ISSUE 8.12
2009 sneak preview
Leading lawyers make their predictions
Project finance
Fundamentals in the sector that never sleeps
International arbitration
Alternative becomes mainstream
Analysis: The ‘R’ word
Recessionary swings and roundabouts
ALB
FAST 30
The firms in Asia to watch n Analysis n LATERAL MOVES n DEALS ROUNDUP n REGIONAL PERSPECTIVES n UK, US REPORTS n Sign off
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EDITORial >>
Getting back to basics
A
s tales of economic woe continue to grab headlines across the region, and, in response, lawyers continue to hatch plans designed to help them survive in a less than buoyant legal services market, the project finance practitioners ALB interviewed for this issue (see project finance feature on p70) offer some timely advice. The time has come, they say, to get back to basics – to rediscover the fundamentals and master the little things. Whether this be re-evaluating client care methods, assessing the pragmatic utility or commercial value of advice, or looking more closely at their firms’ (and their own) positions relative to the broader legal market in their respective jurisdictions, these micro matters must be mastered and perfected into a fine art by practitioners across the region in the current inclement economic environment. But something much more profound is needed, according to James Harris, the local head of Lovells Lee & Lee. “It’s more than just a back-to-fundamentals time,” he says, speaking of the need for project finance lawyers “to morph to remain relevant”. Maintaining relevance, it seems, is at the heart of this struggle for survival. Our look at the 30 fastest growing law firms in the region (p44) demonstrates that growth, in the eyes of the firms at least, is a means to this end – but one which may assume different and varied forms. JSM, Dacheng and Nishimura & Asahi serve as examples of firms which have, by and large, favoured nonorganic means. Then there are those firms, of which Atsumi & Partners and WongPartnership are stand-out examplars, that have pursued strictly organic growth. This touches on one of the many ‘Catch 22’ issues confronting the region’s law firms in slower economic times – whether increasing partner or feeearner headcounts will necessarily yield an increase in firm revenue, much less profitability. Indeed, the latter is very much the untold story in this overview. As events of the last few months alone have demonstrated, growth for growth’s sake, growth as a means of insulation and growth as a means of diversification are all ‘each way bets’ in the current environment. Sensible measured growth, however, a growth that seeks to get back to basics, to master the fundamentals, may be more of a sound investment.
As events of the last few months alone have demonstrated, growth for growth’s sake, growth as a means of insulation and growth as a means of diversification are all ‘each way bets’ in the current environment
2
IN THE FIRST PERSON “The assertion that firms [who
outsource work] are sending all low-end work to India is just hot air”
Som Mandal, managing partner of FoxMandal Little, on legal process outsourcing (p18)
“There is a big problem in Thailand
at the moment; people believe that being listed on the Thai stock market does not help them”
Urapeepatanapong Kitipong, chairman of Baker & McKenzie in Bangkok, on Thailand’s economic malaise (p16)
“The currently held view is that the financial crisis could be good for project finance” David Elliott, partner with Baker & Mckenzie. Wong & Leow, on the future of project finance (p68)
ALB ASIAN LEGAL BUSINESS
Asian Legal Business ISSUE 8.12
News | deals>> >> CONTENTS
contents
ALB issue 8.12 16
42 COVER STORY 42 ALB Fast 30 ALB’s annual review of the top 30 fastest-growing law firms in Asia reveals some savvy players displaying sophisticated strategies to get ahead in tough times
ANALYSIS
Regulars
14 China and the Middle East Commonalities between China and the Middle East extend further than acquisitive SOEs. ALB investigates the strengthening ties
6 • • • • • • • • • •
16 Thai turbulence Political unrest is expected to exacerbate the impact of the financial crisis on Thailand’s lawyers. ALB investigates 18 Indian LPO Is Indian legal process outsourcing really a lowcost, high-quality solution? 20 Recession ALB examines the impact of the global economic environment on law firms
•
52
NEWS CSRC trials margin financing Foreign lawyers banned in Dubai courts Norton Rose looking to recruit Indian lawyers Dewey & LeBoeuf heads to the Middle East The impact of New Dubai property laws US law firms in Chinese corruption probe US takeover of China Water and Drinks Inc PAMIEM project financing Senoko incineration plant divestment SMRT Corp acquires major stake in Shenzhen Zona Transportation Sinopec International Petroleum move for Toronto-listed Tanganyika Oil
26 UK report
FEATURES 52 Arbitration and ADR Will international arbitration remain unscathed by the economic crisis? ALB views the sector’s future 56 2009 sneak preview Leading lawyers make their predictions 68 Project finance ALB investigates changes to the practice and players following the economic downturn
4
28 US report
6 32 IP Legal rules on internet-related advertising Alban Tay Mahtani & de Silva 33 International arbitration Appeals against AA and IAA arbitral awards Drew & Napier 38 REGIONAL UPDATES • China Paul Weiss • Philippines SyCip Salazar Hernandez & Gatmaitan • Singapore Loo & Partners LLP • Malaysia Tay & Partners • India Singh & Associates
34 M&A league tables
PROFILES
78 Living
45 Melli Darsa & Co
80 Sign off
71 Nagashima Ohno & Tsunematsu
INDUSTRY UPDATES 30 International tax UK FSA decisions on anti-money laundering Azure
ALB ASIAN LEGAL BUSINESS
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Asian Legal Business ISSUE 8.12
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NEWS | deals >>
deals in brief
| CHINA | ►► Heckmann Corporation – China Water and Drinks Inc acquisitions Value: US$625m Firm: DLA Piper Client: Heckmann Corporation Lead lawyers: Steven Pidgeon, Stephen Peepels, Keith Yuan
Stephen Peepels,
• Largest China-based SPAC transaction ever completed, and one of first purchases by a SPAC of another public company
►► SMRT Corp – Shenzhen Zona Transportation acquisition Value: US$90m Firm: KhattarWong Client: SMRT Lead lawyers: Tan Chong Hua, Lin Lei • SMRT Corp acquired 49% equity interest in Shenzhen Zona Transportation Group. Remaining 51% held by National Express Transportation Group • SMRT said it is looking forward to working with National Express to deliver an efficient transportation service to residents in Shenzhen • With acquisition, Zona will become an SMRT associate company
►► Sinopec – Tanganyika Oil acquisition Value: US$1900m Firm: Vinson & Elkins Client: Sinopec Lead lawyers: Paul Deemer, Xiao Yong • Sinopec International Petroleum cash offer for Toronto-listed Tanganyika Oil • Acquisition will be one of largest takeovers by a Chinese acquirer of a North American-listed public company
6
Value: Undisc. Firm: Watson, Farley & Williams Client: BW Bulk UK Co Lead lawyer: Madeline Leong • BW Bulk UK Co acquired four 388,000 DWT VLOC new buildings being built by China Shipbuilding & Offshore International and Bohai Shipbuilding Heavy Industry Co Ltd in PRC
• Creates a DLA Piper US$1bn market cap company, with over US$300m in cash to pursue additional acquisitions
“We were delighted to help Dick Heckmann and his team with this groundbreaking deal. That Dick was able to get this done in such turbulent markets is testament to his track record, particularly his past successes in the water business” Steven Pidgeon, DLA Piper
►► BW Bulk UK building acquisitions
• UK leasing arranged by Calyon Credit Agricole and debt financing facility extended by a syndicate of lenders
►► PAMIEM project financing Value: US$50m
Firm: DLA Piper Client: Avex Lead lawyers: Michael Leow, Brett Stewien Firm: Richards Butler Client: Media Asia and eSun Holdings • Deal involved joint financing project of Asian film fund, PAMIEM • JV involves collaboration between Japanese Avex and Hong Kong’s Media Asia groups • Transaction represents significant contribution to increase competitiveness of film industry in Asia and is one of the few deals of this nature in Asia
►► Winnington Capital – Foresight Profits acquisition Value: US$324m Firm: Freshfields Bruckhaus Deringer Client: Foresights Profits Lead lawyer: Jack Wang Firm: Minter Ellison Client: Winnington Capital Lead lawyer: Matthew Hibbins • Winnington Capital acquired 49% of the shares in Foresight Profits Limited from Shui On (Development) Holdings • Deal involved acquisition of a 25% interest in Foresight Profits Limited for RMB1.13 billion (US$162m) together with an irrevocable call option for a further 24% equity interest at an exercise price of RMB1.13 billion (US$162m)
Asian Legal Business ISSUE 8.12
NEWS | deals >>
• Deal sees another partnership between Minter Ellison and Winnington Capital, previously advising on its acquisition of Rightschina
►► LDK Solar Co American deposit receipt offering Value: US$200m Firm: Cleary Gottlieb Client: LDK Solar Co Lead lawyer: Clay Johnson • Cleary Gottlieb represented underwriters in a US$200m SECregistered follow-on offering of ADRs of LDK Solar Co • UBS Investment Bank and Goldman Sachs (Asia) acted as joint bookrunners for the offering • LDK manufactures multicrystalline solar wafers, the principal materials used to produce solar cells • LDK is based in Xinyu City, Jiangxi Province, China
►► Renhe Commercial Holdings IPO
►► Your Month At Glance Firm
Jurisdiction
Deal name
Amarchand & Mangaldas & Suresh A Shroff & Co
India
Hindalco Industries Limited rights offering
Ashurst
Singapore
Marina Bay District Cooling Project financing
AZB & Partners
India
Hindalco Industries Limited rights offering
Bae, Kim & Lee
Korea
Furukawa Sky – Choil Aluminum Co acquisition
Baker & McKenzie
Hong Kong
PCCW Limited privatisation
Cleary Gottlieb
US/Hong Kong
Citigroup – Wachovia acquisition
China
LDK Solar Co American deposit receipt offering
Thailand
DEG, FMO investment restructuring
Clifford Chance Clyde & Co
Firms: Morrison & Foerster/ Latham & Watkins Client: Renhe Commercial Holdings Lead lawyers: Tien-yo Chao (MoFo); David Zhang, Eugene Lee (Latham) • Deal consisted of IPO and Tien-yo Chao, listing of Renhe Morrison & Commercial Foerster Holdings Company Limited on HKEx • Team of underwriters and joint sponsors included BOCI Asia Ltd, The Hongkong and Shanghai Banking Corporation Limited, Morgan Stanley Asia Limited, and UBS AG • Renhe Commercial Holdings, one of China’s largest underground shopping centre developers, is first company to list in Hong Kong since mid-August. Offering raised US$435m, which the company plans to use to fund expansion projects in China www.legalbusinessonline.com
1,100
92 1,100 2.5 Undisc. 2,160 200 28
Deal type Finance
Project finance Finance M&A Finance M&A Finance/ banking Insolvency & restructuring
UAE
M’Sharie private share placement
Undisc.
Finance
UAE
Yemen Gulf of Aden Port Corporation – Dubai Port World JV
Undisc.
Corporate
Undisc.
Finance
817
Finance
UAE
KEF Holdings – Dubai International Capital interest sale
UAE
Emirates Integrated Telecommunications syndicated loan facility
UAE
ADIC MENA Partners – Unitra METS Group LBO
Conyers Dill & Pearman
Cayman Islands China Hong Kong
Renhe Commercial Holdings IPO
435
Davis Polk & Wardwell
US/HK
Citigroup – Wachovia acquisition
2,160
DLA Piper
HK
PAMIEM project financing
US/China
Heckmann Corporation – China Water and Drinks Inc acquisitions
Singapore
Veritas Fund Launch
Singapore
Raffles Fund 1 establishment
Freshfields Bruckhaus Deringer
China Hong Kong
Winnington Capital – Foresight Profits acquisition
Gide Loyrette Nouel
China
China Equity Links – ET Solar Group private equity placement
Hadiputranto, Hadinoto & Partners
Indonesia/ Singapore
HSBC – Bank Ekonomi Raharja proposed acquisition
Harry Elias Partnership
Singapore
Second Chance Properties warrant listing
Jingtian & Gongcheng
Cayman Islands China Hong Kong
Renhe Commercial Holdings IPO
Jones Day
India
Hindalco Industries Limited rights offering
JSM
China Hong Kong
Winnington Capital – Rightchina stake acquisition
KhattarWong
China
SMRT Corp – Shenzhen Zona Transportation acquisition
Kim & Chang
Korea
Jaguar Land Rover Korea establishment
Korea
Dongwon Enterprise – StarKist acquisition
Korea Korea Korea
Furukawa Sky – Choil Aluminum Co acquisition
Cayman Islands China Hong Kong
Renhe Commercial Holdings IPO
435
Finance
Value: US$435m Firms: Conyers Dill & Pearman (Cayman Law)/Jingtian & Gongcheng (PRC Law)/Norton Rose (Hong Kong Law) Client: Joint arrangers
Value (US$m)
Drew & Napier
Latham & Watkins
Undisc.
50 625
Equity market Finance
M&A Finance M&A
50
Finance
Undisc.
Finance
324 31 607
M&A Equity Market M&A
43
Finance
435
Finance
1,100
Finance
272
M&A
89
M&A
Undisc. 360
M&A
WindRiver Systems – Mizi Research Inc acquisition
Undisc.
M&A
MBK Partners – Mutual Savings Bank share acquisitions
Undisc.
M&A
2
M&A
Japan
IG Group Holdings – FXOnline Japan Co acquisition
237
M&A
Linklaters
Australia Hong Kong Japan
Nomura – Lehman asset acquisition
225
M&A
Japan
IG Group Holdings – FXOnline Japan Co acquisition
237
M&A
Lovells
Indonesia/ Singapore
HSBC – Bank Ekonomi Raharja proposed acquisition
607
M&A
7
NEWS | deals >>
►► Citigroup – Wachovia acquisition Value: US$2,160m Firms: Davis Polk & Wardwell/ Skadden Client: Citigroup Lead lawyers: Bill Sweet, Eric Friedman, Greg Fernicola, Stuart Levi (Skadden) Firm: Cleary Gottlieb Client: Underwriters Firm: Sullivan & Cromwell Client: Wachovia • Acquisition expands Citigroup’s retail franchise, giving it more than 4,300 US branches and US$600bn in deposits, and secures its standing as one of the top three banks in the US • In acquisition, Citigroup will assume US$53bn worth of debt, and will absorb up to US$42bn of losses from Wachovia’s US$312bn loan portfolio • Federal Deposit Insurance Corp. agreed to cover remaining losses in exchange for US$12bn in Citigroup preferred stock and warrants • Deal is subject to approval by Wachovia’s shareholders and regulators, and must be completed by 31 December 2008
►► China Medical Technologies acquisition Value: US$345m
financial advisors to Hong Konglisted Enric Energy Equipment in its acquisition from major shareholder China International Marine Containers of its entire interests in tank and storage equipment businesses based in China and Europe
►► PCCW Limited privatisation Value: US$1,900m
Firm: Baker & McKenzie Client: China Netcom Lead lawyer: Lawrence Lee Firm: Skadden Client: Pacific Century Regional Developments Lead lawyers: David Yun, Dominic Gregory, Jamii Quoc Firm: Reed Smith Client: PCCW Limited Lead lawyer: Graham Winter
►► Shanghai Oriental Pearl Group – Hong Kong Anschutz Entertainment Group China JV Value: US$350m Firm: Baker & McKenzie Client: Shanghai Oriental Pearl Group Lead lawyer: Danian Zhang • Deal involved Shanghai Oriental Pearl Group Co setting up joint venture with Hong Kong Anschutz Entertainment Group China Ltd to operate Shanghai World Expo Performing Arts Centre, arena to hold performances during the Shanghai World Expo 2010 • JV will take part in design and construction of centre, estimated to eventually cost approximately US$350m
►► China Equity Links – ET Solar Group private equity placement Lawrence Lee, Baker & McKenzie
• Pacific Century Regional Developments (PCRD) and China Netcom were joint offerors in cash offer to privatise PCCW Limited by way of scheme of arrangement • Skadden has previously worked with PCCW, advising on merger with Cable & Wireless HKT in 2000
Value: US$31m Firm: Gide Loyrette Nouel Client: China Equity Links Lead lawyer: Guillaume RougierBrierre Guillaume
• China Equity Rougier-Brierre, Links private Gide equity placement in ET Solar Group, a Nanjing-
based integrated manufacturer of photovoltaic products
| SINGAPORE | ►►Raffles FUND 1 ESTABLISHMENT Value: Undisc. Firm: Drew & Napier Client: Raffles Venture Partners Lead lawyer: Petrus Huang Value: Undisc. • Drew & Napier assisted fund manager, Raffles Venture Partners, with both onshore and offshore establishment and tax advisory requirements of the Raffles Fund 1 Limited
►►Veritas Fund Launch Value: US$50m
Firm: Drew & Napier Client: Raffles Venture Partners Lead lawyer: Petrus Huang • Veritas I Fund launched in September 2008 • Veritas I targeted at institutional investors outside of Singapore and designed to provide access to public and private equity and pre-IPO investment opportunities • Trustee and Administrator of Veritas I is SG Trust (Asia) Ltd. Custodian Bank is Société Générale Bank & Trust, Singapore Branch
Firm: Morrison & Foerster Client: China Medical Technologies Lead lawyer: Paul Boltz • China Medical Technologies acquired HPV-DNA Biosensor Chip and Surface Plasmon Resonancebased Analysis System for detection of human papillomavirus (HPV), which causes cervical cancer and sexually transmitted diseases • China Medical will pay Molecular Diagnostics Technologies Ltd US$345m in cash
►► Enric Energy Equipment Holdings acquisition Value: US$1,200m Firm: Morrison & Foerster Client: China Merchant Securities, Deutsche Bank Lead lawyers: Tien-yo Chao, Xiaohu Ma • Deutsche Bank and China Merchant Securities (HK) acted as joint
8
Asian Legal Business ISSUE 8.12
NEWS | deals >>
www.legalbusinessonline.com
9
NEWS | deals >>
►►PT Mitra Rajasa – PT Apexindo Pratama Duta acquisition Value: US$519m Firm: Stamford Law Corporation Client: Mira International Holdings Pte Ltd Lead lawyers: Jerry Loo, Marcus Tan, Yap Wai Ming • PT Mitra Rajasa Tbk, an Indonesian public listed limited liability company, through its indirect subsidiary, Mira International Holdings Pte Ltd, acquired 80.57% shares in drilling company PT Apexindo Pratama Duta Tbk from PT Medco Energi Internasional Tbk and Encore International Ltd • Acquisition financed by combination of bridging loan facility and notes issuance comprising junior mezzanine notes and senior mezzanine notes, all arranged by Goldman Sachs Credit Partners LP and a preIPO investment
| KOREA | ►►Jaguar Land Rover Korea establishment Value: Undisc. Firm: Kim & Chang
Client: Ford Motor Co Lead lawyer: Sung-Joo Yoon • Ford Motor Co established Jaguar Land Rover Korea Co Ltd. New entity was formed by horizontally splitting-off Jaguar and Land Rover business divisions from Ford subsidiary PAGK
►► Dongwon Enterprise – Starkist acquisition Value: US$360m Firm: Hwang Mok Park PC Client: Dongwon Enterprise Lead lawyer: Doil Son Firm: Kim & Chang Client: Korea Development Bank Lead lawyer: Myung Jae Chung • Korean fishery company Dongwon Enterprise acquired US tuna brand StarKist from Del Monte Foods • Syndicate of Korean and international banks, arranged by Korea’s Hana Bank, provided transaction finance • Kim & Chang advised on crossborder acquisition and financing
►► MBK Partners – Mutual Savings Bank share acquisitions Value: Undisc Firm: Kim & Chang
Client: MBK Partners Lead lawyers: Hyoung-Soo Kwon, Jong-Koo Park, Tae Hyun Park • Private equity fund based in Korea, MBK Partners successfully completed cash tender offer for Tae Hyun Park, 30.8% shares Kim & Chang of HK Mutual Savings Bank for KRW 7,500 per share through its wholly owned subsidiary Echelon Limited • MBK Partners, together with Hyundai Capital Services, already owns 64.2% stake in HK Mutual Savings Bank, the second largest mutual savings bank in Korea • MBK Partners and Hyundai Capital Services plan to delist HK Mutual Savings Bank from the KOSDAQ • Upon delisting, this transaction will mark first successful take-private transaction by a Korean private equity fund • Kim & Chang’s Private Equity Practice Group advised MBK Partners in this transaction
| JAPAN | ►►IG Group Holdings – FXOnline Japan Co acquisition Value: US$237m Firm: Latham & Watkins Client: FXOnline Japan Co Lead lawyers: Kuang Tang, Michael Yoshii Firm: Linklaters Client: IG Group Holdings • Equity firm IG Group Holdings acquired 87.5% stake in Japanese online retail foreign exchange trader FXOnline Japan • To fund acquisition, IG completed a placement to raise $A185m
| THAILAND | ►► DEG, FMO investment restructuring Value: US$28m
Lead lawyers: Andrew Matthews, John Cordova • Deal involved Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV (FMO) restructuring investments in and financing provided to Indorama Petrochem Ltd, and on further investments in Indorama Ventures Ltd • DEG and FMO also hold debt and equity interests in IVL Thailand, the holding company of IRPL and IR • Transaction involved restructuring existing project financing subordinated to senior facility
| INDIA | ►►Hindalco Industries Limited rights offering Value: US$1,100m Firm: Jones Day Client: Financiers Lead lawyers: David Neuville, Joe Bauerschmidt, Leander Coutinho • Jones Day advises ABN AMRO, Citi, Leander Coutinho, Deutsche, Merrill Jones Day Lynch and State Bank of India in INR 50.48 billion rights offering of equity shares of Hindalco Industries Limited • Equity shares of Hindalco listed on Bombay Stock Exchange and National Stock Exchange • GDRs representing equity shares of Hindalco listed on Euro MTF Market of Luxembourg Stock Exchange • Hindalco produces aluminium and copper in India, and ranks 6th and 11th in Asia and world respectively for aluminium by production volume • Acquired Novelis Inc, world’s largest aluminium rolled products producer, in May 2007. It is also among the world’s top 10 producers of copper by installed capacity
Firm: Clifford Chance Client: Deutsche Investitionsund Entwicklungsgesellschaft, Nederlandse FinancieringsMaatschappij Voor Ontwik
10
Asian Legal Business ISSUE 8.12
NEWS | deals >>
| MALAYSIA | ►► Grange – ABM iron ore merger Value: US$718m Firm: Tay & Partners Client: Shagang International Holdings Limited Lead lawyers: Tay Beng Chai, Khor See Lin Firm: Freehills Client: ABM
• Merger will provide Grange with cash flow and access to funds to help finance its A$2bn Southdown iron ore project • Merged company will be controlled by one of largest steel producers in China, Jiangsu Shagang Group, which is one-third owned by company founder Wenrong Shen, with management holding most of the rest
| australia, HK, JAPAN | Tay Beng Chai, Tay & Partners
Lead lawyer: Simon Reed Firm: Clayton Utz Client: Grange Resources Lead lawyers: Mark Paganin, Matt Johnston Khor See Lin, • Deal will see Tay & Partners combination of Chinese company ABM’s Savage River magnetite mining and pellet operation in Tasmania and Grange’s Southdown magnetite project in Western Australia
www.legalbusinessonline.com
►► Nomura – Lehman asset acquisition Value: US$225m Firms: Shearman & Sterling/ Skadden Client: Nomura Holdings Lead lawyer: Jonathan Stone Firm: Lehman Brothers International Client: Linklaters • Liquidation sale went at fraction of reported value of US$1.4bn and includes Lehman’s businesses in Japan and Australia, and 3,000 employees
• Biggest US bankruptcy sale after billion-dollar losses from mortgagelinked debt forced the once numberfour bank into liquidation • Nomura acquired Lehman after British bank Barclays acquired parts of Lehman’s US business but declined to acquire more • Latest deal not expected to include any trading of assets or liabilities • Skadden has not previously acted for Nomura, but has handled similar transactions such as Coca-Cola’s acquisition of Jonathan Stone, Huiyan Juice Shearman (US$2.5bn) and various IPOs • Nomura also expected to acquire Lehman’s businesses in Europe
“It was challenging to deliver the speed at which the deal needed in order to give comfort to the target’s employees that Namura will be taking over the company. The matter was referred from our UK office that worked on the London aspects of the Lehman transaction. Our office has done a lot of similar regional M&A work” Nicholas Norris, Skadden
11
NEWS | deals >>
| SINGAPORE | ►► HSBC – Bank Ekonomi Raharja proposed acquisition
►► Your Month At Glance (cont) Firm
Jurisdiction
Deal name
Luthra & Luthra
India
DLF Boggi Joint Venture
India
Value: US$607.5m Firm: Hadiputranto, Hadinoto & Partners/Norton Rose Client: HSBC Lead lawyers: Tuti Dewi Hadinoto (HHP); Jake Robson, Ken-Hui Khoo, Carla Macksey, Phillip John (Nortons) Firm: Lovells, Makes & Partners Client: Vendors
• Tender awarded to consortium comprising Keppel Integrated Engineering Limited and Keppel Infrastructure Fund Management • Stamford Law Corporation advised Singapore Government on and throughout divestment process of Senoko Incineration Plant and its negotiations with bidders, and handled preparation of agreements
12
DLF Retail – Capri Franchise Arrangement
Undisc.
FDI
Undisc.
Finance
DLF – SIA Boutique franchise agreement DLF – Piquadro Joint Venture
Makes & Partners
Indonesia/ Singapore
HSBC – Bank Ekonomi Raharja proposed acquisition
607
M&A
Minter Ellison
China Hong Kong
Winnington Capital – Forseight Profits acquisition
324
M&A
Morrison & Foerster
Cayman Islands China Hong Kong
Renhe Commercial Holdings IPO
435
Finance
China
Enric Energy Equipment Holdings acquisition
►► Senoko Incineration Plant divestment/Project Oscar
• Deal involved Singapore Government's intention to divest Senoko Bernard Lui, Incineration Stamford Plant to either a newly listed infrastructure business trust/ fund or an existing infrastructure business trust/fund by way of a tender process • Divestment exercise for purpose of further improving efficiency in waste management sector through greater private sector involvement. First time a divestment exercise by the Singapore Government has stipulated that purchaser be an infrastructure business trust/fund
FDI
India
Norton Rose
Lead lawyers: Bernard Lui, Lee Xianwei, Vanessa Ng
Deal type
26
India
Lead lawyers: Scott Calver (Lovells); Iwan Setiawan, Yozua Makes (Makes)
Value: US$311m Firm: Stamford Law Corporation Client: Singapore Government
Value (US$m)
Reed Smith
1,200
FDI
M&A
China
China Medical Technologies acquisition
345
M&A
Cayman Islands China Hong Kong
Renhe Commercial Holdings IPO
435
Finance
Indonesia/ Singapore
HSBC – Bank Ekonomi Raharja proposed acquisition
607
M&A
Hong Kong
PCCW Limited privatisation
UAE
Jabal Resorts resort development
Richards Butler
HK
PAMIEM project financing
Shearman & Sterling
Australia Hong Kong Japan
Nomura – Lehman asset acquisition
Simmons & Simmons
7
Undisc
200 50
Finance
Finance/ construction Finance
225
M&A
137
Finance
UAE
Salam Bounian Development Company sukuk
UAE
Reem Developers construction projects
Australia Hong Kong Japan
Nomura – Lehman asset acquisition
US/Hong Kong
Citigroup – Wachovia acquisition
Hong Kong
PCCW Limited privatisation
Stamford Law Corporation
Singapore
Senoko Incineration Plant divestment/Project Oscar
311
Singapore
PT Mitra Rajasa – PT Apexindo Pratama Duta acquisition
519
M&A
Sullivan & Cromwell
US/HK
Citigroup – Wachovia acquisition
2,160
M&A
Skadden
Tay & Partners
Australia/Malaysia
Grange – ABM iron ore merger
Vinson & Elkins
China
Sinopec – Tanganyika Oil acquisition
Watson, Farley & Williams
China Singapore UK China Singapore UK
Undisc.
Construction
225
M&A
2,160
M&A
Undisc.
Finance M&A, finance
718
M&A
1,900
M&A
BW Bulk UK building acquisitions
Undisc.
M&A
BW Bulk UK building acquisitions
Undisc.
M&A
Does your firm’s deal information appear in this table? Please contact
alb@keymedia.com.au
61 2 8437 4700
Asian Legal Business ISSUE 8.12
NEWS | analysis >>
news in brief >>
job market
Impact of crisis on salaries already felt
P
“The average figures provided are a little on the low side with respect to Hong Kong in regards to lawyers five years+ PQE, as the figures show that a lawyer with similar experience in Singapore would be earning as much if not more,” he said. The workflow for many lawyers now is comparatively steady – barring those in the financial and real estate practices – due to the upswing in insolvency, restructuring and litigation work catalysed by the current economic crisis. While some do not expect legal salaries to be hugely affected by the current global economic turmoil, Talalla notes that it is already having a discernable impact on the legal sector
rivate practice lawyers looking for an overall snapshot of the legal market are in for a treat. ALB has amalgamated salary surveys from several reliable recruitment companies to provide an overall view of legal market salaries for private practice lawyers of PQE 1-6 across the Asia-Pacific region. While it is fairly difficult to gauge the state of the overall legal market from salary figures alone, they are a good indicator, and David Talalla from recruitment firm David Talalla & Associates says that the ALB average figures depict a slight slide in legal salaries for the mentioned PQEs – especially in Hong Kong.
►► average salaries: Australia – Sydney (Top-tier only) Qualification
ALB average
1 yr PQE 2 yrs PQE 3 yrs PQE 4 yrs PQE 5 yrs PQE 6 yrs PQE
$73,833 $85,750 $97,833 $114,833 $129,583 $157,500
Recruitment company average (AU$) Hays Hudsons (average Hughes from range) Castell $82,000 $90,000 $105,000 $120,000 $135,000 $150,000
$72,500 $82,500 $100,000 $115,000 $132,500 $152,500
Taylor Root
$65,000 $75,000 $83,000 $100,000 $105,000 $140,000
Michael Page International
Mahlab **
$72,500 $82,500 $87,500 $107,500 $135,000 $180,000
$76,000 $92,000 $109,000 $119,000 $130,000 –
$75,000 $92,500 $102,500 $127,500 $140,000 $165,000
Allen & Gledhill partner abstains from takeovers An Allen & Gledhill partner has voluntarily abstained from takeover work for six months following an investigation into the controversial Jade Technologies buyout. Steven Lo, partner in the financial services practice of the firm’s Singapore office, has abstained from takeover advisory roles for six months as of 1 September, as the Securities Industries Council (SIC) investigation into the Jade Technologies takeover found him and his client in breach of several rules in the takeovers code. The controversial case emerged when Lo’s client, former Jade president Anthony Soh, who owned almost half of the company’s shares, sought to buy out the rest of the stock at 22.5 cents per share, well over the last traded price. Two months after the offer and the inevitable increased investor interest, Soh revealed a number of his shares were placed in the collapsed broker Opes Prime. The SIC barred Soh from any takeover offers or share trading without consent in the Singapore Exchange, for the next five and three years respectively. After finding Lo in breach of codes, the committee accepted that primary responsibility for disclosing Soh’s shareholdings rested with Soh himself, and that Soh’s financial advisor, OSBC Bank, held a higher position in the advisory role. The committee subsequently accepted Lo’s move and decided that no further action will be sought against the law firm.
* These figures refer to Sydney salaries and top tier firms only ** Mahlab did not have figures for 6 yrs PQE
►► average salaries: Hong Kong – China Qualification
ALB average
Recruitment company average (HK$) Hays Hudsons Hughes (average (average Castell from range– from range (average internat’ly – internat’l from qualified) law firms) range)
Lewis Sanders
Taylor Root HK
Law Alliance
Mahlab
1 yr PQE
$845,857
$852,000
$765,000
$800,000
$912,000
$864,000
$870,000
$858,000
2 yrs PQE 3 yrs PQE 4 yrs PQE 5 yrs PQE 6 yrs PQE
$926,114 $1m $1.10m $1.18m $1.27m
$906,000 $978,000 $1,050,000 $1,194,000 $1,272,000
$830,000 $890,000 $937,500 $951,500 $982,000
$905,000 $1,000,000 $1,200,000 $1,300,000 $1,450,000
$1,008,000 $1,080,000 $1,152,000 $1,260,000 $1,380,000
$948,000 $1,044,000 $1,140,000 $1,200,000 $1,320,000
$970,800 $999,000 $1,218,000 $1,236,000 $1,287,600
$915,000 $1,014,000 $1,068,000 $1,143,000 $1,200,000
* Figures represent international firm salaries – not local
►► average salaries: Singapore Qualification
ALB average
Recruitment company average (Singapore $) Hays
Hudsons (average from range)
1 yr PQE 2 yrs PQE 3 yrs PQE 4 yrs PQE 5 yrs PQE
$141,375 $152,000 $165,125 $228,125 $244,375
$100,000 $110,000 $115,000 $125,000 $130,000
$210,000 $227,500 $255,000 $282,500 $310,000
6 yrs PQE
$256,875
$130,000
$337,500
Law Alliance
Hughes Castell (average from range – international firms)
$140,000 $155,000 $175,000 $205,000 $237,500
$115,500 $115,500 $115,500 $300,000 $300,000
$260,000
$300,000
* Figures represent international firm salaries – not local
www.legalbusinessonline.com
Thelen casualties move to Nixon Nixon Peabody has announced it is taking in a hefty number of ex-Thelen attorneys, following the confirmation of the latter’s demise in a partnership vote last month. The partner numbers and names were undisclosed by Nixon Peabody, but the firm did mention that it would add to its business, IP, litigation and real estate departments, and be placed across its Silicon Valley, San Francisco, New York, Los Angeles, Shanghai and Washington offices. The partners will be supported by a number of associates and staff which the firm also plans to hire. Nixon had expressed considerable interest in Thelen during the year. The two firms underwent merger talks in September and, after discussions proved fruitless, Nixon had reportedly expressed interest in picking up parts of the firm the following month. It is yet to be confirmed to where Thelen’s Asiabased attorneys will move.
13
NEWS | analysis >>
news in brief >> Greenberg Traurig turns Japanese Greenberg Traurig has secured its Tokyo presence by restructuring its office as a registered foreign law firm and has boosted its numbers with the hire of corporate specialist Go Hashimoto as a shareholder and registered foreign lawyer. Hashimoto joins the firm's corporate and securities practice from Bingham McCutchen's Tokyo office, where he spent five years advising clients on corporate restructuring and international commercial litigation transactions. He was previously a loan officer with the Japan Bank for International Cooperation. The Tokyo office was originally involved in an alliance with Japanese law firm Hayabusa Asuka, but the firm steadily strengthened its presence by adding registered foreign lawyers, including Allison Rosenberg, who is recently qualified. The firm has increased its Asian presence over the year, recently adding its Shanghai office in January and boosting the office's attorney count from one to 12. "There will be an increasing number of transactions originated by or involving Japanese government and enterprises under the current economic conditions," said the firm's president, Richard A Rosenbaum.
– as shown by the lower than usual salary figures compiled by ALB. “The figures seem to be lower than in previous periods and this could be for a number of reasons. The current economic climate is clearly a significant factor where most firms and organisations are adopting a wait and see attitude to recruitment with the exception of insolvency lawyers. The workflow emanating from countries such as China and India will also play a significant part in job vacancies. “Some of the investment houses are coming to the end of their financial year and November is traditionally a month where there is a freeze on recruitment while all reports are being finalised and submitted,” he said. Talalla notes that Singapore in particular seems to be in the grips of a transformation at the moment, with the country currently undergoing radical changes to their rules and regulations with respect to foreign lawyers and off-shore firms. “These [changes] in turn will have a knock-on effect on the movement
of foreign and local lawyers in that jurisdiction and again a better indicator would be early to mid-2009,” he said. “These are indeed interesting times in the Australasian legal market.” Lawyers on the lookout for a bigger pay packet should turn their attention to overseas positions, but Talalla warns that the current economic climate means that the opportunity to snare a meatier salary may depend on their area of practice. “There’s still a demand for high quality energy & resources lawyers at most levels, especially in Asia and the Middle East, Australian firms in states such as Brisbane and Perth are also on the lookout for such lawyers, particularly the junior to mid-level ones,” he said. “Overseas moves are also always an option – particularly for returning Australians who have a proven record and have gained solid experience in a high-calibre firm or organisation.” ALB (The tables in this analysis refer only to private practice salaries.)
ANALYSIS And now for some light embarrassment... Ever had a boss who loves his team building activities and “fun” theme days? The banking & finance team at French firm Ayache Salama & Associes apparently know the feeling - in the interests of fostering team unity, they've been asked to do a photo shoot variously dressed up as clowns and bound together with a giant red ribbon. We particularly liked the photo captioned “an available team” – clients trying to ring through might experience some difficulty. We must admit that we weren't the first to break this all-important story, and it appears that others have also seen the funny side. It would be a nice to be a fly on the wall at Ayache Salama as the partnership ponder what will no doubt be a sudden and unaccountable rise in traffic on their website. Now... where are our plans for the video montage for the 2009 ALB Law Awards...
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Rising dragon embraces allies in Middle East
I
t is said that the journey of a thousand miles begins with one step – and, one step at a time, stateowned enterprises (SOEs) and local companies have been making forays into the Middle East. Strategically so, as the country scours for resources in a region where economic power is being consolidated. The good news for
lawyers is that local and international firms may be able to look forward to more and higher value deals in a variety of practice areas.
Satisfying mutual needs
The growing friendship is evolving from mutual needs. As the country sources stable and secure supplies of Asian Legal Business ISSUE 8.12
NEWS | analysis >>
►► China – Middle East deals Location
Details
When
Iraq
US$3bn oil service contract deal between the Chinese National Petroleum Company and Northern Oil Company
2008
Qatar
China National Offshore Oil Corp (CNOOC) inked deal with Qatargas Operating Co to import two million tons of Liquefied Natural Gas (LNG) a year from Qatargas. PetroChina signed a deal in Beijing with Qatargas and Shell under which the firm would buy three million tonnes of Qatari LNG per year for 25 years
2008
Jordan
US$30m joint venture between China’s Hebei Zhongxing Automobile and Jordan’s Ayass Motors
2007
Saudi Arabia
Sinopec, ExxonMobil and Saudi Aramco seal US$5bn joint ventures to refine Saudi heavy crude in Fujian
2005
UAE
First Eastern Investment Group and Dubai International Capital (DIC) to launch a fund that will invest in Chinese companies and list them on Dubai securities markets
2008
energy to maintain its economy, Middle East sovereign wealth funds are looking for investment opportunities for their petrodollars. China is the world’s second biggest consumer of crude oil, after the US, and this fact alone provides a major platform for sizeable trade with the Gulf. Both the Gulf and the republic have several things in common. Firstly, a civil law legal system. Secondly, both regions are flush with excess liquidity. Thirdly, they have economic sectors that are complementary and thereby satisfy mutual needs. According to the UAE’s economic minister, Sheikha Lubna Al Qasimi, the Gulf nations are anticipating a 20% spike in trade with China this year, with the total to pass US$17bn. Initiatives to invest in the Middle East were largely spurred by the country’s need to secure raw materials and natural resources to sustain its economic growth. Now many nonSOEs have also taken an interest in the region as it is another big export market to be tapped. Both countries are emerging with high performance in complementary economic sectors. For example, China’s ambition to move up the higher value chain in producing high-end goods, such as cranes, fits nicely with UAE’s need for large amounts of construction machinery to develop its infrastructure. This certainly helped drive up the demand for China’s machines and promoted fast export growth for the crane market. For the first half of this year, China’s crane industry recorded 13,250 units in sales, up 32.41% yearwww.legalbusinessonline.com
on-year, while the sales of engineering cranes reached RMB15.2bn, an increase of 93.25% on a year ago. Does this mean that local and international firms may be able to look forward to more and higher value deals in a variety of practice areas? “This will happen only for the big deals, and more for those that are inbound rather than outbound. This is because many local businessmen are making the personal connections themselves, and may not involve local lawyers when they invest in the Middle East. But when the deal is inbound, local lawyers are a must,” said Gavin Wang, a banking & finance and M&A partner in Run Ming. He said such deals are increasing. In just one year, the firm has handled three major deals from the Middle East compared to the “few and far in between” trend previously. One aviation-related deal handled by Wang was worth US$80m. Yet the bonds between mainland China and the Middle East will continue to solidify alongside the current US banking crisis which has caused Western markets to be risky targets for investment. The current economic doldrums in the US and Europe have affected the manufacturing sector as it suffers weakened demand for its exports to the Western regions. But with Hong Kong positioning itself as one of mainland China’s economic gateways and the development of Islamic capital markets and structured finance for investment and deals, the two-way flow is likely to strengthen. This may be the catalyst behind several firms’ international approach to bolster their local presence in
►► China strikes first Iraq deal
China has made no secret of its want to secure the natural resources necessary to feed its vastly growing economy with a US$3bn oil service contract deal with Iraq. The Iraq cabinet approved the contract to develop and produce the al-Adrab oil field between the Northern Oil Company and the Chinese National Petroleum Company (CNPC) in a deal that was originally signed as early as 1997. The Iraqi government expects to earn about US$55bn over the next 20 years from the deal. The revenue estimate is based on an average price of oil of US$100 per barrel and a production cost of about US$4 per barrel. This is the first major oil contract with a foreign firm for Iraq and potentially heralds forward movement of the other energy contracts that have been held pending in the Middle East since 2002. Thomson Reuters’ figures reveal that CNPC wanted to acquire a US$50m stake in Oman’s Mazoon Petrogas. In Iran, oil giant Sinopec Group signed a gas deal worth US$2bn where Iran would be paid as much as US$100bn over 25 years for liquefied natural gas and oil and a 51% stake in Iran’s Yadavaran oil fields.
China and in the Middle East. The China Investment Corporation was established in September 2007. The sovereign wealth fund, a first for the country, was financed with initial capital of US$200bn. The current crisis in the market could see deeper levels of cooperation between China and the Middle East, especially when these two areas still retain a high level of liquidity. An indication of this trend is in the figures: the volume of trade between the country and UAE alone rose 42% in 2007 to US$20.4bn.
Two-way traffic
The flow is going both ways. Recently, the Abu Dhabi Investment House (ADIH) announced a US$1.5bn private equity fund to invest in real estate and manufacturing in China with a local partner. China Harbour Engineering picked up a US$40.8m contract to develop Ajman Marina’s infrastructure, a huge residential and commercial development based on the coast of Ajman, the smallest of the seven Emirates. Iran, for example, is tapping the country’s experience in heavy crude oil extraction and local companies are getting contracts in building dams and ship yards, and developing ports and airports in projects of various scales 15
NEWS | analysis >>
there. In the financial markets, the Hang Seng launched an Islamic China Offshore Index Fund off the Dow Jones Islamic Market (DJIM) Index in November 2007 to tap and draw Gulf wealth through Hong Kong – an economic gateway to the people’s republic. In 2005, the Kuwait China Investment Company was set up to facilitate capital flows between the Middle East and Asia, with a particular focus on China. This was later followed by Jade Value Partners, a private equity fund that offers investors exposure to private equity funds operating in the mainland. “There are certainly more and more interactions both ways. Chinese investors are looking to the Middle East just as Middle Eastern sovereign wealth funds are looking to Asia,” said Nick Bryans, Ashurst’s managing partner in Dubai. “Hong Kong is establishing Islamic financial institutions to manage Shariacompliant financial products. Clearly,
this is an indication of where the money is moving.”
Arbitration to gain prominence
Just as deals are struck, some may fall through. James Kwan, an energy and infrastructure partner at Simmons & Simmons, who specialises in arbitration, sees precious opportunities in the synergy that is stewed between Asia (particularly China and Hong Kong) and the Middle East. “There’s a lot of work here in Dubai as more investments are flowing between Asia and the Middle East. Dubai is leading the pace for arbitration in the Middle East, and this is crucial as it instils confidence in investors; that they can resolve any dispute that arises in a fair and impartial manner,” said Kwan. Kwan represents the emerging hybrid of lawyers who bridge Asia (particularly China and Hong Kong) and the Middle East. He is on the arbitration panel of the China
International Economic and Trade Arbitration Commission (CIETAC) and an honorary member of the Dubai International Arbitration Centre. “Both China and the Middle East have similar legal structures as they have civil law courts and relatively young jurisdictions. The arbitration centres in these two regions are constantly making improvements in legislation to support their economic growth,” said Kwan. By all accounts, the activity is shifting to the Middle East and China – which saw a record surge of M&A activity in the last few months. A decade or two ago, the connections between the two might have seemed unlikely. These days, the attraction factors are strongly embedded in both push and pull factors, making it a union that is likely to grow even stronger in view of the economic imperatives and the geo-political positioning vis-à-vis the republic’s emergence as a peaceful superpower. ALB
ANALYSIS
Thai turbulence
T
hailand has got it tough. Not only will it – like all economies in the region – feel the full force of an economic crisis that is slowly but surely encroaching on Asia’s shores but, according to media reports, the country’s military is widely tipped to be on the cusp of embarking on its 19th military coup since the kingdom declared democracy in 1932. Not exactly the KPIs you are looking for if you are an investor or looking to invest in the resource-rich archipelago.
16
The result is, of course, an economic malaise of sorts. Stock prices have remained depressed, the country’s capital markets have stalled and investors at market are unwilling to part with shares and instead are opting to proceed with caution. “For newcomers to the Thai market there are many issues they must consider in going forward; for them I think it’s very much a case of wait and see,” explains Urapeepatanapong Kitipong, chairman of Baker & McKenzie in Bangkok.
But as is perhaps the Thai way, lawyers there are refusing to frown in the land of smiles – and well they might, for while things may look tough now, there is light on the horizon, and while they wait for the outlook to brighten, there is plenty of work to keep them going.
Mental fortitude
While many prospective investors remain wary, the embedded strengths of the Thai economy remain strong. Indeed, the case for buying in the Thai market remains relatively solid. Fundamentals Asian Legal Business ISSUE 8.12
NEWS | analysis >>
are strong; yields are resiliently high and the markets’ low price to earnings ratio mean that Thai stocks are amongst the cheapest in the region. And while the case for investing in Thailand remains strong, according to Kitipong, more and more of Thailand’s domestic companies are looking offshore. “There are plenty of opportunities for Thai companies to invest overseas at the moment,” he says, noting that while investment in so-called ‘toxic’ assets is currently flavour of the month for domestic companies, much work is also coming from foreign companies looking to cut their losses and exit the market. And while litigation remains quite active, it is Thailand’s world-renowned service sector that is coming in for a lot of attention. “The service sector, especially hotels, property and tourism, has been very busy on the incoming side,” says Kitipong. “At the moment, it’s probably split evenly between people wanting to exit and people wanting to buy-in, but it’s [an area] we’ll be watching for solid growth in the months ahead.”
doesn’t seem to be any incentive for companies to list.” And this is by no means an isolated observation. The consensus view is that the only tangible benefit to be had from listing on the SET is that it serves as a means to the hefty capital gains tax bill that comes from disposing of shares off-market. But according to Kitipong, the utility of listing can extend far beyond this. “While there doesn’t seem to be any incentive to list, there are moves being made to fix this,” he says. The Thailand Capital Markets Development Committee established under the previous government is believed to be on the brink of regulatory change to offer incentives such as tax breaks for companies to list. “Of the total amount of corporate income tax collected by the government, 27–30% comes from the 400 listed on the SET,” says Kitipong, noting that should the proposed reforms be pushed through, the number of IPOs at market will increase in the medium to short term.
Thai big bang
Meanwhile, while some lawyers throughout the region may feel that turbulent economic conditions are more favourable for their practices than stable macroeconomic times, lawyers in Thailand are looking to harness the feel-good factors. “I think typically lawyers have said that turbulent times are good for them,” explains Kitipong. “But really turbulent times aren’t so pleasing. I believe in the good old days, that if everyone is winwin, the work will be done in a better environment and there are no losers, in a sense everyone wins.” But, good feelings aside, it is the country’s full service firms which are set to be the biggest beneficiaries in the downturn, although Kitipong has advice which may benefit firms of all shapes and sizes and it involves lawyers moving out of their comfort zones. “Lawyers need to reposition themselves in times like these. They must get out and see the clients more. They don’t only need to advise them on the legal aspects, but also on the commercial aspects of things,” Kitipong says. It is to be noted that Kitipong reiterates this point: “Lawyers mustn’t wait for clients to come to them, as few will do that in times like this; lawyers must get out and see their clients.” ALB
The number of Thai companies to list in the country’s stock exchange (SET) is also set to increase according to lawyers who ALB interviewed, especially with the government suggested to be on the cusp of regulatory reform designed to both encourage companies to list and diversify the composition of the SET. Economists suggest that the composition of the stocks of the SET are not representative of the real Thai economy. Although the country’s food and agriculture sectors are its largest exporters and its service sector contributes its fair share to Thailand’s GDP, these realities are not reflected in the SET board. Instead, it is said that the SET is weighted too heavily in favour of utilities, oil and gas sectors. However, according to Kitipong, this glaring imbalance only bespeaks a much more profound problem. At present, only around 450 of the country’s 300,000 plus companies are listed on the SET and this, he says, is because companies see little or no tangible benefit in listing. “There’s a big problem in Thailand at the moment; people believe that being listed on the Thai stock market doesn’t help them, but rather to bring more costs and subject them to being closely regulated by the authority. So there
www.legalbusinessonline.com
news in brief >> Top 10 Asian legal advisors of project finance deals For more information, please refer to Project Finance feature on page 68 Rank
Firm
1 2
Jun He Law Offices Mallesons Stephen Jaques Allens Arthur Robinson J Sagar & Associates Armachand & Mangaldas Clifford Chance Freehills Lovells Sullivan & Cromwell Chadbourne & Parke
3 4 5 6 7 8 9 10
Value No. of US$m deals 6,6943 1 3,235 11 2,382 1,931 1,766 1,586 1,586 1,533 1,533 1,381
8 2 2 4 10 1 1 1
Source: Project Finance Magazine
China cross-border announced M&A 1 January – 30 September
Feel-good factors
Source: Thomson Reuters
End of road for Heller Ehrman As expected, Heller Ehrman gave its lawyers 60 days’ notice of its intention to close its doors forever, with the last day being 28 November. It is a sad end, with the firm just two years away from what would have been its 120th year of operation. While there were rumours of Baker & McKenzie and Winston & Strawn picking up large segments of Heller Ehrman’s lawyers, both firms have said that this would not occur. Birth of the Phoenix Three partners from Trilegal, Allen & Overy’s Indian alliance partner, have left with a Kochhar & Co banking partner to create a new firm. Abhushek Saxena, Saket Shukla and Sawant Singh from Trilegal, and Kochhar’s Manjula Chawla will move to create a corporate specialised firm named Phoenix Legal. Trilegal’s managing partner, Anand Prasad, praised the three partners and supposed ambition as a driving factor for the move. “There’s significant market opportunity that exists, and I think it’s more to do with finding more potential for themselves,” he said. In February, Allen & Overy formed an alliance with Trilegal which gave them access to training and referrals. Prasad said that the alliance is not likely to be affected by the breakaway. “The alliance is extremely strong. I doubt that the [breakaway] will be able to do much to our firm, but let’s see.”
17
NEWS | analysis >>
news in brief >> Intellectual property firm extends Asia operations in Hong Kong Marks & Clerk Solicitors, well known in British legal circles for its specialist intellectual property (IP) practice, has decided to take root in Asia through a newly formed firm in Hong Kong, Anthony Evans & Co. The move follows its merger with IP firm Lloyd Wise last year to extend its reach into Singapore and China. The new Hong Kong office cements a long-standing referral relationship that Marks & Clerk Solicitors has had with the local lawyer, Anthony Evans.
M&A benchmarks show contradictory deal count for Freehills, Mallesons There appears to be some contradiction in the latest Q3 M&A league tables released by Mergermarket and Bloomberg. Mergermarket’s table showed that for the first three quarters of 2008, Mallesons had slightly more deal volume (55) than Freehills (53), while Bloomberg’s results showed Freehills (103) was significantly in front of Mallesons (51). Either way, Freehills partner Rebecca MaslenStannage is happy with the firm’s performance in Mergermarket’s latest Asia-Pacific league table. This could be because the firm’s M&A value (US$217.7bn) was about four times more than Mallesons (US$58.8bn), and Freehills was also recently named Australian M&A legal advisor of the year at the 2008 FT/Mergermarket M&A advisor awards. Maslen-Stannage believes the differences on the tables are due to different deal value thresholds, among other things: “We focus on M&A deals that are strategic, which means that the dollar value may not be very high. However, we’re happy to help our clients if they think it has enough value for their business.” Recently M&A activity has been “lumpy”, she said, due to the global credit crunch and uncertainty over whether companies will be able to finance takeovers with debt. Maslen-Stannage said Freehills still has a strong workflow, even though it is relatively “stop-start” at the moment due to the credit crunch. “It’s still looking very promising, we have a lot on the books, but it’s a question of whether the planets will align,” she said.
18
ANALYSIS
Legal process outsourcing: just hot air?
T
he current macroeconomic environment has thrown up several interesting examples of cost cutting by law firms across the globe. In the spirit of their new found fiscal discipline, firms have axed Christmas parties, made communal chockie biscuits contraband, put an end to partner washrooms stocked with lush 40-ply toilet paper, and of course, laid off countless lawyers – all consequences of the need to decrease overhead costs and keep profit margins fat and balance sheets healthy. It is against this maelstrom of cost cutting that legal outsourcing, also known as legal process outsourcing (LPO) has again risen to prominence as a means to not only slice operating costs, but to keep clients happy in the saddest of economic times. And while the latter may just be good PR sense, some have serious doubts as to whether firms engaged in LPO will actually see any tangible savings much less be able to pass these on to their clients.
the context of legal services you can’t just take those and flow them through directly to your client.” Other sources close to ALB agree. “The costs associated with outsourcing legal work to places like India may not be as small as some may think. If this is the case, then how much of a saving that firms can actually pass on their clients may be debatable – will they actually save their clients anything? Savings may be negligible.” But while firms should not expect the savings from LPO to go through the roof, many expect the goodwill that this process will create will be as good as money in the bank. ALB’s source explains, “the PR that some firms can build off of this could be enormous. I think that clients only want to hear one thing in the down times: how their lawyer is saving them money.”
The savings smoke and mirror
What makes LPO so appealing to firms such as Clifford Chance, Eversheds and others who dabble in offshoring work to places such as India and Israel – first and foremost – is that it presents a way to greatly reduce costs and even create work for the firm which is not normally done – things such as contract reviews and the like. The average annual salary for an Indian professional engaged in LPO work starts at around US$600 per annum, with charge out rates at only US$30p/h. Add to this the overhead costs such as office rents and the like that UK and US firms escape by sending work offshore, and the financial merits involved become quite clear. But as Wendy Gross, partner at McCarthy Tétrault, told Lexpert Magazine beneath the facade of spectacular savings there are plenty of other factors that need to be considered. “On its face, the hourly rates and the unit price are lower, but you have to factor in the additional costs of managing your service provider, and in Asian Legal Business ISSUE 8.12
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In addition, the complexities involved in LPO may prove to be something of a headache for law firms considering outsourcing. Law society rules in home jurisdictions, restrictions on who can do legal work and the types of work they can do, conflicts, confidentiality, privilege and privacy are all important considerations. Quality control issues also loom large, not to mention the fact that LPO may actually cut out a vital link in the accountability chain. But where the whole LPO model fits into the broader fiscal strategies of law firms is another point of contention, most notably, in relation to how the tensions between the want of law firms to increase profits and their current need to reduce them are reconciled. “In most law firms, the objective isn’t to reduce costs; the objective is to increase costs as much as possible,” a source close to ALB said. “Lawyers want to increase the amount of work being done, and increase the fees wherever they can get away it,” the source says, implying that LPO may just be a stop-gap solution during the economic downturn.
Hot air
Even so, lawyers interviewed by ALB questioned whether LPO was being used as extensively by international law firms as media reports suggest. Hence, while the media claims that the likes of Clifford Chance and Eversheds are outsourcing everything from
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conveyancing and accident claims to due diligence investigations and patent work to Indian outsourcing outfits, lawyers like Som Mandal, managing partner of FoxMandal Little, says the firms doing the outsourcing may be indulging in a little bit of exaggeration. “The assertion that firms [who outsource work] are sending all low-end work to India is just hot air,” he says, noting that by far the largest exponents of LPO have, and always will be, multinational corporations (MNCs). Indeed, a cursory glance at some of the major LPO players seems to indicate as much. SDD Global Solutions, the affiliate arm of New York-based law firm SmithDehn is one such firm. According to SDD’s president and chairman, Russell Smith, the majority of its work comes from in-house legal teams rather than referral from the monolithic UK and US law firms. SDD is by no means an isolated case. Other LPO operators in India such as LexOrbis, New Galaxy Partners, United Lex, ATI Advocats, LEX, and InFosys LPO all note that the bulk of their work comes from foreign conglomerates and domestic companies looking to slash legal bills rather than law firms overseas. Says the founder at one of India’s largest LPO operations: “We expected to receive a lot of work from international firms in the UK, but nothing much has materialised. Our work really comes from MNCs who are under more pressure to cut costs in the current environment.”
news in brief >> Myanmar lawyers’ convictions criticised The jailing of Burmese pro-democracy lawyers has been criticised by an association concerned about the government authorities’ treatment of the legal profession. Australian law association LAWASIA has expressed concern about the arrest of four lawyers, who were recently sentenced to jail for contempt of court. Lawyers U Nyi Nyi Htwe, Saw Kyaw Kyaw Min, U Aung Thein and U Khin Maung Shein had all represented student activists. Two of the arrests were made following lawyers’ submission of a complaint related to the defence in the trial of the student activists; while the other two were said to have happened following the request to call a government official to the case. The association also said it was concerned the convictions would deter lawyers from acting in defence of political activists. Music stops, Rajah & Tann called in to break up the party Singapore nightclub operator LifeBrandz will terminate its agreement with London-based Ministry of Sound, under which it operated a Clarke Quay nightclub under the famous Ministry of Sound brand. The termination is a result of licence agreement problems and allegations of unpaid royalties which had already resulted in litigation in the UK. In turn, LifeBrandz has instructed Rajah & Tann to file a suit against the brand owners in the High Court of Singapore.
Pigeon-holing India
The effects that the growth of the LPO sector will have on the complexion of the broader Indian legal services market have not been the source of much debate, but is nonetheless important as the country hurtles towards legal market liberalisation. However, it is a debate that needs to be had, according to sources close to ALB. “The ramifications of LPO for the Indian legal market could be quite interesting, but we really need to talk about what, if any effect, it will have on the market,” says Mandal. Other Indian lawyers agree. “LPO may create a three- or even fourtier legal market in India – you may have corporate law firms, possibly 19
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news in brief >> US firm links with China’s Grandall Legal Group US-based law firm Sichenzia Ross Friedman Ference has furthered its link with China by appointing Grandall Legal Group lawyer in Shanghai, James Li, as a visiting attorney. Li will join Sichenzia’s Asian practice group for the next few months to boost the firm’s connections with the Chinese market. The firm will build on its experience with Chinese companies intending to become public and accessing capital in the US. “[Li’s] presence ... gives us an affiliation with Grandall which is one of the largest law firms in China,” said Sichenzia’s founding partner, Gregory Sichenzia. The relationship between the firms will also produce more business for both, said Li. Li, who has studied at the US at Chicago-Kent College of Law, will focus his practice on private investment into public equity (PIPE) transactions and reversing Chinese company mergers into traded shell companies Baker & McKenzie refreshes management Baker & McKenzie has refreshed its management teams with the election of Tokyo managing partner Jeremy Pitts as a member of its executive committee and Poh Lee Tan as its Asia-Pacific regional council chairman. Pitts will sit alongside Poh Lee Tan, Baker & McKenzie chairman John Conroy and five other members to oversee the successful management of the global firm. He replaces Sydney-based David Jacobs whose threeyear term has concluded. Tan has been promoted after a three-year stint on the firm’s executive committee. The firm has also appointed Alan Harvey to the executive committee and Peter Engstrom as its North American managing partner. Both are US-based partners. Private equity makes move on ADERANT There’s still plenty of private equity cash around, provided the target is right. Software and solutions provider ADERANT, which focuses on services for law firms and other professional service organisations, must have ticked a few boxes with California-based private equity firm Vista, with the latter announcing on Monday that it had acquired ADERANT. Vista focuses on vertically specialised companies that develop and market software, and technologyenabled business services. The company said that it intended to leverage its industry experience to position ADERANT for continued growth and enable the company to strengthen and expand its position in its respective markets. Law firms will be watching with interest to see what comes of this investment. ADERANT is well established as a global brand across the industry. In Australia, nine out of the 10 largest law firms are ADERANT clients.
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international firms, specialist firms and then LPO outfits. This isn’t entirely bad, but may result in overcrowding.” Overcrowding may just be the panacea to the country’s oversupply of lawyers. The Bar Council of India notes that Indian universities graduate nearly 80,000 lawyers per year – a number which does not take into account those who study at overseas universities and return in search of work. Statistics indicate that of these fresh graduates, only 42% find gainful employment as lawyers in India with others having to content themselves
with jobs in the country’s booming services and IT sectors. But the question still remains – what risk is there of India being pigeon-holed as the home of mass-produced low-end legal grunt work, similar to the infamy of the country’s call-centres? “These claims are without basis,” says Saurabh Misra of Paras Kuhad & Associates. “With the continuing interest of so many foreign companies to do business in India, this pigeon-holed issue doesn’t arise at all,” he says, also refuting claims that LPO will affect standards in the Indian market. ALB
ANALYSIS
It’s the economy, stupid
As Asian stock markets plunge, currencies drop, and the credit crunch threaten Asia’s export-driven economies, ALB looks at how the economic outlook will affect law firms. The demise of US law firms Thelen and Heller Ehrman, in particular, herald a significant pattern emerging in the global legal environment. With an exceptional number of appointments and office openings in the Middle East announced recently, it seems the region is looking increasingly desirable
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here are several narratives and thoughts on how the financial crisis will play out in Asia, but it is clear that the economies will undoubtedly see a slow-down happen in the next year. “Asian countries can’t avoid the impact of the weakening US, European and Japanese economies,” said Singapore’s prime minister, Lee Hsien Loong in October. “We must prepare for a rough
ride at least over the next year, and quite possibly even longer.” With GDP growth expected to slow by about 2% across Asia, the Asian Development Bank expects the global financial crisis will depress demand and lower commodity prices in the region. It is apt to say that Asian economies are likely to see some sort of cut back in investments and deals, although according to analysts, the slow-down Asian Legal Business ISSUE 8.12
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will be milder than the economic crisis of 1997. This time round, past experience, larger foreign reserves, better-capitalised banks, and exchange rates leave Asia in safer territory. Industries set to see a decrease in activity include the manufacturing and construction sectors, as the credit crunch continues to bite and consumer demand of Asian exports in the US wanes. “There’s increasing intra-regional trade, but the US and Europe are still very important to [Asian economies], particularly in the trade of final goods,” says Hal Hill, the professor of South-East Asian economies at the Australian National University, speaking to The Sydney Morning Herald. In Singapore, some industries are expected by economists to support the economy through the downturn. The construction sector will look healthier, with predictions that the government will speed up the infrastructure projects that were delayed last year. Other industries, such as transport & storage, information & communications, and bank intermediation, are also expected to continue providing some support to growth. “There’ll be an increase in work in certain areas,” says Loo Choon Chiaw, managing partner at Loo & Partners. “For instance: M&As, as shrewd and deep-pocket investors seize acquisition opportunities; corporate restructuring, as corporate entities streamline their financial and operational structure; corporate insolvency, as we see more corporate failures; and governance and compliance work, as authorities respond to the present crisis by a flood of new regulations and compliance directives. In China, the government is responding to fears of a recession in a similar fashion to Singapore – by injecting funds into infrastructure
projects. A US$586bn stimulus package announced in November should see a boom in construction deals in the housing, road, railway and airport sectors. The announcement immediately led to a significant jump in the stock markets across Asia, on expectations that the stimulus package will create cross-border transactions. And while a 2006–2010 five-year plan by the government has dedicated a budget of US$182bn specifically to create new rail lines, it will be complemented by a number of projects planned for the following period to be brought forward to the current one. In all, local law firms need not worry about recession fears, says Sun Wenjie, partner at Grandall Legal Group. “Foreign law firms in Beijing and Shanghai will probably be more affected than domestic [PRC] law firms, because the majority of their income is generated from foreign clients and cross-border transactions,” she says. Experts agree that Asia’s relatively healthier outlook compared to the US and Europe will see it recover from the financial crisis quicker, because of lower leverage and stronger economic growth rates. Across the region, M&A activity still looks strong. Asia will see more cross-border activity, as companies focus closer to home rather than the US and Europe, says Gordon Paterson, Deutsche Bank’s head of M&A for Asia. He also expects sovereign wealth funds to return as large acquirers, due to their access to capital and general motivation to invest overseas.
IP firm jumps the fence to join Springboks brawl Memo to marketing managers: Need more exposure? Try getting involved in the hottest news issue du jour and then feel the heat of the media spotlight. That’s the experience of South African intellectual property law firm Spoor & Fisher following their recent foray into the debate over the use - or misuse - of the South African rugby team’s Springboks emblem. The trouble started when SA sports minister Makhenkesi Stofile complained that the South African Rugby Union was using the Springbok emblem illegally, as it had failed to renew its licence to use the emblem. According to Stofile, his department is the rightful owner of the trademark, the King Protea. Legal action to recover royalties owed for the alleged unauthorised use of the emblem is reportedly underway. Meanwhile, the media are lapping up commentary from Spoor & Fisher partner Owen Dean, who said that Stofile’s comments were misconceived. “We have checked with the Register of Trademarks, and Saru [South African Rugby Union] is the current owner of the trademark,” said Dean. Clarification is being sought from Spoor & Fisher as to whether these comments were made on behalf of the South African Rugby Union.
Movin’ on up
The global financial crisis has prompted some significant moves in the legal industry in the past few months. While some have set up shop or bolstered their Asian practices, others have cut back on out-of-demand practice areas, such as M&A, to
“Foreign law firms in Beijing and Shanghai will probably be more affected than domestic [PRC] law firms, because the majority of their income is generated from foreign clients and crossborder transactions” www.legalbusinessonline.com
news in brief >>
Harneys scores new best friend Offshore law firm Harney Westwood & Riegels (Harneys) has confirmed its growth strategy in a tie up with Cypriot firm Aristodemou Loizides Yiolitis & Co (ALY), following the opening of its Cayman office only a few months ago. The “best friends” agreement with ALY will provide a link of work referral and secondment of lawyers across the firms, as well combining marketing efforts and office space. The tie up will best serve Harneys’ clients in India, said partner Peter Tarn, as the addition of a Cyprusbased tax treaty will be valuable for the firm’s Asian region clients. “Our two firms have an outstanding cultural fit and a great deal to offer each other,” said ALY partner Pavlos Aristodemou. The news comes following the recent opening of its Cayman office, on 1 September.
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NEWS | analysis >>
“Hong Kong continues to be the most important financial centre in Asia and it should remain as such, provided our leaders show careful foresight”
increase those in demand (insolvency & restructuring). As the ‘news in brief’ stories on p20 show, there is a significant trend emerging as US firms increasingly eye Asia and the Middle East in its time of economic crisis. Some stories to demonstrate: the recent decision by Magic Circle firm Clifford Chance to lay off 20 litigation and dispute resolution associates in the US was followed, significantly, by the appointment of 15 new associates to its Asian offices. “The long-anticipated increase in overall US litigation activity has not yet appeared,” said the firm in a statement following the cuts. “The firm is taking action now in light of market conditions.” Another prominent firm, Dewey & LeBoeuf, closed its office in North Carolina and within two days announced the opening of two new offices in Abu Dhabi and Doha. The closure – the third for the firm in the 2008 year – was a response to 22
market conditions, the firm said, which contrasted with the Middle East’s booming investment opportunities. Loeb & Loeb, Ogier and Kilpatrick Stockton were some of the others to establish themselves in the Middle East and Asia in only the last month. And while some firms set up shop, others are boosting its numbers in the region. Again in only the last month, a handful of notable firms, including Bird & Bird, Mallesons Stephen Jaques, Latham & Watkins, Kirkland & Ellis, Reed Smith, and Cleary Gottlieb, added to their Asian practices, citing growth in the region’s technology and economical growth as reasons for the additions. Singapore, Hong Kong, and Beijing, in particular, were on the radar for firms. James Wood, counsel at O’Melveny & Myers’ Hong Kong office, said that he is confident that Hong Kong will always remain a popular destination for lawyers. “Hong Kong continues to be the most important financial centre
►► Law firms tighten Santa's belt to compensate for credit crunch Law firms around the world are defying the traditionally-held stereotype of plush and luxurious living, by cutting costs to compensate for an overall drop in legal work A UK survey by Legal Business based on a sample group of 700 associates revealed that 50% of respondents agree that their workflow has decreased, while competition between firms has increased. About 30% of associates had their salary frozen or expected it to be withheld, and more clients are pressuring firms to minimise costs. Although the situation looks grim, firms do not appear to be considering redundancies and have responded by saving money. UK firm Nabarro cancelled its Christmas party booking at the Intercontinental Hotel and opted for a workplace celebration. Magic Circle firm Slaughter & May has stopped providing mineral water and offered its own brand of bottled water, while other firms have stopped providing free food. It would appear; however, that the sweet tooth is still strong in firms, since client snacks such as chocolates or biscuits will continue to be provided by most firms.
in Asia and it should remain as such, provided our leaders show careful foresight,” he says. “While a number of Asian cities have changed dramatically (mostly for the better) in the past 10 to 15 years, reports of the ‘death’ of Hong Kong were greatly exaggerated.” In China, there has been much flurry of activity as foreign law firms rush to capture a piece of the country’s technology sector boom. China’s WTO commitment to open up markets has led to a re-organisation of the telecommunications industry, which saw the merger of six important telcos. Law firms Bird & Bird and Loeb & Loeb opened up offices in the region, both citing the IT sector as a driving force. “China continues to be an exciting market, particularly in many of our key sectors, namely IP, communications, IT, life sciences and sport,” said Bird & Bird’s China managing partner, Matthew Laight. Despite the gloom, as ALB’s Fast 30 shows (see p42), 2008 saw that revenue is still high, and the opening of new offices in the region is a sign of increased interest that is likely to remain as foreign investors look for healthier economies to invest in. For more on how law firms expect to weather the storm, see ALB’s predictions feature on p56. ALB Asian Legal Business ISSUE 8.12
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news in brief >> LAW FIRMS THAT MADE ADCB’S PANEL The Abu Dhabi Commercial Bank (ADCB) has created its first external legal panel that comprises local A-list and Magic Circle firms in the United Arab Emirates (UAE). This move has been closely watched by the legal community, as the trend towards developing in-house legal teams in financial institutions in the UAE as finance lawyers fear redundancy. The bank’s first in-house general counsel, Simon Copleston, selected a 10-firm panel including Reed Smith, Clifford Chance, Freshfields Bruckhaus Deringer, Allen & Overy, Linklaters, Norton Rose, Clyde & Co and local firm Al Tamimi & Company. ADCB previously worked with a range of firms on an ad hoc basis. Although Copleston said that the group formed a “general panel”, the firms have been selected for their expertise in specific fields. They are intended to complement the seven-strong internal team made up of lawyers specialising in debt collection, capital markets & derivatives, investment banking and corporate governance. CSRC TRIALS MARGIN FINANCING The China Securities Regulatory Commission has announced it will launch margin financing and securities lending on a trial basis. However, the CSRC is taking a very cautious approach to the companies that will be permitted to participate in the trial. Fang Jian, partner at Linklaters in Shanghai, said that the CSRC will be taking such matters as the company’s scale of net assets, compliance track record, net assets risk control indicators and their readiness for conducting the business
into account. Stringent rules will also apply to investors.
ASIA, INDIA, US, UK
India should share fruits of litigation: minister
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ndia’s union law minister has reignited debate about allowing foreign firms to establish local partnerships, and local firms to reap the benefits of globalisation. Speaking at a seminar on the Indian justice system, minister HR Bhardwaj advised that the time has come to amend the Legal Services Act while the process still rests in the hands of the Bar Council, as the WTO has the legal services industry on its agenda. “Because the legal service is on the WTO agenda, you should prepare for it and their rules that will protect your interests, as you have the powers,” he said to the audience in New Delhi. The reforms would help India acquire better legal technology and reap the benefits of partnership. “So, allow them to set up office on
partnership here and enjoy the fruits of litigation, and nobody will allow them to appear in Supreme Court,” he said, reassuring the crowd that their jobs would be protected. The minister also acknowledged delays to promised reforms. These went on the agenda last year, but associated talks have since been stifled. Anand Prasad, who manages the Allen & Overy Indian partnership firm Trilegal, said that foreign partnerships can create better Indian lawyers and he encouraged more investment in the legal industry. “India presents an excellent opportunity for good lawyers. Hence, to my mind it might be better for international firms to partner with Indian firms as early as they can.”
Updated daily news Clifford Chance, Freshfields, Bakers on major Chinese gas deal China stimulus package "good news" for legal sector International US law firms outdo local firms
Asia Australia New Zealand
Korean lawyers turn the tables on judges
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Asian Legal Business ISSUE 8.12
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MIDDLE EAST
New Dubai property laws to increase consumer confidence and mortgage financings
uk report Firms sink or swim as the credit crunch fallout continues City firms have had their mettle tested as the credit crunch continues its onslaught; while some have sailed through the turmoil relatively untouched (Trowers & Hamlins, Norton Rose, CMS Cameron McKenna, Ashurst, Pinsent Masons) others have struggled to stay buoyant. Wragge & Co, Eversheds, Halliwells, Cobbetts and Addleshaw Goddard are a handful of those who have experienced revenue drops over the first half of 2008-09 with Wragge & Co one of the hardest hit – suffering a 6% downturn in annual earnings to £44m, followed by Cobbetts (5–10% down), Eversheds (4% down to £188m) and Halliwells (3.1% down to £44m). Addleshaw Goddard also reported a loss of 2.8% down to £94.7m. Other firms however, have weathered the volatile H1 term to enjoy double-digit revenue growth for the first six months of the year. Trowers & Hamlins are up 16% to £42m, followed by Norton Rose a (both up 11% to £141.5m and £548m respectively) and CMS Cameron McKenna (10% up to about £113m). Ashurst, Pinsent Masons and Simmons & Simmonsn have also seen reasonable rises in revenue – of 7.5%, 7% and 5.5% respectively. Bird & Bird in particular brought in an extra £85m over the H1 period, translating to an impressive 30% rise in turnover.
Pinsents soars in AIM ratings Pinsent Masons is sitting comfortably at the top of London’s Alternative Investment Market (AIM) rankings for the last quarter, after scooping an extra two AIM clients over the final quarter. Data provider Hemscott reports that Pinsent’s tally is now a healthy 61 on the AIM tables, thus making the firm a lead adviser to the largest number of clients. Simmons’ staff cut Simmons & Simmons recently made lawyer redundancies across London and in several practice groups, following a three-year review of its wage bill. It’s reported that eight lawyers and 19 service staff were made redundant; in addition 35 lawyers were sent on secondment and 15 others, including two partners, were relocated to the Middle East and Russia. More UK firms fold to redundancy talks: Hammonds begins lay-off discussions with minimum 20 staff Hammonds recently joined several other UK firms as it began redundancy consultations with at least 20 staff. These redundancies are likely to affect the corporate and real estate departments across all the firm’s offices. Taylor Wessing also recently confirmed it had engaged in redundancy talks with six members of its real estate group due to the market downturn.
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ecent changes in Dubai's mortgage laws should boost consumer confidence during the global financial crisis, lawyers in a property industry meeting stated. The new amendments introduced on 31 August will be in full operation in November, and target off-plan sales, mortgage registrations and property disputes.
ASIA, UK, INDIA
Norton Rose hunting for Indian trainees
I ROUNDUP • Eversheds UK managing partner Bryan Hughes will replace David Gray as the firm’s next chief executive in May 2009 for a four-year term, following his recent appointment • The Freshfields London office lucked out in the firm’s third round of counsel promotions this year, with the City office picking up just one of the 11 global promotions • Norton Rose is soon to launch an anti-corruption and business ethics group to cater to eight jurisdictions (Europe, the Far East and the Middle East). The initiative will be headed by disputes partner Sam Eastwood and focus on helping clients reduce their exposure to anti-fraud legislation • The poaching partners dispute between Taylor Wessing and Nixon Peabody has settled, and Nixon Peabody will soon launch its new Paris office with 13 of Taylor Wessing’s former Paris partners, including former managing partner Arnaud de Senilhes • Goodwin Procter is set to open a City office with the help of a former UK hospitality and real estate finance duo from Heller Ehrman • Shearman & Sterling has reintroduced its European managing partner role, with M&A partner Creighton Condon set to relocate from the firm’s New York office to take up the post
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ndian lawyers who have in the past criticised the west’s refusal to recognise their law degrees are seeing a change in the offing. Global law firm Norton Rose has been on the hunt for Indian law graduates, recruiting up to five trainees for its 2010 intake. The firm’s graduate recruitmentpartner, Sam Eastwood, said that the motivation of the profession and its willingness to work hard separated Indian trainees from their UK counterparts. The announcement has been met with some questioning of the motivation behind the Indian recruitment drive. It is perhaps a timely and well considered move, with news that the Indian law minister has once again reignited talk of opening the legal market to foreign players. Asian Legal Business ISSUE 8.12
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US, ASIA, AUSTRALIA
Recessionary pressures bring Thelen down
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They will clarify the rights and responsibilities of parties – including developers, buyers and banks – improve regulation to protect buyers further and prevent the inflation of market prices, said industry members of the Dubai Property Society. “The new property laws are a positive move that’s set to boost the confidence of the property investor and
the end-user amid the current global economical turmoil,” said Lynette Brown, partner at UAE-based law firm Al Tamimi & Company. Mortgage financing will also increase, said a spokesman for Amlak, one of the region's biggest finance companies, which estimates that financing should increase by around 190% in the coming years as the population grows.
ASIA, US, MIDDLE EAST
US firm closes US office, opens in Abu Dhabi and Doha
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n a sign of the times, within a day of announcing the closure of its office in North Carolina, US-based law firm Dewey & LeBoeuf declared it is adding two offices in the Middle East. According to the firm, the decision to close the North Carolina office was “made in part due to the economic conditions in the market, which has seen the consolidation of several major banking institutions and a challenging structured finance market”. The opening of the new offices in Abu Dhabi and Doha, due to open early next year, is seen as a response to increased investment potential in the region. “The emirates of Dubai and Abu Dhabi, plus Qatar and Saudi Arabia, are at the forefront of some of the world’s most important inward and outward investment opportunities today,” said the firm's chairman, Steve Davis. The closure of the Charlotte office comes only months after the firm shut
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the doors of three other US offices, a decision which Davis said at the time was based on transferring resources to “major commercial and financial centres around the world”. Also diving into the Qatar pie is fellow global firm DLA Piper, which yesterday celebrated the opening of its office in Doha, witnessed by 150 guests. The new office will be headed by Jeffrey Bailey, who seemed to confirm Davis’ projections. “The number and value of projects in development that are planned for Qatar is truly exciting, and it represents a significant opportunity for us,” said Bailey “It’s also exciting to be able to play a part in the continued growth of Qatar and the business environment here.” The Doha office adds to DLA Piper’s Middle East presence, which has been boosted by a handful of appointments and new offices over the year.
S-based law firm Thelen has told its partners it is looking to close its doors on 1 December. Thelen’s demise follows the firm’s failed merger talks, Pillsbury Winthrop’s raids on its China office and a number of high level hires from the firm’s ‘crown jewel’ construction litigation team in the US. A management council met yesterday to recommend the closure to its full partnership, which has a week to vote on the final outcome. The firm confirmed that recessionary pressures and hefty partner losses contributed to the recommendation. “The decision to dissolve the firm was precipitated by several economic factors, including recessionary pressures and numerous partner departures over the past year, all of which have negatively impacted on firm revenues,” read a statement released by the firm. The firm admitted that the hefty partner losses over the year (reportedly almost 20%) breached an agreement with its bank, which now controls the firm's expenditures. “The firm is in default of its primary credit agreement, having breached a partner departure covenant that restricts the number of partners who may depart the firm within any 12-month period.” The 84-year-old firm has been involved in unsuccessful merger talks in the last year in a bid to save it from its financial woes. “Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full-firm merger discussions terminated last week,” the statement read. An administrative committee comprising three partners will work with the bank in the winding-up process. The firm will pay employee salaries and vacation pay through to the end of November, but not accrued vacation pay. Rumours that the firm will dissolve had been circulating in legal circles and comparisons were drawn with another troubled San Francisco-based firm, Heller Ehrman, which also closed its doors following hefty partner losses. 27
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us report Three laid-off Heller employees locked horns with the firm recently over unpaid wages The disgruntled trio filed a class action complaint against the dissolving firm in September, requesting a jury trial over money they believe should have been paid post-redundancy, in accordance with federal and California Worker Adjustment and Retraining Notification (WARN) Acts, vacation laws in California and the firm’s own employee “contracts” governing vacation payouts. The suit proposed various classes, which are likely to cover “hundreds” of staff and associates who were laid off as a result of the firm’s impending break-up.
The firm has said it will pay its employees 60 days’ salary as well as all accrued vacation pay.
Thelen Reid calling it quits It seems that Thelen Reid Brown Raysman & Steiner is set to join Heller in the dissolution stakes. The partnership council of Pinsents Masons’ former US alliance firm recently confirmed that it would be recommending the firm’s dissolution, citing the economic downturn and mass defections (reportedly more than 100 lawyers during 2008) as the cause. The break-up, decided in a crisis meeting with the firm-wide partnership is set to occur in early December, and a three-partner administrative committee has been appointed to oversee the wind-down process.
US firms fold amid economic pressure O’Melveny & Myers and Dewey & LeBoeuf have joined the raft of US firms buckling due to the economic downturn. While O’Melveny is reportedly looking to reduce its staff and associate headcount as part of costcutting measures, partners at Dewey have had to do without their monthly distributions since August due to a decision by the firm’s executive committee to hold on to the monthly share of annual profits to bulk up the firm’s cash reserve. But this has not affected the partners’ monthly fixed payments, which continue as per normal. Eversheds, also, recently suspended two quarterly profit distributions to partners.
Chadbourne slides into saving mode Chadbourne & Parke has put a freeze on hires temporarily in an attempt to stay afloat in the turbulent economic environment. The firm-wide hiring stop extends to both legal and non-legal staff, and managing partner Charlie O’Neil reportedly revealed that any gaps in shortstaffed practice areas will be filled – temporarily – by shifting lawyers from areas that are less busy, rather than hiring laterally. Chadbourne’s planned technology upgrade will also be delayed as another cost-saving measure.
ROUNDUP • Atlanta-based Powell Goldstein and international firm Bryan Cave are set to join forces in January 2009. The merger will create a firm of about 1,165 lawyers – overtaking the headcount at King & Spalding • White & Case closed its 15-lawyer Milan office last month, ending the firm’s presence in Italy • White & Case also closed its 18-year-old seven-lawyer Dresden office. Three of the departing partners are expected to launch an office in Dresden for KPMG Legal in January 2009, along with two other White & Case associates • Dewey & LeBoeuf is set to close its 11-lawyer office office in Charlotte, North Carolina in late December, due to economic conditions • US firm McKee Nelson has seen a decrease in its lawyer headcount to 174, after laying off 13 associates across its New York offices and four in Washington DC, in response to the economic downturn • Former Heller Chairman Matthew Larrabee recently joined Dechert’s San Francisco office as a senior trial lawyer
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ASIA, US
China’s IT attracts more US law firms
C
hina’s booming technology sector is attracting law firms from the US, with two more announcing office openings in the region. Detroit-based firm Miller, Canfield, Paddock and Stone has opened its new office in Shanghai on 1 November after securing a licence from the government. The firm said it is capitalising on the region's expanding market for technology and commercial work. “Shanghai is China's technology gateway and its largest commercial, financial, industrial and communications centre,” said the firm’s CEO Michael Hartmann. US-based Goodwin Procter, which until now has had offices only in the States, will open in Hong Kong in January, focusing its practice on technology companies, funds and private equity. “This global team will focus initially on our clients who are investing in India, China and other Asian centres of commerce,” said managing partner Regina Pisa. However, the firm is not stopping there. Once settled, it is to “explore additional opportunities for office locations in Asia as part of its longterm global strategy”, the firm said in a statement. This is one of several office openings by firms in the last month, with Bird & Bird and Leob & Leob also announcing their moves in response to growth in the technology industry. Asian Legal Business ISSUE 8.12
News >>
US, CHINA
US law firms in Chinese corruption probe T he Chinese government is investigating deals involving two US law firms in a wider corruption probe which saw the detention of officials responsible for approving foreign investment deals in the country. According to the Chinese media, special government investigators are reviewing cases in which two US-based law firms are involved. Media sources did not name them but said they had offices in Hong Kong and Beijing. Richard Cassin, from US-based firm Cassin Law, said that American law firms embroiled in the corruption probe may risk criminal prosecution at home too under the Foreign Corrupt Practices Act (FCPA). He also said that these problems may occur when law firms are not careful enough in complying with the Act.
“Foreign lawyers practising with American firms in non-US offices sometimes know little – if anything – about the FCPA, and may be reluctant to ask for help in understanding it,” he said. “Yet those same lawyers are frequently called upon to help clients secure business and investment licences in high-risk countries such as China. The work requires daily contact with regulators, either directly or through intermediaries, and many of these regulators openly expect illegal gifts and payments.” Regulators have also been implicated in the probe. In August and September, Ministry of Commerce officials Guo Jingyi, director of treaty and law, and Deng Zhan, deputy head of foreign investment, were detained by
government investigators. Both held positions crucial to the approval of FDI deals in China. Two other lawyers, from Beijingbased law firm Si Feng (also known as Seafront), were also detained in connection to the probe, said the Chinese media. And, according to reports, Deng Zhan had accepted bribes from a Si Feng lawyer to approve FDI deals. Reuters sources said that the crackdowns are likely to stifle current and future foreign investment deals. “This makes people nervous,” said the source, who asked not to be named, “and it will naturally slow down – or even tighten – deal approvals involving foreign investments before the government gets the full story.”
AUSTRALIA, CHINA
Chinese acquisitions to bring more M&A legal work in Australia
C
hinese companies are preparing to increase stakes in the Australian resources sector, which means there could be more M&A work on the way for lawyers. Fat Prophets analyst Greg Canavan believes Chinese steel companies will utilise market volatility and dwindling prices to increase their stake in the Australian iron ore companies. DLA Phillips Fox partner Robert Edel agreed there would be a significant "uptick" in Sino-Australian M&A next year. This is partly because a lot of Asian companies with strong balance sheets and significant cash reserves are just waiting for banks to return to normal lending practices. Signs that this could be the case are Chinese steel producer AnSteel's move to increase its stake in its Aussie JV partner, Gindalbie Metals (A$162m), and Chinese traders who are increasing their stakes in Mount Gibson, which faced near closure and agreed to sell at a discounted price. Johnson Winter & Slattery partner Rick Malone said most iron
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ore miners are trading at substantial discounts compared to 12 months ago, making smaller miners likely targets. "The Chinese still require secure iron ore supplies at a reasonable price and many of the juniors are very attractive propositions," he said. Edel believes that M&A will not be restricted to small iron ore miners. “It won’t just be small players in the sector,” he stated.
“It’ll reach the mid-range in coal, base metal, uranium or gold. If they have good assets and access to rail and port infrastructure, they will be good targets.” According to Malone the mid-west region of Western Australia will require legal work in consolidation, capital raisings, secure long-term supply contracts and equity for the next 12 months. 29
News >>
Update >>
ASIA, INDIA
International Tax
LLP model to expand India’s legal industry
UK FSA fines manager in anti-money laundering failure
T
T
he UK Financial Services Authority (FSA) has fined a senior manager of Sindicatum Holdings, the financial advisory and asset management firm, nearly £20,000 for failing to have adequate anti-money laundering controls in place. Michael Wheelhouse, a board member and money laundering reporting officer at Sindicatum, was fined £17,500 , and the firm was fined £49,000. It is the first time that the FSA has fined a compliance officer. While the financial industry watchdog found no evidence of money laundering at Sindicatum, which was set up by former Nomura and JP Morgan bankers, the FSA said Sindicatum did not implement adequate procedures for checking or recording the identity of its clients, and that Mr Wheelhouse personally “failed to take reasonable steps to implement adequate procedures for controlling money laundering risk”.
British Virgin Islands and Australia Sign Tax Information Exchange Agreement The Australian Assistant Treasurer Chris Bowen and the Premier of the BVI Ralph O’Neal announced the signing of a Tax Information Exchange Agreement (TIEA) between Australia and the BVI. The TIEA provides for full exchange of information (EOI) on request in both criminal and civil tax matters and builds upon legislation in both jurisdictions, which already provides for mutual legal assistance in criminal matters. The TIEA reflects both governments’ shared commitment to implementing Organisation for Economic Cooperation and Development (OECD) principles of transparency and effective exchange of information, to eliminate harmful tax practices. Under the terms of the TIEA, Australia and the BVI have agreed not to apply prejudicial or restrictive measures based on harmful tax practices to residents or nationals while the TIEA is in force and effective. Further, Australia will remove any governmental references to the BVI as a ‘tax haven’ and will list the BVI as an ‘information exchange country’ in the Taxation Administration Regulations 1976. This will provide residents of the BVI with access to reduced withholding tax rates on distributions of certain income they may receive from Australian managed investment trusts. In addition to the TIEA, Australia and the BVI have signed an agreement for the allocation of taxing rights with respect to certain income of individuals, which will provide benefits to Australian and BVI residents. Australia and the BVI have also agreed to enter into discussions, when appropriate, to foster further co-operation in areas of mutual interest.
he limited liability partnership Bill recently passed by India’s parliament will encourage the establishment of more law firms and bring the country’s legal sector into line with its international counterparts, said Indian law firms. “The LLP structure has been a much-awaited one in India, and will aid the growth of professional firms by providing them with the flexibility and statutory framework they need to establish and expand,” said Vivek Kathpalia, partner at Indian firm Nishith Desai Associates. The new Bill removes restrictions on the number of partners allowed (now maximum 20), and limit the liability of partners, with a firm currently liable as a separate legal entity. The industry should expect to see more law firms sprouting as a response to the liberalisation, said Kathpalia. “It will allow law firms to become larger in a more aggressive fashion, encouraging the growth of existing ones as well as new firms,” he said. “The Bill also covers amalgamations between LLPs and this should allow easier consolidation in the market as well.” However, the government has been silent on how LLP firms will be taxed, which is a major issue for existing firms seeking to convert to the new model. “It is very important for this to be clarified,” said Kathpalia. “In India, currently a partnership is taxed as a separate entity at the rate of 34% and partners are not taxed when they receive distribution from the partnership. Further, the system itself is unfair as partners receiving small incomes and those receiving high incomes are all effectively subject to the same rate as the partnership itself. The Bill is also silent on whether capital gains and stamp duties would be payable on the conversion of an existing partnership to an LLP.” The capital gains tax issue has some other law firms hesitant to change to the new model. Delhi-based law firm Luthra & Luthra has said that this would make it too expensive to convert. Nishith Desai Associates, however, is waiting to see how the Bill develops. “We would definitely consider [converting to LLP model] once the law is enacted and things are clearer,” Kathpalia said. “It would depend on what final shape the law takes.” The liberalisation of the Indian legal industry has been a hot topic in the last month, as both local and foreign firms await a decision by the Bar Council of India whether to approve the entry of foreign law firms.
By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.
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Debbie Annells
Asian Legal Business ISSUE 8.12
News >>
news in brief >>
MIDDLE EAST
Foreign lawyers banned in Dubai courts
F
oreign lawyers will be banned from representing clients in the Dubai Court of Appeals and Cassation as of 1 January 2009. The ban was issued by the Director of Dubai Courts, Dr Ahmad Bin Hazim Al Suwaidi, and restricts foreign lawyers from Dubai's two highest courts, Appeals and Cassation. Expatriate lawyers will, however, be allowed representative roles, in the First Instances Courts only, until 13 March 2012.
He said the decision follows similar bans in the other emirates and, after discussions held before the UAE Cabinet in April this year, lawyers knew about it. “We decided to give lawyers in Dubai a grace period before we applied the new law, but they knew it would be implemented,” Suwaidi said in an article in The National Newspaper. The bans will not be implemented in Dubai International Financial Centre courts, which follow an Anglo-Saxon legal model.
US, CHINA
New Beijing office for Loeb & Loeb
U
S-based law firm Loeb & Loeb will open a Beijing office next year to meet increasing demand in crossborder commercial transactions and China’s technology-driven economy. While continuing to service its US clients doing business in China, in its new office the firm will look to bring in Chinese clients investing in the US and stock-market listings. The firm will also increase its focus on China’s developing technology-driven economy. “As China moves to a technologydriven economy from a manufacturing one, our firm will be there to work with emerging businesses as well as established companies investing in China,” said the firm's co-chair, John Frankenheimer. The Beijing office will focus on private equity, intellectual property, and corporate & securities advisory, and will be a platform for creating a better relationship between the two cultures. “The new office will ... allow us to better serve our clients by bridging culture, language and time-zone differences more effectively, while positioning the firm inside China to capitalise on the growth of that country's economic infrastructure and global investments,” said securities partner Mitch Nussbaum. The first attorney in the Beijing office will be recently appointed partner Eric
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Doering, who will be based in New York pending the opening of the new office. “Eric brings the right mix of technology industry and corporate governance, as well as transactional experience, to help develop Loeb’s services in Beijing,” said co-chair Michael Beck.
Curtis sets up Dubai office The new office Curtis, Mallet Prevost, Colt & Mosle has set up in Dubai is located in the Dubai International Financial Centre (DIFC). Peter Stewart, corporate partner of the firm’s private equity practice, is the managing partner for the office and Charles Buderi, head of the firm’s London operations, will divide his time between London and the emirate. While most firms have chosen Dubai or Abu Dhabi as their first Central Asia/Middle East base, Curtis Mallet has done the reverse, thus reifying the firm’s relatively unconventional earlier expansion strategy that includes setting up new offices in Kazakhstan and Istanbul. It is understood that the Dubai office is focusing on M&A, energy & commodities, sovereign wealth funds and dispute resolution in the DIFC, and also has other practice areas. The decision to be situated in the DIFC may well be strategically founded on the huge growth potential for dispute resolution in the Middle East. Last year, the firm’s London partners won the first judgment handed down by the Judicial Authority of the DIFC Courts on behalf of its client Daman Real Estate Capital Partners Ltd, a publicly listed company in the United Arab Emirates.
Baker & McKenzie cooking up new Abu Dhabi office Baker & McKenzie is set to further its presence in the Gulf region with the opening of an Abu Dhabi office later this year. Licence requests have been submitted for the global firm’s 69th office, the location of which is currently pending. Supplementing the Riyadh and Bahrain offices, it will be bolstered by a team of 50 attorneys and focus on the corporate and commercial practice areas including M&A, private equity and banking & finance, with particular emphasis on the energy and construction industries. Partner Borys Dackiw, who helped establish the firm’s Kyiv and Prague offices, will head the firm’s Gulf region presence as managing director. Baker & McKenzie is the latest firm to increase its interest in the Middle Eastern region, and enter its thriving legal sector. “Recently, the region has seen higher levels of economic growth and investment in the energy-related industries, as well as real estate and other sectors,” said John Conroy, the firm’s executive committee chairman.
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News >>
Update >>
Intellectual Property Legal Ramifications in Internet-Related Advertising
T
he Internet has created new possibilities for businesses to reach out to consumers but it has also enabled companies to engage in commercial mischief. One area where this is evident is the unauthorized use of trade marks as metatags. A metatag is a keyword term embedded in the HTML source code of a webpage. Metatags are used by search engines to classify the webpage and to rank the results list based on what an Internet user has entered as a search term. A practice has arisen whereby businesses have used the trade marks of competitors as metatags, with the result of their websites being ranked high in the results list when an Internet user has entered the trade mark into the search engine. The legality of such use have been considered by the English High Court in Roadtech Computer Systems Ltd. v. Mandata Ltd. [2000] ETMR 970, which decided that the unauthorized use of trade marks as metatags constituted trade mark infringement, but the law became uncertain when the English Court of Appeal subsequently decided in Reed Executive Plc. v. Reed Business Information Ltd. [2004] RPC 40 that such use was not trade mark infringement, as the defendant company’s website came below the claimant’s website in the results list. It has also become a practice for competitors to purchase keywords, such as trade marked words, from search engines. Google for example sells advertising links to keyword searches through its “Ad Words” program. Advertisers pay the search engine according to the number of clicks their “sponsored link” receives, and a high payment guarantees a prominent position in the results list. There is no international consensus on the legality of Google’s advertising model. A concern over Google’s Ad Words Program lies in the fact that it allows an advertiser to customize the headline of the advertising link, and advertisers may incorporate trade marked words. A company with the business name of “Japan Electronics” may for example customize the headline of its advertising link as “Sony Japan Electronics”. Such conduct may constitute passing off of the trade mark owner’s goodwill and reputation in the trade mark. Trade mark owners should be vigilant to preserve the distinctiveness and goodwill of their trade marks, and raise objections with search engines and advertisers who use their trade marks without authorization.
John Lim, Associate Intellectual Property and Technology Group Alban Tay Mahtani & de Silva LLP Phone +65 6428 9883 Email: JohnLim@atmdlaw.com.sg
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John Lim
►► five-year relationship ‘bears fruit’
Offshore law firm Ogier has partnered with accounting company Keypoint in a JV designed to set up trust funds in Bahrain. The joint venture company, called Two Seas Trust, targets Bahrain’s corporate elite to establish trust funds under the new Bahraini law. A strong five-year relationship with Keypoint combined with strategic growth projections in the region prompted the move by the law firm, said Paul Perris, the managing director of the JV company and previously Ogier’s associate director. “Bahrain is widely recognised as one of the best-regulated financial centres in the Middle East, and its proximity to other Gulf states – Saudi Arabia, in particular – makes it an attractive proposition to establish a presence there,” said Perris. The firm responded to the country’s recent efforts to ‘step up to the plate’ of global financial markets, as its recent establishment of the Financial Trusts Law is seen as a strong indication of the region’s further advancement in financial sectors. “Bahrain has experienced steady growth in recent times and ... clients and intermediaries have expressed interest in the trust concept, which is a relatively new phenomenon in the Middle East.”
UK, CHINA
Bird & Bird makes a
B
ird & Bird has expanded its Chinese practice with an office in Shanghai. IP partner Shirley Kwok will move between the firm’s Shanghai and Hong Kong offices, acting as the latter’s chief representative, and will be supported by Beijing commercial partner Grace Chen. The new office is expected to be staffed by a team of 20 lawyers, focusing on corporate, commercial and IP advisory, who will address the demand from the media, publishing and IT industries. “China continues to be an exciting market, particularly in many of our key sectors – namely IP, communications, IT, life sciences and sport,” said China managing partner Matthew Laight. Asian Legal Business ISSUE 8.12
News >>
Update >>
International Arbitration Recourse to appeal against arbitral award
S MIDDLE EAST, ASIA
Ogier launches Bahrain, Tokyo offices
O
ffshore law firm Ogier has expanded its jurisdictional network by opening new offices in Tokyo and Bahrain. The new offices are part of Ogier's expansionary strategy to maximise its presence in the world's financial hot spots. “In pursuit of our strategy, we felt it critically important to establish a strong presence in both the Middle East and Japanese markets so that we can provide the full range of Ogier’s services to our clients in their own time zone and in a manner that is responsive to local conditions and practices,” said Ogier chairman Jonathan White. The opening of the Bahrain office comes a few weeks after the firm announced its new Bahraini JV company, Two Seas Trust, designed to establish trust funds in the region. Chartered secretary Paul Perris will head both the office and the JV company as general manager of Ogier Bahrain and managing director of Two Seas Trust. The firm said the office would launch with three professionals, but numbers are dependent on client demand, The Tokyo office is to be headed by former Deutsche Securities analyst Skip Hashimoto, and will provide a link with the firm’s Hong Kong office, integrating its Cayman and BVI experience for its Japanese clients.
new nest in Shanghai “Our clients have asked increasingly for us to expand our presence in Asia, specifically in Shanghai, so we are delighted now to be opening a stand-alone operation to serve their needs better,” he continued. The firm’s opening in Shanghai is the latest in its expansion strategy and it was preceded by a three-year wait due to local rules governing the establishment of additional offices in the mainland. www.legalbusinessonline.com
ingapore has a twin-track arbitral regime. The Arbitration Act (“AA”) applies to domestic arbitrations whilst the International Arbitration Act (“IAA”) applies to international arbitrations. Different policy considerations underlay the two regimes. Thus, recourse to appeal against an arbitral award on merits under AA and IAA is different. Under AA, there is limited recourse to appeal against an arbitral award on merits. Section 49 provides that a party may appeal to the High Court on a question of law arising out of an award. Under AA, an appeal on a question of law shall not be brought except with the agreement of all parties or with leave of the High Court. Apart from meeting the requirement that the determination of the question will substantially affect the rights of parties, another requirement before leave is given is that the High Court must be satisfied that on the basis of the findings of fact in the award:• the decision of the arbitral tribunal on the question is obviously wrong; or • he question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt. Generally, the question arising from a “one-off” contract will not be of general public interest and thus, by a process of elimination, leave will be granted from one-off contract cases when the finding of fact is obviously wrong. In American Home Assurance Co v. Hong Lam Marine Pte Ltd [1999] 3 SLR 682, the Court observed that the applicant will not have succeeded in satisfying the Court that the award is “obviously wrong” if the error cannot be demonstrated quickly and easily and if hours of legal arguments are required. The second limb pertains to the issue of general public importance. In Ng Chin Siau v. How Kim Chuan [2007] 2 SLR 789, the Court accepted that a question of law of general importance should be one of general principle upon which further argument and a decision of a higher tribunal would be to public advantage. Here, leave will only be given if the decision of the arbitrator on the question is at least open to serious doubt. Generally, a question arising from a standard form contract will fall under this limb. In contrast, under IAA, there is no recourse to appeal against an arbitral award on merits. However, there is recourse to set aside an award under IAA, as there would be under AA. This article does not purport to deal with recourse to set aside an award. Lastly, in Jurong Engineering v. Black & Veatch [2004] 1 SLR 333, the Court observed that parties who wish their award to carry a higher degree of finality may agree in writing for IAA to apply while parties who favour more judicial intervention may opt for AA to govern their arbitration. Mr Tan Liam Beng heads Drew & Napier’s Building & Construction Group. He is also a qualified engineer, and Who’s Who Legal (Singapore) describes him as a ‘superb lawyer’. He can be contacted at +65 6531 4138 or Liambeng.tan@drewnapier.com. For his full CV, please visit http://www.drewnapier.com/directors.html.
Tan Liam Beng
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Asian Legal Business ISSUE 8.12
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www.legalbusinessonline.com
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News | appointments >>
appointments ►► LATERAL HIRES Name
Leaving
Going to
Practice
Location
Michael Liu
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
William Woo
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Cathy Yeung
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Kenneth Chan
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Jane Ng
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Simon Berry
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Stanley Chow
Allen & Overy
Latham & Watkins
Corporate
Hong Kong
Andrew Tarbuck
Norton Rose
Latham & Watkins
Corporate
Hong Kong
Matthew Wong
K&L Gates
Bird & Bird
Commercial/M&A
Hong Kong
Martyn Huckerby
Clifford Chance
Mallesons Stephen Jaques
Competition
Shanghai
Megan Tang
Shearman & Sterling
Cleary Gottlieb Steen & Hamilton
Corporate
Hong Kong
Zack Dong
Baker & Daniels
Reed Smith
M&A
Beijing
Michael Hickman
Fried Frank
Dechert
M&A/China
Hong Kong
Liang Tsui
Fried Frank
Dechert
M&A/China
Hong Kong
David Chu
Heller Ehrman
Dechert
Litigation
Hong Kong
Martin David
Linklaters
DLA Piper
Finance & projects
Singapore
Sau-Wing Mak
Wachovia Bank
Simmons & Simmons
Equity derivatives
Hong Kong
Xiaoyang Li
Jun He
Kirkland & Ellis
China practice
Hong Kong
Katherine Wang
AstraZeneca
Sidley Austin
Life sciences
Shanghai
Yang Ing Loong
Heller Ehrman
Sidley Austin
Arbitration
Singapore
Tarek Abdalla
Reed Smith
Reed Smith
Commercial
Abu Dhabi
Duane Keighran
Freshfields
Simmons & Simmons
Real Estate
Dubai
Paul Davies
Clifford Chance
Denton Wilde Sapte
Real estate
Middle East
David Nancarrow
Mallesons
DLA Piper
Construction
Middle East
Abhushek Saxena
Trilegal
Phoenix Legal
Commercial
Delhi
Saket Shukla
Trilegal
Phoenix Legal
Commercial
Delhi
Sawant Singh
Trilegal
Phoenix Legal
Commercial
Delhi
Manjula Chawla
Kochhar & Co
Phoenix Legal
Banking
Delhi
Liu and Chan pulled in some big-ticket deals for Allen & Overy’s corporate practice and had a hand in getting the firm appointed as the first Londonbased adviser on the Beijing Olympics in 2002. The firm Kenneth Chan conducted corporate and finance work for the Beijing Municipal Development and Planning Commission, which advised on the construction of facilities for the recent Games. undisclosed
Bird & Bird
Bird & Bird adds one to the nest Corporate finance specialist Matthew Wong has been appointed to global firm Bird & Bird’s Hong Kong corporate practice. Wong has worked on cross-border M&A transactions, IPOs and private equity deals, and has advised investment managers on the establishment of funds and bank operations in Hong Kong. The appointment is a further boost to the firm’s Asia corporate practice, which recently announced the addition of consultant John Koh. Clifford Chance
Mallesons
Mallesons snares Clifford Chance’s competition expert Competition lawyer Martyn Huckerby has returned to Mallesons Stephen Jaques where he was once an associate in the firm’s Sydney office, and is to be based in the Shanghai office as a partner, . Huckerby has transferred from Clifford Chance where he was mostly active in cases involving China’s recent Anti-Monopoly law, moving between the firm’s London and Shanghai offices. Mallesons’ chief executive partner, Robert Milliner, has previously indicated ambitious plans to build up the firm’s Shanghai and Beijing offices to the same level as the Hong Kong office, with over 90 lawyers.
►► Relocations Firm
Partner
From
To
Kirkland & Ellis
Justin Dolling
London
Hong Kong
Kirkland & Ellis
Albert Cho
New York
Hong Kong
Kirkland & Ellis
Kirkland responds to growing Asian PE market Asia’s growing private equity sector has seen law firm Kirkland & Ellis send two of its partners to its Hong Kong funds practice. Justin Dolling and Albert Cho will move there from the London and New York offices respectively in January 2009 and respond to the region’s increasing significance for private equity. “Moving these two experienced partners to Hong Kong reflects Asia’s growing importance in private equity fundraising and investment,” said Bruce Ettelson, partner in the private funds practice group. The news comes as PE funds in Asia are reported to be beating their European counterparts
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in capital raisings. Research by Private Equity Intelligence found that, against the 31 funds in Europe that raised US$11.9bn, 25 funds based in Asia amassed US$12.5bn.
Allen & Overy
Latham & Watkins
Partner exodus from Allen & Overy Seven corporate partners in Allen & Overy’s Hong Kong office have quit the firm to join Latham & Watkins. They include the firm’s two top honchos in its China and Hong Kong group, Asia corporate chief Michael Liu and China group head Kenneth Chan. The other partners are Jane Ng, Simon Berry, Stanley Chow, William Woo and Cathy Yeung.
Shearman & Sterling
Cleary Gottlieb
Tang joins Cleary Cleary Gottlieb has appointed former Shearman & Sterling counsel Megan Tang as partner in the firm’s China practice. Tang will be based in the Hong Kong office from mid-November Megan Tang and will advise on China-related corporate transactions, including capital markets and investments, working alongside practice partners Clay Johnson in Hong Kong and Filip Moerman in Beijing. Cleary’s managing partner, Mark Walker, said that the appointment was a perfect fit for the firm’s Asia practice. “Based in Hong Kong, she has represented issuers and underwriters in a wide variety of US and Hong Kong capital markets transactions involving Chinese issuers. She also has experience working Asian Legal Business ISSUE 8.12
News | appointments >>
on transactions in India, Singapore, the Philippines, Malaysia and other countries in Asia.” The China practice has recently advised on the US$169m Tower Semiconductor–Jazz Technologies proposed acquisition, acting for Citigroup Global Markets, and on a win for the Ajinomoto Foods Europe on its Chinese MSG imports anti-dumping ruling.
various
Dechert
Dechert scoops ex-Heller, Fried Frank partners Dechert has expanded its Hong Kong office with the capture of partners Michael Hickman and Liang Tsui from Fried Frank, and David Chu from dissolved firm Heller Ehrman. Since its opening in January this year, the recent additions have David Chu boosted Dechert’s numbers to a team 18-strong across its greater China practices. “David Chu’s presence will significantly enhance our ability to assist our multinational clients with investigations relating to activities in Asia cross-border litigation, and also boost our ability to advise existing clients in the region on litigation in the US and Hong Kong,” said Dechert chairman Barton J Winokur. Chu will work in Dechert’s white-collar and securities litigation practice, and says he is looking forward to contributing to its success.-
Wachovia
Simmons entices Wachovia’s legal counsel Simmons & Simmons has appointed equity derivatives specialist Sau-Wing Mak, previously senior legal counsel with Wachovia Bank’s legal team. Mak joins the firm’s China financial markets group and, although based in Hong Kong, she Sau-Wing Mak will serve Simmons’ clients across Asia and develop its equity derivatives practice. She will be aided in this by capital markets managing associate Kevin Tong, with whom she has worked at Linklaters. “[The] appointments are part of the strategic growth of our international financial markets group,” said the group head, Jeremy Hoyland. AstraZeneca
DLA Piper
DLA Piper finds new recession-experienced managing partner DLA Piper’s Singapore office was strengthened recently with the appointment of finance & projects specialist Martin David as its new managing partner. David also heads the finance & projects group and joins the firm Martin David from Linklaters in Singapore where he extended his experience advising clients through Asia’s boom in the 1990s to the economic crash in 1997.
Winston Strawn
Winston Strawn takes on Heller Ehrman lawyers The remains of Heller Ehrman continue to be picked up. On Friday, Winston & Strawn added Heller’s entire DC international trade group to the firm’s Washington office. Winston also says it will be opening up three offices in Asia – in Hong Kong, Beijing and Shanghai – filled mostly with former Heller lawyers, pending the approval of the Chinese and Hong Kong governments. Seven lawyers join Winston’s DC office. William Barringer, Christopher Dunn, James Durling and Daniel Porter all join as partners. Valerie Ellis is of counsel, and Ross Bidlingmaier and Matthew McCullough are both associates. www.legalbusinessonline.com
Luthra & Luthra
Anand & Anand IP team leaves to join Luthra & Luthra A team of IP & entertainment lawyers from Indian firm Anand & Anand has left to unite with the competition, joining the Delhi office of Luthra & Luthra. Practice leader and partner Ameet Datta brought associates Mohit Lahoty, Himanshu Bagai and Thomas George with him to his new firm, adding a significant boost to the Luthra IP practice. Datta cited the cross-disciplinary capabilities of Luthra as the reason for the move. “We look forward to taking advantage of the great cross-disciplinary synergies that are present at Luthra & Luthra,” he said. Clifford Chance
Heller Ehrman
Reed Smith
Reed Smith’s UAE practice swells with another addition Reed Smith has moved construction and project development partner Tarek Abdalla from its Pittsburgh office to the one in Abu Dhabi. It is one of a number of relocations and appointments for the firm’s Middle East practice this year that include partners Adam Morgan and Philip Allford from London, and seven associates from its UK and US offices. The moves are part of its overall investment strategy in the UAE, in response to its expanding client base, said the firm. “Tarek has significant expertise in one of the most important industry sectors in the region,” said Vince Gordon, managing partner of the Abu Dhabi office. “We expect [him] to be a great asset in helping us to continue to satisfy the evolving needs of our clients in the Middle East.”
Sidley Austin
Top GC moves to Sidley Shanghai Sidley Austin has appointed pharmaceutical company AstraZeneca’s former Asia-Pacific legal head, Katherine Wang, to its Shanghai office. Wang will be counsel in the Shanghai life sciences practice, focusing on the corporate and commercial aspects of the practice area. Anand & Anand
Linklaters
Simmons & Simmons
Denton Wilde Sapte
Denton gains real estate head Denton Wilde Sapte has appointed former Clifford Chance associate Paul Davies its new head of real estate in the Middle East. Working across the Denton offices in Abu Dhabi, Doha and Dubai, Davies will be supported by Dubai construction partner David Courtney-Hatcher to build his practice. Davies spent a decade with Clifford Chance working in the London and Dubai offices on property and real estate deals. “Paul is first and foremost a property expert in the Emirates. He knows it frontwards and backwards,” said Denton’s Middle East managing partner, Neil Cuthbert. The capture adds to the firm’s recent coup of being named global counsel for Doha- headquartered news network, Al Jazeera.
Freshfields
Simmons & Simmons
Property expert leaves Freshfields Simmons & Simmons has ramped up its Dubai office expansion with the hire of real estate expert Duane Keighran from Freshfields. With Dubai’s construction and property sector continuing to be an important focus for the firm, Simmons sees the latest hire as a way to maintain the real estate practice’s regional growth. Keighran will boost the practice area’s numbers in Dubai as the deputy head of real estate for the region. Paul Simpson, regional managing partner of the firm’s Middle East practice, said the move will also help the firm keep up with the increasing thirst of international clients for local knowledge. Heller Ehrman
Sidley Austin
Sidley takes in Heller partners Meanwhile the firm has also acquired several partners from the ruins of Heller Ehrman, as one of whom, Yang Ing Loong, joins its Singapore office. In addition, six others – namely, Sara Brody, Marie Fiala, Michael Rugen, Carol Lynn Thompson and Stan Berman – have joined the Sidley offices in Washington, DC, and San Francisco. Conyers
Harneys
Harneys adds to Hong Kong office Offshore law firm Harney Westwood & Riegels (Harneys) continues its expansion with the appointment of former Conyers Dill & Pearman lawyer Paul Lau. Lau will the based in the firm’s Hong Kong office as partner in the corporate practice. While at Conyers, Paul Lau Lau spent five years in the Bermuda office before moving to the Hong Kong office to advise clients on finance, M&A and funds transactions. He has also worked with Freshfields and GE.
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News | regional update >>
Regional updates
CHINA
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CHINA
Paul Weiss
Philippines SyCip Salazar Hernandez & Gatmaitan
MALAYSIA
Tay & Partners
SINGAPORE Loo & Partners
INDIA
Singh & Associates
Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region
PRC Foreign Exchange Control Regulations in Perspective Due to the rapid economic development in the past decade, China has evolved from a country with limited sources of foreign exchange to a powerhouse with tremendous growth of foreign exchange reserves today. To alleviate the pressure emanating from significant build-up of foreign exchange reserves, the government now places emphasis on the inflow of foreign exchange in addition to the continuing monitoring of capital outflow as evidenced by the newly revised Regulations of the People’s Republic of China on Foreign Exchange Administration (“Regulations”). These new Regulations made certain changes to the former forex control regime. Some highlights as follows: 1. The Regulations abolished the requirement for compulsory repatriation of foreign exchange income and provide that domestic enterprises and individuals can choose to transfer the foreign exchange income back to China or deposit them in overseas countries, subject to conditions that may be imposed by the State Administration of Foreign Exchange (“SAFE”). 2. However, once foreign exchange is remitted into China for investment purposes, such forex must be used for specified purposes and cannot be used for re-investment. The Regulations specify that foreign exchange under capital accounts and the foreign exchange settlement funds shall be used for purposes approved by the relevant authorities. 3. Administrative principles for outbound transactions are briefly described in the Regulations which provide the legal basis for implementing future policies over outbound activities. According to
the Regulations, domestic institutions and individuals are, in principle, allowed to invest in offshore securities and derivatives products. Besides, financial institutions in banking industry may offer foreign direct commercial loans within the approved business scope. Other domestic institutions may also offer foreign commercial loans but subject to SAFE approval. 4. SAFE is further empowered to monitor the flows of foreign currency, and their specific administrative powers and inspection procedures are listed in the Regulations. 5. A range of foreign exchange related illegal activities are identified in the Regulations. Penalties for such illegal activities are specified (including confiscation of illegal income and imposition of fines). These changes to the foreign exchange regime reflect the government’s desire to rein in excessive inflow of foreign exchange, and most importantly, to achieve financial stability. The effectiveness of these measures, however remains to be seen. Written by Jeanette Chan, Partner May Chan, Hong Kong Solicitor Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Email: jchan@paulweiss.com Ph: (8621) 5828-6300 or (852) 2536-9933
Philippines
Institution of a Credit Information System in the Philippines Amidst the impending global financial crisis, Republic Act No. 9510 or the “Credit Information Systems Act” (CISA) was signed Asian Legal Business ISSUE 8.12
News | regional update >>
into law to establish a comprehensive and centralized credit information system for the collection and dissemination of reliable credit information on the credit standing and track record of borrowers. To implement the new system, the Credit Information Corporation (CIC) is tasked to receive and consolidate basic credit data (which refers to the positive and negative credit information of a borrower in connection with the application for a credit facility), and to act as a central registry of credit information on credit history and financial condition of borrowers. Banks, quasi-banks, their subsidiaries and affiliates, credit card companies and other entities that provide facilities are required to submit basic credit data and updates on a regular basis to the CIC. The CIC may also access credit and other relevant information from government offices, judicial and administrative tribunals, prosecutorial agencies, as well as pension plans administered by the government. Each submitting entity is required (1) to regularly submit to the CIC any negative and positive credit information that tends to update and/or correct the credit status of the borrowers, and (2) to notify its borrowers of the entity’s obligation to submit basic credit data and to disclose such data to the CIC. In case of denial of the application for credit facility, the lender is required to inform the borrower of the reason for such refusal. Negative information on the credit history of a borrower in the database of the CIC should not exceed five (5) years from the date of rectification (e.g. payment or liquidation of debt, settlement of debts through compromise agreements, or court decisions that exculpate the borrower from liability). Unless required by the court, the CIC can only disclose consolidated basic credit data to the Bangko Sentral ng Pilipinas, the qualified entities, and the borrowers. The CIC and all participating entities are required to maintain strict confidentiality of credit information. Violators will be subjected to pay a fine or imprisonment, or both, at the discretion of the court. The CISA expressly excludes confidential information under the Law of Secrecy of bank Deposits, Foreign Currency Deposit Act, General Banking Law and the AntiMoney Laundering Law in the basic credit data, except if there is a written waiver executed by the borrower. www.legalbusinessonline.com
The government expects the CISA to: (1) provide great improvement on the overall availability of credit, (2) decrease the credit premium charges by the lenders, (3) minimize the cost on credit processing, and (4) reduce the reliance on collaterals to secure credit facilities. Written by Nestle C. Lizardo SyCip Salazar Hernandez & Gatmaitan 7/F SSHG Law Centre 105 Paseo de Roxas Makati City, 1226 Metro Manila, Philippines Phone: + 632 8179811 nclizardo@syciplaw.com www.syciplaw.com
MALAYSIA
Renewable Energy – A Bright Future? In the era of globalization, Malaysia faces many challenges on its mission to achieve developed nation status. Sustainable development of energy sector is an important factor to maintain economic competitiveness and progress. Recent world oil price hike illustrated that the over-dependence on oil as a fuel will hinder the Malaysian economic growth. To overcome this potential energy crisis, renewable energy was announced as the fifth fuel in the Eighth Malaysia Plan. With this objective in mind, greater efforts are being undertaken to encourage the utilization of renewable energy, such as biomass, biogas, solar and mini-hydro for energy generation. To intensify the development of renewable energy, the Small Scale Renewable Energy Programme (“SREP”) was launched by the Malaysian Government in 2001. A Special Committee on Renewable Energy has been set up under the Ministry of Energy, Communications and Multimedia to coordinate the programme and a secretariat functioning as a One-Stop Centre at the
Energy Commission facilitates industry participation in the programme. SREP’s primary focus will be to facilitate the expeditious implementation of grid-connected renewable energy resource-based small power plants. Under the SREP programme, the utilization of all types of renewable sources of energy, including biomass, biogas, municipal waste, solar, minihydro and wind are allowed. Small power generation plants that utilize renewable energy sources can apply to sell electricity to the utility through the National Distribution Grid System. A power plant can be more than 10 MW in size, but the maximum capacity that will be allowed for power export to the distribution grid will be not more than 10 MW. Project developers are required to negotiate directly with the relevant utility in all aspects relating to the Renewable Electricity Purchase Agreement including the selling price on a willing seller and wiling buyer basis, based on take and pay. The renewable energy electricity producer will normally be given a licence for a period of 21 years, effective from the date of commissioning of the plant. The Malaysian Government has offered several fiscal incentives to stimulate the emergence of renewable energy activities and technologies. These incentives include pioneer status with tax exemption of statutory income for a period of 10 years or Investment tax allowance of 100% on qualifying capital expenditures incurred within a 5-year period, with the allowance to be set off against 100% of statutory income for each year of assessment. Equipment used for the project will be given import duty and sales tax exemption if not produced locally. Equipment purchased from local manufacturers will also be given sales tax exemption. To widen the usage of energy from renewable sources, the Malaysian Government has also recently as part of its budget for 2009 proposed that import duty and sales tax exemption on solar photovoltaic system equipment for the usage by third parties be given to importers including photovoltaic service providers approved by the Energy Commission. It has also proposed to exempt sales tax on the purchase of solar heating system equipment from
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News | regional update >>
local manufacturers. The proposal is effective for applications received from 30 August 2008 until 31 December 2010. Renewable energy has a major role in meeting our nation’s energy demand needs and combating global warming. It represents a prime opportunity to seek alternative energy options. Thus, the market in Malaysia for renewable energy is expected to boom in the near future. Written by Chang Hong Yun Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Tel: +603 - 2050 1888 DID : +603-2050 1882 Fax: +603 - 2031 8618 Email: hongyun.chang@taypartners.com.my
SINGAPORE
Unique Entity Number (“UEN”) Brings Convenience to Entities The Ministry of Finance (the “MOF”) issued a press statement announcing that from 1 January 2009, all entities that are registered in Singapore, such as businesses, local companies, limited liability partnerships (LLPs), societies, representative offices, healthcare institutions and trade unions, will have a Unique Entity Number (UEN) as its identification number. This shall be used for correspondence and interaction with government agencies. UEN shall be for registered entities as NRIC is for Singapore citizens. UEN will replace all other identification numbers issued to them by different government agencies. Entities will enjoy the convenience of having a single identification number for interaction with the Government. From 1 January 2009, 51 government agencies will use UEN to interact with
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entities (both over-the-counter and online interactions). The Accounting and Corporate Regulatory Authority (ACRA), the Central Provident Fund Board (CPFB), the Inland Revenue Authority of Singapore (IRAS) and the Singapore Customs are amongst the 51 agencies using UEN from 1 January 2009. Besides, all other government agencies will use UEN from 1 July 2009. No change in Identification Number for Businesses and Local Companies Businesses and local companies constitute 85% of all registered entities in Singapore. These two entitytypes currently registered with the Accounting and Corporate Regulatory Authority (ACRA) will retain their ACRA Registration Number as their UEN, in order to minimise the impact of the implementation of UEN on entities. Issuance of UEN All new entities which are formed from 1 January 2009 will be issued with the UEN at registration. Other than businesses and local registered companies, all other registered entities, such as LLPs, foreign companies, societies and management corporations, will be issued with a new UEN. From August to October 2008, these entities will be informed, via post, of their UEN directly by the government agencies that register or oversee them. As LLPs are required by legislation to display their LLP registration number on their official stationery, they will need to change to UEN at their next print of the stationery or by 1 January 2010, whichever is earlier. Entities can visit the UEN website (www. uen.gov.sg) and MOF website (www.mof. gov.sg) for more information about UEN. Written by Mr Gerald Cheong and Ms Eng Hui Ting Mr Gerald Cheong Corporate Finance Manager Ph: (65) 6322-2232 Fax: (65) 6534-0833 E-mail: geraldcheong@loopartners.com.sg and By Ms Eng Hui Ting Corporate Finance Executive Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907
INDIA
Singh & Associates
Proposals for security for External Commercial Borrowing will now be considered by Authorized Dealer The External Commercial Borrowing (ECB) policy is constantly reviewed by the Government of India in consultation with the Central Bank of India i.e. Reserve Bank of India (RBI), to keep in tune with the changing market conditions, sectoral requirements, global market situation, etc. In a move the Reserve Bank of India has allowed Authorized Dealer Category –I banks to convey a ‘no objection’ under the Foreign Exchange Management Act (FEMA), 1999 for creation of charge on immoveable assets, financial securities and issue of corporate or personal guarantees in favor of overseas lender/security trustee, to secure the ECB to be raised by the borrower for which earlier the proposals were considered by Reserve Bank of India, itself. Pre conditions for issuance of ‘NoObjection’ (i) The underlying ECB is strictly in compliance with the extant ECB guidelines, i.e. all the other approvals, and compliances, limits etc has been followed by the applicant; (ii) There exists a security clause in the Loan Agreement requiring the borrower to create charge on immoveable assets/financial securities/furnish corporate or personal guarantee; (iii) The loan agreement has been signed by both the eligible lender and the eligible ECB borrower; and Asian Legal Business ISSUE 8.12
News | regional update >>
(iv) The borrower has obtained Loan Registration Number (LRN) form the Reserve Bank;. Once the above mentioned conditions are satisfied the banks may convey their ‘no objection’ under FEMA 1999 for creation of charge on immoveable assets, financial securities and issue of personal or corporate guarantee. Apart from the above there are many other conditions which needs to complied with as per the choice of security, i.e for creation of charge on Immoveable Assets, Financial Securities, Corporate or Personal Guarantee. The conditions differs in all the cases depending upon the requirement and nature. No-Objection should not be considered as final approval for complying ECB norms It is has also been clearly mentioned in the guidelines issued with the respect to issuance of ‘no-objection’ by Authorized
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Dealers by Reserve Bank of India that banks will specify that the ‘no objection’ is issued under FEMA and should not be construed as an approval by any other statutory authority or Government under any other laws/regulations. The ‘no objection’ should not be construed as regularizing or validating any irregularities, contravention or other lapses, if any, under the provisions of FEMA or any other laws or regulations. Further, in case approval or permission is required from any other regulatory/ statutory authority or Government under the relevant laws/regulations, the applicant of ECB should take the approval of the authority concerned before undertaking the transaction. As referred in the guidelines itself issuance of no objection by Authorized Dealer Banks is a measure of rationalization, it will have a two way benefit, on one hand it will to a large extent the burden of Reserve bank and on the other hands speeds up the process of consideration of the
proposals for creation of charge on immoveable assets, financial securities and issue of corporate or personal guarantee. Written By Mr. Manoj K Singh, Managing Partner, and Ms. Daizy Chawla. For more information, please contact:Singh & Associates, Advocates and Solicitors N-30, Malviya Nagar, New Delhi-110017 Ph: 91-11-26680927, 26687993, 26680331 Fax: 91-11-26682883 Website: www.singhassociates.in Email: newdelhi@singhassociates.in
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FEATURE | fast 30 >>
Asia’s fastest-growing firms 2008 Among the many firms around the region that are cutting a swathe or carving a niche, some stand tall above the rest. These firms have used mergers to bulk up, aggressive recruitment strategies to explode into new practice areas or jurisdictions, or their own verve to achieve lightning-quick organic growth. ALB singles out the top 30 performers by percentage revenue and headcount growth
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Broad & Bright
Dacheng
Managing partners: Multiple Number of partners/other fee earners: 10 partners/24 total lawyers Asian offices: Beijing, Shanghai Summary: Whichever way you look at it, it’s been an impressive year for Broad & Bright. Not only did the Beijing-based firm branch out with the opening of a Shanghai office, but its partner headcount also increased by 30%. The firm brought seven new lawyers on board – a major factor behind revenue growth of 21% in this period. But the quality of deals coming through the door at the firm has also contributed to its strong showing in this year’s ALB Fast 30. Broad & Bright successfully represented Yamaha Motor of Japan against companies including Zhejiang Huatian Industrial Co. for trademark infringement. The appeal for compensation was upheld by the Supreme People’s Court and an RMB8.3m award was given. The firm also represented Singapore New Media Corp in acquiring its state-owned equity and increasing its registered capital – the first transaction of its kind in China. It also represented Keenward in acquiring an equity stake in the owner of the Shanghai World Financial Center – the world’s tallest building. Inspiration, perhaps, as the firm seeks to climb to new heights in 2009.
Managing partner: Wang Zhongde Number of fee earners: 598 total lawyers Asian offices: Beijing, Shanghai, Wuhan, Sichuan, Jinan, Chongqing, Hainan, Harbin, Tianjin, Yinchuan, Zhengzhou, Shenzhen, Xining, Xiamen, Yinchuan, Haikou, Hangzhou Summary: It’s not every financial year that a law firm can claim to have opened eight offices – nor is it every financial year that one can say it has added 80 partners to its roster and increased its feeearner headcount by 76% and revenue by 72%. However, these are all claims that Chinese mega-firm Dacheng can justifiably make. The firm opened offices in Zhengzhou, Tianjin, Shenzhen, Xining, Xiamen, Yinchuan, Haikou and Hangzhou during this period and now boasts a massive 17 offices in mainland China – many more than its nearest rival.
►► Methodology
The Fast 30 list of law firms is based on a survey distributed to over 350 firms throughout the region. Partner, fee earner and revenue figures were supplied by the firms themselves and ranked to produce the ‘Fast 30’. Only firms who participated in the survey were considered for the final ranking and all information is accurate to the end of October 2008. International firms were judged on their Pan-Asia growth but they are listed under the jurisdiction in which the most notable growth occurred Asian Legal Business ISSUE 8.12
FEATURE | fast 30 >>
Grandall ►► ALB Fast 30 Firms at a glance CHINA Broad & Bright Dacheng Grandall Guangdong Guanghe Llinks Tahota Zhonglun HONG KONG DLA Piper Hammonds JSM Sidley Austin Simmons & Simmons INDIA Luthra & Luthra INDONESIA BT Partnership Hutabarat Halim & Rekan Melli Darsa & Co
KOREA Bae Kim & Lee Yulchon MALAYSIA Azmi & Associates SINGAPORE Ashurst Gibson, Dunn & Crutcher KhattarWong Rajah & Tann Stamford Law WongPartnership TAIWAN LCS & Partners THAILAND Hunton & Williams
JAPAN Anderson Mori & Tomotsune Atsumi & Partners Nishimura & Asahi
Managing partner: Lv Hongbing Number of partners/other fee earners: 93 partners/450 total lawyers Asian offices: Beijing, Chengdu, Guangzhou, Hangzhou, Hong Kong, Kunming, Shanghai, Shenzhen Summary: What started out as the 1998 union of Beijing-based Michael Zhang & Associates, WanGuo Law Firm in Shanghai and TangRen Law Firm in Shenzhen has grown into a legal leviathan. Not only did Grandall celebrate its 10th anniversary this year, but it also ventured into Hong Kong by opening a dedicated office there. These activities bespeak impressive growth. In the 2007-08 financial year, the firm added 12 partners to its roster – an increase of nearly 9%. The number of fee earners increased by 30% allowing the firm to reap a revenue increase of 40%. And while it already boasts an impressive network of domestic offices, it has made no secret of its desire for further expansion, with sources close to ALB noting that the opening of branch offices in Ningbo and Fuzhou are believed to be imminent. The firm’s capital markets and M&A expertise could be the key to further expansion – Grandall was the top legal adviser to successful A-share listings in this period. Look for this firm to consolidate its strong position organically in the year ahead.
Llinks
Guangdong Guanghe
Managing partners: Multiple Number of partners/other fee earners: 9 partners/45 total lawyers Asian offices: Beijing, Shanghai Summary: Llinks has executed its lightning-fast growth in a different way. Partner numbers at the firm have remained stable throughout the 2007–08 financial year, but it has been extremely acquisitive at the lower levels, increasing the number of fee earners by almost 11% over this period. The firm now boasts a dedicated corpus of 45 lawyers, all of whom were responsible for increasing revenue by almost 38% – a milestone that bespeaks the firm’s high-calibre business acumen. The period also saw it achieve a number of ‘firsts’ as Llinks was instrumental in sealing the first deal involving a partial tender offer for the shares of a PRC-listed company and the first announced takeover of a PRC-listed company using comprehensive approaches, including share transfer by agreement, targeted placement and a tender offer: SEB Internationale’s strategic investment in Shenzhen-listed Zhejiang Supor. In addition the firm also acted on the first authorised actively managed listed Chinese equity fund with a closeended structure in the Hong Kong–HSBC China Dragon Fund’s global offering and HKEx listing.
Managing partners: Multiple Number of partners/other fee earners: 21 partners/145 total lawyers Asian office: Shenzhen Summary: Although Guanghe was only founded in 1995, this southeast China heavyweight has had a meteoric rise. Under the guidance of a young but astute management team, including the highly regarded Peter Tong and Frank Shi, the firm has grown solidly across the board. And it hasn’t just been growth for growth’s sake – Guanghe has opted for organic growth rather than the standard growth through acquisition. In the 2007-08 financial year, the firm elevated 22 of its own to the partnership while reinforcing its junior ranks with a number of new fee earners and associates. But it’s this firm’s revenue figures that are most impressive. Guanghe claims to have increased revenue over the same period the year before by almost 94% – racking up total fees of RMB164m in 2007 – making it one of the top performers in the region. The firm, which figured strongly in ALB’s feature on China’s largest firms, is ideally placed in the booming Special Economic Zone to continue its strong growth in 2009.
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Zhonglun Managing partner: Zhang Xuebing Number of partners/fee earners: 96/96 Asian offices: Beijing, Guangzhou, Shanghai, Shenzhen, Tokyo Summary: Despite losing a number of key personnel to rival firms, Zhonglun posted impressive growth figures for the 2007–08 financial year. It welcomed 25 new recruits at partner level but also lost 13 partners. According to the firm, however, the loss wasn’t enough to stop it posting revenues of RMB436m, a 46% increase over the previous year. A joint winner of the ‘Real Estate and Construction Deal of the Year’ at the ALB China Law Awards in 2008 for its role in the record-breaking IPO of Soho China, the firm will no doubt look to more lateral hires in the year ahead to maintain its strong growth.
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FEATURE | fast 30 >>
Tahota Managing partner: Cheng Shoutai Number of partners/other fee earners: 26 partners/163 total lawyers Asian offices: Beijing, Chengdu, Guangdong, Hong Kong* * Representative office
Summary: Once referred to as the ‘new kid on the block,’ Tahota has now well and truly established itself as one of the premier firms in China’s west and has been recognised as such by being named Western Law Firm of the Year at the ALB China Law Awards in 2008. Recording a 50% spike in the number of partners in this period, the firm has experienced similarly strong growth on the fee-earner front, bolstering ranks with a 20% increase in the number of lawyers. Revenue figures tell a similar story with the firm realising a record year and a 35% increase in revenues. Furthermore, it not only kicked off its Southern ambitions by opening the allied Guangdong Shun Tahota law firm, but its longstanding agreement with Hong Kong firm Woo Kwan Lee & Lo and entry into the Sino-Global Legal Alliance earlier this year give it unprecedented access to the international firms vital to consolidate growth in the years ahead.
JSM Managing partners: JSM team Number of partners/other fee earners: 93/330 Asian offices: Bangkok, Beijing, Guangzhou, Hanoi, Ho Chi Minh City, Hong Kong, Shanghai Summary: Johnson Stokes & Master made headlines earlier this year when it announced its merger with US giant Mayer Brown. Already one of the largest domestic firms in Hong Kong, JSM is now head and shoulders above the rest in terms of headcount and revenue. JSM saw its partner numbers increase by 13% across after welcoming 11 new partners on board with a large portion of this growth emanating from its rapidly growing Vietnam offices, both of which almost doubled in size in the 2007–08 financial year. It’s a similar story for JSM’s mainland offices. The firm’s offerings in Beijing, Shanghai and Guangzhou also recorded stellar years. The total number of lawyers there increased by 18% with eight new recruits joining the ranks. The global presence that the firm has gained from its merger should stand it in good stead to post similarly strong growth figures in the years ahead.
Simmons & Simmons Managing partner: Paul Li Number of fee earners: 74 Asian offices: Abu Dhabi, Doha, Dubai, Hong Kong, Shanghai, Tokyo Summary: Its been another impressive year of growth in Asia for this London City firm. Simmons & Simmons increased both partner and fee-earner numbers across its Asian operations by 7% and 2% respectively. In addition, revenue figures for the period skyrocketed 15% over those from the 2006/07 financial year. 2007 also saw the firm secure the Employment Law Firm of the Year award at the ALB China Law Awards for the sixth consecutive year. An exemplary corporate citizen, the firm was also the first in the world to achieve carbon neutral status across all its international offices, a feat it achieved in 2007. That growth is still at the forefront of the firm’s mind is manifest in the high-profile lateral hire of Wachovia Bank’s senior legal counsel and senior vice-president, Sau-Wing Mak, to bolster its China financial markets practice.
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DLA Piper Managing partner: Alistair Da Costa Number of fee earners: 285 (in Asia) Asian offices: Abu Dhabi, Bangkok, Beijing, Doha, Dubai, Hong Kong, Kuwait City, Shanghai, Singapore, Tokyo Summary: Despite its size, DLA Piper posted growth figures that were hard to ignore – figures that were all the more impressive given partner numbers decreased by nearly 4% in the 2007–08 financial year. However, according to the firm, it attracted 67 new fee earners to its Asian offices, an increase of just over 7%. In this same period, it noted that gross billings for its Asian operations increased by 35% – a figure no doubt aided by involvement in a number of watershed transactions. The firm’s Asia capital markets group advised on the largest PRC IPO, which at the time was also the first A- then H-share listing ever completed. It also pioneered a new model for the dual listing of PRC companies, perfectly demonstrated by China Railway Group Limited’s mammoth IPO. Similarly, strong growth is also expected this year if the firm’s activities in the last few months are any indication. Not only has it commenced operations in Doha and Abu Dhabi, but it has also made a number of key lateral hires. Earlier this year, funds specialist Luke Gannon was snared from Freehills to launch the firm’s Asia transactional funds practice. In addition, M&A specialist Daniel Lee left Kim & Chang to join DLA Piper’s Tokyo-based Korea desk. Watch for DLA Piper to be one of the first firms into Korea should the country liberalise its legal market. Asian Legal Business ISSUE 8.12
FEATURE | fast 30 >>
Hammonds
Sidley Austin
Managing partners: Anthony Chan, Keith Brandt Fee earners: 13 Asian offices: Beijing, Hong Kong Summary: Widely known in Asia as the ‘firm to the English Premier League’ – because it counts no less than seven English Premier League clubs in the UK as regular clients – it is highly regarded for its high-calibre China-related commercial practice, a practice that experienced good growth in the 2007–08 financial year. Not only did partner numbers increase by 25% but the number of fee earners at the firm has increased by over 160% over the last four years and by 18% in 2007–08. The revenue figure posted by the firm increased by almost double this amount reaping 32% more for its coffers. Apart from revenue and headcount growth, the firm has also increased office space in Asia from 1,500 sq ft to 3,000 sq ft in 2005, and then in 2008 it moved into new office premises occupying 6,000 sq ft, representing a further 100% increase in floorspace. The total space occupied by Hammonds has increased by 400% over a three-year period and, with all that to fill, 2009 lateral hires may well be on the cards.
Managing partner: William Fifield Number of fee earners: 118 Asian offices: Beijing, Hong Kong, Shanghai, Singapore, Sydney, Tokyo Summary: Organic growth was the medium preferred by Sidley Austin for its Asian operations. In the 2007–08 financial year the firm elevated four lawyers to partnership and restricted activities on the lateral hire front to recruiting just one partner, yielding a total percentage increase of just over 26%. In the same period, the total number of fee earners increased by nearly 24%. The catalyst for this growth was the firm’s expansion in a number of key practice areas. Winner of the Investment Funds Law Firm of the year for 2007 at the ALB Hong Kong Law Awards, the firm was also ranked as one of the Top 10 legal advisers on China IPOs in 2007 – its representation of LDK Solar Co., Ltd. in its SEC-registered IPO is but one example. The firm also played a pivotal role in negotiating PT Indosat Tbk’s US$228.5m financing agreement to construct and launch a new satellite, the Palapa-D. And the firm advised on one of Australia’s largest M&A transactions to date, the A$16.9bn acquisition of Coles Group by Wesfarmers, which was named the Crown Records Management M&A deal of the year at the 2008 ALB Australasian Law Awards.
Firm Profile
Melli Darsa & Co
►► About The Firm
Melli Darsa & Co. Menara Standard Chartered,19th Floor Jl. Prof. Dr. Satrio No.164 Jakarta 12950 - Indonesia Phone : +62 21 25532019 | Fax : +62 21 25532020 Website: www.darsalaw.com Contacts: Melli Darsa Managing & Founding Partner melli_darsa@darsalaw.com Elizabeth Silalahi , Partner elizabeth_silalahi@darsalaw.com Sugianto Osman, Partner sugianto_osman@darsalaw.com Zippora Siregar, Partner zippora_siregar@darsalaw.com David Siahaan, Partner david_siahaan@darsalaw.com
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M
elli Darsa & Co. or “MDC” is an independent Indonesian law firm dedicated to provide quality Indonesian legal services meeting international standards. The firm was founded by Ms. Melli Darsa in 2002. Now at over 35 lawyers, MDC is considered a mid-size firm by Indonesian standards. In its relatively brief period of existence, MDC has established itself as a pre-eminent Indonesian firm and a leader in its generation of Indonesian law firms. It is also considered a top tier Indonesian firm for M&A, capital markets, and finance work. Clients of the firm include the international investment banks and financial institutions, financial and strategic investors, in addition to blue chip Indonesian corporate and stateowned entities. The firm has also advised the Indonesian Government from time to time. One of MDC’s key mission is to provide excellent service with a personal touch. MDC’s lawyers are trained to understand the industry and market environment in which MDC’s clients operate, in addition to keeping abreast
of developments in the law. The firm also endeavors to provide “added value” through the work which it delivers, and to work seamlessly with its clients.
Our Lawyers All of MDC’s partners and/or senior attorneys are highly experienced lawyers and graduates of Indonesia’s top law schools. Most of them have also obtained masters degree from the US, Netherlands and Australia. The firm continues to attract highly qualified candidates to join its ranks and was identified by a leading Asian legal publication survey, as one of the best law firms to work for in Indonesia.
Areas of Practice The firm’s main practice areas are Mergers & Acquisitions, Capital Markets & Securities, Banking & Finance, Structured & Corporate Finance, Project Finance, Restructuring, Investment Law, Media & Telecommunications and Corporate & Commercial Law. Languages: English and Indonesian.
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Luthra & Luthra
Hutabarat Halim & Rekan
Managing partner: Rajiv K Luthra Number of fee earners: 153 Asian offices: Bangalore, Delhi, Mumbai Summary: Of all the firms catalogued by ALB in this feature, no other firm has experienced such impressive growth as Indian firm Luthra & Luthra. Not only did it manage to increase partner and fee-earner numbers by 130% and 39% respectively, it also managed to increase revenue during this period by almost 70%. These are pretty good statistics in their own right but they are even more impressive considering the restrictions on partner numbers, advertising and marketing imposed on law firms in the subcontinent. Nominated in no less than six categories at the 2008 ALB South East Asian Law Awards, the firm worked on some of the country’s most complex and significant deals during the year, including DLF’s structured finance transactions for which it was awarded Structured Finance and Securitisation Deal of the Year. Not only did the firm open a new tax office in this period but it also greatly expanded its corporate offering, increasing headcounts in its antitrust/competition, real estate and IP departments – a sure sign of things to come from this firm in 2009.
Managing partners: Nini Halim, Pheo Hutabarat Number of partners/total fee earners: 5/18 Asian offices: Batam, Jakarta Summary: It is a story of sustained growth for this burgeoning Indonesian commercial firm. It now boasts a list of international clients that it is the envy of much larger firms in the archipelago, including PT Duta Wisaka Loka, Export-Import Bank of Malaysia Berhad, Sindicatum Carbon Capital, PT. Indomobil Sukses Internasional Tbk, Turner Broadcasting Systems and Pikko Group. The firm acted on the development of one of Jakarta’s most prominent entertainment precincts – the Taman Ria Senayan – and was counsel on the development of Crystal Square in Medan, which will be one of the largest and most modern mixed-use complexes, comprising offices, hotels, apartments, shopping malls and an entertainment centre. And it’s this high-calibre cross-border work that is behind the firm’s growth figures for the 2007–08 financial year, notably the 21% boost to revenue figures over the same period last year. Watch out for further growth from HHR this year as the firm seeks to expand its already sizeable number of blue-chip clients and challenge the ascendancy of the larger firms in the marketplace.
BT Partnership Managing partner: Rahmat Bastian Number of fee earners: 15 Asian offices: East Java*, Hong Kong*, Jakarta (*Representative office) Summary: ALB sat down with BT’s managing partner, Rahmat Bastian, earlier this year to discuss its evolution from a niche commercial practice to one of the more reputable firms in Indonesia. “We are continually growing in terms of headcount and in matters handled, so growth is definitely a work in progress,” he said. “Moving from a boutique firm to almost close to a full-service firm has been very quick … but we are still looking to become bigger and better.” This is seen in BT’s figures for the 2007-08 financial year when partner numbers at the firm exploded by 100% and fee earners too, by 25% – figures that are behind BT’s increase in revenue by 25% in this period. An increase in its client portfolio this year and a number of new recruits at all levels is highly probable this year and the latter should be made easier by the fact that BT was crowned ALB’s Indonesia Employer of Choice for 2008.
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Melli Darsa & Co Managing partner: Melli Darsa Number of partners/fee earners: 5/31 Asian office: Jakarta Summary: The firm that started as a splinter of Indonesian heavyweight Hadiputranto Hadinoto & Partners in 2002 has now become a force to be reckoned wth in itself. Although numbers in the firm’s two-tier partner system remained static during this period, in the 2007-08 financial year, those of associates and junior solicitors increased by 21% and, from June 2003 to the present, the number of fee earners went up nearly 420%. At this time, the firm also enhanced its already strong reputation as a large-deal firm by representing Lehman Brothers in the issuance of 11.25% guaranteed senior notes due 2013 by Mobil-8 Telecom Finance Company B.V., guaranteed by PT Mobile-8 Telecom, in reliance of Regulation S. Its crowning achievement, however, was its representation of Temasek in the sale of BII to Malayan Banking Bhd for US$1.5 billion. The complexity, quantum and value of these deals was no doubt a major factor behind the firm’s revenues increasing by over 71% this period.
Anderson Mori & Tomotsune Managing partner: Kunihiko Morishita Number of fee earners: 257 Asian offices: Beijing, Tokyo Summary: Anderson Mori already boasted an impressive cache of lawyers before its 2005 merger with Tomotsume Kimura but, since then, this firm has truly established itself as one of the more formidable firms in Japan, through a growth policy predicated on organic growth. In the 2007–08 financial year the firm not only bolstered its partner ranks with five new additions – an increase of nearly 9% – but also reinforced its number of fee earners by almost 17%. The firm has boosted its many practice groups throughout this period with regular associate hires, the most recent of which saw it add 10 fresh graduates in September, a move which will no doubt keep it ahead of the pack in a tight employment market. Asian Legal Business ISSUE 8.12
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Atsumi & Partners
Bae, Kim & Lee
Managing partner: Hiroo Atsumi Vice managing partner: Hiroaki Takahashi Number of fee earners: 59 Asian office: Tokyo Summary: No other firm has demonstrated as strong a penchant for organic growth in this period than this Japanese heavyweight. In the 200708 financial year, the rise of a number of associates to partnership accounted for most of the 31% increase in its partner headcount and the number of fee earners also increased by 64%. To outsiders, it is clear from this that the firm offers s a viable path to partnership for junior lawyers. Its lawyers providing legalsector commentary at industry seminars and conferences also enhanced its standing in the legal community. Recently, the firm has boosted its practice with the addition of four new associates – Akihiro Ishihara, Masatoshi Ujimori, Yoshiharu Hamada and Atsushi Fukurojiri – and two partners returned to the firm after studying abroad
Managing partner: Y S Oh Number of partners/fee earners: 68/163 Asian offices: Beijing, Seoul, Shanghai, Tokyo Summary: One of the oldest commercial firms in Korea, Bae, Kim & Lee posted some impressive growth figures in this period. Not only did it increase its partner and fee-earner headcounts by 10%, but it also managed to increase its revenue take by 26.5%. As part of this broader expansion strategy, the firm also launched a dedicated financial institutions practice group to be serviced by an 18-member team, a move which the firm says will enhance its ability to offer “swift and effective legal services” in the area. That growth is still at the forefront of BKL’s strategy is perfectly demonstrated by the sheer number of acquisitions in the last few months whereby it has made a number of high profile of counsel hires. BKL not only lured Lee Byung-Ju away from his post as vice chair of the OECD’s Competition Committee, but also secured the services of Oh Dae-Sik, the former chief of the Seoul Regional Tax Office, and Oh Young-Ho, the former vice minister of the Ministry of Commerce, Industry and Energy. Attracting such high profile recruits as these may well be the perfect tonic to cracking a notoriously tough Korean employment market.
Nishimura & Asahi Managing partner: Akira Kosugi Number of partners/other fee earners: 77/392 Asian office: Tokyo Summary: The firm’s merger with the international division of Asahi Law Offices in July 2007 reinforced its status as one of the samurai nation’s pre-eminent firms. Before the merger, it had 241 fee earners, but by the end of June 2008, the number of these had swelled to more than 390. Like other Japanese firms profiled in this year’s ALB Fast 30, Nishimura & Asahi has also proved that while inorganic methods such as mergers may be a viable growth path, organic means – such as internal promotions and recruitment at the lower levels – are also strongly effective. Earlier this year the firm added 19 new associates to its ranks in what others in the industry believe is a sign of things to come.
Yulchon Managing partner: Chang Rok Woo Number of partners/fee earners: 34/130 Asian offices: Ho Chi Minh City, Seoul Summary: Although Yulchon literally means ‘law village’ in Korean, it is easy to see from the growth statistics in the 2007-08 financial year why this firm is considered to be well on the way to building its own ‘law city’. It added 25 new fee earners to its team in this period including two high-profile lateral hires – former Korean Patent Court Judge Kim Cheol Hwan and former director of the tax bureau in the Korean Ministry of Finance and Economy and National Tax Tribunal, Lee Kyung Geun. Given the weakening economy, these are certainly impressive feats. In addition, the firm not only entered into a strategic alliance with Y P Lee, Mock & Partners to build and strengthen its IP capabilities, but it also added a Vietnam office late last year citing increased client interest in the Indochina peninsula. www.legalbusinessonline.com
Azmi & Associates Managing partner: Azmi Mohd Ali Number of fee earners: 33 Asian offices: Johor Bahru, Kuala Lumpur Summary: Azmi & Associates’ strong growth in the financial year ending July 2008 sees it yet again hot on the heels of the larger players in the Malaysian legal services market. In this period the firm not only increased its partner numbers by 14% but also bulked up its fee-earner stocks with an increase of 6%. Furthermore, although these feats were impressive, even they are dwarfed somewhat by its stellar revenue growth which topped 25% in this period – all against a backdrop of political unrest and a dip in investor confidence. The firm can thank its pragmatic, yet prudent market-segmentation strategy for much of its success in this period, a strategy that has seen it increase its cross-border capabilities and strike an alliance with Hugh Frazier International, thereby solidifying its connections in Asia and the Middle East. And it is from these connections that the firm derived a sizeable slice of its revenue in this period. With domestic and international clients – he likes of Petronas, Petronas Gas, Malaysia Venture Capital Berhad, Malaysia Debt Ventures Berhad, Perbadanan Nasional Berhad and HVB Australia Pty Ltd – the firm is set for yet another strong showing in next year’s edition of the ALB Fast 30.
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Ashurst
KhattarWong
Managing partners: Matthew Bubb (Singapore), John McClenahan (Tokyo) Number of fee earners: 47 Asian offices: Abu Dhabi, Mumbai*, Hong Kong**, Singapore, Tokyo
Managing partner: Tan Chong Huat Number of fee earners: 150 Asian offices: Bangkok*, Ho Chi Minh City*, Kuala Lumpur*, Shanghai, Singapore
*Liaison office only
* Associate office
** To open January 2009
Summary: The 2007–08 financial year has, in many ways, been a watershed period for KhattarWong as it stepped up the implementation of its ‘blue ocean’ expansion strategy. Not only did the firm cement its greater-Asia presence with new associate offices in Vietnam, Malaysia and Thailand, but it also came close to finalising joint venture agreements with firms in Abu Dhabi and Doha. In this period the firm also expanded its human capital base by both organic and inorganic means. On the inorganic front,the merger with TM Hoon & Co. in June 2007 provided the injection of key partners for several practice areas from corporate and securities to litigation and IP. The merger with Hee Theng Fong & Co has also served to cement the firm’s already strong position in China, while the merger with Koh Ong & Partners
Summary: It’s been an incredibly successful 12 months for Ashurst by anyone’s standards. Not only did the firm kick off its Abu Dhabi operations but it cemented its position as a major player in the Southeast Asian energy, transport and infrastructure sectors through a number of key lateral hires and groundbreaking transactions. Carl Dunton joined the firm as a partner in its banking and restructuring practice and the firm also welcomed former Norton Rose lawyer Melanie Williams as counsel. In the same period, the Tokyo office was bolstered by the appointments of Matthias Schemuth as partner and Harvey Weaver as counsel. With these hires, the firm registered a 33% increase in partner numbers across its Asian offices and it also recorded similarly strong growth among fee earners. The number of fee earners in the Singapore office increased by 128% while the Tokyo office recorded growth of 23%. The growth in these categories bespeaks similarly impressive revenues. According to the firm, in the 2007–08 financial year it generated US$6.2m turnover, a premium of 55% on the previous reporting season. It has worked on three of the most significant deals in the power and infrastructure sectors this year. It not only advised PowerSereya in relation to its US$1bn negotiation and drafting of an engineering, procurement and construction contract for an 800MW cogeneration combined cycle plant, together with associated service and maintenance agreements, but it was also counsel for the Brunei Methanol company on the groundbreaking US$362m limited recourse project financing.
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has provided valuable inroads into the Middle East. On the other hand, the firm managed to bring 15 new partners on board, increase its fee-earner headcount by 45% and bolster revenue by nearly 29%. This period has also seen the firm invest heavily in training and human capital development, an investment that has yielded higher staff retention rates with 94% of employees rating themselves as “highly satisfied” with the firm. It represents just one of many cards that this firm has up its sleeve to help it grow by attracting high quality candidates in 2009.
Rajah & Tann Managing partner: Steven Chong SC Number of fee earners: 255 Asian office: Kuala Lumpur*, Shanghai**, Singapore * In association with Kamilah & Chong ** Representative office
Summary: As one of the largest players in a domestic legal services market the size of Singapore, opportunities for growth – whether by organic or inorganic means – are often few and far between. Not so for Rajah & Tann, which has found both modes of expansion fruitful in this period. The firm not only brought 18 new partners on board but also struck an important strategic alliance with Malaysian law firm Kamilah & Chong, designed to increase the ability of the firm to service the Malaysian needs of its domestic and international clients. During this period, Sundaresh Menon from the firm’s international arbitration group and Lee Eng Beng from the business finance and insolvency group
were appointed as senior counsel, bringing the total number of senior counsel at the firm to six. Rajah & Tann has established a major projects group during this period to spearhead deals in international projects while also developing its sports law practice by building up its expertise and making important contributions to this fastdeveloping area of the law. Getting into new areas such as these may be the key to solid future growth for this firm. Asian Legal Business ISSUE 8.12
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Gibson, Dunn & Crutcher
Stamford Law
WongPartnership
Managing partner: Jai Pathak Number of fee earners: 10 Asian offices: Dubai, Singapore Summary: In a phase of spectacular growth, this US-based firm took the plunge into the booming Singapore market in May, by opening an office staffed by a number of ‘big name’ lateral hires. It poached Jai Pathak, Emad Khalil, John Viverito and Saptak Santra from rival Jones Day in a move that ALB described at the time as evidence of its India aspirations. Impressive as that was, it also managed to increase revenue across its global network by 12.2% in the period – no mean feat in the 2007-08 financial year that can best be described as one of economic and legal market contraction. Its portfolio of blue-chip clients, including Chevron, Singapore Refining Company, the Brunei Economic Development Board, Kuwait Energy Company, the Government of Laos, Ashmore Energy International, Vitol and Bharti Airtel, is likely to see the firm’s Asian operations continue to grow steadily.
Managing partner: Lee Suet Fern Number of fee earners: 36 Asian office: Singapore Summary: The 2007–08 financial year has been one of strong growth for this boutique corporate firm as it not only added to its established offerings in corporate banking, corporate real estate, IP and litigation, but also managed to increase personnel at all levels across the firm. This period saw the addition of five new partners – an increase of 14% on the previous year – while feeearner numbers similarly increased by 36%. Add to this, a considerable its revenue increase of 25% and it’s easy to see why this is one firm that’s on the fast track – and worth watching.
Managing partners: Alvin Yeo SC, Dilhan Pillay Sandrasegara Number of fee earners: 240 Asian offices: Abu Dhabi, Doha, Shanghai, Singapore Summary: The 2007–08 financial year has been a busy one for WongPartnership. Not only did it become the first Singaporean firm to establish a physical presence in the Gulf region – opening offices in both Doha and Abu Dhabi – but it also scored several high profile lateral hires at both the partner and lawyer/foreign law consultant level. In July 2007, the firm snared the services of former Harry Elias Partnership co-managing partner Tan Chee Meng, who had been with HEP for 14 years – three as managing partner. As a consequence of this and other lateral hires, the firm saw its partner ranks swell by 23%. At the lower levels, the firm brought talent in a variety practice areas, resulting in a 38% spike in its fee-earner numbers. Watch for this firm to look to more growth by acquisition in the months ahead.
Asian Legal Business ISSUE 8.12
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LCS & Partners
Hunton & Williams
Managing partner: Rich Lin Number of fee earners: 53 Asian offices: Taipei Summary: Not only did this firm reclaim the number one ranking for Taiwan M&A deals by quantum and value, but it was also the only domestic firm to have been involved in every single LBO transaction in Taiwan to June 2008. By these statistics alone, it is not hard to see why it is only a matter of time before LCS & Partners overtakes its more established rivals in the Taiwanese legal market – the likes of Lee and Li and Tsar & Tsai. Its growth statistics provide further evidence of its growing stature in the marketplace. It experienced a 30% increase in the number of partners at the firm while on the fee-earner front, it noted an 18% increased headcount. And although it did not provide ALB with revenue statistics for the 2007–08 financial year, it did note that the amount “increased substantially more than its headcount”.
Managing partner: Edward B Koehler Number of fee earners: 31 Asian offices: Bangkok, Singapore Summary: This firm continued to increase its footprint in the region by bringing on a number of high profile recruits in this period. South Asian and African project development and finance expert G Thomas West joined the firm's Singapore office, while Manida Zinmerman joined its Bangkok office where her practice focuses on capital markets and cross-border transactions. In this period too, it saw its partner ranks grow by 29%. The firm also acted on some of the most significant transactions during this time, representing two of the Thai and international companies awarded the 2007 IPP Bid Solicitations for the construction, financing and operation of power plants in Thailand. Out of Singapore the firm has been counsel to the Thai government on its free trade agreement negotiations with the European Union, Australia and New Zealand in addition to acting on
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Quezon Power’s (Philippines) US$100m note facility agreement. The firm's Asian banking practice represented the ExportImport Bank of Thailand as seller in the THB8.72bn sale of its non-performing loan portfolio. Transactions of this complexity and size guarantee that the firm is well placed to overtake its record 2007–08 financial year revenue figures in which it increased takings by 98% on the same period last financial year. ALB
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FEATURE | arbitration and ADR >>
Where there’s a will...
Is international arbitration work about to take a dive? ALB talks to some leading experts
I
t is called “alternative” dispute resolution, but international arbitration is well and truly in the mainstream. A vital insulation against the vagaries of unfamiliar legal systems, arbitration is big business, not least for the lawyers who are advising on it. And, while one needs to be wary of the ‘warm and fuzzy’ tag sometimes associated with it, this mode of dispute resolution has much to commend it. It is a reminder of the old adage of cooperative spirit: where there’s a will, there’s a way.
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An international discipline International arbitration is one of the by-products of the increasing volume of cross-border transactions in recent years. Parties, reluctant to commence proceedings in an unfamiliar jurisdiction, are drawn to alternative dispute resolution. The traditional strongholds of arbitration work are construction and joint investment matters, Chou Sean Yu, WongPartnership but Chou Sean Yu,
partner at WongPartnership, says he has seen an increase in arbitration work where there is no pre-existing arbitration clause. “The rise in ad hoc arbitration isn’t necessarily confined to the traditional areas. For example, we’ve recently seen a tort claim for damage to a marine facility which would normally have gone through the courts.” He continues that parties are attracted to arbitration for two reasons. “First, there’s the opportunity to have an arbitrator who’s a specialist in the particular area of dispute. Secondly, Asian Legal Business ISSUE 8.12
FEATURE | arbitration and ADR >>
Chou warns against oversimplifying the one between the current economic climate and a rise in arbitration work. “Certainly, when times are tough, you see a rise in litigation – but that’s more the recovery-type claims. These aren’t the kind of disputes which generally go to arbitration.” Chou says that, while arbitration work certainly will not decrease, there will not be any immediate dramatic rise in work. Nor is the news on the economy all bad. He points out that the Singapore domestic projects sector, for example, is still going strong. Hee Theng Fong, partner at KhattarWong, agrees that the link between economic fortunes and arbitration is complex. “During Hee Theng Fong, economic downturns, KhattarWong small businesses often attempt to settle disputes amicably as the costs of arbitration may prove too damaging to a company already grappling with the effects of the downturn. However, in the case of larger companies where arbitration fees are but a small part of their costs, the state of the economy won’t affect their decision to pursue a matter – through arbitration or the court system.” But the full effects of an economic downturn are often not felt by the legal sector until some way down the track, as Jimmy Yim SC, managing director of Drew & Napier, points out: arbitration can be conducted in private, as opposed to court proceedings, which are conducted in public.” Chou says these factors are resulting in a cultural shift which is seeing businesses become increasingly more open to the idea of arbitration.
Economic conditions While it is easy to draw a link between macro-economic conditions and certain legal practice areas – capital markets, to take an obvious example – the link with arbitration work is more enigmatic. www.legalbusinessonline.com
►► Rise of Asian arbitration: international cases received by main centres China International Economic and Trade Arbitration Commission
2002
2003
2004
2005
2006
2007
684*
709*
850*
979*
981*
1,118*
Hong Kong International Arbitration Centre
320
287
280
281
394
448
International Chamber of Commerce
593*
580*
561*
521*
593*
N/A
Japan Commercial Arbitration Association
9
14
21
11
11
15
Korean Commercial Arbitration Board
47
38
46
53
47
59
Kuala Lumpur Regional Centre for Arbitration
2
4
3
6
1
N/A
Singapore International Arbitration Centre
114
100
129
103
119
119
* Statistics for this centre include domestic as well as international arbitrations Source: Singapore International Arbitration Centre
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“The rise in ad hoc arbitration isn’t necessarily confined to the traditional areas … we’ve recently seen a tort claim for damage to a marine facility which would normally have gone through the courts” Chou Sean Yu, WongPartnership “The recent financial downturn hasn’t been a dampener yet, as the arbitration work [currently] coming in is a result of past economic activities.”
South East Asia A truly international outlook and a complementary court system are the key indicators of arbitration and there are reservations in relation to some jurisdictions in South East Asia. “We wouldn’t recommend arbitration in several Asian countries as I’m not confident that their judicial systems will be supportive of, and not disruptive to, the international arbitrations conducted there,” says Yim. Professor Steve Ngo of the Adler Consulting Group says that the main arbitration centre in Vietnam, the VIAC (Vietnam International Steve Ngo, Arbitration Centre), is a Adler Consulting body which is still trying to come to terms with the challenges of internationalisation. “It’s true that we’ve seen some recent improvements in the form of international arbitrators being included for the first time, but
more needs to be done in terms of being open to foreign law and having more training and promotional activities.” By contrast, Indonesia, says Ngo, is far more receptive to the use of foreign law and arbitration. “For example, Indonesian companies have embraced the idea of contracts written in accordance with English and even Singapore or US law, and they do most of their arbitration overseas in places like Singapore, Paris, London or New York,” he adds. Meanwhile, Singapore continues to court arbitration from India. “India is a safe place to arbitrate with good laws and no government interference,” says Ngo. “However, in reality, doing arbitration there could be lengthy and exasperating as it’s common for the parties to seek recourse from the local courts even for arbitrations.” Despite this, and the fact that Indian arbitration, when it does go offshore, generally goes to London, Ngo is positive about Singapore’s strategy to attract more business from India to arbitrate in Singapore. “I’ve heard anecdotally that
“During economic downturns, small businesses often attempt to settle disputes amicably as the costs of arbitration may prove too damaging to a company already grappling with the effects of the downturn” Hee Theng Fong, KhattarWong 52
two Indian companies may find it somewhat suffocating to arbitrate in India, and that there’s a general belief that different surroundings and an outside arbitrator are more conducive to dispute resolution,” he says.
Hong Kong and Singapore The two standout jurisdictions in the region for international arbitration are, of course, Hong Kong and Singapore, and the well-known rivalry between the two has increased in recent times with the Singapore government making concerted efforts to promote Singapore with measures such as tax incentives and allowing foreign lawyers to represent parties in arbitration. But Steve Ngo says that Hong Kong still has the edge over Singapore. “There’s a bigger pool of experienced professionals and more cases have been tested in the courts, so the courts themselves are more experienced,” he says. Ngo has a theory that the more recent legacy of British rule has also had a positive impact on the development of arbitration. “Hong Kong has that strong common law foundation, and the university courses and the research and training facilities are of a high calibre, but – most importantly – they have a strong track record.” From July 2009, Singapore will have a dedicated facility for alternative dispute resolution, known as Maxwell Chambers. Not surprisingly, Wong Sheng Kwai, general manager of the new facility, does not warm to the notion that Singapore lags behind Hong Kong. “In a 2006 report published by the ICC International Court of Arbitration, Singapore ranks as the top city in Asia for arbitration and one of the six most popular arbitration venues beside Paris, London, Geneva, Zurich and New York,” he says. “According to the report, among Asian countries, Singapore arbitrators were also the most frequently appointed.” “The uptake of arbitration in Singapore has improved,” says Chou. “Koreans in particular seem to favour Asian Legal Business ISSUE 8.12
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Singapore as a neutral venue for dispute resolution.” He regards Singapore as being on par with Hong Kong in terms of a suitable location for arbitration, and he particularly rejects the notion that the pool of experts is not as deep in Singapore. The main point of difference, he says, is in the varied styles of the two local arbitration institutions. “The Singapore International Arbitration Centre follows the ICC model where the centre actively supervises the proceedings. The Hong Kong International Arbitration Centre, on the other hand, is lighter in terms of administration.”
China Arbitration in China has long suffered from a poor reputation. Whether fairly or not, it has been accused of having biased arbitrators, cosy relationships between judges and local authorities and, as a result, problems with the enforcement of awards, particularly in local courts. But times have changed, says David Bateson, long-standing partner at Mallesons in Hong Kong. “In recent years we’ve seen a lot of progress,” he David Bateson, says. “For example, the Mallesons Supreme People’s Court now automatically vets all decisions where a local court declines to enforce an arbitral award. This counters any perception that local courts may not decide these matters in an impartial manner.” Other improvements made to Chinese arbitral law include allowing foreigners to act as arbitrators and non-Chinese legal advisors to assist with disputes. “Parties can also choose to apply laws other than Chinese law, although there are certain exceptions,” says Bateson. “Chinese arbitral law is increasingly aligned with best international practice”. China’s best known arbitral body, CIETAC, has also been criticised for its system of appointing arbitrators www.legalbusinessonline.com
which has each party appointing one arbitrator of their choice and, absent of the parties’ agreement, CIETAC appointing a chairperson to the threeperson panel. “This third person is usually Chinese, and foreign parties do sometimes raise concerns about perception of bias,” says Bateson, “In other arbitral regimes, the arbitrators must be from different countries. “However, the anecdotal evidence these days is that foreign parties are in fact having more success than Chinese parties in these proceedings.” The procedures used are different from those used in common law countries, owing to China’s civil law system. “The manner in which hearings are conducted may differ in many aspects. For instance,
cross-examination isn’t common in China, while it’s considered an important tool in the [common law] system. Thus, an arbitration counsel in China must be able to adapt to such a system and utilise the different procedures in order to ensure that the best course of action is adopted for his client,” explains Hee. It’s said that ‘the proof of the pudding is in the eating’, and feedback from lawyers who have used CIETAC is encouraging. Hee praises the “high calibre” of some Chinese arbitrators while Chou is also positive. “Our experience is that it works fairly well. We have no major criticisms,” explains Chou. “Of course, there are some areas with room for improvement – for example, enforcement in the 53
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smaller provinces is difficult because the courts there aren’t familiar with international arbitration principles, but the courts in Shanghai and Beijing are pretty good.” Yim estimates that there are several hundreds of regional, provincial and institutional arbitration centres. However, he points out that while these help service domestic arbitrations and arbitrations involving foreign investment in China, he does not think that they are at the stage where they are out to “woo arbitration work that has no Chinese element”.
East in the long term in support of our transactions work,” says Chou. “We didn’t expect it to come in almost immediately,” he explains. He does not mean to suggest that the firm has been flooded with work, but he says the signs are very encouraging. “This is probably due in no small part to the growing number of disputes, especially in the construction sector, as well as a general preference for arbitration as the preferred mode of dispute resolution there,” Dubai, in particular, has been strident in its attempts to attract more
international arbitration, but no one is predicting that it will be taking on the traditional players just yet. “Dubai doesn’t have a strong arbitral history and UAE law is still something relatively unfamiliar to most parties,” says Bateson. “There’s also a geographical disadvantage. If a Chinese party is going to go to Dubai, they may as well continue on to London or Stockholm. And then there’s the perception that the Middle East is less safe because of terrorism – it’s an unfair perception for Dubai, but one you hear expressed a lot.” ALB
Middle East WongPartnership recently set up offices in the Middle East and was surprised at the demand for arbitration services. “Arbitration was certainly something we wanted to develop in the Middle
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“We’ve seen some recent improvements in the form of international arbitrators being included for the first time” Steve Ngo, Adler Consulting
Asian Legal Business ISSUE 8.12
Firm Profile FEATURE | arbitration and ADR >>
KhattarWong
KhattarWong an industry leader in International Arbitration
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hattarWong’s International Arbitration Practice Group is a credible force in the field and is a member of the majority of well-established arbitration institutions in the world. These include the International Chambers of Commerce (ICC), Singapore International Arbitration Centre (SIAC), China International Economic and Trade Arbitration Commission (CIETAC), Badan Arbitrase Nasional Indonesia (BANI) and the United Nations Commission on International Trade Law (UNCITRAL). The Practice Group’s experience relates to or has taken place within the jurisdictions of a wide spectrum of countries including Korea, India, Vietnam, the Philippines, Indonesia, China, Brunei and Singapore. “Our International Arbitration Practice Group has grown over the years and has been actively involved in arbitration matters in the region. We are proud to have established ourselves as a strong contender in the arena, and have focused our efforts on our roles as both counsel and arbitrator,” says Mr K. Anparasan, Deputy Managing Partner at KhattarWong. Building the team’s portfolio are some wellestablished names in the field such as Senior Consultants Mr L P Thean and Mr Amarjeet Singh SC, Senior Partners Mr Rajan Menon and Mr Abdul Rashid, Deputy Managing Partner Mr K. Anparasan and Partners Mr Hee Theng Fong, Mr Chia Ho Choon, Mr Michael Lai and Ms Wendy Tan. The addition of arbitration expert Professor M. Sornarajah to the International Arbitration Practice Group further fortifies its position as a leading firm in the field of International Arbitration. Professor Sornarajah boosts KhattarWong’s practice with his in-depth academic knowledge in the field as well as his extensive experience as both a counsel and an arbitrator. Professor Sornarajah, who specialises in disputes arising from foreign investment and was awarded the prestigious professorship of CJ Koh Professor of Law at the National University of Singapore, bolsters KhattarWong’s strengths as a counsel in the field with his expertise. This includes acting as Lead Counsel for a Claimant in a project in Sri Lanka involving timber resources in an ICC Arbitration and acting as Lead Counsel for a Claimant in a claim involving the take over of a beer factory in Myanmar under UNCITRAL Rules. The Professor was also an Expert
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Counsel for the Government of Argentina in an ICSID Arbitration involving gas supplies. “I am pleased and excited to be joining KhattarWong which has already built up a formidable reputation in the field. With the rise of international investment, resolving disputes through international arbitration has become more common. The field seems set to become even more exciting in the future and I look forward to making progress and new developments in the field of international arbitration,” says Professor Sornarajah. The firm has paid particular attention to growing its role as Counsel in the field of International Arbitration and their hard work has paid off. KhattarWong has acted as Counsel in major cases such as a dispute between a French company and a Filipino company on the purchase of a cement plant in Philippines, and a dispute between a Brunei and a Singapore company over the construction of a chancery in Brunei worth US$1.5 million. The arbitration team has also assisted an English Queen’s Counsel in one of Singapore’s biggest construction disputes, which was valued at S$60 million. Senior Partner Rajan Menon, a lawyer of more than 30 years of experience in the property, banking and corporate practice areas and a Fellow of the Singapore, Malaysian and UK Institutes of Arbitration is now actively involved in the international arbitration practice. He recently conducted an ICC arbitration and is advising on a large claim involving several international parties. “We believe that our knowledge of the economic, cultural and social nuances in Asia is vital to our progress and success in the field and have always placed great importance in understanding our clients’ needs and goals,” adds Mr Rajan Menon. Partner Mr Chia Ho Choon also strengthens the Practice Group with his experience in the field. Mr Chia earned a diploma in International Commercial Arbitration in 2004 and was on the panel for the Plenary Session on Enforcing Arbitration Awards in Asia and Contesting Arbitral Rulings at the Asia Pacific Dispute Resolution Summit. A prolific public speaker, he has conducted a seminar for the Bar Council of Ho Chi Minh City, Vietnam on International Arbitration and the Benefits of Arbitration as well as made presentations at various regional seminars. KhattarWong’s International Arbitration
L-R: Michael Lai, K. Anparasan, Abdul Rashid Gani, Professor Sornarajah, Rajan Menon, Chia Ho Choon, Wendy Tan
Practice Group is also involved in all aspects of international arbitration including advising on the selection of and appointment of arbitrators, sitting as arbitrators, the appointment of qualified technical experts, the preparation and collation of evidence, the drafting of pleadings, and advocacy during arbitration and the enforcement of awards. Lending their expertise to the field are Senior Consultant Mr LP Thean, who served as a Judge of the High Court and a Judge of Appeal in the Court of Appeal, and now focuses on arbitration, and Senior Consultant Mr Amarjeet Singh, SC, a former Judicial Commissioner in the High Court. Mr Singh has amassed over 39 years of legal and judicial experience and currently serves as an ad litem Judge with the UN war crimes tribunal for the Balkans at the Hague. Also of great significance is the presence of partner Mr Hee Theng Fong who has been involved in many international arbitration cases as the presiding arbitrator or arbitrator in the Asia Pacific Region. Mr Hee’s arbitration appointments include being a Fellow of the Chartered Institute of Arbitrators (UK) and the Singapore Institute of Arbitrators (SIArb). He is also on the panel of arbitrators of the Singapore International Arbitration Centre (SIAC), Beijing Arbitration Commission (BAC), Huizhou Arbitration Commission, China International Economic and Trade Arbitration Commission (CIETAC) and the Asia-Pacific Regional Group (APRAG). Summing up the team’s core strengths, Mr K. Anparasan says, “Our team’s extensive first hand experience in arbitration, particularly in the international sphere, will prove invaluable to the firm and its clients. We are confident that we are well-positioned for the challenges ahead in this specialised and rapidly developing field.”
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FEATURE | 2009 predictions >>
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Asian Legal Business ISSUE 8.12
FEATURE | 2009 predictions >>
CHINA Sun Wenjie
partner & co-head of international group Grandall Legal Group • testing times ahead for foreign firms in PRC • China still prime choice for foreign investment
Where are the key markets? The key sectors? What can law firms expect from 2009? Let ALB be your guide. Our panel of legal industry experts predicts new year trends, providing a map of the opportunities and challenges that lie ahead
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awyers often shy away from crystal-ball gazing, especially in emerging Asian markets, where rapidly changing legal and economic landscapes make accurate predictions all the more difficult. However, after strong encouragement from ALB, a panel of industry leaders has come together from jurisdictions across Asia to do just this – to give their unique take on the pipeline issues and how they are likely to affect the region’s complex legal markets. The result is an engaging – and opinionated – look at the world’s most exciting and diverse legal markets. From more M&A in Korea and possible legal market liberalisation in India to law firm mergers, law firm implosions, salary squeezes, credit crunch related mishaps and pressure on rates, you can expect it all in 2009. It may be that time proves some of our experts’ thoughts wrong, but we have no doubt that most of them will be spot-on. One thing that is certain is that the following pages will provoke vigorous discussion among the panel’s peers, whether they work in private practice or in-house. ALB wishes all the law firms and inhouse teams across Asia success in the coming year. ALB
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have to say that during the last couple of years, a big portion of the growth in China’s legal service market has been contributed by services in relation to capital markets, such as IPO, crossborder M&A, PE and VC. No doubt the recent financial tsunami has had and will continue to have a significant impact on these practice areas. Partners who have enjoyed huge successes working on IPOs must now consider how they will keep their associates busy. In 2009, the market will tell whether their decision to recruit more staff back in 2007 was correct. Foreign law firms in Beijing and Shanghai will probably be more affected than domestic (PRC) firms because the majority of their income is generated from foreign clients and from crossborder transactions. However, I personally believe that the Chinese legal service market will witness steady growth over the long term, since China is still one of the best choices for investors. The current crisis is proving that China is safer than many other countries. The legal market in China is, to a large extent, very diversified, and
this will continue to provide room for growth. Those law firms that can quickly shift between a number of different targeted practice areas are particularly well placed. I see many opportunities in this crisis. In the past decade, leading foreign and local commercial law firms have accumulated plenty of experience as well as harvesting significant revenues from inbound investment. We are now witnessing more and more outbound investment from large-scale Chinese SOEs and private companies. While inbound investment is shrinking, outbound investment is growing. When competing with foreign firms for outbound deals, local firms will have the upper hand because of their experience in providing day-to-day advice to their Chinese clients. Local firms will play increasingly important roles in outbound M&A transactions given that the language barrier, once considered an obstacle, is arguably no longer a major issue in this fast-moving global market. Generally, in typical inbound crossborder transactions, Chinese law firms have either acted as direct providers of services to foreign clients or, more often, taken instructions from foreign law firms that are acting for their foreign clients. In outbound investments, however, Chinese firms can play a leading role because Chinese clients need their Chinese counsel to locate and instruct foreign firms. Chinese law firms are more like service buyers when it comes to outbound transactions. The challenge now for PRC-based law firms is proving to their Chinese clients that they are ready and able and equipped with the knowledge required for handling and managing multijurisdictional legal work.
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FEATURE | 2009 predictions >>
HONG KONG Elaine Lo
chairman of the Asia board, JSM • negative growth likely • focus on competition law
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he Asia-Pacific region is not immune to the impact of the financial tsunami triggered by the US sub-prime crisis. In the coming year, we anticipate quite a number of legal activities in the areas of corporate restructuring, regulation, M&A, litigation and dispute resolution. Global trade and energy may also be hot topics in view of increased globalisation and various trade controversies. As many international financial institutions run into trouble and large enterprises collapse due to an inert credit market, Hong Kong’s economy is likely to enter a period of negative growth. The restructuring and insolvency practice has already been very occupied in the last few months and we expect they will continue to have a busy year ahead. Hong Kong will be an M&A transaction hub for what we expect to be increased M&A activity emanating from China. Many acquirers are currently sitting on the sidelines and looking at strategic development through enhancing operational efficiencies,
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utilising resources and diversifying risks. In addition to outbound investment, China will continue to attract M&A and cross-border deals and is expected to be a leading figure in Asian M&A activities. The Hong Kong government has repeated earlier commitments to introduce a Competition Bill during the 2008/2009 legislative session. Of particular interest will be whether Hong Kong introduces its own merger control regime, and in what form. Meanwhile, guidelines and rules that will supplement China’s broadly worded anti-monopoly law remain in development. While this means active enforcement of many behavioural rules in the law will be delayed, the law’s merger control provisions are already impacting many significant deals. It is clear that China and Hong Kong are taking divergent approaches to a number of antitrust issues, which will complicate the task of advising and educating clients on this new area of law. The main feature in the area of litigation and dispute resolution in 2009 will likely be the fallout from the financial crisis and the economic downturn. Mediation, not commonly used in dispute resolution, may be adopted in the coming year. In April, the Civil Justice Reform is likely to be implemented. This is a series of measures aimed at improving the efficiency and cost effectiveness of conducting court cases. This is unlikely to have a significant impact on the litigation landscape. Lawyers will need to remain astute during these challenging times. Understanding the commercial as well as legal implications for clients and the impact of the global economy on their business is critical to developing supportive business relationships. Proactive and timely responsiveness is also essential. Not only must we assist clients reacting to current market conditions but also work with them strategically in preparation for new legal/ commercial developments.
INDIA
Saurabh Misra
Paras Kuhad & Associates • LIBERALISATION QUESTION • push to expedite delivery of justice
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he level of foreign investment in India is now so large that the country has attracted the interest of foreign legal practitioners (FLPs), especially providers from the UK and USA, desperate for an India entry. India does not currently allow FLPs any direct access to its legal services markets. This remains a major point of debate across the world. Under the WTO’s General Agreement on Trade in Services, India has no obligation to open up its legal markets to FLPs. Despite continuous lobbying by FLPs, particularly from the UK, the Bar Council of India (BCI), the regulator of the Indian legal profession, is unwilling to allow FLPs entry. BCI has the support of the majority of advocates, who mostly practice in local courts and view any move to open up India’s legal services markets as contrary to their interests. Predictably, any move against the wishes of local advocates results in strikes, protests and boycotts of court proceedings. It may be worthwhile for the FLP representatives to educate and Asian Legal Business ISSUE 8.12
FEATURE | 2009 predictions >>
comfort the lawyers and the BCI in this regard and dispel the notion that FLPs will practice in Indian courts. FLPs must also agree on a model, preferably the Singaporean JV model, for getting access to India’s legal services, since BCI has not agreed on the German model. In 2009, bold steps must be taken in India to expedite the disposal of the millions of pending court cases. Filling vacancies at all levels of the judiciary will certainly help and setting up evening/ night courts will assist in clearing the huge backlog. ADR mechanisms should also be optimised in order to settle cases wherever possible. Deliberate delaying tactics employed by many lawyers must be punished, with maximum emphasis placed on speedy justice. There is no doubt that lawyer quality is still an issue in India. While some of the problems have been taken care of by establishing five-year law schools across India, many more remain. Most law school graduates aspire to be employed within the corporate and commercial/ capital markets/real estate divisions of law firms and are less inclined to practise advocacy. This has had an impact on the quality of young lawyers practising advocacy. The quality of teachers at the old law schools needs considerable improvement. Another right step would be to make professional indemnity insurance mandatory for all advocates. The Advocates Act of 1961 (the Act) does not differentiate between litigation and corporate lawyers. The Act removed differentiation between a barrister and a solicitor and does not even define a corporate lawyer. Since the Indian legal profession is undergoing a transformation, an amendment of the Act is needed, whereby necessary provisions regulating corporate lawyers, firms and even FLPs may be introduced. Further, in order to address the concerns of local firms on practice development, BCI must allow local firms to maintain websites on par with the websites of world-renowned law firms and also formulate guidelines to allow advertising by local firms. Finally, the government must pass the limited liability partnership (LLP) bill, which has been pending in the parliament for some time, and usher in to India the concept of LLP. www.legalbusinessonline.com
INDONESIA Sugianto Osman
partner, Melli Darsa & Co • political elections may slow business • bankruptcy, restructuring on rise
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or those who have been in the business long enough to have witnessed the 1997 Asian financial crisis, the ongoing global economic crisis must feel like déjà vu. This is especially the case for Indonesia, the country hit hardest by the 1997 crisis. While it remains to be seen how the current crisis will unravel (most experts
say it is different for Indonesia this time), the impact is starting to be felt in the legal business. Most equity or debt securities deals have either been cancelled or postponed (until the market is back on track, as it is said). Common questions from clients seem to have shifted from ‘How do I set up a business?’ to ‘What are my rights if my counterparty goes belly-up?’ The situation is exacerbated by the fact that 2009 is an election year in Indonesia. From past experience, election years tend to be slow for business since most people play wait-and-see until it is clear what the country’s political landscape will look like over the next five years. Just like the period immediately following the 1997 crisis, lawyers need to retool and equip themselves with the appropriate set of skills. Bankruptcy law could become the most frequently askedfor subject (again). Although there may not be a spike in bankruptcy cases in Indonesia as there was in 1998 and the tendency is to try one’s best to avoid bankruptcy proceedings in Indonesia, business players will want to know what their rights are if faced with a bankrupt business partner, debtor or investment in Indonesia. Thus, having knowledge of bankruptcy law may come in handy when dealing with clients in whichever field you practice. Lawyers in Indonesia will also need to brush up on their restructuring skills. New loans and new investment work may be hard to come by for some time. Instead, banking and finance lawyers as well as M&A lawyers will need to shift gear to restructuring. In a time of economic upheaval, transactions will mainly focus on revising existing capital or debt structures. The good thing about being a lawyer is that it is practically recession proof – you are needed in good times and bad. You just need to make sure that you are well equipped with the necessary skills.
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FEATURE | 2009 predictions >>
JAPAN
Toru Ishiguro
partner, Mori Hamada & Matsumoto • stability for IP and China practices • insolvency, restructuring, strategic investment and M&A also solid
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he world financial crisis is currently the single largest issue facing the legal services market in Japan, and presumably most other countries as well. Just as nobody knew the real value of the sub-prime mortgage assets, nobody knows the full extent and manner of impact of the financial crisis. In the near term, it seems apparent that certain legal practice areas will be relatively quiet or at least less active. These include structured finance, real estate investment trusts and other real estate-related areas and the activities of financial investors (as opposed to strategic investors) including fund formation, fund raising, investment and M&A activities. Capital markets in general are also expected to be quiet. The exception would be activity focused on the crisis itself, such as capital injections into troubled financial institutions by Japanese institutions, which have generally sustained far less damage than their US and European counterparts. Other practice areas, such as insolvency and rehabilitation, strategic investment and M&A activities, and corporate restructuring, are expected to remain strong. The intellectual property and China practices are stable. The environment for the legal services market is clearly affected by general business, economic, financial and political conditions, all of which have an interrelated impact not only at the business unit level, but at country-wide and global levels. I anticipate continued general instability for at least a while. We may even see radical changes in the fundamental framework of the world’s political, economic, financial and business systems. What we can and should do in this situation is to keep careful and close attention to these ever-changing conditions not only for the narrow purpose of our own economic survival, but for positioning ourselves to be able to render the best solutions for our clients who are struggling for their own survival at the front line. These difficult times offer us the most challenging and rewarding opportunities to better serve our clients with innovative solutions and hopefully to contribute to building a new and sustainable economic environment through such services. Asian Legal Business ISSUE 8.12
FEATURE | 2009 predictions >>
KOREA KT Jung
Chair of M&A, corporate practice and antitrust & competition practice groups, Kim & Chang • global liquidity shortage to be felt keenly • M&A deals still occurring
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007 was a year of extraordinary M&A activity in Korea, with deal volume rising by more than 70% from 2006, according to published data. The number of transactions, however, is expected to fall in the near term as the overall economy has been slowing due to the tightening of credit and recessions worldwide. Korea is similar to the US in that its economy is highly leveraged. Thus, a
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persistent global liquidity shortage will have an impact on Korea, particularly its financial sector. Record high real estate prices have recently started declining and the value of the won has been experiencing extraordinary volatility. These developments can undermine the soundness of Korean financial institutions exposed to mortgages and overseas borrowings, affecting the Korean economy at large.
As the US and Chinese economies slow down, Korea, whose economy is driven largely by exports, will feel the impact of a slump in demand for its products. Even though the recent sharp depreciation in the won may give Korean companies a price advantage in overseas markets, falling demand caused by the economic downturn will likely reduce their earnings, adversely affecting the number of business transactions requiring sophisticated legal services. At the end of the tunnel, however, we expect that transaction volume, particularly in M&A, will rise again as many companies affected by the sluggish global economy consider industry consolidation while others see attractive new opportunities abroad. When such growth occurs will depend largely on how fast the credit market can recover to provide the necessary financing, as well as the timing of the overall macroeconomic recovery. The Korean government has been implementing various measures to ease the impact of the global credit shortage by lowering local interest rates, injecting additional US dollars into its financial system and announcing economic stimulus packages. Despite the challenging macroeconomic conditions, a few major M&A deals are still in the works. For example, Hynix, the world’s second largest DRAM maker, and Daewoo Shipbuilding & Marine Engineering, the world’s third largest shipyard, are both expected to be sold in the near future. Another important issue is that the government has been seeking new free trade agreements with the US, EU, ASEAN, India, Australia and other jurisdictions. Even though these agreements have recently been overshadowed by the impending financial crisis, they will eventually receive a new spotlight as they can serve as a new growth engine for reviving the economy after the crisis is over. When the financial crisis swept across Korea and other Asian countries in 1998, many foreign companies were eager to take advantage of the investment opportunities presented by the crisis. It provides a lesson for the currently challenging environment, and corporate lawyers should serve their clients in good times and in bad to weather the storms.
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FEATURE | 2009 predictions >>
MALAYSIA Tay Beng Chai
managing partner, Tay & Partners • insolvency work not a sure bet • liberalisation of legal market still a live issue
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n 2009, Malaysia’s economic growth will slow to 3.4% from the projected 5%+ for 2008, according to the Malaysian Institute of Economic Research. At the time of writing this article, the government has not ventured any revised forecast of 2009’s GDP. Unlike the Asian financial crisis in 1997/98, when there was insolvency and restructuring work to compensate for
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anaemic M&A and capital markets work, this time round things are different. Malaysia is not in the eye of the financial maelstrom and insolvency work is not a sure bet. Companies could be limping along, giving rise to a modicum of restructuring work but not much else. The resulting decrease in work will put a damper on law firms’ growth and we could see some consolidation. The
slowdown could also affect the already uncertain outcome of the plans to allow foreign lawyers into Malaysia. The path to liberalisation has been slow and generally lacking in leadership. The loudest, most unequivocal voice heard in 2008 was that of the Central Bank. It is pushing to allow the admission of foreign lawyers as part of its plan to consolidate Malaysia’s leadership on the global Islamic banking and finance scene. The Malaysia International Islamic Financial Centre will not be complete without the presence of international law firms, the Central Bank contends. Various parties have had a hand in the proposal to grant foreign lawyers access, notably the Bar Council and the Ministry of International Trade and Industry, responding to WTO and GATS pressure. Representations and requests for access came through thick and furious when multi-lateral trade agreements were in vogue. The local bar sent its proposal to the attorney-general and things inched along until the Central Bank came into the picture with its imperative of Islamic finance and international lawyers. It is still too early to predict if 2009 will see foreign lawyers in Malaysia. All bets could be off given the near economic meltdown in every major financial centre in the world. Another issue that must be addressed is Malaysia’s fixed-fee regime. Malaysian lawyers are strange in advocating fixed scale costs for conveyancing and property-related work in an era of fair trade and anti-monopoly laws. Of course, Malaysia does not have competition law and it has been perfectly acceptable for lawyers to fix the fees they charge the public. However, there is a Fair Trade Act on the horizon and many lawyers who are embarrassed by price-fixing will be relieved when the practice is outlawed. It is also noteworthy that the bar has problems enforcing the no-discount rule among its members. As a result, some lawyers discount and some don’t. Clients naturally go shopping until they find a lawyer prepared to discount. Bankers and property developers are not happy and the public is leery of fixed fees. Perhaps it is time to end this, and the only way that will happen is if the Fair Trade Act is passed. Asian Legal Business ISSUE 8.12
FEATURE | 2009 predictions >>
PHILIPPINES Rafael A Morales
partner, SyCip Salazar Hernandez & Gatmaitan • bank M&A to be active • possible consolidation of legal sector
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lthough the Philippines is on a stronger and more sound economic footing than it was during the 1997 Asian financial crisis and is expected to post around 5% economic growth, it will certainly feel the effects of the current global economic downturn. Given this scenario, the year 2009 will be busy for M&A lawyers as well as banking and finance practitioners. Amalgamations in the banking sector will
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continue in line with the Bangko Sentral ng Pilipinas’ long-standing policy of transforming existing players into fewer but bigger institutions. The BSP will, however, be stricter in granting derivative licences to banks. There will also be continued capital raising by banks in line with Basel II requirements. As a result, the capital market will not be inactive. Corporate rehabilitation will be the refuge of those gravely affected by the
global financial crisis, so this practice area will also be active. Project financing will get a boost if the government’s planned economic stimulus (PHP100bn worth of infrastructure projects) materialises. We might see some consolidation in the legal profession in the form of acquisitions of boutique firms by multior full-service firms. This will be the wave of the future as the Philippine legal profession copes with the changing face of law practice in the region and globally.
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FEATURE | 2009 predictions >>
SINGAPORE Loo Choon Chiaw
managing partner, Loo & Partners • competition for legal work to increase • operational expenses for firms to be more manageable
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espite America’s US$700bn rescue package and the strong pledges of the G7 finance ministers to stabilise the global financial markets, market sentiments across the globe have not lifted. As an open economy, Singapore is certainly not isolated from the current global financial tsunami, the worst the world has ever seen since the Great Depression. The benchmark Straits Times Index has fallen from a high of 3,831 on 11 October 2007 to below 1,800 as at 24 October 2008. Singapore has also entered its first technical recession with two consecutive quarters of negative growth since 2007. Against this backdrop, 2009 will certainly not be a bed of roses for Singapore law firms. Commercial property prices and rentals will continue their downward trends. Salary increases for legal and support staff will be moderate, if any. Most local law firms will freeze or scale down their recruitment drives. Foreign law firms’ plans to expand their presence in Singapore by capitalising on Singapore’s liberalisation initiative regarding the legal industry will also slow down. All in all, the costs of operating a business will likely be more manageable in 2009. Thus, there will be less justification for law firms to increase their billing rates. As the pie gets smaller, competition for work will become more intense. General practitioners will feel the heat more than specialist practitioners. Adverse business and public sentiment overall will see a drop in work in certain areas, for instance real estate work (as there are less purchases), IPOs (as the IPO aspirants are holding back their listing plans) and general banking work (as banks are cutting down on new loans). Be that as it may, every cloud has its silver lining and there will be an increase in work for the legal profession in certain areas. These include M&As (as shrewd and deep-pocketed investors seize acquisition opportunities), corporate restructuring (as corporate entities streamline their financial and operational structures), corporate insolvency (as we see more corporate failures) and governance and compliance work (as authorities respond to the present crisis with a flood of new regulations and compliance directives). Asian Legal Business ISSUE 8.12
FEATURE | 2009 predictions >>
TAIWAN
Victor I-Hsui Chang
partner, LCS & Partners • real estate and IP steady for the moment • capital markets work may drive growth
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ike many of their counterparts in the Asia-Pacific region, Taiwan’s banks and other financial institutions have thus far emerged from the global financial crisis relatively unscathed. However, this is not to say that the Taiwan economy is doing well or has strong prospects for growth in the short to medium term. Indeed, the TSEC Weighted Index has fallen below 5,000 from a recent high of 9,617 in October 2007, unemployment has hit a four-year high and several of the largest companies in Taiwan, such as Hon Hai Precision, have announced slowdowns or cut-backs in investments. The gloomy global outlook that is permeating consumers, investors and companies is forcing law firms in Taiwan
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to pause and review their strategies for growth. For the past several years, M&A, securitisations, real estate, intellectual property and banking have been strong growth drivers for the Taiwan legal market. Although real estate and intellectual property-related work appear to be steady in the short term, banking and securitisation transactions have been at a virtual standstill. It remains to be seen whether any thawing of the credit markets in the last quarter of 2008 will be sustainable. In M&A, valuation and/or financing concerns have dampened enthusiasm from private equity firms and major international strategic players, although M&A activities involving local and/or private companies continue at a brisk
pace. Indeed, published M&A statistics for Taiwan through Q3 2008 show a strong decline in deal size but only a moderate decline in deal count. Looking ahead, there are three areas that may drive growth in the Taiwan legal market for the next 1–2 years. The first area is, of course, restructuring and insolvency-related work, frequently resulting from the collapse or bailout of international companies. The second area is capital markets work. This may seem counter-intuitive in this environment, but the possibility for growth in this practice can be attributed to three factors: First, the increasing attractiveness of the Taiwan capital markets relative to those in Hong Kong and Singapore; second, a heavily promoted policy and program by the government to attract Taiwanese-owned businesses in China and the US to list their shares or DRs in Taiwan (ie, to “return to Taiwan”); and third, proposed new regulations that will give attorneys a greater role in the listing process. The third area that may drive growth in the Taiwan legal market is white collar criminal defence work, which for Taiwan is only partly related to the global financial crisis as the combination of too much media and insufficient corporate governance has resulted in multiple highprofile over the last few years. Added to this sensational environment are the ongoing saga of investigations into the affairs of the Chen administration, which as of 11 November 2008 has resulted in the arrest and detention of former president Chen. Enforcement officials are finding themselves stretched to meet the demand of justice and trial lawyers are in short supply. Finally, it should be noted that President Ma’s administration has been steadily improving cross-straits relations with China. The several rounds of high-profile visits and the opening of direct flights gives assurance to business leaders who advocate heavier reliance on Chinese demand for Taiwanese goods to offset weakening American demand. However as China’s economy cools and turns itself inward, it remains to be seen how Taiwanese businesses will adapt and compete in the changing regional and global environment. That said, the future does not look so bad for law firms in Taipei as, perhaps, elsewhere.
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FEATURE | 2009 predictions >>
THAILAND Peter Shelford
Office Managing Partner, DLA Piper (Thailand) • political unrest creating uncertainty • less exposure to global economic downturn
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009 will present several challenges to legal service providers in Thailand. A combination of the global
economic downturn, the uncertainty surrounding Thailand’s political situation and the Thai government’s possible use of policy tools will affect businesses and
consequently the types of services clients will require. The current unstable political situation does nothing to encourage or attract foreign investors and is having a dampening effect on potential investment expansion in Thailand. We do expect these political issues to be resolved in 2009 and this should have a measurable impact on investment activity. The emergence of a stable political situation will create more confidence among foreign investors and also establish a positive environment for both Thai and foreign investors. Although the Stock Exchange of Thailand has been affected by the current global economic downturn, many Thai financial institutions had only limited exposure to sub-prime-related collateralised debt obligations. These CDOs had a devastating effect on other (external) financial institutions but the conservative approach of Thai businesses has reduced the effects of the downturn in Thailand. Leverage ratios in the Thai corporate and bank sectors are also low, reflecting risk aversion in the modest economic recovery since the 1997 Asian finance crisis. This puts Thailand in a better position to cope with the expected capital outflows from foreign investors holding Thai-based investments. At present the Thai government has not utilised any government policy tools in order to aid businesses affected by the economic downturn. However, regulators have begun holding talks on how to minimise the impact of greater risk aversion by the financial sector on small companies. The Thai legal market in 2009 will face less direct foreign investment, more restructuring and M&A projects and more practice work in litigation based on the challenges that will affect businesses in Thailand. The current trend is for businesses to look increasingly toward litigation either to seek outstanding amounts of money or simply to hold on to cash longer. During these economic downturns, when all businesses suffer to a certain extent, legal service providers will need to be flexible and be able to provide a cost-effective service in order to accommodate client needs add value to their services.
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FEATURE | 2009 predictions >>
VIETNAM Dang The Duc
Office Managing Partner, Indochine Counsel • tough times for international firms in particular • M&A and insolvency work to grow
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espite the slowdown of the economy in 2008, according to the Ministry of Planning and Investment, in the first nine months of the year, Vietnam attracted US$57.12bn in FDI, a fivefold increase on the same period last year. However, given the high inflation and soaring CPI in the first months of the year, as well as decreased stock prices, the government has implemented a tightened monetary policy, giving very high banking rates and as such making it hard for the business community to raise funds for new projects. Last year, local companies looked at IPOs and the further issuance of shares as an important channel for fund raising, but at the time the stock market was hot and all were too optimistic. As for the recent global financial crisis, many analysts and observers believe it will not have a direct and immediate impact on the local economy since
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Vietnam is not yet closely connected with the world’s financial centres. It is predicted, however, that there will be serious impacts on Vietnamese exports and a decrease of FDI inflow, especially from those countries most affected by the crisis such as USA, Korea, Japan and Taiwan – all major investors in Vietnam. Portfolio investment (or indirect investment as it is called in Vietnam) into the country will also be affected, since fund raising in the world capital markets will be limited. Given all of the above macro changes, the government has decided to lower the targeted GDP growth rate from 7.5–8% to 6–6.5% this year. Based on the current economic situation, I have some observations for the Vietnamese legal profession in 2009. First, the legal market will continue to develop, however the volume of work for law firms will be decreased, especially
for 2009 and 2010. International law firms will be the first affected since larger projects and cross-border work will be reduced. Foreign investors should still be interested in Vietnam over the long run, but they may have to adjust their investment plans given difficulties in financing. Impacts on local firms and mid-size firms (targeting mid-size clients and investors) will be less serious than those on big firms. In the last 3–4 months, foreign law firms and some local firms saw a decrease in the volume of work and new enquiries. Korean outbound investment into Vietnam has decreased noticeably and substantially affected the volume of work for some Korean law firms, as noted by several lawyers. This will increase the competition for work, and firms will find that they cannot be as selective as they have been in the past. Second, in light of the decreased volume of work, firms will have to be more careful with expansion plans. Some may have to downsize or reduce the number of fee earners next year. As such, the recruitment of lawyers will be slower compared with 2007 and 2008. Predictably, certain areas of practice will be affected. These include inward investment (for large-scale projects), real estate/property, fund work and capital markets. While M&A will not boom as it has in previous years, it should remain strong since many companies (especially foreign investors) view this is a good time to buy existing companies in Vietnam. So M&A and insolvency work will continue to grow, while private equity from foreign funds will be reduced. 2009 will also see the effectiveness of the two new tax laws tested. The Corporate Income Tax law and the Personal Income Tax law both have substantial impacts on companies and individuals in Vietnam. Hence, tax practices should grow quickly, since more and more individuals and organisations will need tax advice and tax planning. In order to cope with all of these changes to economies both in Vietnam and around the world, law firms will need to be more flexible. They may find it necessary to adjust their plans, the types of work they take on, recruitment strategies, office expansion and even fee structures and rates.
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FEATURE | project finance >>
Vale: project finance?
I
t is not a particularly good time to be a project finance banker in Asia. Borrowing margins have widened, liquidity has evaporated, sponsors have gone AWOL and lenders seem to have started their Christmas break prematurely – and taken their loan books with them. Bankers who had dined out on multi-billion-dollar deals are having to settle for smaller deals or, even worse, nothing at all. But while project finance bankers are spending their afternoons sipping lattes, the region’s project finance lawyers are busy at work feeding on the appetite of Asia’s emerging nations to build, develop and construct infrastructure. Of course, it is harder to push deals in the current environment, and each lawyer ALB spoke to has seen some transactions deemed ‘sure things’ a year ago fall by the wayside, but that just means lawyers are becoming a little more innovative in their approach to practice in the area.
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Nervous optimism According to Hong Kong-based Jack Su, the newly appointed head of JSM’s energy practice in Asia, the global financial crisis has brought with it a pervading sense of nervousness, with investors, financiers, Jack Su, JSM sponsors and underwriters all prepared to wait on the sidelines until this economic maelstrom subsides. And these sentiments are nowhere more apparent than in the project finance arena. “People are battening down the hatches,” he says. “Lenders are not necessarily looking to finish their loan book by the end of the year, and there is an expectation that it will be very difficult to leverage up a deal in the next few months.” James Harris, the local managing partner at Lovells Lee & Lee in Singapore, agrees. “[The global financial crisis] has definitely bumped up borrowing margins,” he says, noting
that liquidity premiums are being added more regularly to transactions. “Some banks have confided that they are not lending on any new deals for the rest of the year,” he says. Many lawyers note that banks, lenders and sponsors are approaching potential deals with more trepidation than was previously the case. And with good reason, according to Howard Fraser, a Sydney-based banking and finance partner at Baker & McKenzie. “There’s certainly a flight to quality at the James Harris, Lovells Lee & Lee moment,” says Fraser. “The confidence that was previously there a year or even a few months ago seems to have dissipated somewhat.” But while Fraser and others concede that some deals may currently be harder to close, they concur that those which are already committed or considered vital and economically sound would proceed. Asian Legal Business ISSUE 8.12
FEATURE | project finance >>
that the region’s project finance and infrastructure lawyers are ardently sticking to.
Project finance: a safe investment?
“If a project is well based, if the economics are good, if it is backed by appropriate hedging and off-take arrangements and technology, of course banks still want to participate,” says Fraser. Hence, no matter how dire things may seem at present it seems that lawyers in the region will be kept busy by a steady, albeit reduced, amount of work through the next quarter – so long as countries in the region continue to see the economic, social and pragmatic utility of developing their infrastructure. And this is the view
“The currently held view is that the financial crisis can be good for project finance. Governments in the region are likely to try to prop up economies by increasing infrastructure spendingand this should be a plus for project finance,” says Paul Elliott, head of the banking and finance and major projects groups at Baker & McKenzie. Wong & Leow in Singapore. David Egan, a Sydney-based Baker & McKenzie partner, agrees, noting that the current environment may mean that investors see safety in project finance investments. “The general financial constraints [that we are seeing now] may well have a positive effect on project finance,” he says. “In your typical project finance transaction, there is obviously a focus on cash generation and strict document control, and in this environment these types of transactions can be more appealing than low-grade corporate debt.” Su agrees with this and says that this may be a reason why he is seeing a spike in activity from his power sector clients. “While investors in other sectors are a little edgy, potential infrastructure investors like the look of things at the moment. I think that power companies in the region and strategic investors are cautiously keen on the new environment going forward.” Indeed, these observations are confirmed by the data. Standard Chartered Bank statistics noted that project finance grew strongly in Asia over the last four quarters. Led by
“It’s back to fundamentals time. I think project finance is going to have to morph somewhat if it is to remain relevant. And I think it will. But there may not be too many deals closed in the next six months” James Harris, Lovells Lee & Lee www.legalbusinessonline.com
Singaporean and Philippine power projects, project finance hit a record of US$44.8bn last year and in firstquarter 2008 grew six-fold over the same period in 2007, despite the global credit crisis. Needless to say that the predictions for first half of 2009, while indicating a resilient project finance sector, are much less upbeat. But as to how bad things could get, lawyers that ALB interviewed roundly agree that it is simply just too early to tell. “We all must remember that the real global economic crisis for financial institutions has only been going on only for a couple of months,” says Elliott. “Therefore, it is very difficult to see where things are going. While banks have effectively closed their books for this year, it is simply too early to tell what their position will be post-crisis.” Harris agrees. “It remains to be seen if any impact on risk, industry or geographical appetite results from the various national government bail outs.”
►► Top 5 Asia Project Finance deals COUNTRY
PROJECT
Saudi Arabia
Saudi Kayan Petrochemical Complex Liaoning Nuclear Power Plant Maaden-Sabic Fertilizer Complex Saudi Polymers Petrochemical Mundra Ultra Mega Power
China Saudi Arabia Saudi Arabia India
VALUE (US$m) 10,000 6,942 5,619 5,223 4,143
Source: Dealogic
►► Top 10 Legal Advisors of Global PFI/ PPP Project Finance Deals 1H 2008 Rank
Firm
1. 2. 3. 4. 5. 6.
Clifford Chance Allen & Overy Clayton Utz Allens Arthur Robinson Linklaters Corrs Chambers Westgarth Simmons & Simmons Uria Menendez Orrick Kim & Chang
7. 8. 9. 10.
Value (US$m) 3,611 2,005 1,855 1,846 1,785 1,763
No. of deals 7 12 3 4 4 1
1,707 1,583 1,104 969
2 3 2 5
Source: Dealogic
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FEATURE | project finance >>
Change agents But where they agree that the mid- to long-term prospects of Asian project finance in the throes of global recession are a ‘wait and see’ proposition, all of the lawyers interviewed by ALB note that a number of changes are afoot – changes that may challenge the way lawyers operate in the space, the manner in which deals are transacted and deal size, not to mention profound shifts in financing sources, project delivery models and lender and sponsor behavior. Deal size has arguably been the most visible manifestation of the economic crisis on the project finance sector. “Jumbo deals are probably dead for a while,” says Fraser. Su agrees. “Big deals will be very very difficult to close in the next quarter or two. I hate to give a number, but the larger financings – say around $US50bn-100bn will be very difficult to lend.” Similarly, debt financing is also becoming much more difficult to obtain, and most agree that, as a consequence, banks may prefer clubstyle deals, which combine several partners to share the risk from the outset of the project. Cue greater involvement of domestic bank lending for infrastructure development. Turn the clock back a decade, and lending patterns in the project finance sector were markedly different. Lenders tended to be a mixture – it was commonplace to find most of the lending emanated out of London or the US, more often than not with a small local tranche. But now many of the project finance deals coming to market tell a different tale, with local lenders contributing more than their international counterparts. “One of the themes that has been rolling through the latter half of the decade has been an increase in domestic bank lending for infrastructure,” says Elliott. “The current volatility means that many local and domestic banks in the region are going to be more liquid in the short term than the more 70
“The currently held view is that the financial crisis could be good for project finance. Governments in the region are likely to try to prop up economies by increasing infrastructure spending – and this should be a plus for project finance” Paul Elliott, Baker & McKenzie.Wong & Leow traditional international banks and in a better position to lend or at least willing to underwrite portions of particular projects.” This trend is also something that Egan is seeing in his Sydney practice. “We haven’t seen any great changes in terms of where funding is coming from over the last few months. “There is obviously less activity, particularly from the international banks, and more stringent consideration of projects from credit committees, but we haven’t seen any particular change in sources of finance.” Banks themselves, governed by their very pressing need to make money, declare that it’s business as usual, with some adjustments. “We are still open for business,” says Nicolas Vix, head of natural resources, infrastructure, power and structured finance Asia for Calyon – the investment banking arm of Credit Agricole. “Good projects with good sponsors can still get done at the right price. But we’ll probably see fewer closings of deals in the next year.” Nonetheless, we should not think for a second that the increased activity of domestic banks in the area means they are looking to jump into deals headfirst. Quite the contrary, according lawyers across the region. For not only are these banks placing more of a premium on quality of deals but they are also imposing greater demands on parties to deals. “Banks are risk averse at the best of times,” says Fraser. “In the current climate they need to convince a credit committee that a
deal is a particularly good one, a safe one. This often means that projects at the periphery may not go through.” Su concurs, suggesting that while banks will always look at the economics of deals closely, the current environment may see them scrutinising deals ever more closely – especially transactions in countries that are feeling the full force of the international credit crunch. “There is definitely more of a concerted effort to look at the heart of projects – and while this should be the case for all projects in any time and place, some projects which might have been let through before are being more closely dissected, especially in countries that may not have as strong balance sheets as they did previously – Thailand, the Philippines and even Korea are cases in point.” Elliott agrees that lender behaviour has drastically changed and as a result banks are becoming ever more demanding. “With pricing going up and credit committee approvals slowing down, banks are making more requests of customers in order to provide themselves with the equipment to be able to convince credit committees to continue with deals.” And sponsors are also exhibiting a behavioural change. “Major sponsors are aware the world has changed and they have changed accordingly,” says Elliott. “We are seeing more flexibility from sponsors who would have previously told banks they were pulling out of deals. Now they are being quite more receptive to security enhancements and pricing tweaks.” Asian Legal Business ISSUE 8.12
FEATURE | project finance >>
What all of this means for project finance lawyers in the region, however, is still unclear. Do changes in the macroeconomic environment and client, bank and sponsor behaviour put the onus on lawyers to play an enhanced role in deals – to become something analogous to an overall deal manager? Will it unite sponsors, contractors and developers with banks and financiers? “I don’t think the strategic role of lawyers changes greatly in a market such as this, although that wouldn’t necessarily be the case for corporate advisors,” says Egan. “Obviously, we are being called on to make some changes from a technical perspective but much less in terms of actual deal strategy,” added Elliott. Su agrees, noting that for lawyers who want to take on more of an enhanced role things may be complicated by a number of factors. “Lawyers often do not have all the
information, so it is extremely difficult to balance things with boards and shareholders, each of whom has their own agenda and thoughts on how the market will play out.” But while most of the project finance lawyers interviewed by ALB for this report agreed that there would not be any wholesale changes to their role, they all noted that evolution and commercialism are the cornerstones of relevancy during quiet periods. “I think in any area of law and especially in a downturn, lawyers have to be constantly evolving into areas aligned to their practice areas or risk becoming pigeon-holed” says Su. “Clients are looking for legal counsel to be more flexible in their advice and in some ways lawyers have to wear different hats. These are certainly very challenging times.” It is a do-or-die predicament for lawyers, according to Harris. “If lawyers aren’t able to change with the
Signs of Movement in the Japanese PFI Sector
T
he BTO (Build, Transfer and Operate)type of PFI has long been the dominant form of PFI in the Japanese market, until today. Recent projects indicate that the BOT (Build, Operate and Transfer)-type and the BOO (Build, Operate and Own)-type of PFIs may be on the rise in Japan. From the start of PFIs in Japan in 1999, the BTO-type PFI has dominated the Japanese PFI market. In the traditional Japanese PFI arrangement, the SPC for the PFI constructs the subject facility, and upon completion, transfers the completed facility to the government while retaining responsibility for the maintenance of the transferred facility (while certain operational aspects of the facility (other than maintenance) may also be retained by the PFI SPC, facility maintenance is the principal function to be performed by the PFI SPC). Pursuant to such arrangement, the major source of the PFI SPC’s revenues will be in the form of installment payments paid by the governmental body for its acquisition of the facility. Accordingly, under the traditional Japanese PFI arrangement, the only risk undertaken by the PFI lender is
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the risk of the governmental body’s nonpayment of the acquisition price installment payments (in the most cases, the PFI lender advances the PFI loan to the PFI SPC only after the facility construction completion, thereby avoiding all construction risks). Thus, the traditional Japanese PFI finance arrangement is quite different from the typical PFI finance arrangements in other countries. However, recent PFI projects may serve as indications of change. On May 1st of this year, construction of the Haneda International Passenger Terminal commenced. The Ministry of Land, Infrastructure, Transport and Tourism has structured the PFI for the Haneda International Passenger Terminal as a BOO-type PFI under which the PFI SPC will build, own and operate the subject facility as a passenger terminal, with all of the PFI SPC’s revenues to come solely from its operation of the passenger terminal facility. Accordingly, the PFI finance arrangement for the Haneda passenger terminal project will be quite similar to the typical project finance arrangement. The cargo facility for the Haneda airport,
times then do-able deals may be killed as a result of poor or non-commercial counsel.” “It’s back to fundamentals time. I think project finance is going to have to morph somewhat if it is to remain relevant. And I think it will. But there may not be too many deals closed in the next six months.” ALB ►► Legal Advisors of Global Project finance deals 1H 2008 Rank
Firm
Value (US$m)
No. of deals
1.
Clifford Chance
22,462
27
2.
White & Case
15,682
11
3.
Linklaters
13,143
15
4.
Allen & Overy
12,200
30
5.
Milbank
7,738
18
6.
Jun He
6,942
1
7.
Allens Arthur Robinson
4,790
16
8.
Sullivan & Cromwell
4,071
3
9.
J Sagar & Associates
3,931
3
10.
Mallesons Stephen Jaques
3,183
16
Source: Dealogic
Firm Profile
Nagashima Ohno & Tsunematsu
construction of which will also start in the near future, is also designed as a kind of BOOtype PFI arrangement. These recent projects may indicate a growing trend in the Japanese PFI market towards the BOT-type or BOO-type PFI. In August of this year, the Cabinet Office proposed a revision to Japan’s tax system to reduce fixed asset taxes, city planning taxes and real property acquisition taxes on facilities under BOT-type PFI arrangements to zero, which is currently the case for facilities under BTO-type PFI arrangements. Such revision to the tax system would also support the development towards BOT-type and BOOtype PFI arrangements in Japan.
Nagashima Ohno & Tsunematsu By Jiro Mikami, Partner Contact details Kioicho Building 3-12 Kioicho, Chiyoda-ku Tokyo, 102-0094, Japan (Phone) +81-3-3288-7000 (Fax) +81-3-5213-7800 (Mail) info@noandt.com (Web) http://www.noandt.com
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To view all jobs, free surveys and more visit
www.taylorroot.com.hk T: +852 2973 6333 For Practice roles contact Michael Luckett E: michaelluckett@taylorroot.com.hk For In-house roles contact Liam Richardson E: liamrichardson@taylorroot.com.hk
In-house EQUITY COMPLIANCE MANAGER
HONG KONG
HONG KONG
Global financial institution seeks mid-level lawyer to advise fast expanding wealth management business in Asia Pacific. Ideal candidates will have existing private banking industry knowledge although general finance/banking/funds experience will be considered. Must be able to demonstrate a commercial attitude. Ref: 5189. 5-8 years
HEAD OF LEGAL
HONG KONG
Exciting opening at this leading Asian investment bank for a mid-senior level banking and finance lawyer. You will be responsible for managing a small team and must have gained strong exposure to treasury products. Fluent Chinese language skills are highly desirable for this role as there will be high levels of interaction within the business. Ref: 5867. 5-8 years
PROJECTS
HONG KONG
Excellent opportunity to join the regional legal team of a leading Asian energy corporation. This role will see you supporting a number of different business lines including financing and project development as well as handling general corporate and commercial issues. Fluent Mandarin is highly desirable for this role. Great work/life balance. Ref: 5835. 5-7 years
IT/COMMERCIAL
SHANGHAI
Leading US based multinational organisation is now looking for a highly commercial senior lawyer to join this growing regional team. A solid corporate commercial background is required for this regional role as well as the ability to forge strong relationships with senior business heads. Fluent Mandarin is essential for this role. Ref: 5864. 6-8 years
CORPORATE FINANCE
TOKYO
This powerhouse financial institution wishes to employ legal counsel to support the legal risk management team, focusing on tailored transactions and general corporate matters. Main duties include structuring documentation to minimize legal risks, evaluating legal risks of new business activities and projects. A highly competitive salary on offer. Ref: 5HVG. 5+ years
STRUCTURED PRODUCTS/DERIVATIVES
TOKYO
International investment bank seeks lawyer with solid experience in structured credit products, derivatives and securities to join team in Tokyo. Some knowledge of Japanese securities (and languages) an advantage but not necessary. Relocation will be considered. UK/Aus/US lawyers encouraged to apply. Ref: 5803. 4+ years
US ATTORNEY
Liam Richardson
Private Practice
A truly international global financial house seeks a senior manager in equity compliance to provide day-to-day compliance advisory services to the equity division including cash and equity derivatives. Applicants will have a good knowledge of the equity business particularly product knowledge. Fixed income and structured products would be an advantage. Ref: 5965. 3+ years
WEALTH MANAGEMENT
Michael Luckett
TOKYO
A unique opportunity now exists for a US qualified lawyer with experience from an international law firm in New York to join this leading Japanese trading house. You will have a background in corporate, commercial, projects, energy or construction matters and will be looking to develop your career in-house. Japanese languages desirable. Ref: 5922. 2-5 years
COMMERCIAL LITIGATION
HONG KONG
One of Hong Kong’s leading litigation practices currently requires a new associate. You will be involved in high profile international commercial litigation and arbitration and represent some of the biggest corporations in the world. Chinese language skills are not needed but excellent academics are essential. Ref: 3447. 2-4 years
LITIGATION PARTNER
HONG KONG
Top UK firm with an established presence in Asia wants to appoint another partner to its highly ranked practice. This presents an excellent opportunity for a senior lawyer with contacts to establish themselves in the local market in Hong Kong and to use this great platform to expand their book of business. Ref: 1651. 6+ years
CORPORATE PARTNER
HONG KONG
Great opportunity for a senior lawyer with experience working on high end M&A, corporate finance and ECM matters to lead this department of 4 corporate partners. The firm has a preference for someone with existing clients and contacts to build on this already strong global practice. Top market remuneration for the right candidate. Ref: 4066. 6+ years
RESTRUCTURING PARTNER
HONG KONG
Leading US restructuring/distressed debt specialist seeks a senior corporate/financial restructuring lawyer for its Hong Kong office. You will be advising US and European hedge/private equity funds and must have significant experience in the area, ideally in the HK/China market but no following is required. Ref: 5960. 10+ years
COMMERCIAL LITIGATION
HONG KONG
International firm with one of the longest standing disputes practices in Hong Kong seeks a mid-level commercial litigator. You will be working on a range of Hong Kong and cross-border commercial litigation matters. You must have at least 3 years’ PQE from a well regarded firm, HK qualification and Chinese language skills. Ref: 5945. 3-6 years
COMMERCIAL LITIGATION
HONG KONG
US firm seeks a HK qualified commercial litigator for its Hong Kong office. You will be advising on white collar crime and securities litigation matters for an international and local client base. No prior experience in these areas is required but at least 1 years’ commercial litigation experience and HK qualification are a must. Ref: 5943. 1+ years
COMMERCIAL LITIGATION
HONG KONG
This Magic Circle firm’s litigation department has an excellent reputation and is looking to take on an additional junior lawyer with top-tier experience and an outstanding academic background. Mandarin is an advantage but isn’t essential. You will gain high calibre commercial litigation and international arbitration experience. Ref: 5065. 2-3 years
RESTRUCTURING & INSOLVENCY
HONG KONG
Award-winning Asia restructuring and insolvency group is searching for a lawyer with strong drafting and negotiating skills and a solid non-contentious restructuring and insolvency background. It is looking to expand its practice further and to build on its already impressive global reputation and reach in this area. Ref: 5131. 2-6 years
The SR Group | Brewer Morris | Carter Murray | Frazer Jones | Parker Wells | SR Search | Taylor Root London | Birmingham | Manchester | Leeds | Edinburgh | Dubai | Hong Kong | Sydney | Melbourne
LONDON • PARIS • BEIJING • HONG KONG • SINGAPORE • BRISBANE • MELBOURNE • PERTH • SYDNEY • AUCKLAND • WELLINGTON
Here are some reasons to smile In-house Litigation & Regulatory Lawyer (10+ yrs pqe) Hong Kong This premier global financial services firm is looking for an experienced Litigation & Regulatory Lawyer to handle Asia-Pacific regional matters and lead a small team. The role will provide support on the contentious regulatory side, strategic litigation advice, actively participate in the legal and compliance global litigation business team and liaise with colleagues in legal and compliance on risk management initiatives. Ref: 7893/AB
Equities Legal Counsel (3-8 yrs pqe) Hong Kong Newly created regional role at this global bank working in the growing equity derivatives platform. Areas covered include India, China, Korea, Hong Kong and Singapore. One will need to have experience with structured products such as linked notes and OTCs. This is a wonderful opportunity to be a part of a young business and join a good environment with ample rewards. Ref: 7956/AB
Contracts Manager (10 yrs exp) Singapore/Hong Kong Newly created
support the Tokyo office of this technology multinational. The position offers the flexibility to work partially from home or part-time. There will be the opportunity to handle work outside of Japan, and the reporting line is to senior counsel AsiaPacific. The focus is primarily on contracts work. Candidates need excellent Japanese skills (speaking, reading and writing) and a good command of English. Ref: 7965/AB
stand-alone role working for a famous technology multinational. The job involves identifying, planning, coordinating, drafting, negotiating and implementing strategic and worldwide non-standard contracts across the Asia-Pacific. You will successfully develop long-term business solutions with customers and business partners. Ability to conduct complex face-to-face negotiations is mandatory. Previous experience in the software industry is required. Ref: 7954/AB
Senior Legal Counsel (10 yrs pqe) Shanghai Large multinational seeks someone to assist the GC covering the North Asia region. Role will analyze legal risks, develop the legal department and support compliance efforts. Ideally, candidates have solid experience gained in-house from international MNCs, as well as private practice background. You must be able to lead a team and have superior communication skills in oral and written Chinese and English. Frequent travel will be expected. Ref: 7864/AB Compliance Manager (5-8 yrs exp) Hong Kong Our client is seeking someone to take up a leadership position and establish a compliance function. The position requires someone with at least 5 years compliance experience in an asset management field or experience with Asia compliance dealing with investment management products. Additionally, exposure to private equity and hedge funds along with familiarity dealing with UCIT funds is sought. You should be a team player and have the ability to work in a global organization. The company is a global leader in wealth management. Ref: 7953/AB In-house Lawyer (5-7 yrs pqe) Hong Kong Corporate/commercial experience
is needed to join this blue-chip conglomerate. The role will be focused on M&A work, and the incumbent should be able to provide general legal advice on a variety of matters. Ideal candidates are ambitious with the desire to grow the business and also have good communication skills to deal with all levels of the organization. Look forward to a friendly and stable environment. Ref: 7919/AB
Legal Counsel (2+ yrs pqe) Tokyo Unique opportunity for an attorney to
Private Practice Litigation Lawyer (3+ yrs pqe) Shanghai Interesting mix of work awaits
the successful candidate joining this international firm. Litigation work will involve general/commercial contentious matters, contract disputes and joint venture disputes. Additionally, there will be some shipping matters so marine experience is advantageous but not essential. You should be able to work independently. Mandarin language skills are needed for those with a litigation background but are not required if you have marine experience. Ref: 7950/AB
Corporate Associate (4+ yrs pqe) Hong Kong Award-winning international firm has need for a mid-level Hong Kong qualified solicitor with transactional experience to join their M&A/private equity practice. Candidates must have a US JD or equivalent such as LLB and have experience with a US, UK or other international firm in M&A/equity. The position encompasses regular travel to China and within Asia. Candidates must be fluent in English—ability to read and write Chinese and speak Mandarin is highly beneficial. Ref: 7867/AB
Funds Lawyers Hong Kong Funds Lawyers sought by this top tier firm. Midlevel to senior-level lawyers are welcome to apply. You will work on all aspects of funds work with a range of quality clients. A great opportunity for you to further develop your skills and gain international experience. Chinese language skills are not essential but would be an advantage. Ref: 7500/AB Business Recovery and Insolvency (2-4 yrs pqe) Hong Kong Join this top
UK firm and work with established partners on global matters with a focus on insolvency related work. You must be admitted as a solicitor in Hong Kong and have experience with complex/high value commercial litigation and insolvency matters. Preferred is someone fluent in Cantonese and Mandarin. Ref: 7849/AB
Hughes-Castell wishes you a joyful holiday season HONG KONG Tel: (852) 2520 1168 Fax: (852) 2865 0925 Email: hughes@hughes-castell.com.hk SINGAPORE Tel: (65) 6220 2722 Fax: (65) 6220 7112 Email: hughes@hughes-castell.com.sg
www.hughescastell.com
In-house TELCO
Bahrain
10+ PQE
Leading communications provider with a large presence in the Middle East is looking for an experienced telco lawyer to join their dynamic team. You should have experience in telecommunications regulation and a good network of regulatory contacts internationally. Top drawer remuneration and it’s tax free. (ALB 3825)
TELCO
Beijing
8+ PQE
Well known telco MNC seeks a senior legal counsel to join its legal team in Beijing. Ideal candidate should have strong PRC corporate background and Chinese language skills. This person should also possess strong business acumen. (ALB 3835)
BANKING
Hong Kong
5+ PQE
Top-tier Asian bank has a rare opportunity for a banking lawyer to provide legal advice on all aspects of retail banking activities. You will be working closely with senior management. Regional exposure and fluency in Chinese is essential. (ALB 3813)
LITIGATION
Hong Kong
4-6 PQE
This is an exciting opportunity for a top tier litigator from a leading international firm. This role is with a well known financial services firm and will involve advising on both contentious and noncontentious matters. (ALB 3827)
COMMERCIAL / M&A
Hong Kong
3-5 PQE
Our client is a leading Hong Kong based conglomerate. They are looking for a mid level M&A lawyer with excellent training from an international firm and solid academics. This group offers excellent long term career development opportunities. (ALB 3264)
Private Practice CORPORATE
Beijing
Partner
Interesting opportunity for a senior corporate lawyer with strong management skills to join the Beijing office of this established US firm. Some book of business is required if only to demonstrate your business development skills. (ALB 3831)
CORPORATE
Hong Kong
Partner
Newly established city firm with existing operation in the region seeks corporate partner to join and lead its practice. Ideal candidates should have some following and regional experience. Excellent opportunity for a candidate with entrepreneurial vision. (ALB 3698)
SHIPPING
Hong Kong / Singapore
4+ PQE
Premier shipping firm with a first-class reputation in both dry and wet shipping litigation and arbitration matters is keen to recruit mid-level to senior lawyers for its Singapore and Hong Kong offices. Exciting opportunity to work with some of the leading names in the Asian shipping sector. (ALB 3804)
COMMERCIAL LITIGATION
Hong Kong
2-6 PQE
This profitable US firm is looking for a commercial litigator from a top firm to join their growing practice. The ideal candidate will have experience of a broad range of commercial litigation as well as some arbitration matters. Excellent opportunity for career development. New York rates. (ALB 3823)
CORPORATE
Hong Kong
Professional Recruitment These are a small selection of our current vacancies. If you require further details or wish to have a confidential discussion about your career, market trends, or salary information then please contact one of our consultants: Denvy Lo, Nick Marett, Nisha Chugh, Lucy Li, or Andrew Skinner.
2-5 PQE
This reputable international firm is expanding its corporate / M&A practice. It seeks a junior to mid level lawyer with fluent Chinese language skills to join this fast growing team. Client base consists of European multinationals. (ALB 3833)
Hong Kong Office
Singapore Office
3305, 33/F, The Centrium, 60 Wyndham Street, Central, Hong Kong Phone: (852) 2973 0810 Evening / Weekends: (852) 9383 1819 Email: als@alsrecruit.com
20 Cecil Street, #20-03 Equity Plaza, 049705 Singapore Phone: (65) 6557 4163 Email: singapore@alsrecruit.com
www.alsrecruit.com
PRIVATE PRACTICE
IN-HOUSE
CORPORATE – HONG KONG
TREASURY & PRODUCTS – HONG KONG
Leading UK law firm requires experienced corporate lawyer to join its
This leading financial institution has an opening for an experienced
busy practice. Impressive blue chip client list with a focus on high
banking lawyer to advise its wholesale banking clients – which
profile M&A and private equity matters. Opportunity to work in a
include sovereigns and multinationals – on a range of issues
friendly and well resourced team with some of HK’s leading
including cash management, treasury and liquidity management.
corporate partners. Chinese language skills not required. You will
You should have relevant experience, preferably gained in Asia,
enjoy the sociable team environment and the stable corporate
and come from a top tier law firm or bank. Competitive salary on
practice. (PT2028)
offer. (IS1086)
4-6 YRS PQE
5 YRS+ PQE
CAPITAL MARKETS – HONG KONG
WEALTH MANAGEMENT – HONG KONG
US law firm with busy capital markets practice seeks ambitious US
Wealth management conglomerate invites a high calibre funds
qualified associate. High quality work on offer with young and
lawyer to assist with its growing investment requirements in Asia.
dynamic partners in very supportive environment. Exceptional career
You will essentially be responsible for new and existing fund projects,
development prospects with considerable client contact. You will
as well as handle other wealth management related matters.
have excellent technical and client skills and fluency in Mandarin.
Relevant experience required. Lucrative and unique prospect for
You will be working in a well regarded international firm. NY rates on
career progression and a dynamic work environment within a
offer. (PT2027)
coveted business sector. (IS1059)
4-7 YRS PQE
4 YRS+ PQE
ARBITRATION – HONG KONG
PROJECT FINANCE – HONG KONG
International law firm seeks talented arbitration specialist. You will
Our client, an impressive multinational, is looking for an experienced
work on a variety of high profile and challenging arbitration and
projects lawyer to advise on greenfield projects, development and
litigation matters across the region. You will be given considerable
acquisitions
responsibility and autonomy and will be mentored by some of HK’s
energy-related experience is highly desirable. This is an opportunity
most well regarded arbitrators. Excellent remuneration package and
to work with a diverse team of seasoned lawyers in a company that
pleasant working environment. Rare opportunity with one of HK’s
is constantly expanding. Competitive remuneration and interesting
leading practices. (PT2031)
work on offer. (IS1081)
4-6 YRS PQE
across
the
APAC
region.
Infrastructure
and
5 YRS+ PQE
CORPORATE FINANCE – HONG KONG
INVESTMENT BANKING LAWYER – MUMBAI
US law firm requires corporate finance lawyer to join its busy team.
Key financial player seeks an exceptional lawyer. As part of the Asian
The successful candidate will be fluent in written and spoken
IBD legal team, the India CFX and IBD/GCM deal teams and India
Mandarin and will have experience dealing with complicated PRC
legal team, you will be responsible for a diverse range of matters
focused IPO matters. You will have strong client relationship skills
such as various legal issues, M&A and capital markets transactions.
and be HK qualified. On offer is the chance to join a stable corporate
Knowledge of US and Indian securities essential. Rare prospect to
finance practice where you will be offered excellent mentoring and a
join a dynamic environment within a growing market for an elite and
competitive package. (PT2038)
stable institution. (IS1070)
2-4 YRS PQE
HONG KONG OFFICE Please contact James Garzon at (852) 2521 0306 or email hk@law-alliance.com
SINGAPORE OFFICE Please contact Jeremy Small at (65) 6829 7155 or email sing@law-alliance.com
4 YRS+ PQE
www.law-alliance.com Visit our website to see the latest in-house and private practice vacancies worldwide.
Living >>
VIm aNd VIgour
Yoga classes. Pilates. Basket weaving. Is this the future of lawyer performance management? Renu Prasad puts aside the finger painting to investigate
8
am: Breakfast seminar. Coffee, croissants, more coffee. 9am: Back to the office. E-mails, phone calls, meetings. 1pm: Client lunch. Food a bit heavier than you would like, but one must be polite. 2pm: Time to head back to the office. No time to walk, so a taxi it is. Afternoon: Back behind the desk. Light falls, day becomes dusk. You were planning to go to the gym tonight, but it’s seven o’clock already. No chance at all. Now, where was that bottle of red… Welcome to the typical dilemma of professional life, where resolutions for a healthier lifestyle remain unfulfilled
as we come to terms with the basic incompatibility of a busy working day with the kind of effort required to live well. It’s no secret, of course, that law firms have been overwhelmingly supportive of initiatives aimed at improving the physical wellbeing of their lawyers. Whether it’s running yoga classes, sponsoring charity fun-runs or offering discounted gym membership, we have almost come to the point where the firm without such offerings is the exception to the rule. The rationale, at least in theory, is clear. An active, healthy lawyer means less absenteeism through illness and better quality work. A sound mind in a sound body, as the saying goes. But the cynic might wonder whether the lawyers who take up these offers of free yoga, gym classes and so on are the ones who would be doing those things anyway. And exactly how many lawyers have the time to take up the offers? Flexible hours are one thing, but is the total number of requisite hours flexible?
The more we explore the link between lawyer productivity and health, the more we unearth the kinds of problems that don’t lend themselves to easy resolution. If a lawyer is energised and fresh, does it mean the client should be billed a higher hourly rate than at other times of the day? Is work carried out in the morning better quality than work done later on? The phrase ‘can of worms’ comes to mind. Of course, health is something that applies not only to productivity, but also retention. “In the past, it was okay for firms to tell young lawyers ‘we are the world’,” one recruitment consultant told ALB. “Nowadays, however, the younger generation wants to be acknowledged as a complete individual – not just a lawyer.” And part of that acknowledgment is a holistic understanding of the individual. Health, it might be said, is the whole – as ‘health’ itself is derived from the ancient Greek holos, meaning ‘whole’. Of course, for every lawyer fascinated by classical language and holistics, there is another asking for the ancient Greek translation for ‘who cares?’. And the pendulum might just be swinging back to this old school of thought. As the full effects of the credit crisis are felt and the employment market for lawyers begins to loosen up, perhaps the emphasis on employee health and wellbeing may soon come to be seen as a luxury of more prosperous days, when firms fought over talent. Not that the talent wars are completely over – certain skills will always be in short supply and for such lawyers, firms will still roll out the welcome mat. The critical question is – will they roll out the yoga mat too? ALB
“In the past, it was okay for firms to tell young lawyers ‘we are the world’. Nowadays, however, the younger generation want to be acknowledged as a complete individual – not just a lawyer” 78
Asian Legal Business ISSUE 8.12
my ambition
www.michaelpage.com.hk
my career – Michael Page
Let Michael Page assist you in achieving your career goals. As industry leading specialists, we can give you access to exceptional opportunities with the world’s best employers. Talk to us about your ideal role or visit www.michaelpage.com.hk for our full range of career opportunities.
Asia Product Safety & Regulatory Lawyer
Legal Counsel
Our client is a leading US Multinational manufacturer with substantial operations across PRC and Asia. In this newly created role, you will report directly to the US headquarters and be responsible for providing legal advice on compliance, manufacturing and product safety standards. You will also be required to manage relationships with PRC and Hong Kong governments and regulatory authorities. Suitable candidates will have at least eight years’ post qualification experience with a good understanding of corporate law and government relations. Previous in-house experience in the manufacturing industry will be advantageous but not mandatory. Fluency in English, Cantonese and Mandarin is essential. ref: H326750
This is a rare and challenging opportunity to join a financial institution specialising in hedge fund and asset management work. Reporting to the General Counsel, you will be involved in a large range of compliance and regulatory work, and provide advice on asset management, alternative investment strategies and hedge fund related matters. The ideal candidate will have 4-6 years’ post qualification experience, preferably gained in the area of regulatory compliance. Prior experience working in an asset management or investment banking firm would be advantageous. You must be a highly motivated and energetic candidate who is keen to learn and be challenged. You must also have strong communication skills and fluency in Chinese is preferred however not mandatory. ref: H322400
Corporate Finance Lawyer
Leading Global Law Firm | 3-5 Years PQE As part of the corporate finance team, you will be involved in take-overs, mergers and acquisitions, pre-IPO, IPO, equity securities and other transactional work such as restructuring and joint ventures. The successful candidate will possess at least three years’ post qualification experience gained in corporate M&A and/or IPO work. Prior experience in advising leading investment banks or blue-chip corporate clients will be advantageous. You must be able to work in a large and diverse team within a fast-paced and challenging environment. Fluency in English, Cantonese and Mandarin is essential. Candidates with Hong Kong and PRC qualifications will be highly regarded. ref H325720
Commercial Lawyer
Fund House | 4-6 Years PQE
Corporate Partner
International Firm | 10+ Years PQE Our client is an international law firm with a clear strategy for expansion. They are currently seeking a corporate partner with a strong reputation in corporate mergers and acquisitions practice area to join their team. Your key focus will be on practice and business development and you will play an integral part in building the firm’s strength and strategy in the region. Ideally you will be Hong Kong qualified with solid experience in private equity transactions and possess strong business development skills. China exposure and Chinese language skills will be advantageous. ref: H324470
European MNC | 2+ Years PQE
Employee Relations Adviser
Our client is a global brand in the retail industry. Based in Hong Kong and reporting to the General Counsel, you will provide a comprehensive range of legal services to various business units within the company. This will include drafting and reviewing documents and contracts, establishing standard forms of agreements and handling internal control and risk management related matters. You must be a general commercial lawyer with at least two years’ post qualification experience gained within an in-house or private practice environment. You must also be a proactive individual as this role involves managing cooperation between departments. Fluency in English and Cantonese is essential. ref: H215920
As part of a small team, you will advise managers on employment relations including disciplinary actions, terminations and business restructuring. In addition to providing advice and conducting training programs on bank policies for employees, you will also liaise with internal and external legal counsel to resolve employee issues as they arise. The formulation and implementation of policies pertaining to employee relations will also be a key focus. Ideally, you will be based in Hong Kong with over eight years’ post qualification experience and be familiar with employment laws. ref: H311620
Investment Bank | 8+ Years PQE
To apply for any of the above positions, please go to www.michaelpage.com.hk/apply quoting the relevant reference number, or to discuss other Private Practice, Financial Services or In-house opportunities, contact one of our specialist consultants on +852 2530 6100. To browse our full range of available positions, please visit: www.michaelpage.com.hk
#7317
US Multinational | 8 Years PQE
Sign off >> H2 not looking up
T
he credit crunch is now old news, but the devastating impact on the economy continues to batter law firms and other businesses alike – and recent research indicates that the second half of the financial year will see layoffs continue. A poll of the top 50 UK law firms reports that almost one-quarter of these firms are considering layoffs this financial year, with 10% revealing that redundancies in the next six months are probable. Five firms surveyed said they were anticipating job losses by the end of the financial year, admitting that job cuts were ‘likely’ or ‘very likely’. An additional 12% said cuts were ‘possible’, and not one firm ruled out redundancies altogether. It’s not hard to believe when you consider that almost one-third (32%) of the top 50 firms have now cut jobs – the latest being Hammonds, which launched a redundancy consultation in early November. Clifford Chance, DLA Piper, Eversheds and Simmons & Simmons are among those reporting redundancies in the past few months.
Eversheds tightens belt on travel spending
F
irms are feeling the pinch as the economy continues its downward spiral, and Eversheds in particular has recently taken to cutting back on travel costs to relieve some financial stress. The firm recently initiated a kind of travel lock-down, with all practice groups – from partner to support staff – required to gain approval from an appointed a line manager for any travel within the firm. Reports indicate that client-related travel will not be affected, and the cutback is being balanced out by increasing the use of video and telephone conferences by staff – with positive results. According to the firm, the restrictions have allowed it to cut travel expenses by up to 25% over the last few months in certain practice areas. Other firms are also catching on and have implemented cost-cutting measures. Olswang for one recently announced it would be cancelling its staff Christmas bonus and weekend trips as a result of hard economic times.
80
Top 10 family-friendly US firms revealed Y
ale Law Women group has compiled a list of the best firms for work-life balance in their third annual survey on family-friendly firms. The poll, which organised around 100 top firms who were required to answer a 35-question survey, weighted and ranked responses, giving kudos and special attention for extending parent-leave programs, offering on-site child care, allowing lawyers to work from home or fostering leadership opportunities for women and minorities. The following firms were identified by the report as top of the range for facilitating work/life balance: • Arnold & Porter and Covington & Burling – Washington, D.C • Debevoise & Plimpton and Kramer Levin Naftalis & Frankel – New York • Mintz Levin Cohn Ferris Glovsky and
Popeo and WilmerHale – Boston • Perkins Coie in Seattle; Dorsey & Whitney – Minneapolis • Gibson, Dunn & Crutcher – Los Angeles • Kirkland & Ellis – Chicago Arnold & Porter no doubt upped their family-friendly status by allowing employees to take a leave of absence of up to three years, while the firm continues to pay bar membership fees, and assists with continuing legal credits. In-house day care is available for parents who choose to return to work at the firm. Another mentioned firm – Debevoise – counts more than 50 lawyers as working part-time for the firm and reports that 12 of their partners have worked part-time at one point or another. Finally – some good news amid all the doom and gloom of the financial crisis.
Equine ecstacy turns into Aussie achiever’s viticultural victory
S
ome people seem to have 48 hours in their day compared with the 24 us mortal folk have to make do with. Take leading Sydney litigator Brian Agnew, for example. Not content with being the founder of one of Sydney’s more successful mid-tier law firms, Moray Brian Agnew & Agnew, Agnew decided he fancied breeding a Melbourne Cupwinning horse – duly acheived with Subzero in 1992. Then four years ago he decided to make a foray into the world of wine, purchasing the historic Audrey Wilkinson vineyard in the Hunter Valley two hours north of Sydney. Sticking to his winning ways, Agnew has just received the New South Wales
2008 Wine of the Year Award for the 2006 Audrey Wilkinson Hunter Valley Museum Reserve Semillon. Agnew is definitely, one would think, a man to avoid in court.
Asian Legal Business ISSUE 8.12