (ella_irdamis@darsalaw.com)

Manarihon SM. Ondi Panggabean (ondi_panggabean@darsalaw.com)

Laksmita Andarumi (laksmita_andarumi@darsalaw.com)

www.darsalaw.com Office: Menara Standard Chartered 19th Floor Jl. Prof.Dr. Satrio No. 164 Jakarta 12930 - Indonesia P. 62-21 2553 2019 F. 62-21 2553 2020

20

COVER STORY

Tier 1 • Clifford Chance • Freshfields Bruckhaus Deringer • Linklaters • Simpson Thacher & Bartlett • Skadden, Arps, Slate, Meagher & Flom • Slaughter and May • Weil, Gotshal & Manges Tier 2 • Allen & Overy • Baker & McKenzie • Cleary Gottlieb Steen & Hamilton • Davis Polk & Wardwell • Deacons • Fried, Frank, Harris, Shriver & Jacobson • Herbert Smith Freehills • Hogan Lovells • Kirkland & Ellis • Latham & Watkins • Mayer Brown JSM • Morrison & Foerster • Norton Rose Fulbright • O'Melveny & Myers • Shearman & Sterling • Sullivan & Cromwell • Paul Hastings • Paul, Weiss, Rifkind, Wharton & Garrison

ASIAN LEGAL BUSINESS SEPTEMBER 2014

Tier 3 • Ashurst • Bingham McCutchen • Debevoise & Plimpton • DLA Piper • King & Wood Mallesons • Milbank, Tweed, Hadley & McCloy • Orrick, Herrington & Sutcliffe • Reed Smith Richards Butler • Ropes & Gray • Sidley Austin • White & Case Firms to watch • Akin, Gump, Strauss, Hauer & Feld • Berwin Leighton Paisner • Bird & Bird • Eversheds • K&L Gates • Stephenson Harwood • Vinson & Elkins • Vivien Chan & Co

Tier 1 • Amarchand & Mangaldas & Suresh A. Shroff & Co • AZB & Partners • J. Sagar Associates • Khaitan & Co • Luthra & Luthra Tier 2 • Desai & Diwanji • S&R Associates • Talwar, Thakore & Associates • Trilegal

Tier 3 • Economic Laws Practice • HSA Advocates • Kochhar & Co • Majmudar & Partners • Nishith Desai Associates • Phoenix Legal • Rajani, Singhania & Partners • Seth Dua Associates • Vaish Associates • Wadia Ghandy & Co Firms to watch • A&M Law Offices • ALMT Legal • Aureus Law Partners • Crawford Bayley & Co • DSK Legal • Finsec Law Advisors • Fox Mandal & Associates • IndusLaw • Mundkur Law Partners • S.H. Bathiya & Associates

22

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

D OM ESTIC Tier 1 • Anderson Mori & Tomotsune • Mori Hamada & Matsumoto • Nagashima Ohno & Tsunematsu • Nishimura & Asahi Tier 2 • Atsumi & Sakai • Oh-Ebashi LPC & Partners • TMI Associates

INTERNATIONAL Tier 1 • Morrison & Foerster • Shearman & Sterling • Simpson Thacher & Bartlett Tier 2 • Baker & McKenzie (Gaikokuho Joint Enterprise) • Davis Polk & Wardwell • Freshfields Bruckhaus Deringer • Herbert Smith Freehills • Skadden, Arps, Slate, Meagher & Flom • Sullivan & Cromwell Tier 3 • Allen & Overy • Ashurst • Bingham Sakai Mimura Aizawa (Bingham McCutchen) • Clifford Chance • Hogan Lovells • Jones Day • Latham & Watkins • Linklaters • Norton Rose Fulbright • Orrick, Herrington & Sutcliffe • Paul Hastings • Paul, Weiss, Rifkind, Wharton & Garrison • Ropes & Gray • Sidley Austin • Squire Patton Boggs • White & Case

REUTERS/Kyodo

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24

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

Tier 1 • Shearn Delamore & Co • Skrine • Wong & Partners/Baker McKenzie • Zaid Ibrahim & Co Tier 2 • Albar & Partners • Christopher & Lee Ong • Kadir Andri & Partners • Rahmat Lim & Partners • Shook Lin & Bok • Zul Rafique & Partners Firms to watch • Abdullah Chan & Co • Adnan Sundra & Low • Azmi & Associates • Cheang & Ariff • Chooi & Company • Lee Hishamuddin Allen & Gledhill • Raja, Darryl & Loh • Tay & Partners • Zain & Co

Tier 1 • ACCRALAW • Quisumbing Torres (member firm of Baker & McKenzie International) • Romulo Mabanta Buenaventura Sayoc & De Los Angeles • SyCip Salazar Hernandez & Gatmaitan Tier 2 • Castillo Laman Tan Pantaleon & San Jose • Picazo Buyco Tan Fider Santos • Puno & Puno

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SPONSORED ARTICLE

25

INCEIF

REGULATORY ENVIRONMENT OF ISLAMIC FINANCIAL SERVICES INDUSTRY, COMPLIANCE & SHARIAH NON-COMPLIANCE RISK Assoc Prof Dr Ahcene Lahsasna Deputy Director for Centre of Research and Publication (603) 7651 4027 hasan@inceif.org

The regulatory environment of Islamic Financial Services Industry is very dynamic putting higher levels of competition and cooperation within a soundness and stability of the financial system. Regulation through supervision to ensure Shariah compliance becomes one of the major concerns of the regulators especially in Malaysia. This fact has been demonstrated in the Islamic financial Services Act 2013 where a great emphasise was given to Shariah compliance.

It is understood that failure to comply with Shariah triggers non-Shariah compliance risk which lead to some negative implication in finance and governance.

The purpose of regulation and governance in Islamic finance is carefully specified to ensure that the objectives of Shariah (Maqasid al Shariah) are met and achieved. This mandate is the responsibility of the Board of directors, Shariah board and the senior management of the financial institution. The said mandate is collective effort which is clearly mentioned in various clauses of IFSA 2013. (Malaysia).

Shariah governance and Shariah compliance represent twin aspects in Islamic financial regulation and structure, it can be further said that they are well integrated in the financial system, where are promoted to ensure the efficiency of the Islamic financial systems and operation based on certain structure and process within a sound and dynamic regulatory environment. Strict compliance with Shariah rules and regulation become a challenge for the Islamic financial institution (IFI) based on the regulation environment where the IFI operate. The other challenge is meeting the Shariah requirement and the economic activities along with the industry practices, where sometimes the activities are incompatible to Shariah.

As for the compliance it means to comply with all relevant laws, rules, regulations, and regulatory guidelines.

Compliance refers to proper supervision and a competent system of internal controls within an organisation to mitigate the risk, and to preserve the financial institution’s reputation as well as safeguarding of its assets and compliance with all relevant regulatory requirements. Compliance risk can be defined as the risk of legal or regulatory sanction, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organisation standards, and codes of conduct applicable to its banking activities.

A: INCEIF Lorong Universiti A, 59100 Kuala Lumpur T: (603) 7651 4035 F: (603) 7651 4094 W: www.inceif.org www.mifc.com

Failure to comply with all applicable laws, rules, regulations, and regulatory guidelines will constitute a breach. It may result not only in the imposition of disciplinary, civil or criminal sanctions against the IFI, but also in damaging one of IFI’s most important assets, its reputation. In addition, it may also result in the banking license being suspended by the regulator.

The compliance operation manual for the IFIs hopes to achieve the following objectives:

• Improve the quality and effectiveness of the compliance function • Provide uniform practice guide on compliance, which would serve as a basis for guidance and measurement of performance of the compliance function by the compliance officer • Facilitate the understanding and correct implementation of compliance function and procedures • Ensure compliance officer meet the minimum job expectation level imposed by the Bank • Minimise the non-compliance to laws, rules, regulations, Shariah rules and principles, and regulatory guidelines that may result not only in the imposition of penalties, rendering the contract null and void, and staff disciplinary action, but also damage the IFI’s reputation • Specific compliance responsibilities that compliance operation manual intends to convey is that compliance should be looked upon as an entire system of the following: • Compliance with laws, rules, regulations, Shariah rules and principles, regulatory guidelines, and standards • The compliance is promptly informed prompt reporting of any compliance incidents (including Shariah noncompliance) • Taking an appropriate action is taken if compliance incidents occur.

The compliance operation manual normally applies to compliance officer and all staff of the IFI. The scope of compliance operation manual is one of the general compliance standards and requirements that govern the overall working and business within the IFI. It should neither be interpreted as an all-encompassing manual which that has exhaustively and conclusively listed out all the laws, rules, and regulations which that the IFI is subjected to, nor is it the s a substitute to the regulations. The areas of compliance for business sector shall cover all regulatory (including Shariah rules and principles) and statutory requirements.

As for the Shariah non-compliance risk, it is very a very unique concept in Islamic finance. It is still an emerging field of knowledge in the area in Islamic finance literatures.

Shariah non-compliance management is regarded as an important component in operational risk management that needs to be observed, mitigated and managed. Shariah noncompliance risk is the risk that arises from the IFIs’ failure to comply with Shariah rules and principles determined by their Shariah Boards or relevant body in the jurisdiction in which these institutions operate.

The failure of the IFIs to comply with prescribed Shariah rules may expose them to high risk which has an impact on reputation, branding and profitability. The IFSB highlighted that Shariah non-compliance falls within a higher priority category in relation to other identified risks. Failure of the IFS to comply with Shariah rules and principles will result the risk of cancellation of the truncation, and the income generated shall be considered as illegitimate.

26

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

D OM E STI C

I NTE R NATI ONAL

Tier 1 • Allen & Gledhill • Rajah & Tann • Stamford Law Corporation • WongPartnership

Tier 1 • Allen & Overy • Clifford Chance • Latham & Watkins • Linklaters

Tier 2 • Baker & McKenzie.Wong & Leow • Drew & Napier • Rodyk & Davidson • Shook Lin & Bok

Tier 2 • Baker & McKenzie.Wong & Leow • Freshfields Bruckhaus Deringer • Herbert Smith Freehills • Milbank, Tweed, Hadley & McCloy • Norton Rose Fulbright • O'Melveny & Myers • Skadden, Arps, Slate, Meagher & Flom

Tier 3 • ATMD Bird & Bird • Colin Ng & Partners • Duane Morris & Selvam • Lee & Lee • RHTLaw Taylor Wessing • Virtus Law

REUTERS/Matthew Lee

WE MAKE DEALS HAPPEN Our award-winning Corporate/Mergers and Acquisitions Practice is actively engaged in transactions across the Asia Pacific and Middle East. With the legal talent in our team, we believe that we are extremely well equipped to find innovative and practical solutions to unique and demanding situations. Our involvement in many high profile mergers and acquisitions and corporate transactions in Singapore enables us to share our experience with clients involved in similar transactions in the region.

wongpartnership.com ASEAN | CHINA | MIDDLE EAST WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A).

Tier 3 • Ashurst • Berwin Leighton Paisner • Duane Morris & Selvam • Hogan Lovells Lee & Lee • Morrison & Foerster • Shearman & Sterling • Sidley Austin • Stephenson Harwood • Watson, Farley & Williams

COVER STORY

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27

Tier 1 • Allen & Overy • Baker & McKenzie • Weerawong, Chinnavat & Peangpanor Tier 2 • Chandler & Thong-ek Law Offices • Linklaters • Siam Premier International • Thanathip & Partners • Tilleke & Gibbins Tier 3 • Clifford Chance • DFDL • Norton Rose Fulbright • Rajah & Tann • Watson, Farley & Williams Firms to watch • Apisith & Alliance • LS Horizon • The Capital Law Office

REUTERS/Athit Perawongmetha

Weerawong, Chinnavat & Peangpanor Ltd. is one of Thailand’s largest independent law firms, combining local expertise with international standards of excellence.

Dedicated to helping our Thai and international clients develop business opportunities in Thailand, Indochina and around the world, we focus on solution-based advice and getting the deal done.

•Banking & Finance •Capital Markets & Securities •Corporate & Commercial

•Litigation & Arbitration •IT, Telecommunications & Media •Mergers, Acquisitions & Joint Ventures

Weerawong, Chinnavat & Peangpanor Ltd. 540 Mercury Tower, 22nd Floor Ploenchit Road Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: +662 264 8000 / Fax: +662 657 2222 www.weerawongcp.com

•Projects & Energy •Real Estate & Construction •Restructuring & Insolvency

Contact: Peangpanor Boonklum, Executive Partner Email: peangpanor.b@weerawongcp.com Chinnavat Chinsangaram, Executive Partner Email: chinnavat.c@weerawongcp.com

28

COVER STORY

ASIAN LEGAL BUSINESS SEPTEMBER 2014

Tier 1 • Bae, Kim & Lee • Kim & Chang • Lee & Ko • Shin & Kim Tier 2 • Jipyong • Yoon & Yang • Yulchon Firms to watch • Kim Chang & Lee • Lee International IP & Law Group

Tier 1 • Baker & McKenzie • Lee and Li Tier 2 • Chen & Lin • Formosa Transnational • Formosan Brothers • Jones Day • Tsar & Tsai Firms to watch • Eiger • K&L Gates • LCS & Partners

Tier 1 • Baker & McKenzie • Freshfields Bruckhaus Deringer • VILAF • YKVN Tier 2 • Allen & Overy • Allens • DFDL • Frasers Law Company • Hogan Lovells • Mayer Brown JSM • Tilleke & Gibbins

Tier 3 • Bizconsult Law Firm • Indochine Counsel • Leadco Legal Counsel • LNT & Partners • LuatViet Advocates & Solicitors • Phuoc & Partners • Vision & Associates

LOSING LUSTRE: HIGH-END RETAIL HURT BY LUXURY SLOWDOWN 高 端奢侈品在中

国风光不再

JANUARY/FEBRUARY WWW.LEGALBUSINE

2014

SSONLINE.COM

亚洲法律杂志 - 中国版

ISSN 2220-2706

CHINA

FIRMS TO WATCH

9 772220 270006

2014

年最 值得 关注 的15 BEIJING SUMMIT

Event tackles hot issues 第10届北京法务 峰会成 功举办

TRANSPARENCY KEY

China deals with rising debt 地方债务：透明 度是关键

BEYOND BORDERS

Corruption crackdown deepens 反腐败：国际化 影响和动力

家律 所

INSIDE n THE BIG STORY n DEALS SPOTLIGHT

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JAPAN

ASIAN LEGAL BUSINESS SEPTEMBER 2014

JOURNEYING ABROAD

WITH GROWTH GRINDING TO A HALT AT HOME, MORE JAPANESE COMPANIES ARE EXPECTED TO FOLLOW THE LIKES OF SUNTORY HOLDINGS IN ACQUIRING COMPANIES OVERSEAS TO GAIN A FOOTHOLD IN FASTER-GROWING MARKETS. THE COUNTRY’S BANKS AND GOVERNMENT AGENCIES, AWASH WITH CASH, ARE HELPING FUEL THIS EXPANSION, WHICH HAS HELPED COMPANIES SECURE SEVERAL BILLION DOLLAR MEGA DEALS THIS YEAR. MANY MID-SIZED COMPANIES TOO ARE LOOKING OVERSEAS FOR THE FIRST TIME, WITH SOUTHEAST ASIA AS A PRIME TARGET. JAPAN’S LAW FIRMS ARE RESPONDING TO THIS TREND. THE SO-CALLED ‘BIG FIVE’ FIRMS ARE INVESTING HEAVILY IN THEIR OUTBOUND PLANS, AND HAVE COLLECTIVELY OPENED 16 OVERSEAS OFFICES SINCE 2012. KANISHK VERGHESE REPORTS

“W

hen ‘Abenomics’ started, I was slightly worried about the weakening of the Japanese yen. I thought some Japanese companies might lose their appetite to go overseas. But this was not the case. It turns out that it was inevitable for Japanese companies to go overseas, regardless of the movement of the yen,” notes Jiro Toyokawa, a partner at Baker & McKenzie (Gaikokuho Joint Enterprise) in Tokyo. Indeed, Japan’s slow domestic growth after the devastating 2011 tsunami, coupled with declining birth rates and an ageing society, have left Japanese companies with no other option but to venture overseas. Recent figures indicate that Japan Inc is on the road to recovery, with an uptick in outbound acquisitions across a range of sectors from consumer and retail to finance and electronics. According to Thomson Reuters data, Japanese outbound activity for the first half of 2014 recorded a total of $33.6 billion in deal value, the highest first half deal value for outbound deals in the last three years and more than twice the $15.2 billion in deal value recorded during the same period in 2013. Importantly, market watchers say, it is not only the top-tier Japanese companies that are expanding abroad, but also an increasing number of medium-sized

companies that are eager to venture overseas for the first time.

A SHIFT WESTWARD? Japan’s mega banks and government agencies are also awash with cash and willing to lend support to Japan Inc’s outbound drive.

In January, Japanese beverage group Suntory Holdings agreed to purchase U.S. spirits company Beam Inc for $16 billion, using about $14 billion in borrowed money.

T h e s t ate - o w n e d Ja p a n B a n k fo r International Cooperation (JBIC), which provides financial resources to domestic firms expanding abroad, is looking to boost its support for Japanese firms in overseas M&A deals. The bank, which has traditionally focused on infrastructure and energy investments, made loans, guarantees and investments worth 15.3 trillion yen ($149.93 billion) last year, Reuters reports. Japan has three other entities that provide capital to Japanese companies – the Innovation Network Corporation of Japan (INCJ), the Regional Economy Vitalization Corporation of Japan (REVIC) and a fund managed by the state-owned Development Bank of Japan (DBJ). “We have seen several transactions where these state-owned banks and corporations and Japanese companies jointly conduct

outbound M&A transactions,” says Toyokawa, adding that Japanese building products group Lixil used funding from DBJ on its $4 billion acquisition of Grohe, a German bathroom instalments maker, last September.

An impor tant aspect of the recent Japanese outbound M&A boom is a notable shift from mid-sized deals in Asia to bigticket transactions in the U.S. and Europe, lawyers say. In addition to the sale of Grohe to Lixil, Japanese companies have conducted a number of mega deals in the West, including Suntory Holdings’ $16 billion acquisition of Beam Inc in January, Dai-ichi Life Insurance Co’s $5.7 billion purchase of American insurer Protective Life in June, and SoftBank’s $20 billion acquisition of Sprint Nextel in 2012, the largest-ever Japanese outbound M&A transaction to date. “For the last few years, Japanese companies have been focusing on Southeast Asia because the region’s geographic proximity to Japan makes it convenient for them to expand their businesses,” says Toyokawa. But finding sizeable targets in developing countries is no easy task. “As a result, following some successful mid-sized acquisitions in the Asian market, more Japanese companies are now willing to go further to acquire bigger targets in developed regions like the U.S. and Europe,” says Toyokawa,Moraes who REUTERS/Ricardo

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led the Baker & McKenzie team that advised Dai-ichi Life Insurance on its acquisition of Protective Life. “The Dai-ichi transaction is typical of this trend. The company has done several transactions in Asia, and is now looking to penetrate a much bigger market like the United States,” he says.

A FOCUS ON SOUTHEAST ASIA But while big-ticket deals like SoftBank’s acquisition of Sprint are eye-catching, they are somewhat uncommon, says Hisashi Hara, head partner of Nagashima Ohno & Tsunematsu’s Singapore office. On the other hand, acquiring Asian companies is more of a routine for Japanese companies, claims Hara.

“One good indicator is that the Singapore office of three Japanese mega banks and five big Japanese trading companies are now bigger than their London and New York offices in terms of headcount. This is a clear signal that they are putting more energy into the Asian market,” he says.

Japanese companies are making sizeable investments in Southeast Asia as the region grows in importance. Last year, Sumitomo Mitsui Banking Corp acquired 40 percent of Indonesian bank BTPN for $1.3 billion.

In December, the Bank of Tokyo Mitsubishi, a subsidiary of Mitsubishi UFJ Financial Group, purchased a 72 percent stake in Thailand’s Bank of Ayudhya for $5.31 billion, and Sumitomo Life Insurance Co bought a 40 percent stake in the life insurance unit of PT Bank Negara Indonesia for $350 million.

And earlier this year, Nippon Paint bought stakes in paint businesses in about eight Asian markets, including China, Singapore and Malaysia, for around $1 billion.

One reason for these sizeable investments is that Japanese companies’ focus on Southeast Asia has changed, says Hara.

“Before, they saw the region as a place to utilise low labour costs and cheap manufacturing, but now they see those countries as a place to sell their products and services,” he says. The region has seen a steady increase in inbound M&A activity over the past couple of years, and with healthy growth rates and a burgeoning middle class, the likes of Indonesia, Malaysia, Thailand and Vietnam are expecting to attract a larger volume of deals in the second half of 2014.

Southeast Asia’s new markets are also enticing Japanese investors. The new kid on the block is Myanmar, whose new civilian government, which came to power in 2011, is opening the country’s economy after five decades of military rule. Several Japanese companies are flocking into Myanmar, including the likes of

Mitsui, Itochu, Toyota, Mitsubishi, Toshiba, Hitachi and Panasonic. The two countries signed an investment treaty last December to enhance transparency, and provide greater protection and a stable legal environment for investors.

Japan is also Myanmar’s largest aid donor.

Last year, Tokyo waived part of Myanmar’s 500 billion yen ($5.74 billion) debt and made a fresh loan of 50 billion yen, partly to kick-start construction of Thilawa, a $12.6 billion, 2,400 hectare special economic

JAPAN

31

zone. According to Reuters, the part of the Thilawa package that includes debt forgiveness and refinancing adds up to nearly $5 billion. Mitsubishi Corp, Marubeni Corp and Sumitomo Corp form the Japanese side of the joint venture developing Thilawa. Japan will also provide up to $3.2 billion in new lending to build another special economic zone and deep-sea port in Dawei, in southern Myanmar, which will be developed into Southeast Asia’s largest industrial complex.

Most recently, following a government

REUTERS/Victor Fraile

32

JAPAN

ASIAN LEGAL BUSINESS SEPTEMBER 2014

policy change to permit a limited number of foreign banks to operate in Myanmar, the Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp and Mizuho Bank applied to the Myanmar government for banking licences in July. So far, about 25 banks have already applied for licences, and approval is expected to be granted to up to 10 banks by the end of September. Market watchers expect at least one or two of the Japanese banks to obtain licences.

However, Myanmar is also still reworking its legal system after passing new foreign direct investment laws in 2012. Legal reforms are rapidly changing the basic legal framework in Myanmar, and many Japanese companies are waiting to evaluate the effects of the reforms before investing. “It may take some time for Japanese financial, trading and construction companies to make a substantial investment into Myanmar, but they see the future potential in the market,” says Hara.

JAPAN’S LAW FIRMS RESPOND Japan’s law firms too are following their clients overseas in Southeast Asia, stressing

the importance of having a physical presence abroad to better service Japanese companies on their investments abroad, as well as to assist regional companies looking to do business in Japan. Mori Hamada & Matsumoto and Nishimura & Asahi both opened offices in Singapore in 2012, while Nagashima Ohno & Tsunematsu and Anderson Mori & Tomotsune, the last of Japan’s Big Four law firms, launched Singapore offices in January and November last year, respectively.

In addition to Singapore, Nishimura & Asahi has a Southeast Asian presence in Ho Chi Minh City and Hanoi, and opened new offices in Bangkok and Yangon in mid-2013.

TMI Associates, another large Japanese law firm, also has offices in Singapore, Hanoi, Ho Chi Minh City and Yangon. And in April, Mori Hamada launched a Yangon office, while Nagashima Ohno opened in Bangkok. Two months later, the latter opened its doors in Ho Chi Minh City. Since opening in January last year, Nagashima Ohno’s Singapore office has tripled in size in terms of headcount, says Hara. “This reflects the increasing demand for Japanese lawyers in the region,” he adds.

Despite the aggressive expansion of Japanese companies and law firms into Southeast Asia, conducting business in the region can often be a complex and difficult task. “In many ASEAN countries, there is no clear-cut rule of law. But each country has its own track record and way of implementing laws,” says Hara. “As lawyers, we need to be more creative and understand our clients’ businesses better.”

For his part, Toyokawa says that it can be quite difficult for Japanese companies to find good targets in Southeast Asia.

Comparatively, in Europe, it has been relatively easy to find good targets due to the global financial downturn, with several European financial institutions willing to dispose of their non-core assets, he adds.

Nonetheless, Hara says that the growing amount of investment by Japanese compa-

GOING AB ROAD The table below provides a summary of the locations and launch dates of the ‘Big Five’ Japanese law firms’ overseas offices ANDERSON MORI & TOMOTSUNE

MORI HAMADA & MATSUMOTO

NAGASHIMA OHNO & TSUNEMATSU

NISHIMURA & ASAHI

TMI ASSOCIATES

SINGAPORE

• Singapore (NOV 2013)

• Singapore (FEB 2012)

• Singapore (JAN 2013)

• Singapore (JAN 2012)

• Singapore (OCT 2012)

THAILAND

–

–

• Bangkok (APR 2014)

• Bangkok (JUL 2013)

–

• Ho Chi Minh City (OCT 2010)

• Ho Chi Minh City (NOV 2011)

• Hanoi (SEP 2011)

• Hanoi (SEP 2012)

• Yangon (MAY 2013)

• Yangon (OCT 2012)

VIETNAM

MYANMAR

OTHER OVERSEAS OFFICES

–

–

–

• Yangon (APR 2014)

• Beijing (1998)

• Beijing (1998)

• Shanghai (SEP 2013)

• Shanghai (2005)

• Ho Chi Minh City (JUL 2014)

–

• New York (SEP 2010)

• Beijing (APR 2010) • Shanghai (FEB 2014)

“FOLLOWING SOME SUCCESSFUL MID-SIZED ACQUISITIONS IN THE ASIAN MARKET, MORE JAPANESE COMPANIES ARE NOW WILLING TO GO FURTHER TO ACQUIRE BIGGER TARGETS IN DEVELOPED REGIONS LIKE THE U.S. AND EUROPE.” Jiro Toyokawa, Baker & McKenzie (Gaikokuho Joint Enterprise)

• Shanghai (1998) • Beijing (DEC 2012) • Silicon Valley (JUL 2014)

nies into Southeast Asia is providing more potential opportunities for Japanese law firms and lawyers in Asia. And with Japanese outbound M&A activity expected to pick up even further in the next few years, the region is fast becoming a hotly contested battleground for legal work. But despite the influx of Japanese law firms into the region, Hara sees international law firms as Nagashima Ohno’s direct competitors. “The challenge is to absorb more work and increase our market share in the region,” he says. “Competition with international law firms will get quite fierce, but I enjoy the challenge.”

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SPONSORED ARTICLE

33

TOSHIO KOBAYASHI

TOSHIO KOBAYASHI KOBAYASHI AND TODO Toshio Kobayashi Attorney at Law

Firm Profile The firm was established in 1962 and is located in the Chiyoda-ku district in the heart of Tokyo. Near fifty years of practice, the firm has developed a solid reputation specializing in the areas of domestic and international intellectual property and antitrust law as well as offering a wide range of legal services to our Japanese and international clients.

Members Of Firm (1) Toshio Kobayashi, Attorney at law,

Patent Attorney

Admitted 1961, Japan. Education: Tokyo Commercial College (Hitotsubashi University); Tokyo University (LLB); Legal Training and Research Institute of Supreme Court of Japan.

Author: “”Management of Trademark,” Toyo Keizai Shinpo Sha; “Directory of Industrial Property rights” Nikkan Kogyo Shinbun sha.”

Practice in Trademark Law” Seirin Shoin.

Member: Japanese federation of Bar Associations; Daini Tokyo Bar Association. Public Action: The prior president of Japan License Executive Society, The present vice president of Japan Trademark Association. Languages: Japanese and English.

Practice areas: Intellectual Property; International Business Law. Email: kobayashi@ktandi.org (2) Terakami Yasuteru, Attorney at Law

Admitted 1975, Japan. Education: Keio University(LL.B);Legal Training and Research Institute of Supreme Court of Japan. Member: Japanese federation of Bar Associations; Daini Tokyo Bar Association. Languages: Japanese and English. Email: terakami@ktandi.org (3) Keiichi Iwashita, Attorney at Law

Admitted 1985, Japan. Education: Tokyo Commercial College ( Hitotsubashi University); Legal Training and Research Institute of Supreme Court of Japan. Member: Japanese federation of Bar Associations; Daini Tokyo Bar Association.

Languages: Japanese and English. Email: iwashita@ktandi.org

A: Suite 310, Sanno Grand Building,14-2, Nagata-Cho 2-Chome,Chiyoda-Ku, Tokyo 100-0014, Japan T: +81-3-3580-2036 F: +81-3-3580-0789 E: office@ktandi.org

General and International Practice, Corporate, Patent, Trademark and Copyright Law, Licensing, Antitrust, Litigation.

(4) Shin’ichi Okamura, Patent Attorney

Admitted 1984 as registered Patent Attorney, Japan. Education: Chuo University (B.L); Legal Training and Research Institute of Supreme Court of Japan. Member: Japan Patent Attorney Association. Languages: Japanese and English.

Email: okamura@ktandi.org (5) Mizuaki Sato, Attorney at Law

Admitted 2000, Japan. Education: Keio University

(LL.B);Legal Training and Research Institute of Supreme Court of Japan. Member: Japanese federation of Bar Associations; Daini Tokyo Bar Association. Languages: Japanese and English.

Email: sato@ktandi.org (6) Issey Mori, Attorney at Law

Admitted 2010, Japan. Education: Kobe University; Law School of Keio University(LL.B); Legal Training and Research Institute of Supreme Court of Japan. Member: Japan Federation of Bar Associations; Daini Tokyo Bar association.

Languages: Japanese and English; Email: mori@ ktandi.org Distinctive Feature of Kobayashi and Todo as a smaller boutique firm Toshio Kobayashi has been specializing in Patent law, Utility model law, Design law, Trademark law, Unfair competition Prevention and Copy right law on the procedures of registration thereof, the litigation thereabout, the licensing agreement and settlement of such intellectual property matters.

At the same time, Yasuteru Terakami and Keiichi Iwashita have been specializing in Antitrust law for a lot of big companies in Japan and foreign countries.

In order to handle the IP and Antitrust mattes, lawyers need not only much experiences but also ever lasted study of new technology or economical change.

In this point, our law firm has self confidence to complete with the largest Japanese firms in the field of IP and Antitrust.

We believe fair use of IP rights controlled by antitrust law stimulates the ongoing productions of new inventions.

Therefore, the legal matters having relation between IP and Antitrust will be more and more increased.

34

INDIA

ASIAN LEGAL BUSINESS SEPTEMBER 2014

GROWING OPTIMISM

INDIA’S NEW PRIME MINISTER NARENDRA MODI HAS INFUSED OPTIMISM IN THE COUNTRY’S BUSINESS ENVIRONMENT PROMPTING FOREIGN INVESTORS TO RECONSIDER THE COUNTRY’S PROSPECTS AND REVIVE THEIR SHELVED PROJECTS. SENSING THE UPBEAT MOOD, INDIAN LAW FIRMS TOO ARE EXPANDING FASTER THAN EVER BEFORE, REPORTS RAGHAVENDRA VERMA

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I

ndia’s recently elected BJP government, led by the charismatic Narendra Modi, is expected to create a more businessfriendly environment that will further support confidence and investment, with many predicting the worst may be over for the Indian economy.

“The new government has changed sentiments of both foreign investors and Indian corporates,” says Nishant Parikh, partner at Trilegal law firm in Mumbai, “there is a general feeling that a big upswing in the economy is around the corner.”

With an image of an industry-friendly leader, Modi had already proved his credentials during his 12 years as the chief minister of India’s highly prosperous Gujarat state. The resounding victory that his party achieved in the country’s May general elections has made investors even more excited.

The Bharatiya Janata Party (BJP) won a clear majority in a 543-member lower house, an achievement that no other party could manage in the past 30 years. However, the victory is credited solely to Modi for his mass popularity.

“Given Modi’s autocratic reputation, this may not be a government but effectively a one -man show,” says Azmul Haque, consultant at Olswang in Singapore, “But this is probably what India needs, a strong person at the centre to take decisions and implement them.”

Furthermore, Haque says that the confidence in the new government is clearly visible as the interest shown by his Singapore-based clients in the Indian economy along with the private equity investments has grown by at least five times since Modi took office.

Law firms in India too are experiencing the same trend. According to Parikh, billions of dollars of investment proposals are in the pipeline. “We have expanded through the downturn, but now, the rate of expansion should be higher,” he says.

Parikh says that in the coming months, there will be many deals involving Indian groups receiving funding from foreign investors for semi-developed or partially completed projects. “It will help Indian companies to fund their cost overruns, refinance their liabilities and create new opportunities in the market,” he says.

Furthermore, according to Parikh, there are clear signals that foreign investors are actively sourcing new mergers and acquisi-

tions in addition to private equity investment opportunities.

BUDGET BOOST The investors’ expectations grew in July when the new finance minister Arun Jaitley presented his first national budget, but no major policy decisions were announced then.

According to Haque, even though the budget is somewhat conservative, the government has managed to assuage the fear of foreign investors.

It might be too early to expect any drastic reforms by the new government, but the investors were looking for a quick reversal of a controversial provision relating to retrospective taxation, which was brought in by the previous government.

The law relates to a dispute over a $2 billion tax claim by Indian authorities against UK’s Vodafone in relation to its acquisition of the telecom company Hutchison. That deal was done through an indirect transfer of shares at an offshore financial centre. After the Supreme Court of India ruled in favour of Vodafone, the previous Congress party-led government introduced an amendment to the Income Tax Act, which taxed indirect transfers of Indian assets retrospectively from 1962, thus bypassing the Supreme Court order.

While calling the new tax law as the biggest source of unhappiness for the investor community, Haque says that these proposals could create significant retroactive tax liabilities for international mergers and acquisitions into India going back to 50 years. “It would also eliminate a tax exemption that many investors came to rely upon,” he says, “No business likes uncertainty, particularly for tax implications as they hit the bottomline.”

Acknowledging the seriousness of the issue in his budget speech, Jaitley tried to reassure the investors. “This government will not ordinarily bring about any change retrospectively which creates a fresh liability,” he said, “We are committed to provide a stable and predictable taxation regime that would be investor friendly and spur growth.”

Jaitley also said: “I hope the investor community both within India and abroad would repose confidence on our stated position and participate in the Indian growth story with renewed vigour.”

However, investors are still not impressed.

“That is just an assurance,” says Parikh,

INDIA

35

“The finance minister would have won over investor sentiment if he had withdrawn the claim against Vodafone and struck down that provision.”

INVESTOR CONCERNS According to Haque, the government has given some indications that there would be a stable, transparent and certain tax regime for foreign investors, and the controversial retroactive tax policies may soon be abandoned.

However he says that “there is disconnect between the government’s promises of a nonadversarial tax regime and its implementation by the bureaucratic tax department that tries to maximise tax revenue.”

The red tape created by an unwieldy bureaucracy along with endemic corruption and working inefficiencies in India are the biggest concerns for investors from Singapore, says Haque. “The government will need to work on number of aspects to make it easier to do business in India,” he says.

Narrating a real estate-related investment undertaken by his firm for a healthcare project in India, Haque says that the deal involved land that could not be sold or taken on a long-term lease because it belonged to a private trust. The only way out was to assign the development rights over the land to an Indian company that would construct the hospital building and only this building structure could be owned, not the land itself. “Our clients struggle to understand such a system as it was unusual in their experience from a developed country’s legal system,” he says.

Haque also expresses concern over the fraudulent practices undertaken by target Indian companies. “We have come across situations where some Indian businesses looking for foreign investment have acknowledged the presence of more than one set of books and accounts,” says Haque, “There would be one set maintained for foreign investors, one probably for compliance or tax reasons and there might even be one more – the real set of accounts.”

Haque adds that “it is difficult to get a true picture of a business without a comprehensive due diligence, and even then, well-drafted representations, warranties and covenants are needed from Indian promoter groups.”

According to Haque, most foreign investors from Singapore compare between the ease of investing in China with that in India.

Indian Prime Minister Narendra Modi addresses the nation from the historic Red Fort during Independence Day celebrations in Delhi August 15, 2014. REUTERS/Ahmad Masood

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INDIA

ASIAN LEGAL BUSINESS SEPTEMBER 2014

“GIVEN MODI’S AUTOCRATIC REPUTATION, THIS MAY NOT BE A GOVERNMENT BUT EFFECTIVELY A ONE MAN SHOW. BUT THIS IS PROBABLY WHAT INDIA NEEDS, A STRONG PERSON AT THE CENTRE TO TAKE DECISIONS AND IMPLEMENT THEM.” Azmul Haque, Olswang

“In China, because of the statutory power structure, foreign investment procedures are centralised - the investment agencies help you implement your project and provide you the last mile support to make sure that it is completed,” he says.

At the same time in India, says Haque, “the government may welcome you, but thereafter, all your troubles start as you need to navigate various national, state and local bureaucracies in order to get things done – often among agencies that have no coordination with each other.”

Furthermore, according to Haque, “many foreign investors haven’t considered India very seriously because they have limited resources, and would rather pursue something that is more tried and tested.”

Among the measures to redress investor complaints, the new Indian government plans to make all business- and investmentrelated clearances and compliances available online with an integrated payment gateway.

All central government departments and ministries will integrate their services with an eBiz platform on a priority by the end of this year, finance minister Jaitley said in his budget speech.

Parikh calls the eBiz platform an extremely important move for businesses, but warns that “it is easier said than done as the bureaucracy is often stronger than political will when it comes to implementing changes.”

Among the major investment sectors that have not achieved desired growth is insurance, and remedial steps have been initiated.

In his budget speech, Finance Minister Jaitley said that “the insurance sector is investment starved,” and therefore, the limit of foreign investments in the insurance has been increased from 26 percent to 49 percent.”

According to Parikh, the increase has drawn the maximum attention because this alone is estimated to lead to $10 billion for-

eign direct investment in the next five years.

“Ideally, foreign insurance companies would have liked an increase of 51 percent, but since the ceiling has been stuck at 26 percent for a long time, this is a welcome change,” he says.

These developments are significant because in recent years, many foreign insurance companies have exited India. “It requires a lot of investment and continuous funding of capital for many years until the business matures,” he says, “With 49 percent limit, the ability of foreign insurance companies to fund those large capital requirements has gone up and there will be more commitment from them.”

ROOM FOR GROWTH Modi must also target investment policies to benefit India’s large and growing population.

According to Parikh, one of the biggest agendas of the new government is job creation, given that India is going to add the highest number to the world’s working population in the next 10 years in comparison to any other country. “For that, there needs to be a new and very large capital expenditure in manufacturing,” he says, “and such investment will happen only when there is good infrastructure, efficient bureaucracy and relaxed labour laws.”

Indeed, India’s archaic labour laws for manufacturing units not only make it almost impossible to retrench the workforce, but even require companies to get an approval from the government for changes in their working conditions.

“These are problems that have existed in India for decades,” says Parikh, “However, the state government of Rajasthan has made a beginning by greatly relaxing labour laws, and perhaps some other states will also follow.”

In July, Rajasthan’s BJP government amended laws that will allow companies to retrench up to 300 employees without seek-

ing government permission and would also make it difficult to register labour unions. The earlier limit for retrenchment was 100. “It is still very early days but fundamentally, these are good changes,” says Parikh.

The other major hindrance for India’s industrial development and investments is the poor state of infrastructure that has been struggling to keep pace with the rapid economic development in the country. In the union budget, the government has committed to build more highways, airports and power plants. However Parikh says that “if the government implements even half of what have been promised, or even half of what the previous government had left unfinished, we

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INDIA

37

Hindu nationalist Narendra Modi, the prime ministerial candidate for India’s Bharatiya Janata Party (BJP), gestures towards his supporters from his car during a road show upon his arrival at the airport in New Delhi May 17, 2014. REUTERS/Adnan Abidi

will see massive changes in the economic landscape.” Given this emphasis, infrastructure, engineering, construction and financial services sectors should witness significant growth, he says.

Indeed, according to Shyam Raghuwani, a Delhi-based private consultant to foreign investors and a former banker, there is a sector-specific approach by investors from various countries. In India’s real estate sector, companies from the Middle East, Singapore and Hong Kong are particularly interested, while there is a competition going on between Japanese and Chinese companies to invest in the modernisation of Indian railways, he says.

“China is offering lower cost but given a more

reliable overall relationship, Japan might be given preference,” he says. The picture will become clearer in the next one or two years, he adds.

Raghuwani says that investments will spurt after October by when Modi would have completed his tours to Japan, China and the United States. “U.S. and European investors will be watching how he is received in the U.S.,” he says, “Once a positive message comes from the Obama administration, many American and European companies will invest [in India].”

Most of the European investments will come from Germany, says Raghuwani, which along with France, is very keen to invest in the

infrastructure and defence sectors. “Many foreign investors are in a hurry as most of the business decisions are taken in [the] first two or three years of a government before it starts preparing for the next elections,” he says.

For now, Modi has seized the initiative and it is a new beginning as according to Haque, the capability of the Modi-led government to spur growth and investment in the country has already been acknowledged by the investor community. “Evidence of this is seen in the fact that the Indian Rupee has recovered from the record low of August 2013, the stock market is up about 30 percent since then, and foreign exchange reserves have been rebuilt,” he says.

38

INDONESIA

ASIAN LEGAL BUSINESS SEPTEMBER 2014

A B O OSTER SHOT F OR

ISLAMIC FINANCE IN INDONESIA IS STILL THE ‘STEP CHILD’ OF THE COUNTRY’S BANKING SECTOR, EVEN WITH THE COUNTRY’S POPULATION OF 210 MILLION MUSLIMS. YET WITH JOKOWI COMING ON AS PRESIDENT IN OCTOBER, AND A NEW BLUEPRINT FROM THE MINISTRY OF FINANCE DUE AT THE END OF THE YEAR TO EXPAND THE SECTOR, THERE COULD BE NO BETTER OPPORTUNITY FOR ISLAMIC FINANCE TO FINALLY GO MAINSTREAM IN SOUTHEAST ASIA’S LARGEST ECONOMY, FINDS AVIEL TAN

REUTERS/Bazuki Muhammad

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W

hen a country has the world’s largest Muslim population but Islamic banking makes up just 4.8 percent of the country’s total banking assets, something isn’t quite right.

Almost 90 percent of Indonesia’s population of 238 million is Muslim. However, the 11 Islamic banks and the 23 Islamic windows operated by conventional banks in Indonesia accounted for just $21.4 billion (244 trillion rupiah), or 4.8 percent of Indonesia’s total banking assets as of May, according to the Otoritas Jasa Keuangan (OJK), Indonesia’s finance ministry, as reported by Reuters.

The current annual growth rate for Indonesia’s Islamic finance market is 16.5 percent, down from 24.2 percent in 2013, and 49.2 percent in 2011. A large part of this decline can be attributed to the most recognisable instrument of Islamic finance, sukuk, that work similar to conventional bonds, but with sharia principles applied.

In 2011, the Indonesian government had a $1 billion sukuk issuance. The previous year and the one before that (2013 and 2012) saw a combined sukuk issuance of $366 million (4.18 trillion rupiah). In 2014 so far, there has been no Indonesian corporate issuance of sukuk, according to data from the OJK. The lack of demand is striking, two years after Indonesia’s stock and bond market landed in the cross-hairs of yield-hungry investors emboldened in their search overseas by low interest rates in the U.S, that still remain close to zero.

NEW BLUEPRINT The OJK is now preparing a new blueprint due at the end of the year to expand Islamic finance in Southeast Asia’s biggest economy.

It says the new blueprint may include additional benefits to current fee and tax incentives to revive the domestic sukuk market, and also said it was considering extending the beneficial issuance fee for sukuk to issuance of sharia-compliant securities.

The document will also address issues in Islamic finance including lack of economies of scale, consolidation opportunities, and the role of foreign ownership.

The OJK had, in early August, also established a committee to enhance coordination between government bodies and the private sector so Islamic banks could better navigate local and federal regulations.

Laksmita Andarumi and Indra Safitri, partner and senior counsel respectively at Melli Darsa & Co, say that while the OJK is taking a step in the right direction,

the government also has to take a bigger leadership role together with the National Sharia Board to spark mainstream interest in sharia-compliant financing.

“If the blueprint is implemented, we expect it will better support the sharia capital market development, but we firmly believe this also depends on OJK and the government actively promoting sharia financing as a mainstream, non-religious alternative financing,” they say.

Andarumi and Safitri add that this would require vision, determination, as well as detailed, supportive, and workable regulations, policies and guidelines.

“The development of more Indonesian experts in the field is the key. The govern-

“THE GOVERNMENT’S PUSH FOR THE SECTOR TO GROW TO A CERTAIN PERCENTAGE OF THE MARKET WILL ENSURE SHARIA FINANCING WILL NO LONGER BE THE ‘STEP CHILD’ OR ‘IGNORED CHILD’ IN GENERAL FINANCING IN INDONESIA.” Laksmita Andarumi and Indra Safitri, Melli Darsa & Co ment’s push for the sector to grow to a certain percentage of the market will ensure sharia financing will no longer be the ‘step child’ or ‘ignored child’ in general financing in Indonesia,” they say.

“One of the key problems is the lack of human resources – particularly on the regulator’s side – trained in Islamic finance, resulting in a dependency on the National Sharia Board for development of new products,” say Andarumi and Safitri.

“Another problem is that there is no known champion of Islamic finance in OJK. If anything, due to a lack of understanding, some prefer to ignore it. Leadership is the key to push any initiative in Indonesia,” they add.

INDONESIA

39

Indonesia’s finance ministry knows it is facing bigger problems than just apprehension over taxes and fees, which it says the market already recognises that it provides incentives for.

“Taxation should not be an issue. Right now, the biggest challenge in our sukuk market is the issuers’ and underwriters’ lack of knowledge and understanding on sharia products,” it said recently.

A lack of understanding of Islamic finance, not just for investors, but also for issuers and underwriters in Indonesia, is a formidable opponent when combined with widespread apathy for a sector that many Indonesians see exists to fulfill religious beliefs.

“One aspect of marketing and possibly education is to get people to understand that Islamic finance is not just for the Muslim population and should be viewed as providing another form of financing,” says Noor Meurling, senior foreign legal consultant at Oentoeng Suria & Partners (OSP) in Jakarta.

“The term Islamic finance may give it a stronger religious connotation thereby restricting interest in its use for general transactions,” says Meurling.

Andarumi and Safitri also call for nonMuslim finance experts to get involved in the sector to make it clear that Islamic financing is not only reserved for Muslims.

NEED FOR CLARITY Then there are problems such as the lack of regulatory clarity, and the lack of experience even for arranging banks. Indonesians themselves are split over which Islamic finance model is acceptable.

Andarumi and Safitri say many Indonesians that are active in Islamic finance prefer not to look at Malaysia’s model of Islamic finance, claiming that it is too advanced and not conservative enough, and say that Saudi Arabia’s version should be used instead.

“This debate as to which kind of Islamic financing should be our reference is part of the reason Islamic finance here has not advanced. People still associate Islamic finance as more of a need to fulfill religious rules rather than a way to provide a wide array of innovative products,” they say.

To create a solution it hopes will capture the imagination of the broader market, the OJK has appointed a committee to develop sharia finance in Indonesia.

Meurling says that the Islamic finance model that is developed in Indonesia will likely be a balance between the Malaysian

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INDONESIA

and the Middle East concepts. “The committee is constituted from various sectors representing social, financial, and religious interests,” she says.

There is also the continuous need to re-evaluate products for compliance with sharia principles.

Take sukuk for example, most Islamic bonds are issued on “beneficial” or “assetbased” ownership to investors. This means that while investors have the right to use and obtain cashflow generated from the underlying asset, they cannot sell the asset to a third party as legal ownership of the asset still remains with the issuer of the sukuk.

Sharia law currently recognises that a valid sale, or “true sale,” is one which all rights to an asset are transferred by the seller to the buyer, and this includes the right to sell the underlying asset to a third party.

To maintain the credibility of the sector, there have been calls for the Islamic finance

ASIAN LEGAL BUSINESS SEPTEMBER 2014

industry to relook the issue of whether ‘beneficial ownership’ is compliant with sharia law, and whether based on sharia, such a sale can even be considered a valid sale in the first place.

“Islamic finance is not, of course, appropriate for everything and strict principles as well as sharia compliance are fundamental. But it can be used for a wide range of purposes including infrastructure-type transactions where investors can benefit from long-term revenue derived from the project while sharing risk with the owner,” says OSP’s Meurling.

Indeed the confirmation of the reformfriendly Jokowi as Indonesia’s new president, together with OJK’s new blueprint, could provide the sector with a much-needed catalyst.

Jokowi had already stated, even during his early campaigning days, that rapid infrastructure development and improve-

ment in Indonesia would be a key pillar of his presidency.

This ties in well with the sharia principles on which sukuk are based. Islamic bonds for example, must link return and cash flow from financing to purchase assets, as sharia law prohibits trading in debt. This means investors can finance non-speculative identifiable assets.

Power plants, oil fields, or real estate used for purposes that do not breach sharia law, are large projects that fall into such categories, and investors can also share in the revenue generated from such assets.

“Sukuk is already relatively successful in Indonesia so I expect with some adjustments allowing for risk control, it will get a larger appreciation,” said OSP’s Meurling.

The sukuk market is forecast to grow 14 percent to $130 billion in issuance in 2014, compared with last year, a Thomson Reuters study shows.

H FEW ASIAN ISSUERS HAVE TARGETED THE GLOBAL SUKUK MARKET IN THE PAST. HOWEVER, THAT IS CHANGING, WITH THIS MONTH SET TO SEE GLUT OF SOVEREIGN SUKUK ISSUES AS GOVERNMENTS ACROSS ASIA LOOK TO ATTRACT ISLAMIC INVESTORS FROM OUTSIDE THE REGION. AND THE ADDITION OF MORE ASIAN SOVEREIGNS TO THE MARKET COMES AMID GROWING INTEREST IN THE SUKUK FORMAT AMONG BORROWERS AROUND THE GLOBE, FINDS KIT YIN BOEY OF IFR

ong Kong, Indonesia and Pakistan are banking on pent-up investor demand as they look to raise up to a combined $3.5 billion in the fast-growing Islamic bond market.

The three sovereign sukuk issues, including a planned $1 billion debut from Triple A rated Hong Kong, are set to launch before the end of September.

Few Asian issuers have targeted the global sukuk market in the past, and the glut of deals comes as governments across Asia are looking to attract Islamic investors from outside the region.

“There are a lot of Islamic investors from the Middle East looking for diversification and new investment opportunities,” says Ahsan Ali, Standard Chartered Bank’s managing director and global head for Islamic Origination.

“Historically, these investors were mostly investing in Europe and U.S., but over the past few years, we have seen growing investment allocations to Asia as they move to diversify their assets,” Ali says.

Indonesia, home to the world’s biggest Muslim population, is Asia’s only regular issuer in the global sukuk market, having issued annually since 2010. Pakistan has sold Islamic debt overseas only once before in 2005, while Malaysia has typically preferred to target its own domestic market.

The addition of more Asian sovereigns to

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INDONESIA

ASIAN LEGAL BUSINESS SEPTEMBER 2014

definitely buy it,” says a Kuala Lumpur-based debt banker.

Bankers hope Indonesia can beat Hong Kong to market with a U.S. dollar sukuk of up to $1.5 billion in late August, after the end of Eid al-Fitr, the festival marking the end of the Islamic holy month of Ramadan.

Roadshows are planned for the middle of August. Indonesia is rated Baa3/BB+/BBB-.

CIMB, Emirates National Bank of Dubai, HSBC and Standard Chartered are joint bookrunners.

Pakistan, with the lowest rating of the three at Caa1/B- from Moody’s and Standard & Poor’s, will appoint lead banks in the coming days, according to a finance ministry official.

An employee walks past a screen displaying the worldwide locations of the National Bank of Abu Dhabi, at the bank’s headquarters in Abu Dhabi. REUTERS/Ben Job

the market comes amid growing interest in the sukuk format among borrowers across the globe. The UK priced its first sukuk this year, while Luxembourg, Tunisia, South Africa are among other governments considering a debut.

“This year has been unique with issues coming from outside the traditional market in the Middle East,” says Mohammed Dawood, HSBC’s global head of sukuk financing. “The UK government sold a 200 million pound ($336 million) bond in June, and other sovereigns are looking at the market.

“This helps to internationalise the product as a mainstream instrument that can be used as an alternative funding source.”

For Islamic investors, the boost in supply cannot come soon enough. Ernst & Young projects the growth of the Islamic banking industry will drive demand for sukuk to $900 billion in 2017, up from $300 billion just over a year ago. Globally, assets held by Islamic investors rose to $1.8 trillion at the end of last year, marking an annual growth rate of about 17.6 percent over the last four years.

SETTING BENCHMARKS Asia’s sovereigns view the upcoming offer-

“FOR HONG KONG TO PASS THE SUKUK-RELATED ORDINANCE [IN MARCH] IS A POSITIVE DEVELOPMENT FOR THE OVERALL ISLAMIC FINANCIAL MARKET... BOTH LOCAL AND GLOBAL INVESTORS WANT TO DIVERSIFY THEIR PORTFOLIOS.” Michele Leung, S&P Dow Jones Indices

ings as an opportunity to set benchmarks for companies to follow, as well as a chance to expand their own investor base.

Hong Kong is expected to sell a $500 million to$1 billion sukuk in September via joint leads CIMB, HSBC, National Bank of Abu Dhabi and Standard Chartered.

Conventional as well as Islamic investors are likely to snap up the debut from a rare Aa1/ AAA/AA+ rated issuer.

“If [conventional] investors want access to a certain credit, and if sukuk is the only way they can get hold of the credit, they will

CHEAPER FUNDING While Asia is home to the world’s biggest Islamic bond market, in Malaysia, Asian issuers have traditionally had a low profile overseas. The only global offering this year was a $300 million 2.874 percent five-year deal from the Export-Import Bank of Malaysia, while last year, there were only two in U.S. dollars - a $800 million dual-tranche from Malaysia’s Sime Darby and a $1.5 billion issue from the Republic of Indonesia.

Other Asian borrowers have taken note of Malaysia Exim’s result, however. The bond priced inside its conventional U.S. dollar curve, showing that the Islamic market can deliver cheaper funding. Some issuers in the Gulf region have sold sukuk in global markets at yields of between 10bp and 20bp lower than their conventional bonds.

Sukuk issues are also performing well.

The Dow Jones Sukuk Index is up 4.39 percent so far this year compared with a return of 0.22 percent in 2013.

Market participants hope high-profile offerings from key Asian sovereigns will allow other borrowers to benefit.

Hong Kong, in particular, is looking to promote itself as a regional hub for Islamic financing to capitalise on growing trade links between Greater China and the Middle East. Trade between China and the Middle East reached $238.9 billion in 2013, up from $25.5 billion in 2004. Malaysia’s Khazanah Nasional and Axiata have already sold sukuk denominated in offshore renminbi in Hong Kong’s dim sum market.

“For Hong Kong to pass the sukuk-related ordinance [in March] is a positive development for the overall Islamic financial market,” says Michele Leung, associate director, fixed income indices, S&P Dow Jones Indices.

“Both local and global investors want to diversify their portfolios.”

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CONSTITUTIONAL COURT OF KOREA

ASIAN LEGAL BUSINESS SEPTEMBER 2014

THE 3RD CONGRESS OF THE WCCJ:

A PLATFORM OF COOPERATION TO RESOLVE SOCIAL CONFLICTS THE LEADERS OF CONSTITUTIONAL COURTS FROM ALMOST 100 COUNTRIES GATHER IN SEOUL.

T

he Constitutional Court of Korea will host the 3rd Congress of the World Conference on Constitutional Justice (WCCJ), a four-day event that brings together the leaders of constitutional justice from around the world, in Seoul from Sep. 28 to Oct. 1, 2014. The Congress, on the topic of “Constitutional Justice and Social Integration”, will be the largest event ever attended by the heads of constitutional courts, supreme courts and constitutional councils, as well as representatives of international organisations from nearly 100 countries around the world. This is unprecedented in the history of constitutional justice. So what is the secret behind this? What made it possible for constitutional justice to assemble the leaders of constitutional courts from all over the world despite its not-so-long history compared to other judicial jurisdictions? Maybe it is because countries around the world share the common ultimate goal of pursuing constitutional justice, namely to enhance the development of democracy, rule of law, and human rights protection through more active constitutional adjudication, despite their varying histories and different political, economic, and cultural environments.

The participants of the Congress are the highest-level officials of great influence over decision making in their own countries.

Among them are President Andreas Voßkuhle of the German Federal Constitutional Court, who has played a leading role in the development of the world’s constitutional justice, Chief Justice Mogoeng Mogoeng of the South African Constitutional Court who hosted the 1st Congress, President Ricardo Lewandowski of the Supreme Federal Court of Brazil who hosted the 2nd Congress, and Chief Justice Hamdan Zoelva of the Indonesian Constitutional Court who will host the 3rd Congress of the Association of Asian Constitutional Courts and Equivalent Institutions in 2016. Additionally, Chief Justice Robert French of the High Court of Australia will also take part in the Congress for the first

THE 2ND CONGRESS OF THE WCCJ IN RIO DE JANEIRO, BRAZIL, IN JANUARY 2011

time. Most participants come from Europe, followed by Africa, Asia, and America.

Under the main topic of “Constitutional Justice and Social Integration”, participants from across the globe will share each other’s experiences and put together their wisdom to propose solutions to the intensifying social conflicts faced by not just Asia, but the entire world. The topic, proposed by the Korean Constitutional Court and adopted by the Bureau of the World Conference on Constitutional Justice, will be discussed in five plenary sessions on five sub-topics, each of which will have a session chair, a keynote speaker, and a rapporteur. The role of session chairs will be to moderate the discussions; the keynote speakers will be invited to make introductory statements based on the members’ replies to the questionnaire to serve as the basis for discussions to follow; and the rapporteurs will be invited to report on the results of the discussions at the final plenary session.

The first session will address the subtopic on “Challenges of Social Integration in a Globalised World”. The session chair will be assigned to the president of the Spanish Constitutional Court, the president of the Algerian Constitutional Council will be the keynote speaker, and the president of the Russian Constitutional Court will be the rapporteur. In the second session, the participants will discuss the topic of “International

Standards for Social Integration”. The president of the Constitutional Council of Morocco will be the session chair, the president of the Korean Constitutional Court will deliver the keynote speech, and the president of the Gabonese Constitutional Court will act as the rapporteur. The third session is about “Constitutional Instruments Enhancing/ Dealing with/for Social Integration,” which will be moderated by the chief justice of the South African Constitutional Court. A justice of the Turkish Constitutional Court will make the keynote speech, and a justice of the Angolan Constitutional Court will take part as the rapporteur. Moderated by the Assistant Secretary General of the Constitutional Court of Bahrain, the fourth session will cover “The Role of Constitutional Justice in Social Integration”.

The Chief Justice of the Supreme Federal Court of Brazil will be the keynote speaker of this session, and a Justice of the Korean Constitutional Court will serve as the rapporteur. The last session will focus on the topic of “Independence of Constitutional Courts-Stocktaking,” which will be moderated by the vice-president of the Austrian Constitutional Court. The president of the Hungarian Constitutional Court will present the keynote speech, and the president of the Constitutional Court of Dominican Republic has agreed to be the rapporteur.

During the four-day Congress, the participants will be able to see and experience the

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CONSTITUTIONAL COURT OF KOREA

ALL NINE JUSTICES STANDING IN FRONT OF THE KOREAN CONSTITUTIONAL COURT BUILDING

ALL NINE JUSTICES SITTING IN THE GRAND COURTROOM OF THE CONSTITUTIONAL COURT OF KOREA

diverse aspects of Korea, such as its beautiful art and culture, long history and tradition, economic and social developments, etc. The welcome reception will be held at The Shilla Seoul, Korea’s most prestigious and representative hotel that is also the venue for the Congress. The farewell dinner will be held at the National Museum of Korea, a national repository of cultural heritage that houses more than 300,000 national treasures. There are also cultural programmes for the participants and their spouses, which include tours to the Demilitarised Zone, Changdeokgung Palace and Suwon Hwaseong Fortress, and a non-verbal cooking performance NANTA. Justice Kang Ilwon of the Kor ean Constitutional Court, who serves as the Chairperson of the Preparatory Committee for the 3rd Congress of the WCCJ, said: “The upcoming 3rd Congress is the third of its kind following the first Congress in South Africa in 2009 and the second Congress in Brazil in 2011. But it is also called the ‘inaugural’ Congress, being the first gathering since the World Conference officially became a perma-

nent body. In particular, it is very meaningful that such an important Congress is being held in Asia instead of Europe that has a long history in constitutional justice. I hope that this Congress will be an opportunity to further advance democracy and the rule of law, as well as promote human rights across the Asian region.”

The World Conference, a permanent forum uniting constitutional courts, supreme courts, and constitutional councils across the world, was organised to promote constitutional justice as the key element of human rights protection, democracy and the rule of law. The courts of constitutional jurisdiction across the globe have been forming regional or language-based groups in their respective regions, such as the Association of Asian Constitutional Courts and Equivalent Institutions, the Association of Constitutional Courts using the French Language, and the Conference of European Constitutional Courts, in their concerted efforts to share experience and knowledge. And the Venice Commission, which acts as the Council of

45

Europe’s advisory body on constitutional matters, has been providing support in these activities. In this context, it has come to the attention of the Commission that these regional, linguistic groups should be expanded to a global scale by involving all courts exercising constitutional jurisdiction around the world.

In January 2009, the Commission held the first Congress jointly with the Constitutional Court of South Africa, which signalled the first step in the history of the World Conference.

The Commission also held the second Congress in cooperation with the Supreme Federal Court of Brazil in January 2011, and the draft statute of the World Conference was made more specific on that occasion. This draft statute was adopted at a meeting of the Bureau of the World Conference in May 2011 and came into force in September the same year, finally taking shape as a permanent body. In its initial stage in 2011, the World Conference had only 30 constitutional courts/ councils and supreme courts as members.

But within three years, the membership increased dramatically to 91 countries (as of August 2014) and the members have engaged in active exchange and cooperation since, which has developed the World Conference into the world’s highest-level forum on constitutional justice in the true sense of the word.

DEVELOPMENT OF CONSTITUTIONAL JUSTICE IN ASIA AND THE KOREAN CONSTITUTIONAL COURT Since its establishment in September 1988, the Constitutional Court of Korea has constantly worked to share its achievements with other countries over the past 26 years.

The Court has transferred its experience and knowledge to many Asian countries through partnerships and exchanges, including Cambodia, Indonesia, Mongolia, Thailand, and Turkey. Recently, the Court also played a leading role in creating a regional forum for constitutional justice in Asia, namely the “Association of Asian Constitutional Courts and Equivalent Institutions,” and hosted the Association’s Inaugural Congress in 2012. As of July 2010, the Association started with seven member countries: Indonesia, Korea, Malaysia, Mongolia, the Philippines, Thailand, and Uzbekistan. However, the number of member countries increased to 14 with Afghanistan, Azerbaijan, Kazakhstan, Pakistan, Tajikistan, Turkey, and Russia joining within only a few years, and thus the Association has grown into a regional group of constitutional courts representing Asia. Moving forward, the Association is expected to further promote constitutional justice in the Asian region.

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ASIAN LEGAL BUSINESS SEPTEMBER 2014

사회갈등 해결을 위한 협력의 장, WCCJ 제3차 총회 100개국 헌법재판기관의 수장, 서울에 모인다. 한국 헌법재판소가 오는 9월 28일부터 10 월 1일까지 나흘 간 서울에서 헌법재판 분 야 최고위급 국제회의인 ‘세계헌법재판회의 제3차 총회’(3rd Congress of the World Conference on Constitutional Justice) 를 개최한다. ‘헌법재판과 사회통합’을 주제 로 열리는 이번 총회는 약 100개국의 헌법 재판소장, 대법원장 등 헌법재판기관장과 국 제기구의 수장들이 한 자리에 모이는 역대 최대 규모로 치러진다. 이는 헌법재판의 역 사에서 전례 없는 일이다. 다른 재판영역에 비해 역사가 길지 않음에도 전 세계 헌법재 판기관의 수장들을 한 자리에 모을 수 있었 던 힘은 무엇일까? 아마도 각 나라들이 겪 어 온 역사나 처한 정치•경제•사회•문화적 환 경 등은 달라도 헌법재판을 통해 추구하고자 하는 지향점은 공통되기 때문일 것이다. 바 로 헌법재판의 활성화를 통해 민주주의, 법 치주의의 발전과 인권을 신장시키는 것이다. 금번 총회의 모든 참석자들은 자국의 정 책 결정에 상당한 영향력을 미치는 각국의 최고위 인사들이다. 이중에는 세계 헌법재판 의 발전에 선도적인 역할을 해 온 독일연방헌 법재판소의 안드레아스 보쓰쿨레(Andreas VoßKUHLE) 재판소장, 제1차 총회 개최기 관인 남아프리카공화국 헌법재판소의 모 호엥 모호엥(Mogoeng MOGOENG) 재 판소장, 제2차 총회 개최기관인 브라질 연 방대법원의 리카르도 르완도스키(Ricardo LEWANDOWSKI) 대법원장, 2016년 개최 될 아시아헌법재판소연합 제3차 총회 개최 기관인 인도네시아 헌법재판소의 햄단 조엘 바(Hamdan ZOELVA) 재판소장이 참석한 다. 이번 총회에는 처음으로 호주 대법원의 로버트 프렌치(Robert FRENCH) 대법원장 도 참석한다. 지역별로는 유럽에서 가장 많 이 참석하며, 그 다음은 아프리카, 아시아, 미주 순이다. 이번 총회의 대주제는 ‘헌법재판과 사회 통합’으로, 각국의 참석자들이 서로의 경험 을 나누고 지혜를 모아 아시아뿐만 아니라 전 세계적으로 심화되고 있는 사회갈등의 해결 방안을 제시한다. 이 주제는 한국 헌법 재판소가 제안하여 세계헌법재판회의 집행 위원회에서 채택하였다. 총 5개의 세션으로 구성되어 있으며, 세션별로 세션의장, 기조 발제자, 조사위원이 지명되어 있다. 회의 진 행방식은 세션의장이 회의를 주재하고, 기조 발제자는 세션별로 질문지 내용을 요약 발 표하여 이후 토론의 기초를 제공하고, 조사

위원은 토론 내용을 정리하여 전체회의에서 보고하게 된다. 첫 번째 세션은 ‘세계화 시대의 사회통합 과제’를 다룬다. 스페인 헌법재판소장의 주 재 하에 알제리 헌법위원장의 기조발제가 이 루어지며, 러시아 헌법재판소장이 조사위원 으로 참여한다. 두 번째 세션은 ‘사회통합을 위한 국제 기준’을 다룬다. 모로코 헌법재판 소장의 주재 하에 한국 헌법재판소장이 기조 발제를 하며, 가봉 헌법재판소장이 조사위원 으로 참여한다. 세 번째 세션은 ‘사회통합을 위한 헌법적 수단’을 다룬다. 남아프리카공 화국 헌법재판소장의 주재 하에 터키 헌법재 판소 재판관이 기조발제를 하며, 앙골라 헌 법재판소 재판관이 조사위원으로 참여한다. 네 번째 세션은 ‘사회통합을 위한 헌법재판 의 역할’을 다룬다. 바레인 헌법재판소 부사 무총장의 주재 하에 브라질 연방대법원장이 기조발제를 하며, 한국 헌법재판소 재판관이 조사위원으로 참여한다. 마지막 세션은 ‘헌 법재판기관의 독립성’을 다룬다. 오스트리아 헌법재판소 부소장의 주재 하에 헝가리 헌법 재판소장이 기조발제를 하며, 도미니카공화 국 헌법재판소장이 조사위원으로 참여한다. 나흘 간 개최되는 금번 총회에서 참석자 들은 한국의 아름다운 예술과 문화, 오랜 역 사와 전통, 경제‧사회적 발전상 등 한국의 다 양한 면들을 보고 체험할 수 있다. 환영리셉 션은 총회의 행사장이자 한국을 대표하는 호 텔인 신라호텔에서 진행되며, 환송만찬은 30 만여 점의 국보급 유물을 소장하고 있는 한 국 문화유산의 보고인 국립중앙박물관에서 개최할 예정이다. 그 밖에도 총회 참석자와 동반자를 위한 DMZ, 창덕궁, 수원화성 방문, 난타공연 등의 문화 프로그램도 준비 중이다. 세계헌법재판회의 제3차 총회 준비위원장 인 강일원 헌법재판소 재판관은 “세계헌법재 판회의 제3차 총회는 2009년 남아프리카공 화국 총회, 2011년 브라질 총회에 이은 세 번 째 총회이기도 하지만, 세계헌법재판회의가 정식 회의체로 출범한 이후 처음으로 열리 기 때문에 창립총회라고 부르기도 한다. 이 러한 창립총회가 헌법재판의 역사가 긴 유 럽이 아닌 아시아에서 열리는 것은 그 의미 가 자못 크다. 이번 총회를 통해 아시아 전역 에서 민주주의와 법치주의가 더 한 층 발전 하고 인권이 신장하기를 바란다.”고 밝혔다. 세계헌법재판회의는 민주주의, 법치주의 및 인권보호의 핵심요소인 헌법재판제도를 활성화하기 위해 각국의 헌법재판기관들로

구성된 헌법재판 분야의 최고위급 회의체이 다. 각국의 헌법재판기관들은 아시아헌법재 판소연합, 불어권헌법재판소연합, 유럽헌법재 판소회의 등 지역별로 또는 언어권별로 협 의체를 구성하여 서로의 경험과 지식을 공 유하기 위해 꾸준히 노력하였으며, 유럽평의 회의 산하기구인 베니스위원회는 이를 지원 하여 왔다. 베니스위원회는 이러한 지역별, 언어권별 협의체를 확대하여 전 세계의 헌 법재판기관들이 참여하는 세계적 규모의 모 임을 만들 필요가 있다고 인식하게 되었다. 베니스위원회는 2009년 1월 남아프리카 공화국 헌법재판소와 공동으로 제1차 총회 를 개최함으로써 세계헌법재판회의는 그 첫 발을 내딛었다. 2011년 1월 브라질 연방대 법원과 공동으로 제2차 총회를 개최하여 세 계헌법재판회의의 규약을 구체화하였다. 그 해 5월 세계헌법재판회의 집행위원회에서 규약이 채택되고 9월 발효됨에 따라 세계 헌법재판회의는 비로소 정식 회의체로 외 형을 갖추었다. 2011년 출범 당시에는 30개 의 헌법재판기관들만이 회원으로 참여하였 으나, 출범된 지 약 3년 만에 회원수가 91개 국(2014년 8월 현재)으로 급증하고 회원들 간 활발한 교류협력이 이루어짐에 따라 명 실상부하게 헌법재판 분야 최고위급 회의체 로 자리 잡았다. 아시아 지역 헌법재판의 발전과 한국 헌법 재판소 한국 헌법재판소는 1988년 9월 창설 이래 지 난 26년간 한국에서 이룩한 성과를 다른 국 가들과 공유하기 위해 지속적으로 노력하여 왔다. 인도네시아, 터키, 태국, 몽골, 캄보디 아 등 아시아의 여러 국가들과의 교류를 통해 한국 헌법재판의 경험과 지식을 전파하였다. 또한, 아시아 지역의 헌법재판기관 협의체인 ‘아시아헌법재판소연합’의 창설을 주도하여 2012년에 창립총회를 서울에서 개최하기도 하였다. 2010년 7월 아시아헌법재판소연합 창설 당시 한국, 인도네시아, 몽골, 태국, 필 리핀, 말레이시아, 우즈베키스탄의 7개국이 서명하였으나 불과 몇 년 만에 타지키스탄, 러시아, 터키, 카자흐스탄, 아프가니스탄, 파 키스탄, 아제르바이잔이 참여함으로써 회원 국이 14개국으로 증가하는 등 아시아를 대 표하는 헌법재판 관련 지역협의체로 성장하 였다. 앞으로 아시아헌법재판소연합을 통해 아시아 지역의 헌법재판이 더 한 층 활성화 될 수 있을 것으로 기대된다.

DATE: 14 OCTOBER 2014 LOCATION: SEOUL

Driving innovation, brand protection & growth “The creative economy starts with the protection of Intellectual Property Rights.”

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Chung Hung-won, Prime Minister, Dec. 2013 Following its successful launch in 2013, ALB’s Korea IP Conference is returning on the 14 October, creating a window of dialogue among key representatives of the government and the legal community in IP management and brand protection.

Taking place amidst significant developments including the rolling out of the Framework Act on Intellectual Property (IP) or the new Patent-Regulatory Approval Linkage System, the forum will facilitate the formulation of strategic action plans to address IP-related challenges in Korea and the region, while simultaneously aligning these strategies with broader business and regulatory frameworks.

SANG-SEOP NOH Former Head, Anti-Monopoly Division, Korea Fair Trade Commission (KFTC)

CALVIN PARK KUIWOU Director, IP, KWON Director General, Qualcomm IP Promotion Bureau, Presidential Council on IP

YUN CHOI General Manager, IP Strategy Team, LG Chem, Ltd.

DAVID HO Senior IP Counsel, Alibaba

JOE WELCH Vice-President for Government Relations, Asia, 21st Century Fox

HO-HYUN NAHM Chairman, Internet address Dispute Resolution Committee

DANIEL WOOSEOB SHIM Senior Legal Counsel, IP Legal Team, Samsung Electronics

ANDERS ERIKSSON VP and Regional General Counsel, Ericsson

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SPECIALISTS IN LEGAL RECRUITMENT Senior Counsel, AMEA

Legal Counsel

Assistant General Counsel

Our client is a well known market leader in the construction and infrastructure space. As part of a senior regional team, you will be responsible for advising on key commercial transactions across the Asia, Middle East, and Africa (AMEA) region. As China is a key market for this organisation, proficiency in Mandarin will be highly preferable. You should be a qualified lawyer with at least 7 years of construction or real estate experience.

As a commercial and culturally sensitive individual, you will possess excellent communication and stakeholder management skills.

Please contact Jerome Hamlin (Reg. no: R1221887) quoting ref: H2364510 or visit our website.

› European multinational › Litigation Lawyer

› Technology industry › Team-based environment Our client, a leading multinational technology group with strong market share, is currently seeking a motivated individual to join their senior legal leadership team.

Reporting to the General Counsel, you will be responsible for providing legal advice and support on major technology transactions across the region. You should be a Singapore qualified lawyer with at least 8 years of PQE gained in private practice and/ or in-house, with good exposure to technology law. As a natural leader, you should have strong business partnering skills with the ability to contribute at a strategic level.

Please contact Jerome Hamlin (Reg no: R1221887) quoting ref: H2399330 or visit our website.

To apply for any of the above positions, please go to www.michaelpage.com.sg quoting the reference number, or contact the relevant consultant on +65 6533 2777 for further details.

Our client, a blue chip European conglomerate, is currently seeking a Legal Counsel with strong commercial litigation experience. Reporting to the General Counsel, you will be responsible for providing legal support and advice to the business and corporate functions while maintaining a proactive eye on risk management and potential disputes.

A Singapore qualified lawyer, you will possess at least 3 years of PQE gained in a reputable multinational and have excellent communication skills.

Please contact Jerome Hamlin (Reg no: R1221887) quoting ref: H2395590 or visit our website.

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