Asian Legal Business Jun 2008 by Key Media

ISSUE 8.6

ALB Special Report: China 2008 Dragon continues to roar

Outbound traffic Offshore firms cash in on PRC listings

Rise and rise of Islamic finance Viable alternative in current credit climate

BIG TIME A SI A’S L ARGES T L AW FI RMS : PLUS

CHINA’S AWARD-WINNING FIRMS

LATERAL MOVES

DEALS ROUNDUP

REGION-WIDE UPDATES

IN-HOUSE PERSPECTIVES

SIGN OFF

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Country editors The Regional Updates section of ALB is sponsored by the following firms: Philippines

Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines. Principally based in Makati City, the country’s financial and business center, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground. China

Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm with over 500 lawyers worldwide. Paul, Weiss is headquartered in New York and has offices in Hong Kong, Beijing, London, Tokyo and Washington D.C.

ALB ASIAN LEGAL BUSINESS

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SENIOR CONSULTANT

Malaysia

Tay & Partners is a Malaysian law firm established in 1989 with offices in Kuala Lumpur and Johor Bahru. It is a full-service commercial law firm, advising a varied portfolio of clients across a broad spectrum of industry sectors. The firm’s vision is to be the law firm of choice to businesses investing or operating in Malaysia. Singapore

Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. The firm has been regularly noted for its IPO, M&A and general corporate work.

James Morrow

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India

Singh & Associates is a full service international law firm comprising of experienced, capable and dedicated legal professionals, company secretaries and chartered accountants. The firm is committed to providing exceptional legal counsel across a wide variety of local, national and international branches of law and specialises in several practice areas.

CONTRIBUTING EDITOR Renu Prasad

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International tax

AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and trustee services your tax plan is comprehensively implemented. Our tax advice provides independent innovative and rigorous solutions which deliver results and long-term accountability. Qualified UK, Hong Kong and PRC tax advisors.

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Horwath Financial Services (www.hfs.com.hk), an independent member firm of Horwath International (www.horwath.com), provides a one-stop solution for your financial planning, investment, property-financing and general financial health needs. We offer a range of payment options for our services including a fee-based alternative setting us apart in an industry that is dominated by commission driven sales. Intellectual property

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SINGAPORE ATMD is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has an extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD has been voted as Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.

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EDITORIAL >>

Growing pains

t is one of the dirtier tricks of nature to make us, as children, long to grow older, only to later look back nostalgically to the simpler times of youth. George Bernard Shaw famously captured this dilemma with his aphorism, “youth is wasted on the young”. Yet even as we age, we learn (hopefully) to accept change and progress with aplomb, and weather with grace the inevitable growing pains that come along for the ride. These same lessons can – indeed, often must – be applied in our professional lives as well. That is much of what this issue of ALB is all about: growth, and the sometimes uncomfortable issues that can arise when getting bigger. Throughout Asia, conversations with top lawyers reveal a surfeit of concerns about the growth of the legal industry. Where will the necessary talent be found to handle the ever-expanding amount of work? How can a consistency of client experience be assured? Already there is evidence that market forces are helping the legal industry work through these growing pains. The rise of boutique and niche law firms to provide specialised advice is one response to these problems. On the regulatory side, the opening up of the legal industry in jurisdictions such as Singapore is similarly to be applauded. And as we report in this issue, the growing number of Asian partners being named by European law firms is a further response to these issues. Yet ultimately, the best rule for all law firms – large or small – is to remember that no matter how many cases and how many clients they might have active at any moment, each must be treated as if it were their only, and crucial to their survival. After all, for many of their clients, these cases are just that.

Ultimately, the best rule for all law firms to remember is that each client and case must be treated as if it were their only, and crucial to their survival

IN THE FIRST PERSON “[Allowing FIEs to list] creates the possibility for foreign investors to raise money locally, and reinvest or acquire with [those] funds” Peter Corne, managing director of Eversheds’ Shanghai office, on Shanghai’s opening up to FIE listings (p14)

“The market in China [will] become increasingly competitive and an increasing number of international firms are going to attempt to make a go of it here” David Jacobs, Asia-Pacific regional chairman of Baker & McKenzie, on China (p30)

“All international firms with offices overseas will look to China as a very important part of their international plan” John Grobowski, head of Faegre & Benson’s Shanghai office, on China for international firms (p48)

ALB ASIAN LEGAL BUSINESS

Asian Legal Business ISSUE 8.6

NEWS | deals>> >> CONTENTS

contents

ALB ISSUE 8.6

28 10

COVER STORY 28 ALB 50 Once again, ALB ranks the largest firms in Asia in a comprehensive annual report revealing the biggest and best firms in the region

ANALYSIS 10 Islamic finance ALB investigates Islamic finance as a practice for firms in the context of the credit crisis 11

Eastern promises Credit crunches, oil shocks and economic slowdowns may be giving Western economies a kick, but for their far-flung law firms, there has never been a better time to be on the partnership track

REGULARS

SWFs The billions lying in sovereign wealth funds (SWFs) mean these funds bear huge potential for law firms. ALB takes a closer look

• • • • • •

FEATURES

6 •

NEWS Foreign firms reluctant to apply for QFLF licences in Singapore Italian firm expands to Asia Increase in China cross-border acquisitions Kookmin Bank claims stake in Bank CenterCredit Jinduichen Molybdenum IPO results LPD acquires equity in Internickel Australia Appointments

21 International tax AZURE TAX 24 REGIONAL UPDATES •

China PAUL WEISS

•

Philippines SYCIP SALAZAR HERNANDEZ & GATMAITAN

•

Singapore LOO & PARTNERS

•

Malaysia TAY & PARTNERS

•

India SINGH & ASSOCIATES

PROFILES

38 Offshore firms ALB examines the crucial role offshore firms play in the listing of Chinese companies

COMMENTARY 16 UK report

37 Wong Partnership

48 ALB Special Report: China 2008 ALB takes a look at the legal service industry in a number of leading economic centres in China

18 US report

45 Walkers

23 IT column

56 ALB China Law Awards On 25 April China’s most brilliant lawyers and firms joined ALB and Omega to celebrate outstanding achievements during the past year

58 Law firm associations As Asia corporations extend their reach outside the region, global law firm associations are coming into their own

IP ALBAN TAY MAHTANI & DE SILVA

20 International arbitration DREW & NAPIER

27 Hendra Soenardi & Rekan

Paul Weiss

ALB ASIAN LEGAL BUSINESS

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

Asian Legal Business ISSUE 8.6

NEWS | deals >>

deals in brief | HONG KONG | ► BARING PRIVATE EQUITY ASIA INVESTMENT FUND US$1.52bn The largest regional growth equity fund ever raised for Asia Firm: Debevoise & Plimpton Client: Baring Private Equity Asia Lead lawyers: Andrew Ostrognai, Gerard Saviola • Known as Baring Asia Private Equity Fund IV, the fund will target

companies in the alternative energy, media, financial services, consumer and industrial sectors • Fund will target companies of between US$100m and US$500m in value and with operations in China, India, Japan, Singapore, Hong Kong, Taiwan or Southeast Asia that require capital for expansion, recapitalisation or for M&A purposes • Baring Asia now has US$2.5bn in assets under advisory • Fund IV, which had an original

target of US$1bn, was heavily oversubscribed and had to raise its hard cap fundraising limit to account for high investor demand and still turned away a substantial amount of investor demand

| CHINA/AUSTRALIA | ► LPD HOLDINGS ACQUISITION IN INTERNICKEL AUSTRALIA PTY LTD (IAPL) US$108m

• Investors in Fund IV include Ontario Municipal Employees Retirement System, Partners Group, University of Texas Endowment, the UK’s Universities Superannuation Scheme, Goldman Sachs Asset Management, Pantheon and Global Investment House

Firm: Hopwood Ganim

• Approximately half the investors came from North America, a quarter from Asia, and a quarter from the Middle East and Europe

Firm: Tress Cox

| KOREA | ► KOOKMIN BANK – BANK CENTERCREDIT ACQUISITION Largest acquisition and M&A deal abroad in Korean banking history

Lead lawyers: Richard Hanel, Michael Hansel Client: Macarthur Minerals

Richard Hanel, Hopwood Ganim

Client: LPD • LPD acquired a 30% equity interest in Internickel Australia Pty Ltd (IAPL), holder of the Lake Giles project, for US$9.4m • LPD also acquired an option for an additional 50% equity stake in IAPL from MMS for US$99m • Upon exercise of the option, LPD is required to solely fund the development of the Lake Giles project through further capital contributions

Firm: Shin & Kim Lead lawyers: Woong Soon Song, Beom Su Kim, Sang Hyun Le

Woong Soon Song, Shin & Kim

Client: Kookmin Bank • Kookmin Bank acquired more than 30% equity interest in Bank CenterCredit • Kookmin to acquire more shares to increase shareholding ratio to more than 50.1% within 30 months by purchasing existing common shares from selling shareholders and subscribing for new shares • Bank CenterCredit is one of the top commercial banks in Kazakhstan. Its primary business consists of corporate and retail banking. Its corporate banking activities include providing a broad range of wholesale banking products to a diversified group of domestic customers, primarily small and medium-sized companies

“While the IPO market has dipped somewhat from the frenetic levels seen in 2007, there is still huge interest in the resource sector, particularly from cashed-up offshore investors. This is where Hopgood Ganim sees a number of synergistic merger and strategic investment opportunities arising in the short to medium term” RICHARD HANEL, HOPGOOD GANIM LAWYERS

• Kookmin is the largest financial institution in Korea, with more than 26 million customers, 1,204 branches and 9,570 ATMs nationwide, and about US$233bn in total assets

Asian Legal Business ISSUE 8.6

NEWS | deals >>

| CHINA | ► JINDUICHEN MOLYBDENUM IPO Firm: Guantao Law Firm Client: Jinduichen Molybdenum Lead lawyers: Cui Liguo, Su Bo, Sun Dongfeng Cui Liguo, Guantao Law Firm

• Upon approval of the China Securities Regulatory Commission, Jinduichen initially offered 538 million A shares • IPO completed raising US$1.28bn • Jinduichen is the largest molybdenum products producer both in the PRC and Asia. It is a vertically integrated producer and possesses a complete production chain that includes mining, ore processing, roasting, smelting, chemical treatment as well as the production of molybdenum metal products

► YOUR MONTH AT GLANCE Firm

Jurisdiction

Deal Name

$USm

Practice

Allen & Gledhill

Singapore

STMicroelectronics Special purpose vehicle

428

Restructuring

Allen & Overy

China

Asia Pacific Land purchase of The Center office building

650

property

Philippines

Pepsi IPO

111

Equity

Alvin Chong & Partners

Malaysia

Dayang Enterprise Holdings IPO

Equity

Beijing Alliance Law Firm

China, HK

Poly (Hong Kong) Investments Limited share swap deal

200

equity

Clifford Chance

Hong Kong

CVC Asia Pacific investment in Hung Hing Printing Group

undiscl.

equity

Deacons

China

Asia Pacific Land purchase of The Center office building

650

property

Debevoise & Plimpton

Hong Kong

Baring Private Equity Asia fund establishment

1520

finance

Pan Asia

Baring Private Equity Asia Investment Fund

1520

finance

DLA Piper

China, HK, US

Heckmann Corporation acquisition of China Water and Drinks

625

M&A

FoxMandal Little

India, US , France

Alcatel-Lucent – Reliance Communications JV

undiscl.

Freshfields Bruckhaus Deringer

China

China Communications Services Corporation share placement

214

equity

China

Belle share placement

undiscl.

equity

Vietnam, UK

Vietnam Property Fund listing on AIM

equity

Yara divestment of China BlueChemical stake

undiscl.

M&A

Japan

Robert Bosch tender offer for Bosch Corporation

960

M&A

Japan, China and Hong Kong

Rank Group – Alcoa acquisition

2700

M&A

Hong Kong, Italy

Hutchison Global Communications /PLDT Global joint venture

undiscl.

| PHILIPPINES | ► PEPSI IPO US$111m The first Philippines IPO of 2008

Guantao Law Firm

Firm: Allen & Overy

China

Jinduicheng Molybdenum IPO

1300

equity

China

China International Exhibition Center’s New Venue Project

428

Project finance, property development

China

Puyang Refractories Group IPO

equity

Haldanes

China, HKSAR

Jones Lang Lasalle-Sallmanns Holdings acquisition

undiscl.

M&A, Equity

Client: Issuer on US law

Hopgood Ganim Lawyers

Australia, China

LPD Holdings acquisition in Internickel Australia Pty Ltd

108

equity

Firm: Romulo Mabanta Buenaventura Sayoc and de los Angeles

JSM

China

Shui On Construction and Materials Limited China Central Properties Limited JV

262

Client: Issuer on Phillipines law

Kim and Chang

Korea

SK Telecom - Hanaro Telecom share acquisition

1101

equity

Firm: Picazo, Buyco, Tan, Fider and Santos

Lovells Lee & Lee

Singapore

China Huaneng Group senior acquisition financing facility

1650

equity

Paul, Hastings, Janofsky & Walker

China

Asia Pacific Land purchase of The Center office building

650

property

China, HK

Poly (Hong Kong) Investments Limited share swap deal

200

equity

Picazo, Buyco, Tan, Fider and Santos

Philippines

Pepsi IPO

111

Equity

Rajah & Tann

Singapore

STMicroelectronics Special purpose vehicle

428

SPV

Singapore

Hong Leong Asia Ltd proposed sale of building materials business to Tasek Corporation Berhad

237

M&A

Singapore

Chartered Semiconductor Manufacturing Ltd stake acquisition in Hitachi Semiconductor Singapore

233

equity

Client: Underwriters on US law Firm: Skadden Arps

Client: Underwriters on Philippines law • IPO comprised a total of 1.14 billion shares, or 30.9% of the enlarged share capital, which included the 30% of the deal that was earmarked for domestic investors • Shares were offered at a price between Ps3.50 and Ps4.30 each and priced at the bottom of this bracket. There is a 15% greenshoe, which could increase the final size to as much as US$128m if exercised in full • Two thirds of the offering consisted of www.legalbusinessonline.com

NEWS | deals >>

existing shares that were sold by the Guoco Group and the Nassim Fund. • Guoco Group, which acquired the company in 1997 from the associates of the Lorenzo family, will see its stake fall from 40.3% to 30% following the IPO • Nassim Fund, which currently holds

21.6%, will sell virtually all its shares and will hold only 0.2% if the 15% overallotment option is also exercised in full • PepsiCo, which aside from access to new products, also provides the company with concentrates and marketing support, will own 29.5%

| HK/CHINA/US | ► HECKMANN CORPORATION ACQUISITION OF CHINA WATER AND DRINKS (HK, CHINA, US) IPO via special purpose acquisition company Firm: DLA Piper Client: Heckmann Corporation Lead lawyers: Stephen Peepels, Steven Pidgeon Firm: Thelen Reid Brown Raysman & Steiner

Stephen Peepels, DLA Piper

Client: China Water • Heckmann is the largest and first special purpose acquisition company to list on NYSE and to acquire a PRC public company • China Water, an OTCBB traded company headquartered in Hong Kong, is a leading PRC licensed bottled water producer and distributor, with distribution in 14 provinces and regions across China

| SINGAPORE | ► STMICROELECTRONICS SPECIAL PURPOSE VEHICLE

Client: lead counsel to STMicroelectronics NV

Firm: Allen & Gledhill

• transfer of STMicroelectronic’s Singapore flash memory business to a special purpose vehicle (SPV), including a wafer fabrication plant

Lead lawyers: Michelle Foo, Tan Wee Meng, Teoh Chia Yin

• SPV subsequently sold to Numonyx BV, the Dutch holding company in which STMicroelectronics acquired a 48.6% ownership interest

US$428m

Client: Local Counsel to Numonyx BV

Lim Wee Hann, Rajah Tann

Firm: Rajah & Tann Lead lawyers: Lim Wee Hann, Yap Chew Fern Client: STMicroelectronics Firm: Shearman & Sterling

Lead lawyers: Derek Dalmer, Kyuli Oh, Queenie Hui

Yap Chew Fern, Rajah Tann

• transaction resulted in the creation of world’s third largest nonvolatile memory provider, through a combination of assets from STMicroelectronics and Intel • Singapore part of transaction involved transfer of the flash memory business, which included assets such as contracts, employees and building, machinery and equipment used in relation to STMicroelectronic’s 200mm wafer fabrication plant.

• The company principally markets its own bottled water products but also supplies to global beverage companies, including CocaCola. China Water will operate as a wholly owned subsidiary of Heckmann • Heckmann will fund the acquisition of China Water with cash currently held in trust along with new shares to be issued

| CHINA | ► SIA PACIFIC LAND PURCHASE OF THE CENTER OFFICE BUILDING Largest ever single asset real estate deal in PRC history Firm: Paul, Hastings, Janofsky & Walker Client: Asia Pacific Land Lead lawyer: David Blumenfeld Firm: Allen & Overy Client: Senior lender Firm: Deacons Client: Hutchison Whampoa Group subsidiary company

• The Center is a Shanghai trophy office building located in Puxi. It was purchased from a Hong Kong Stock Exchange listed Hutchison Whampoa Group subsidiary for approximately US$650m • APL is a privately owned real estate investment, development and asset management company, which makes investments in real estate Asian Legal Business ISSUE 8.6

NEWS | deals >>

► YOUR MONTH AT GLANCE (CONT) Firm

Jurisdiction

Deal Name

$USm

Shearman & Sterling Shin & Kim

Practice

Singapore

STMicroelectronics Special purpose vehicle

1700

restructuring

Korea

Kookmin Bank - Bank CenterCredit acquisition

634

equity

Korea

SK Telecom - Hanaro Telecom share acquisition

1101

equity

Korea

MBK Partners and Macquarie Korea acquisition of C&M

2003

equity

Korea

Kumho Asiana Consortium acquisition of interests in Korea Express

3929

equity

Shook Lin & Bok

Singapore

China Huaneng Group senior acquisition financing facility

1650

finance

Skadden Arps

Philippines

Pepsi IPO

111

Equity

Simpson Thacher & Bartlett

Hong Kong

Suntech Power Convertible Senior Notes Offering

575

Debt market

China, US

E-House (China)’s Follow-on Offering of American Depositary Shares

117

equity

China, US

ATA Inc IPO

equity

Sullivan & Cromwell

Singapore

China Huaneng Group senior acquisition financing facility

1650

finance

Thelen Reid Brown Raysman & Steiner

China, HK, US

Heckmann Corporation acquisition of China Water and Drinks

625

M&A

Tress Cox

Australia, China

LPD Holdings acquisition in Internickel Australia Pty Ltd

108

equity

Wong Tan & Molly Lim

Singapore

China Huaneng Group senior acquisition financing facility

1650

finance

Does your firm’s deal information appear in this table? Please contact Renu Prasad

renu.prasad@keymedia.com.au

61 2 8437 4763

► CORRECTION The deal brief of ‘Toll Holdings–BALtrans Holdings acquisition’ in Issue 8.5 contained the following error: Jennifer Cheung & Co was listed as the legal advisor to BALtrans Holdings in the acquisition. In fact, Jennifer Cheung & Co acted for the seller, while DLA Piper was the legal advisor to the target company and the lead partners of DLA Piper on the deal were Christopher Clarke and Esther Leung. ALB regrets this error.

approved under China’s new M&A Rules Firm: Paul Hastings Client: Poly (Hong Kong) Investments Limited Lead lawyers: Chau Ho, Steve Woo Firm: Beijing Alliance Law Firm transactions in China, Japan and other countries throughout Asia

| HK/CHINA |

• Acquisition was funded by Poly (Hong Kong) Investments Limited

issuing and allotting new shares to Poly Southern Group Limited • Completion of deal was significant given China’s introduction of new M&A rules in August 2006, which only allow overseas investors to invest in Chinese firms through share swaps in certain defined circumstances

Client: Poly (Hong Kong) Investments Limited • Poly (Hong Kong) Investments Limited is a company incorporated in Hong Kong and listed on the Hong Kong Stock Exchange

► POLY (HONG KONG) INVESTMENTS LIMITED SHARE SWAP DEAL

• Shenzhen Poly Investments Co. Limited is a company incorporated in Shenzhen

First share swap transaction

• Deal saw Poly (Hong Kong)

www.legalbusinessonline.com

Investments Limited acquire the entire equity interest in Shenzhen Poly Investments Co, from China Poly Southern Group Limited, a wholly owned subsidiary of China Poly Group

NEWS | analysis >>

Islamic finance on the rise As the credit crunch takes hold, more companies are finding that Islamic financing is a viable alternative

mbryonic. That is the best way to describe Islamic finance practices of Asian law firms outside of Malaysia, but there is no doubt that there are high expectations for the growth opportunities on offer. Lawyers specialising in Islamic finance, while traditionally based in Dubai or London, are keeping a close eye on developments in the Asia region. Oliver Agha, partner and global head of Islamic

finance at DLA Piper, has over 50 lawyers worldwide in his Islamic finance practice group. “It’s hard to get firm statistics, but we believe it’s the largest such group in existence,” he said. Clifford Chance, Norton Rose and Linklaters are other examples of firms which have worked on substantial Islamic finance transactions. Of course, when one talks of team size, this begs the question of how law firms

are structuring their Islamic finance teams. “I don’t see it as a distinct practice area,” said Hooman Sabeti-Rahmati, senior counsel at Allen & Overy Shook Lin & Bok. “Islamic law is a body of law which ultimately needs to be applied to a structure or product. The knowledge of Shari’a is important, but the starting point must be knowledge of the underlying product. This is because most Shari’a-

► ISLAMIC FINANCE – WHAT IS IT? • Islamic finance is finance conducted in accordance with Islamic law or Shari’a • Certain practices in conventional finance are prohibited under Islamic law These include the charging or paying of interest or earning profits from enterprises such as gambling or alcohol • The “sukuk” is the Islamic equivalent of a bond. The sukuk market has experienced exponential growth in recent years, although some commentators have questioned its compliance with Shari’a • Other than a small number of countries such as Saudi Arabia, Shari’a is generally not part of national commercial laws and therefore would usually be voluntarily used by one or more parties to a financial arrangement

compliant products today are designed to replicate the economic and risk profile of a conventional counterpart.” Agha places a heavy emphasis on Shari’a knowledge, hiring lawyers who are also Islamic scholars and adopting a sound understanding of Islamic jurisprudence as a starting point. “A lot of firms are simply trying to replicate conventional structures into a Shari’acompliant structure,” he said. “Our approach is to start with a genuinely compliant structure and to build the product from that.” Banks and other entities looking to raise capital are increasingly turning to Shari’a-compliant offerings. A key reason, Asian Legal Business ISSUE 8.6

NEWS | analysis >>

said Sabeti-Rahmati, is the abundant investment capital currently available, and increasingly so, in the Middle East. “Middle Eastern investors Oliver Agha, generally have not been DLA Piper averse to investing conventionally if Islamic alternatives were unavailable, but now that compliant alternatives are more available and growing, there is ready demand for them, which invites further innovation and growth,” said Sabeti-Rahmati. Agha agrees and said that Islamic finance is increasingly important as a substitute for conventional financing in light of the credit crunch. “You can see this in the current proliferation of Islamic funds, which is occurring as the traditional market is contracting,” he said.

Jurisdictions Islamic finance is an area of exponential growth for law firms, said Agha. “The main growth has been in the Middle East, but there’s also been strong growth in Asian markets. Kuala Lumpur has always the main [Asian] centre for Islamic finance, but in recent years we’ve seen other jurisdictions such as Thailand, Japan and particularly Singapore take an interest.” Hong Kong, in particular, is keen to establish itself as the gateway for Muslim investment into Mainland China – intentions that were made clear by developments such as last year’s opening of the Hang Seng Islamic China Index Fund. “If they’re able to establish Hong Kong as a viable Islamic finance jurisdiction, I can see Hong Kong, along with Kuala Lumpur, being the region’s hot spot for Islamic finance,” said Agha. ALB

“You can see a proliferation of Islamic funds, which is occurring as the traditional market is contracting” OLIVER AGHA, DLA PIPER www.legalbusinessonline.com

Eastern promises Credit crunches, oil shocks and economic slow-downs may be giving Western economies a kick, but for their far-flung law firms, there has never been a better time to be on the partnership track

ocation, location, location: the old mantra for real estate success has lately been adopted by some of the world’s top law firms. In a shift prompted as much by economic slow-downs in their own countries as by the growth of business abroad, a number of major law firms in the UK, US and Australia are naming increasing numbers of partners in their Asian offices. Consider Londonbased international commerce stalwart Holman Fenwick Willan. In their most recent tranche of partner announcements, four out of the eight promoted attorneys hailed from the firm’s Asian outposts: two in Hong Kong, one in Singapore, and one in Shanghai. And while many other firms are not yet approaching the 50 per cent mark in their partnership announcements, it is rare today to see an international firm of any import

not elevating a number of Asian-based attorneys on a regular basis. In the last two years, London’s Clifford Chance made six new partners in its Asian offices; meanwhile earlier this year Linklaters found three of its 28 new partners in its Asian offices. While these numbers are indicative of steady growth – many London firms’ Asian partnership announcements still hover between 10 and 15% from year to year – other firms with major Asian presences such as Baker & McKenzie have been going gangbusters in ramping up their regional partner numbers. Having established its first Asian office in 1963, Bakers has something of a head start on other firms, many of which have come to the party only in the last decade or so. In 2007, the firm elevated 23 new partners across its Asian offices, bringing its then total Asian partner 11

NEWS | analysis >>

number to 275. The past year has seen a further 30 make the cut, bringing the number to 315, including both principals and local partners. “While the firm has increased its partnerships around the globe, we definitely intend on continuing this trend in Asia,” said David Jacobs, Bakers’ chairman for the Asia-Pacific region. “In Asia, we’ve increased our partner numbers in all our offices, but particularly in China, Singapore, Australia, Thailand, and Vietnam. These are both equity and non-equity partners.” “We’re very fortunate that the firm is 12

globally going very well, and as a result we’ve increased both partnerships and absolute profit numbers – so we’ve been pretty lucky. “Secondly, we’ve been fortunate in Asia in that we haven’t experienced the same effects of the sub-prime [crisis] and we’re seeing significant growth in China, Singapore, Vietnam, Thailand, and, to some extent, Australia.” Another firm that has been making major strides in the elevation of partners across the region is Australia’s Allens Arthur Robinson, which in its 1 July 2008 partnership

intake is not only elevating a number of attorneys in its Asian offices (four out of 11 partners, or 36%, versus just two Asia-based partners in last year’s intake) but is, for the first time, bringing in non-common law practising partners into its inner circle. Further signalling the seriousness of the firm’s intentions towards Asia, all four of these attorneys will be brought in as equity partners. “This is really quite an interesting time for us,” comments Allens’ Jim Dunstan, executive partner in charge of the firm’s Asian operations. “We’re bringing up a partner in an Indonesian law firm, signalling our close association with his firm (Widyawan) in Indonesia, and he’ll become an international partner. “In addition, we’ll be raising up another new partner in Cambodia, Marae Cianter – an Australian who graduated from Melbourne University – and two more partners in Singapore: David Holme, who’ll focus on Indonesia; and Robert Fish, who’ll concentrate on Singapore banking.” Along with the obvious instinct to name partners in Asia because, as the famous American bank robber Willie Sutton famously said, “because that’s where the money is”, the increasingly tight talent pool is another reason for firms to offer partnerships to their best and brightest. Just as universities used to be able to (and in America, still regularly do) offer tenure to much sought-after lecturers, partnership is a good way to reward and hold onto talent. “When I joined Lovells seven years ago, my analysis of the local talent markets was that although we were, at the time, behind the curve it wouldn’t be too hard for us to come into Asia and make up ground,” said Robert Lewis, managing partner of Lovell’s Beijing office. (Lovells’ most recent tranche of 18 partners, announced in April, included two in Asia, putting it well within the 10 to 15% band of comparable London firms). “But now, it’s going to be harder for new entrants to the market to catch up”. As more and more talents get snapped up into the lofty ranks of partner, “we’ll get to a stage where it isn’t easy to just come in and grab teams and collections of individuals,” said Lewis. ALB Asian Legal Business ISSUE 8.6

NEWS >>

UPDATE >>

ANALYSIS

Intellectual Property Discretion of the Court in Declaring a Registered Trade Mark Invalid

Shanghai one step closer to financial centre dream

n Wing Joo Loong Ginseng Hong (Singapore)Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co. Ltd and Another [2008] SGHC 51, one of the issues to be determined was whether a “Rooster” device trade mark registered for inter alia, cordyceps (the “Rooster” Mark”), was liable to be revoked or declared invalid. Section 23(1) of the Trade Marks Act (Cap. 332, 1999 Rev. Ed.) (“Act”) provides that registration of a trade mark may be declared invalid on the ground that it was registered in breach of section 7. Section 7(1)(a) of the Act (read with section 2(1)), in effect, prevents the registration of a sign which is incapable of distinguishing the goods or services of a trader from those of another. The court accepted that the “Rooster” mark had lost the capability to distinguish the 1st Defendant’s cordyceps. The issue was whether the registration must be so revoked or invalidated, or if there was discretion allowed in the matter. Whilst Justice Kan was of the view that the construction of “may” in the provision for revocation could equally be applied to the construction of “may” in section 23, he respectfully departed from the judges in three reported Singapore High Court decisions in the context of trade mark revocation – Reemtsma Cigarettenfabriken GmbH v Hugo Boss AG (No. 2) [2003] 4 SLR 155 (“Hugo Boss”), Nation Fittings (M) Sdn Bhd v Oystertec Plc and Another Suit [2006] 1 SLR 712 and Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 – which all held that there was no discretion allowed in the matter. Justice Kan first referred to section 39 of the old Trade Marks Act and the case authorities which confirmed that the power to make rectifications to the trade marks register under that section was discretionary. He also reviewed the explanatory note and the Minister’s speech during the passage of the Act through Parliament in 1998. In his view, if the change in an established position in the legislation, that is, from discretionary to mandatory, was intended in the Act, this would have been mentioned in the Minister’s speech. It was therefore held that the provisions in the Act should be construed to confer upon the Registrar of Trade Marks and the court discretion whether to revoke or invalidate a trade mark when the conditions are established.

Joyce Ang Associate Intellectual Property and Technology Group Alban Tay Mahtani & de Silva LLP Phone +65 6534 5266 Email: JoyceAng@atmdlaw.com.sg

Joyce Ang, ATMD

Investors and lawyers are reacting with excitement to Shanghai’s opening up to listings of foreign invested enterprises, as ALB reports

oreign invested enterprises (FIEs) have always been an important part of the economy, and have created significant demand for commercial and corporate legal services. In the near future, they will offer new mandates to domestic capital markets lawyers, as they are now allowed by Shanghai Stock Exchange to launch A-share IPOs. Although there have never been any official restrictions on FIEs listing on the mainland’s domestic stock exchanges, it has always been difficult for FIEs to list, due to the lack of a systemic and practicable operation guideline for FIEs to obtain fi nancing in the PRC’s securities market. Currently, there are only a few FIEs listed in Shanghai and Shenzhen, including Ningbo Dongmu, a Sino-Japan joint venture that has been the first FIE to successfully issue A shares. Each was handled as a special case and was given special support from the government. However, the Shanghai government recently made a breakthrough in the development of FIE listings by indicating that it would start to encourage FIEs to apply to the stock exchange and set up a task unit to promote the listing of FIEs in Shanghai. Asian Legal Business ISSUE 8.6

NEWS >>

In response to criticism of the slow approval process at the China Securities Regulatory Commission (CSRC), the task unit will aim to fast-track listing applications made by FIEs. “Although there’ll be no major changes to laws or regulations, this shift in government attitude is expected to make it much easier for FIEs to obtain the required approvals,” said Peter Corne, managing director of Eversheds’ Shanghai office. Corne and members of the Eversheds China Business Group recently met with representatives from the Shanghai Municipal Government Foreign Investment Commission and the Shanghai Stock Exchange to discuss FIE listing in China. “This change in government attitude is very positive and encouraging for FIEs wishing to list in [Mainland] China, and we expect to see the number of FIEs listing soar,” said Corne. “We would foresee a three- to four-year window of opportunity before the market becomes saturated and the www.legalbusinessonline.com

Chinese authorities need to put higher listing thresholds in place.” Once the FIEs listing scheme goes ahead, the pool of potential clients for capital markets groups in law firms will be greatly broadened, as there are nearly 300,000 FIEs nationwide. “The infrastructure of China’s capital markets is rapidly upgrading. The establishment of a multi-structural financing platform will drive law firms to diversify their capital markets practices,” said Charles Qin, founding partner of Llinks. “The listings of FIEs, or possibly redchip companies and foreign companies, will be a potential growth centre for our firm in 2008 and 2009,” Qin added. Martin Hu, senior partner with Boss & Young, is also actively marketing his firm’s business in FIE listings. Just a few weeks ago, Hu presented a seminar for the European Chambers of Commerce in Shanghai regarding the new financing channel for FIEs. The firm has advised a large number of overseas listings of domestic enterprises, and is set to take the lead in advising A-share listings of FIEs. “FIEs will create a whole new arena in domestic listings, and will raise new questions and challenges for legal advisors to tackle,” said Hu. “Also, the decision of whether to list in China will be an integrated part of the foreign investor’s global strategy and policy. A lot of global arrangements and strategic planning have to be done before the listing can get the go-ahead.” Most of Boss & Young’s foreign clients are from Europe and the US, but Hu expects that the first FIEs to be listed in Mainland China will be from companies in the Asian region, particularly Hong Kong, Taiwan, Japan, Korea and parts of South East Asia. “Asian groups are likely to be among the first to seize this new financing opportunity. They usually can react

quickly to new developments like this and make a decision in a timely manner. In contrast, European and American companies, especially large multinational companies, will take a longer time to make a decision,” Hu said. In addition, Hu noted that small and medium-sized FIEs owned by Asian investors generally have a greater need to access different financing tools. In the listings of FIEs on the Shanghai Stock Exchange, PRC law firms will inevitably act as lead counsel in the transactions. Yet, due to the cross-border nature of FIEs, international firms and firms from the investor’s home jurisdiction are likely to be instructed in the more complicated IPOs. “International firms can be involved significantly in the restructuring of the business of the group, setting up a company limited by shares and making it suitable for listings,” said Corne. “There’ll be a lot of work for lawyers arising out of this development.” Law firms in Korea, Japan, Singapore and Hong Kong that are trying to represent Chinese companies in their overseas listings should take note of this new development in Shanghai and start to look for opportunities to advise their clients on a Shanghai IPO. In the context of the prohibition of round-tripping, it is increasingly difficult to structure transactions involving foreign investors. The opening up to FIE listings also provides a new, legitimate and attractive exit strategy for venture capital and private equity investors. “For the first time, it creates the possibility for foreign investors to raise money locally, and reinvest or make an acquisition with [those] funds. It’s an amazing new opportunity that has an incredible impact on the way that investments are structured in [Mainland] China,” said Corne. ALB

“For the first time, [allowing FIEs to list] creates the possibility for foreign investors to raise money locally, and reinvest or make an acquisition with [those] funds. It’s an amazing new opportunity that has an incredible impact on the way investments are structured in China” PETER CORNE, EVERSHEDS 15

NEWS >>

SINGAPORE

uk report O’Melveny UK arm falling apart The senior associate and partner exodus at O’Melveny & Myers’ London office continues, with reports that office co-head Chris Ashworth is set to quit for Lovells, leaving just seven partners in the firm’s troubled City office due to underinvestment by the firm’s Los Angeles hub, a shortage of M&A work and bleak partnership prospects. Select firms announce pay freeze for associates Despite a spate of pay rises in major and Magic Circle firms – including Shearman & Sterling, Linklaters, Bird & Bird and Clifford Chance – it seems Allen & Overy, Herbert Smith and Norton Rose are refusing to play ball, confirming that they will not increase salaries for associates for the next financial year. Of the Magic Circle firms, Linklaters leads with the highest-paid newly qualified lawyers in the City, offering £80,000 a year – in comparison with Freshfields, Allen & Overy, Clifford Chance

and Herbert Smith who currently pay their newly qualifieds £66,000, £65,000 (A&O and CC), £63,500 and £64,000 respectively. Herbert Smith finally has London head After 15 years without a managing partner role, Herbert Smith has finally split the senior partner role and appointed corporate partner David Willis to step in and help senior partner David Gold run the show. While Gold will continue to act as the figurehead of the firm and will chair the LLP council, Willis will advise more on matters of global expansion. His term will last until 2010, when Gold’s current term ends. Kingston swaps Herbies for Covington partner role Covington & Burling recently nabbed Herbert Smith’s Paris head of corporate Mike Kingston for the firm’s European corporate practice in London. His appointment brings the number of City-based Covington partners to 14.

Foreign firms shy away from confirming interest in Singapore licences

otty Vivant Marchisio & Lauzeral is the only foreign firm to have confirmed an interest in applying for a Qualifying Foreign Law Firm (QFLF) licence in Singapore. Five of these licences, which allow foreign firms to practise Singapore law in commercial arbitration through their own Singapore-qualified lawyers without entering a joint legal venture, are in the process of being issued. While many firms are expected to apply for a licence, it appears their plans are staying under wraps at present. The QFLF scheme is expected to begin within 12 months. ALB

CHINA

Italian firm gets serious about Asian expansion

I ¨ ROUNDUP • City firm Norton Rose re-elected chief executive Peter Martyr for another three-year term • Ex-Hammonds partner Michael McCormack joins Salans’ City base, as the new UK head of tax • Simmons & Simmons revealed an increase in turnover of 16% and successfully reached a per equity partner target of over £600,000 for the first time, according to the firm’s financial results for 2007/08, while its head of construction, Robert Bryan, has left the firm to launch a London construction practice for Midlands firm HBJ Gateley • Ashurst is enjoying a 17% boost in turnover, taking the firm over the £300m mark with a record turnover of £323m • Norton Rose turnover is climbing. According to its 2007/08 financial results, the firm saw revenues increase by more than a quarter to near the £300m mark • Herbert Smith reports a record-breaking financial year, with a 25% surge in turnover and profits per equity partner smashing the £1m barrier

talian firm Chiomenti Studio Legale has widened its Asian reach by signing a merger deal with Birindelli & Associati. The integration gives Chiomenti a presence in Beijing, Hong Kong, Shanghai, Singapore, Hanoi and Pyongyang. “We believe that Chiomenti is the only top Italian law firm with offices in Asia,” said Filippo Modulo, head of the China desk in Rome. The deal will offer a host of inbound and outbound legal services such as M&A, banking & finance, and capital markets to both Italian and Chinese clients. ALB

• Quinn Emanuel Urquhart Oliver & Hedges poached barrister Sue Prevezer QC from the City arm of rival US firm Bingham McCutchen • Orrick Herrington & Sutcliffe boosted its City office’s restructuring capabilities with the hire of Mark Fennessy from Hunton & Williams • Roger Gregory, former head of Nabarro’s private equity team, became Brown Rudnick’s second partner hire of the year, joining the US firm’s London office last month • Henry Clinton-Davis has left WilmerHale as London head of employment to launch a UK employment team at Arnold & Porter. He joined the firm as partner in early May and will oversee the firm’s wider growth plans for London and New York

Asian Legal Business ISSUE 8.6

NEWS >>

CHINA

HONG KONG

China cross-border acquisitions on the rise …

he mining sector is leading a surge of cross-border acquisitions by China. Chinese acquisitions of foreign mining targets has reached a total of US$15.2bn so far in 2008, up from just US$248m for the same period last year. It is part of a record trend for China cross-border outbound volumes – the value of announced cross-border acquisitions is now worth almost US$25bn from 65 deals – closing in fast on 2007’s full-year volume of US$29.8bn. ALB

INDIA

he Hong Kong Corporate Counsel Association (HKCCA) has launched a corporate membership scheme to make it more cost effective for corporations with larger numbers of lawyers to enrol all their lawyers together. The scheme is open to all companies, subject to a minimum subscription of HK$1,500. In the first few weeks of the scheme, over 60 lawyers have joined. The HKCCA was formed in 2003 with the purpose of establishing a body for in-house counsel, run by in-house counsel. Its activities include CPD seminars and conferences, social events, serving as advocates for the in-house community and forging links with international in-house counsel communities. ALB

… but India cross-border M&A on the wane

ndia cross-border acquisitions are in decline – and by no small margin. The latest statistics show a 39% drop so far this year on the corresponding period last year. Ironically, the news comes only a month after the largest cross-border Indian acquisition so far this year – the US$2.3bn acquisition of Land Rover and Jaguar by Mumbai-based multinational Tata Motors. The deal was a boon to local and international firms alike, including Allen & Overy, that advised on the international aspects of the deal, and AZB and Rodyk & Davidson, that advised on Indian and Singaporean law respectively. Big deals mean big business for firms and the Indian M&A stats might be getting a big boost soon. Bharti Airtel,

India’s largest telecommunications company, has been widely reported to be in pursuit of South African MTN. The deal, if successful, could become the largest cross-border acquisition by an Indian firm on record, with sources estimating the deal to be potentially worth up to US$20bn. ALB

INDIA cross-border M&A volumes ► TOTAL OUTBOUND Rank date Same period 2003 Same period 2004 Same period 2005 Same period 2006 Same period 2007 Same period 2008 YOY growth

Rank value (US$m) 233 244 182 2,445 11,215 6,827 -39%

Number of deals 28 29 32 74 68 109 –

Source: Thomson Financial

REGION

EAPD prepares to open Asian offices

eals in Asia have prompted Edwards Angell Palmer & Dodge (EAPD) to include Tokyo and Hong Kong in its five-year expansion plans. Walter Reed, EAPD’s new managing partner, said the planned offices would service a growing international client base. The plans include new

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offices in California and Chicago, and diversification of the firm’s practices in London and Washington, DC. The firm recently advised Takeda, Japan’s largest pharmaceutical company, in its US$8.8bn acquisition of Nasdaq-listed Millennium Pharmaceuticals, Inc through a cash tender offer. ALB

NEWS >>

us report Skadden selects future executive partner Skadden, Arps, Slate, Meagher & Flom has announced it will have a new executive partner come April 2009, when M&A partner Eric J Friedman succeeds Robert C Sheehan in the firm’s top leadership role. Davis Polk & Wardwell instigates British management first For the first time, New York giant Davis Polk & Wardwell has elected a British partner on its most senior management board, with London-based partner Tom Reid due to join the firm’s threemember management committee for a three-year term. He joins managing partner John Ettinger and litigation partner Carey Dunne, both of whom were re-elected to the committee. Shearman & Sterling cuts global GC role Shearman & Sterling has scrapped its global general counsel role as part of a major reorganisation. John Shutkin’s general counsel and risk management role will be absorbed by a number of partners globally, with New York arbitration partner Henry Weisburg overseeing the function following Shutkin’s departure in June.

K&L Gates and Kennedy Covington to join forces Kirkpatrick & Lockhart Preston Gates Ellis and Kennedy Covington Lobdell & Hickman, from Charlotte, North Carolina, are in merger discussions. If all goes to plan, the merger will be completed by July, resulting in a 1,700-lawyer firm with 28 offices located in the US, Europe and Asia. New chairman on the horizon for Paul Weiss Paul, Weiss, Rifkind, Wharton & Garrison has confirmed that Brad S Karp, currently co-chair of Paul Weiss’ litigation department and a member of the firm’s management committee, will take the helm as chairman come January, succeeding Alfred D Youngwood who will retire at the end of the year. Debevoise & Plimpton promotes five in NYC The latest round of promotions from Debevoise & Plimpton has seen five lawyers from the firm’s corporate and litigation departments make partnership in New York. Erica Berthou, Jordan Murray and Nicole Levin Mesard were all promoted in the corporate department while Catherine Amirfar and Sean Hecker were promoted in the litigation group.

¨ ROUNDUP • Covington & Burling scooped a seven-lawyer private equity team for their New York office from O’Melveny & Myers, including former investment funds practice co-head Timothy Clark • Clyde & Co has closed the doors on its Los Angeles office to launch in San Francisco, following a raid on US firm Duane Morris for a 10-lawyer litigation team • New York partner for Shearman & Sterling Fred Sosnick is set to take up a newly created role as management team co-ordinator to oversee the development of five key areas, following the recent restructure and reduction of the management team at the firm • Morrison & Foerster has finally closed its struggling Orange County office following the departure of both its office leader and another partner to Manatt, Phelps & Phillips • Peter Brown, the ‘Brown’ in Thelen Reid Brown Raysman & Steiner, will wave goodbye to the firm’s New York office when he leaves for Baker & Hostetler • King & Spalding has opened an office in Austin. Robert Meadow, managing partner at the firm’s 103-lawyer office in Houston, will also head up the firm’s newest office • National workplace law firm Jackson Lewis, based in White Plains, New York, has opened its third Florida location with a new office in Jacksonville, Florida, bringing its lawyer count to 470 attorneys in 36 cities • Major firm Weil, Gotshal & Manges is opening an office in downtown Brooklyn, relocating staff members from its finance, operations, and IT departments to 35,000 square feet of new space at 15 MetroTech Center

INDIA

Health check for Indian judiciary, legal profession

ow are we travelling? That’s the question the Bar Council of India (BCI) is posing to its members as it conducts a nationwide survey of lawyers to find out what they really think of the state of the profession and the judiciary. The judiciary questions focus on the transparency (or lack thereof) of judicial appointments and the perceptions of nepotism, referred to as ‘uncle judges’ in bar parlance. “Hopefully, this effort of the BCI will help enhance transparency and accountability of the judges,” said Saurabh Misra, associate partner of Paras Kuhad & Associates. “However, it would have been better if the litigants were also asked to give their feedback and suggestions.” The questions relating to the profession raise a few controversial issues, including the re-introduction of a bar examination and the old concern of allowing foreign law firms to enter the Indian market. The Bar Council is also canvassing the issue of whether part-time lawyers should be permitted. “I’ll not be surprised if the lawyers in India, like the BCI, oppose the entry of foreign law firms and the reintroduction of the bar examination,” said Misra. Asian Legal Business ISSUE 8.6

NEWS >>

“However, the re-introduction of the bar examination would improve the quality of the profession,” he continued. Misra also favours the opening up of the Indian market. “The entry of foreign law firms in India will impact merely 5–10% of law practice and in doing so will enrich and enhance the capabilities of corporate lawyers as well as the budding crop of lawyers in India,” he said. ALB

MALAYSIA

Malaysian merger announced

alaysian firm Azmi & Associates has announced a merger with rival firm Illiayas. The merged entity, which will operate under the name Azmi & Associates, intends to have an international outlook and to serve local, regional and international clients. ALB

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UNITED STATES

Record results for US firms A

s US firms ponder their prospects in less prosperous times, there has been a reminder of just how good the ‘good old days’ of 2007 really were. American Lawyer’s Top 100 feature has revealed record profits for firms in 2007, with the top 100 as a group growing turnover by nearly 14%. Measured in revenue terms, the top US firm was Skadden Arps, followed by Latham & Watkins and Baker & McKenzie. The top two firms each achieved revenue in excess of US$2bn. In terms of profitability, Wachtell, Lipton, Rosen & Katz is the place to be – especially if you happen to be a partner. Wachtell Lipton achieved an impressive US$4.95m profit per equity partner, making it the most profitable firm in the US by a long margin. In second place was Cravath, Swaine & Moore with US$3.3m per partner and in third place was Sullivan & Cromwell with US$3.06m.

A five-year run of remarkable growth for US firms has been capped off by 2007, which saw profit per equity partner for the top 100 more than double to an average of US$1.3m. ALB

Top 10 US firms 2007 by revenue Rank

Firm

Revenue ($USbn)

Skadden, Arps, Slate, Meagher & Flom

2.17

Latham & Watkins

2.01

Baker & McKenzie

1.83

Jones Day

1.44

Sidley Austin

1.39

White & Case

1.37

Kirkland & Ellis

1.31

Greenberg Traurig

1.20

Mayer Brown

1.18

Weil Gotshal Manges

1.17

Source: The American Lawyer

NEWS >>

MIDDLE EAST

UPDATE >>

International Arbitration ALB has invited both Drew & Napier LLC, International Arbitration Firm of the Year winner at the 2007 ALB SE Asia Law Awards, and Professor Steve Ngo to participate in a project to contribute 12 articles to ALB magazine on topical issues in international arbitration.

elcome to the new series on international arbitration. In this first instalment, let’s reflect on the growth and development of Singapore’s arbitration industry. Remembering the words of Lord Donaldson, it was said that ‘arbitrators and judges are in the business of dispensing justice; the judge in the public sector, the arbitrator in the private sector’, aptly called “the privatisation of justice”. While the concept of arbitration is very old, the present framework of a formal regulation dates back more than a hundred years in England. In the last three decades, it has transfigured from a meagre form of alternative dispute resolution into an integral route for international business dispute resolution, forced by globalisation and rapid growth of international trade. Since 1990, there has been much development locally. The first formal initiative was the Attorney-General’s formation of a committee in 1991 to examine the existing arbitration laws, followed by the Law Reform Committee’s SubCommittee review of the laws in 1993. Next, Singapore’s Economic Development Board introduced several initiatives arising from the business development exercise it undertook. In terms of legal infrastructure, Singapore enacted the International Arbitration Act in 1995 and a ‘domestic’ Arbitration Act in 2001. The latter is a combination of the UNCITRAL Model Law and English Arbitration Act of 1996. Instead of a wholesale adoption of an English Statute, it combines with an international convention statute, but has also stayed internationally competitive. While we have not sent anyone to space, our law undergraduates have certainly clinched prizes at the “Willem C. Vis” international arbitration moot competition year after year. Arbitration in Singapore is incomplete without mentioning the Singapore International Arbitration Centre, established in 1991. Much credit for its success goes to its Deputy Chairman, Lawrence Boo. Today, SIAC speaks the language of “Singapore Inc” to go global and internationalise. In 2004, SIAC established collaboration with the Indian Construction Industry Development Council and in 2006, a cooperation with the International Centre for Dispute Resolution. Singapore is also opening up to the international arbitration arena. Important names such as the ICC International Court of Arbitration and the Permanent Court of Arbitration have been associated with Singapore recently. Additionally, by 2009, a dedicated and integrated arbitration complex will house all international arbitral centres in a conducive and neutral setting. In the next issue, I will discuss the attractive incentives dished Prof. Steve K. Ngo out by the Government for the sector, as well as look at what the next 20 years hold for the industry.

Clyde & Co strengthens Middle-East presence

nternational firm Clyde & Co, a long-time Middle East player, has announced five new partners for its Middle East operations, bringing its total number of partners in the region to 19. This is part of an ambitious growth strategy – the firm plans to increase its partner count from 19 to 25 and recruit a further 50 associates within the next 12 months. The firm has offices in Dubai and Abu Dhabi in the UAE, and in Doha, Qatar. ALB

Prof. Steve K. Ngo is the Deputy Secretary-General of Trisakti Arbitration Institute, Trisakti University Law School and the Western Australian Institute of Dispute Management at the Murdoch University School of Law. He is an educator, consultant, arbitration practitioner and thinker. He does not hold himself out to practice Singapore laws. For feedback, he can be contacted at stevekngo@singnet.com.sg Mr Jimmy Yim, S.C., is the Managing Director of Drew & Napier LLC’s Litigation and Dispute Resolution Department. Consistently rated top tier in dispute resolution by international ranking organisations, Drew & Napier is one of Singapore’s leading and largest law firms. Mr Yim can be contacted at +65 6531 2505 or jimmy.yim@drewnapier.com

Mr Jimmy Yim, S.C

Asian Legal Business ISSUE 8.6

NEWS >>

CHINA

UPDATE >>

Chinese trademark filings increase

International Tax

or the seventh straight year, Chinabased companies have increased the number of new filings for trademarks in the US. A Dechert report reveals Chinese companies filed 1,750 applications with the US Patent and Trademark Office in 2007, more than three times the amount in 2003. Japan led its regional neighbours with 2,920 new filings in 2007, down from 3,040 in 2006. After China, South Korea and Taiwan registered about 1,000 new filings each. The Chinese trademark applications were for luggage, electrical wiring, tools, kitchen accessories, clothing, engine parts, hotels and restaurants. The report also noted that Chinese companies are filing trademark applications for their own homegrown brands, rather than adopting a more American-friendly name. Examples include luggage brand “Kongzhongniao”, which translates to “a bird is in the air”, and electrical wiring brand “Wuhandianzianerchang”, which means “flying crane”. ALB US trademark applications filed by China, Japan, Taiwan, South Korea 2000–07 ► FILINGS BY APPLICANTS FROM CHINA Year

2000

2001

2002

2003

2004

2005

2006

2007

New filings

320

340

420

510

910

1,150

1,420

1,750

Change over prior year

23%

21%

79%

26%

24%

23%

► FILINGS BY APPLICANTS FROM JAPAN Year

2000

2001

2002

2003

2004

2005

2006

2007

New filings

3,050

4,530

2,750

2,910

3,230

2,950

3,040

2,920

Change over prior year

48%

(39%)

11%

(9%)

(4%)

► FILINGS BY APPLICANTS FROM TAIWAN Year

2000

2001

2002

2003

2004

2005

2006

2007

New filings

1,090

990

1,010

1,130

1,120

1,070

1,160

1,020

Change over prior year

(9%)

12%

(1%)

(4%)

(12%)

2004

2005

2006

2007

► FILINGS BY APPLICANTS FROM SOUTH KOREA Year

2000

2001

2002

2003

New filings

730

660

650

490

690

820

1,090

Change over prior year

(9%)

(1%)

(25%)

40%

18%

33%

Source: Dechert

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The Australian Budget Highlights The Australian Treasurer, Wayne Swan, handed down the first Rudd Government budget on 13 May 2008. It contained a package of tax relief measures designed to help families with education, child care and other living expenses, while means testing a range of benefits. • The government has announced the terms of reference for a comprehensive review of Australia’s tax system. • Previously announced personal income tax rates will go ahead, as follows: The current proposed personal Tax Rates for 2008 and thresholds for resident individuals (excluding the 1.5% Medicare levy) are: Taxable Income ($) 0 – 6,000 6,000 – 34,000 34,001 – 80,000 80,001 – 180,000 180,001+

Taxable Pay ($) Nil Nil + 15% of excess over 6,000 4,200 + 30% of excess over 34,000 (up from 30,001) 18,000 + 40% of excess over 80,000 58,000 + 45% of excess over 180,000

Families and individuals • A 50% education tax refund will be available for eligible education expenses from 1 July 2008. • The proposed first home saver accounts scheme has been modified to allow individuals to contribute up to $75,000 into their first home saver account. • The child care tax rebate for out-of-pocket child care expenses will increase from 30% to 50% from 1 July 2008, with the maximum out-of-pocket expenses claimable increasing from $4,354 to $7,500 per child per year. • Medicare levy surcharge thresholds and low income thresholds will be increased. • From 1 July 2008, an income threshold of $150,000 will apply to dependency tax offsets. • From 1 July 2008, the Baby Bonus will increase from $4,258 to $5,000 and from 1 January 2009, eligibility for the Baby Bonus will be limited to families with an adjusted taxable income of $150,000. • Eligibility for Family Tax Benefit Part B will be limited to families whose primary income earner earns $150,000 or less a year. • A tax-exempt one-off bonus payment of $500 will be provided to older Australians. • The scope for family trusts to utilise tax losses to lower income tax will be reduced. • The Commonwealth senior’s health card income test will now apply to certain superannuation stream income and salary sacrificed amounts. Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 4708, The Center, 99 Queen’s Road, Central, 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.

Debbie Annells

NEWS | appointments >>

► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Simon Briscoe

Norton Rose

Clifford Chance

Asset finance

Singapore

Scott Calver

Watson, Farley & Williams

Lovells

Corporate

Singapore

Yukihiro Terazawa

O’Melveny & Myers

Morrison & Foerster

IP, entertainment law

Tokyo

Melanie Williams

Norton Rose

Ashurst

Energy, project finance

Singapore

▲ PROMOTIONS Firm

Name

Location

Holman Fenwick Willan

Chris Chan

Partner

Hong Kong

Holman Fenwick Willan

Nicholas Poynder

Partner

Shanghai

Holman Fenwick Willan

Barry Stimpson

Partner

Singapore

Holman Fenwick Willan

Steven Wise

Partner

Hong Kong

Kennedys

Christine Tsang

Partner

Hong Kong

Watson, Farley & Williams

Damian Adams

Partner

Singapore

Watson, Farley & Williams

Ratthakarn Boonnua

Partner

Bangkok

Weil, Gotshal & Manges

Kevin Ban

Partner

Shanghai

Weil, Gotshal & Manges

Anthony Wang

Partner

Shanghai

Norton Rose

Clifford Chance

Aviation expert books flight to Clifford Chance Clifford Chance has continued to build its Singapore practice with the addition of Simon Briscoe, formerly of Norton Rose. Briscoe will join the firm’s asset finance team and will head up the Asian aviation practice. The firm has Joseph devoted considerable energy to Tisuthiwongse its Asian operations, recently establishing an India practice based out of its Singapore office – a move which will only bolster Singapore’s reputation as the gateway to India. There have also been a couple of key relocations on the projects and finance front at Clifford Chance. Project finance specialist Joseph Tisuthiwongse is returning to the firm’s Bangkok office as consultant after three years in the US, while energy and infrastructure partner Geraint Hughes will relocate to Hong Kong in June. “The next wave of infrastructure, energy and transport projects is being unveiled around Asia, replacing older facilities and catering for increased demand,” said Huw Jenkins, Asia head of finance, Clifford Chance. “We are ensuring that our team has the right people in place to cope with the work anticipated in the years ahead.”

New role

practising with Morrison & Foerster’s Japanese joint venture partner, Ito & Mitomi. Morrison & Foerster was one of the first international law firms to be licensed in Japan, opening its Tokyo office in 1987. The firm’s Tokyo office, led by the energised and energising Ken Siegel, is today in the top 10 of Japan’s largest law offices. The firm frequently works with Ito & Mitomi when advising on multijurisdictional transactions. Kennedys

Kennedys appoints new partner Healthcare and professional services expert Christine Tsang has been appointed as a partner at Kennedys Hong Kong. Tsang has extensive experience in areas such as medical malpractice and professional indemnity claims, Christine Tsang and is currently an honorary legal adviser for the Hong Kong Medical Association. Norton Rose

Ashurst

Ashurst gains energy expert

Another firm which has been shopping at Norton Rose is Ashurst, which has appointed Melanie Williams as counsel in its Singapore office. Williams, who specialises in energy projects and project financing. was previously with Norton Rose’s projects and banking team in Singapore.

Holman Fenwick Willan

Big Asia focus for Holman Fenwick Willan British shipping specialist firm Holman Fenwick Willan has revealed its new partner appointments – and half of them are Asia based. They are Nicholas Poynder of the Shanghai office, Chris Chan and Steven Wise of the Hong Kong office, and Barry Stimpson of the Singapore office. Following a growing trend, particularly for UK firms, the firm has also made an appointment to what it describes as a “partner-equivalent position”. Kaare Langeland takes up the position of “senior manager” at the firm’s London office. In an era in which movements of senior lawyers between firms are all the more common, it is worth noting that half of HFW’s new partners trained and developed their careers at the firm.

O’Melveny & Myers

Weil, Gotshal & Manges

Weil Gotshal continues Asia growth with two new partners New York-based firm Weil, Gotshal & Manges has announced the promotion of Kevin Ban and Anthony Wang, both in the firm’s Shanghai office, to partnership. Both attorneys focus on cross-border private equity and M&A transactions, and are fluent Mandarin speakers. The promotion marks a continued expansion for Weil Gotshal in Asia. The firm opened its Shanghai office in 2004, its Hong Kong office in 2007 and expects to open a Beijing office in 2008. The firm has over 20 lawyers in Asia, focusing on both in-bound and out-bound deals for private equity firms and multinational corporates.

Morrison & Foerster

WFW

Entertainment expert distracted by Morrison & Foerster Japan-based intellectual property attorney (bengoshi) and former O’Melveny & Myers partner Yukihiro Terazawa has joined Morrison & Foerster. However, Terazawa will be

Yukihiro Terazawa

Lovells

Watson, Farley & Williams loses senior corporate lawyer to Lovells … Scott Calver, former head of corporate department at the Bangkok office of Watson, Farley & Williams, has joined the Singapore practice of Lovells. Calver’s areas of expertise include corporate and capital markets transactional and regulatory compliance work. asian legal business ISSUE 8.6

NEWS | appointments >>

Watson Farley & Williams

… but gains two new Asia partners Watson, Farley & Williams has announced nine promotions to partnership worldwide, with two based in Asia. They are Damian Adams, of the International Corporate Group in Singapore, and Ratthakarn Boonnua, of the International Litigation Group in Bangkok. Various

Broad & Bright

Broad & Bright to boost corporate work Beijing-headquartered Broad & Bright has appointed John Chu, former head of legal at General Motors in Beijing, and Lawrence Guo, previously a senior associate with Freshfields Bruckhaus Deringer in Beijing, as partners. The firm now has nine partners John Chu in total. Both new partners have extensive experience in handling foreign investment and corporate matters, and are set to give a boost to the firm’s expertise in corporate practices. Lehman, Lee & Xu

Grandall

Grandall adds one in Beijing Gregory Sy has joined Grandall Legal Group in Beijing as a partner and foreign counsel from Lehman, Lee & Xu. His practice includes general business advisory for SME businesses in China, particularly in the areas of international corporate structuring and transactions. He has represented clients such as the Consulate of the United States of America in China, the Embassy of Brazil, various publicly listed companies, along with numerous SMEs operating in a wide range of industries. Sy is admitted to the New York Bar.

TDK China

Otsuka China

Otsuka China hires head of legal from TDK The former legal manager at TDK’s Greater China regional headquarters in Shanghai, Daniel Zhang, has decided to head the in-house legal team at Otsuka (China) Investment. Fully owned Daniel Zhang by Japan Otsuka Pharmaceutical, Otsuka (China) Investment is responsible for investing and managing Otsuka’s invested enterprises in China. “The pharmaceutical industry in China is significantly growing. As [one of the] top five pharmaceutical companies in Japan, Otsuka China will create an increasing amount of challenging and diverse legal work for its in-house legal team,” said Zhang. www.asianlegalonline.com

010 0 010 0111010 01101010 0101010 0101011 01010111010111010 0 01011010 0110101010 1001 0100010011101001101010010101001 IT report 0101101010111010111010 0 01011010 01101 Blackberry and iPhone updates on horizon In news this week to excite those tied to their mobile e-mail, RIM, the BlackBerry company, has announced its next-generation device, dubbed “BlackBerry Bold”. The new handset features 3G mobile capabilities, wifi (802.11 a/b/g) and Bluetooth connectivity, a half-VGA (480x320 resolution) colour LCD, built-in GPS and a 2 megapixel camera. For those looking to use their BlackBerry as a music player, the device also allows the addition of an SD card and software to sync your iTunes play lists. With such impressive specs, the only real competition in that space is likely to come from Apple’s iPhone. Vodafone and Singtel (Optus etc) have already announced that they will be carrying the device and the rumour mill is rife with stories of a 3G version. Now lawyers will just have to convince their IT departments to support it. Industry musical chairs Job-hopping has been a feature of the legal IT world over the past month. In Australia, Paul Wyatt joins the ranks of those moving on from LexisNexis Visualfiles. His new role is BDM for NSW with Law In Order, which specialises in litigation document management, e-discovery and document copying and scanning. On the international front, Kaye Sycamore, one of the founders of Keystone (now Aderant), has resigned from her role as vice president international at Thomson Elite. Sycamore is off to join start-up Chrome River with fellow Elite alumni Alan Rich, Dave Terry and Anne Becknell. Chrome River (www.chromeriver.com) looks interesting. It’s a law firm-orientated expense reporting system, utilising the still emerging (at least for law firms) model of software as a service. We really like the way their products page has customised pitches for CFOs, CTOs, managing partners, lawyers, practice group leaders and others.

Microsoft release XP SP For the law firms still using Windows XP (that’s almost everyone), Microsoft has released Service Pack 3 as an automated download. As with any of Microsoft’s service packs, it’s probably worth waiting a few months until the not insubstantial bugs are ironed out. The most significant appears to be an issue where systems are going into an eternal reboot cycle. From the discussions on the web, the issue appears to be related to AMD processors although Microsoft is yet to issue an official statement on the matter. New practice management player Clickone, a new practice management product, has quietly slipped into the Australian market (www. clickone.com.au). The software, which appears to be aimed at small to medium-sized law firms, claims to be able to provide time recording, trust accounting, billing, contacts management and matter management. A little digging on the domain name reveals that the business is owned by J Cheng and B Janowski, both partners at Australian firm Berrigan Doube Lawyers. It will be interesting to see how the product fares or whether it will simply be sucked into the LexisNexis vortex like everything else. DocsCorp partners with DocAuto Australia-based firm DocsCorp has continued its impressive foray into the international market with the announcement of an alliance with similarly branded US firm DocAuto. DocAuto is primarily known for its Interwoven Worksite plug-ins to enable “matter-centric” work, but had also previously developed a PDF application, MakePDF. The deal means that DocAuto will discontinue development of MakePDF, with current users being offered special pricing to migrate to the DocsCorp product, pdfDocs. With DocAuto’s client base of over 300 law firms, the move will give DocsCorp access to an even greater chunk of the US market. Chris McLean is an IT specialist, former lawyer and currently director of information management at Sparke Helmore. E-mail chris.mclean@sparke.com.au

NEWS | regional update >>

Regional updates

CHINA

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

Draft Implementing Regulations for the PRC Labor Contract Law Close Possible Loophole On May 8, 2008, the Legislative Affairs Office of the State Council issued the Draft Implementing Regulations for the PRC Labor Contract Law (the “Draft Regulations”) for public comment. This article focuses on the Draft Regulations’ attempt to close certain loopholes in the PRC Labor Contract Law (the “Labor Law”) that may allow an employer to avoid circumstances in which an indefinite term labor contract must be put into place with its employee. Indefinite term labor contracts do not have an expiry date and will continue to be in force until they are terminated by the employer, the employee or by operation of law. Because indefinite term contracts cannot be terminated generally unless for reasons that are specifically permitted under the Labor Law, these contracts are generally not favored. Employers prefer fixed term contracts with shorter terms that terminate on the expiry date set out in the contract. The Labor Law acts out situations in which an indefinite term labor contract must be put into place in order to prevent the avoidance of the requirements. For example, when an employer and an employee have entered into a fixed term labor contract for two successive terms, the third successive contract will be deemed as an indefinite term labor contract unless the employee requests for a fixed term labor contract. In addition, when an employee has worked for an employer continuously for 10 years or more, an indefinite term labor contract should be executed unless the employee requests for a fixed term labor contract. The Labor Law is ambiguous as to whether an employer can avoid

entering into an indefinite term labor contract by terminating an existing employment relationship and creating a new employment relationship with the same employee through corporate restructuring. The Draft Regulations clarify this issue somewhat and state that if an employee moves to a new employer because of administrative orders, corporate plans or other reasons not caused by the employee, the employee’s seniority with his/her old employer will count towards the 10 year period for the creation of a fixed term labor contract. This will prevent an employer from moving its employee to an affiliate to reset the clock for the 10 year period. The Draft Regulations are unclear as to whether an employee’s existing seniority will count towards the 10 year period if the employee’s employment relationship is terminated and then recreated with the same employer, but the answer will likely be yes under the final version of the Draft Regulations, as a termination and recreation of employment relationship with the same employer is a more blatant violation of the policy objective behind the PRC Labor Law. While the Draft Regulations are still subject to further comments and changes, the policy objective of the PRC legislators is clear – to protect employees’ entitlement to indefinite term labor contracts and limit the ability of employers to circumvent this entitlement. Written by Jeanette Chan, partner David Lee, associate Paul, Weiss, Rifkind, Wharton & Garrison For more information please contact: Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Jeanette K. Chan, partner Email: jchan@paulweiss.com Ph: (8621) 5828-6300 or (852) 2536-9933

Asian Legal Business ISSUE 8.6

NEWS | regional update >>

PHILIPPINES

Guidelines for Entering into Joint Venture Agreements between Government and Private Entities Approved The National Economic Development Authority (NEDA) has issued Guidelines and Procedures for Entering Into Joint Venture (JV) Agreements between Government and Private Entities. The Guidelines, which will take effect on May 2, 2008, were promulgated pursuant to the mandate given to NEDA under Section 8 of Executive Order No. 423, dated April 30, 2005. The Guidelines apply to all government-owned and/or controlled corporations (GOCCs), government corporate entities (GCEs), government instrumentalities with corporate powers (GICPs), government financial institutions (GFIs) and state universities and colleges (SUCs) which are expressly authorized by law or their respective charters to enter into joint venture agreements. However, Local Government Units (LGUs) are not covered by the Guidelines, as well as transactions of government financial institutions (GFIs) in the ordinary course of business as part of their normal and ordinary banking, financial or portfolio management operations. Activities covered under the joint venture agreements must be directly related to the primary corporate purpose, mandate or charter of the government entity. More importantly, the joint venture should not crowd out private sector initiative in the particular industry. Full freedom is accorded the government entity with respect to the extent and duration of its participation in the joint venture. The Guidelines expressly provide that there are to be no barriers for the government’s withdrawal of its contribution to the www.legalbusinessonline.com

joint venture. In this regard, the mobility of government entities is enhanced and protected with respect to their participation in joint venture agreements entered into with the private sector. As such, the private sector is then allowed to completely take over the project once the government entity divests itself of its investment in the joint venture, setting it apart from the other modes of procurement, where control and ownership ultimately belongs to the government. A win-win situation for all parties is envisioned under the Guidelines. On the one hand, the government entity enjoys the freedom to enter into such agreements to accomplish national development goals and objectives, at the same time enjoying returns on its investment, without being compelled to remain in such an arrangement (having full discretion when and if to divest itself of its participation in the same). On the part of the private entity, not only can it maximize its profits, it is also free to control the direction of the project upon the government entity’s withdrawal from the venture. In formulating the Guidelines, the NEDA has taken into account the objectives of the administration to promote transparency in such transactions as well as to encourage the pooling of resources and expertise between the public and private sector. The passage and adoption of the Guidelines by the NEDA is expected to further a fruitful and viable collaboration between government and the private sector in the attainment of national development objectives. Written by Liza Michelle E. Ramos SYCIP SALAZAR HERNANDEZ AND GATMAITAN SSHG Law Centre, 105 Paseo de Roxas Makati City, Manila, Philippines Tel: +63-2-817-98-11 Fax: +63-2-817-38-96 E-mail: sshg@syciplaw.com, syciplaw@ globenet.com.ph Website: www.syciplaw.com

MALAYSIA

Developments in Companies Law The Companies (Amendment) Act 2007 (“CAA”) which came into operation on 15 August 2007, brought some welcomed changes to the Companies Act 1965 (“CA”). Chief among this is the deletion of Section 132G which generally prevented a company (“Acquirer”) from entering into any arrangement or transaction to acquire the shares or assets of another company (“Target Company”) in which a shareholder or director of the Acquirer or a person connected to such shareholder or director (“Relevant Person(s)’), has a substantial shareholding, unless the arrangement or transaction was entered into 3 years after the Relevant Person(s) first held shares in the Target Company or after the assets were first acquired by the Target Company. Although the intention of Section 132G was to prevent any abuse which may arise due to the Relevant Person(s)’ interest in the Target Company, it also had the effect of stifling legitimate transactions since not even the shareholders’ approval in a general meeting could save such transactions. Notwithstanding the deletion of Section 132G, the safeguards against the abuse which Section 132G was aimed at can be found in other provisions in the CA such as Sections 131 and 132C. Section 131 requires a director of a company who is interested in a contract or proposed contract with the company, to disclose his interest. This could arguably include a situation where the director has a substantial shareholding in the other contracting corporation. Section 131A (which was incorporated by the CAA), further requires an interested director to abstain from voting on such contract or proposed contract. Section 132C

NEWS | regional update >>

requires the company’s approval in a general meeting for arrangements or transactions involving the acquisition of an undertaking or property of a substantial value by the company or the disposal of a substantial portion of the company’s undertaking or property. With these changes, the minority shareholders’ interest is still protected without unduly hindering the company’s ability to undertake legitimate transactions. Written by Ng Pek Wan Ng Pek Wan Senior Associate of Corporate & Commercial Practice Tel: + 603 -2050 1888 DID: + 603 -2050 1968 Fax: +603- 2031 8618 pekwan.ng@taypartners.com.my

SINGAPORE

Singapore Exchange opens Beijing representative office Singapore Exchange Limited (SGX) on April 18 announced the official of its Beijing representative office, which helps to attract more China listing and increase the profile of SGX. Having a physical presence in the country will help to meet the goal of enhancing the ability to meet the funding needs of Chinese companies. The Chairman of SGX, Mr J Y Pillay, believes that this representative office will contribute to the continued strengthening of ties between SGX and the regulatory authorities as well as the business community in China, leading to reciprocal benefit. The new representative office is located in the Excel Centre, in Beijing’s financial district. The new office is headed by Mr Lloyd Loh, who has been the point man for the SGX’s business in China since 2006. His objectives as

the chief representative will be to gain a better understanding of Chinese investors’ needs, such as those of QDII funds, and to deepen the SGX’s appreciation of the Chinese capital market and fund-raising needs of Chinese enterprises. For more details of the new office, please visit the SGX website (www.sgx.com). The market of PRC is today one of the world’s most important markets for all countries, and it will continue to provide listing opportunities. The China Securities Regulatory Commission ruled in July last year to allow overseas exchanges to set up representative offices in China, but the SGX has been actively marketing itself to Chinese companies since the early 1990s. Many Chinese companies expanding beyond their domestic market have chosen Singapore as their springboard to the region by listing on the Singapore exchange. As of 31 March 2008, SGX has a total of 141 China companies which represent 13 per cent of the total number of the exchange listed with a total market capitalisation of S$45.1 billion. The list includes Yanlord Land Group, a developer of high-end residential properties in China, and CapitaRetail China Trust, the world’s largest China real estate investment trust. Written by Ms Eng Hui Ting & Ms Chen Shu Ms Eng Hui Ting Corporate Finance Executive Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg and Ms Chen Shu Legal Executive, Corporate Practice Ph: (65) 6322-2230 Fax: (65) 6534-0833 E-mail: chenshu@loopartners.com.sg Loo & Partners 88 Amoy Street, Level Three Singapore 069907

INDIA

Customs recordation of Intellectual Property Rights in India India is in the final phase of compliance to the obligations under the WTO treaty on Trade Related Aspects of Intellectual Property Rights (TRIPS) and recently implemented the guidelines for border protection for infringing goods under “Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007”. While the mandatory obligations under Articles 51 to 60 of the TRIPS dealing with border measures are restricted to Copyright and Trade Marks infringement only, the said Rules deal with Patents, Designs and Geographical Indications violations as well, in conformity with the practice prevailing in some other countries, notably EU countries. The said Rules, inter alia, provide for the filing of a notice by the right holder; (ii) registration of said notice by the Customs; (iii) a time limit for right holders to join proceedings; (iv) a single point for registration of the notice filed by the right holder; (v) adequate protection to the rightful importer; (vi) adequate protection to the Customs for bonafide act; (vii) suo-moto action by the Customs in specified circumstances; (viii) disposal of the confiscated goods. (ix) no action against goods of non commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer. (i)

The right holders are required to give a notice for registration to any one of the Commissioners of Customs at the ports where counterfeit goods are likely to be Asian Legal Business ISSUE 8.6

NEWS | regional update >>

imported infringing the IPR in respect of any trademark, copyright, patent, design or geographical indication. The grant of registration by Customs is subject to the execution of a bond, along with surety and security by the right holder undertaking to protect the importer, consignee, the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or the disposal of the infringing goods. The registration is also subject to execution of an indemnity bond by the right holder indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods. Registration of an IP Right may be granted for a minimum period of one year unless the right holder wants the same for a lesser period and for a maximum of five years; lapse whereupon a fresh registration may be obtained.

www.legalbusinessonline.com

With the above, India is finally meeting its obligations under the TRIPS Agreement and also ensuring to provide a conducive environment for protection of Intellectual Property Rights. Written by Sumita Singh Singh & Associates N-30, Malviya Nagar New Delhi-110017 INDIA Phone: +91-11-26680927, +91-11-26687993, +91-11-26680331 Fax: +91-11-26682883 website: www.singhassociates.in

FEATURE | ALB 50 >>

THE

ALB

A SI A’S L ARGES T L AW FI RMS China remains the keystone of the region, but dynamic younger players are nipping at its heels ► ASIA’S 50 LARGEST FIRMS BY COUNTRY

ere Frank Sinatra still alive, it is doubtful that he would have chosen to sing about 2007 as having been “a very good year”. To be fair, it was no annus horribilis. Yet last year was also the first time in recent memory when the world saw wobbles in the global economy in the form of the sub-prime mortgage meltdown in the US, rising oil prices out of the Middle East, and in countries such as Australia the distant but increasingly real spectre of ‘stagflation’ – that unenviable vicious cycle of rises in inflation, interest rates and unemployment. Against this backdrop, then, it is fascinating to watch the maturation of Asia’s legal and financial markets which have so far escaped the worst impacts of the global credit crunch. According to a report by Merrill Lynch’s TJ Bond, Asian markets, and especially those of China, are likely to remain largely unaffected, thanks in no small part to their happy isolation from more turbulent credit markets. Only 4% of outstanding global credit is accounted for in Asia, the report notes: “Compared to the US, we think Asia stands at very different points in its investment, credit and housing cycles. 28

The market for domestic credit is not globalised, and not subject to contagion as the US credit cycle turns down.” While down considerably from its 5,000-plus highs, the Shanghai Stock Market Index is still well up from the beginning of 2007. Likewise, while the recent earthquake in China’s Sichuan province was a human tragedy on a massive scale, economists and bankers do not see the event having any major long-term effect on the Chinese economy. The area where the quake took place is not a manufacturing centre and did not have a major impact on the country’s transportation network, although Merrill Lynch did note that some supply shortages might cause temporary regional inflation spikes. Despite all this, not everyone is sanguine about the prospect that the very dynamic, very good times will ALB makes every effort to ensure firms likely to appear in the ALB 50 are contacted. Firms were requested to provide accurate data promptly. The arrows in the ranking column show numerical changes compared to last year but in no way indicate a qualitative change.

AUSTRALIA

KOREA

CHINA

NEW ZEALAND

HONG KONG

SINGAPORE

INDIA

JAPAN

Asian Legal Business ISSUE 8.6

FEATURE | ALB 50 >>

► ALB 50: ASIA’S LARGEST FIRMS Rank

Firm

Total lawyers & partners*

Country of origin

Managing partner

Total lawyers*

Total partners*

Offices in Asia

Total offices worldwide

Minter Ellison

1,100

Australia

Multiple

802

298

Baker & McKenzie

1,075

David Jacobs

760

315

Mallesons Stephen Jaques

1,059

Australia

Multiple

289

Allens Arthur Robinson

891

Australia

Jim Dunstan

705

186

Clayton Utz

867

Australia

Multiple

643

224

Freehills

843

Australia

John Curtis, John Dick

627

216

DLA Phillips Fox

779

Australia/NZ

Alastair Da Costa

619

160

Blake Dawson

768

Australia

N/A

590

178

King & Wood

650

China

Wang Junfeng

500

150

Da Cheng Law Offices

552

China

Wang Zhongde

331

221

Corrs Chambers Westgarth

524

Australia

John Denton

408

116

Deacons

472

Hong Kong

Don Boyd

262

210

Amarchand & Mangaldas & Suresh A Shroff & Co

430

India

Shardul Shroff

390

Beijing Deheng

406

China

Wang Li

332

Nishimura & Asahi

395

Japan

Akira Kosugi

318

Kim & Chang

380

Korea

Young Moo Kim

260

120

Grandall Legal Group

372

China

Lv Hongbing

279

Mayer Brown JSM

370

Elain Lo

300

FoxMandal Little (FML)

366

India

Som Mandal

315

Jun He

336

China

Xiao Wei

262

Mori Hamada & Matsumoto

323

Japan

Multiple

250

Anderson Mori & Tomotsune

320

Japan

Multiple

256

Linklaters

308

Giles White

260

Nagashima Ohno & Tsunematsu

305

Japan

Kenichi Fujinawa

244

Bae, Kim & Lee LLC

290

Korea

YS Oh

229

Middletons

289

Australia

Nick Nichola

230

Freshfields

277

Multiple

253

HWL Ebsworth Lawyers

263

Australia

Juan Martinez

165

Gadens

256

Australia

Multiple

256

112

Allen & Gledhill

250

Singapore

Lucien Wong

147

103

Guang He

249

China

Luan Shaohu

184

Allen & Overy LLP

247

Brian Harrison

190

WongPartnership LLP

240

Singapore

Dilhan Pillay Sandrasegara

176

Lee & Ko

237

Korea

Yong Suk Yoon

154

Hunt & Hunt

229

Australia

Maureen Peatman

156

Bell Gully

223

New Zealand

Roger Partridge

180

Herbert Smith

219

Ashley Alder

182

Zhong Lun

217

China

Zhang Xue-Bing

135

Jones Day

216

Multiple

159

Morrison & Foerster LLP

212

Multiple

165

Chapman Tripp

211

New Zealand

Andrew Poole, Mark Reese

160

Dibbs Abbott Stillman

211

Australia

Alan McArthur, Duncan Hart

141

Paul, Hastings, Janofsky & Walker

201

Multiple

158

Maddocks

192

Australia

David Rennick**

142

Yoon Yang Kin Shin & Yu

181

Korea

Multiple

119

Luthra & Luthra

181

India

Rajiv K Luthra

155

Henry Davis York

178

Australia

Stephen Purcell

130

McCullough Robertson

170

Australia

Brett Heading, David Goener

135

Shin & Kim

170

Korea

Doo-Sik Kim

125

Tahota

162

China

Cheng Shoutai

140

* Numbers in Asia ** From 1 July

www.legalbusinessonline.com

FEATURE | ALB 50 >>

► CHINA Rank

Firm

Total lawyers & partners

King & Wood

Total lawyers

650 Wang Junfeng

Total partners

500

150

Offices 13

Da Cheng Law Offices

552 Wang Zhongde

331

221

Beijing Deheng

406 Wang Li

332

Grandall Legal Group

372 Multiple

279

Jun He

336 Xiao Wei

262

AllBright

257 Shi Huanzhang

195

Guang He

249 Tong Xin

184

Zhong Lun

217 Zhang Xue-Bing

135

Jingtian & Gongcheng

174 Zhang Xusheng

123

Tahota

162 Cheng Shoutai

140

► ASIA’S 50 LARGEST FIRMS BY SECTOR

AUSTRALIA/NEW ZEALAND

INTERNATIONAL

ASIA

Managing partner

continue to roll for law firms operating in China and Asia, as a consequence of both the global economic turmoil eventually bleeding into the Asian economies and the natural maturing of the Chinese legal market. “The market in China is going to become increasingly competitive and an increasing number of firms are going to attempt to make a go of it over here,” predicts David Jacobs, AsiaPacific regional chairman of Baker & McKenzie. “But if there’s a global economic slowdown then that’s going to affect law firms simply because there’ll be fewer deals and more firms competing for them.” Any slowdown in work will likely pluck the low hanging fruit of late arrivals first, suggests Robert Lewis, managing partner of UK-based Lovells’ Beijing office. “A lot of firms coming from places such as the US have come in riding the crest of a very good wave in their home markets. “Now with many of these firms, especially those from the US, finding themselves affected, this slowdown – if and when it comes – means it’s possible that in 2009 and 2010 we’ll see firms revisit their level of investment, possibly leading to some retrenchment as they find their initial investment is unsustainable in terms of getting an office in China up and running and moving independently.” All this, he suggests, is part of a natural maturing of the Chinese legal market which will make it increasingly difficult for new entrants to catch up with established players.

The other major challenge for law firms of all stripes, whether firmly established or just opening in China (and in a number of other Asian jurisdictions such as Singapore, whose recent deregulation of the legal market has sparked a new wave of competition and talent wars), is finding qualified staff who can produce quality work in a bilingual, bicultural environment and ensure a quality product that enhances, rather than detracts from, a consistent client experience. While many local Chinese firms have experienced meteoric growth, anecdotal evidence suggests that this growth has lately been accompanied by a concern that some firms have “grown too fast” and that work product has, as a result, suffered. “For us as a foreign firm, the talent pool is still very limited because everyone is looking for essentially the same candidate,” says Lovells’ Lewis, referencing the dream lawyer who is “bilingual, bicultural, and can do deals in and out of China”. “The challenge for some of the largest China firms is that they’ve grown very very quickly and in this market where there isn’t a lot of ready-made talent, obviously there aren’t a lot of people in that category. But I do feel that over the past few years we haven’t only remained in a competitive position on the hiring front but that the talent pool has expanded a bit.”

Entangling alliances Nearly a quarter century after the words were spoken, it is hard to believe that in 1984 then Australian prime Asian Legal Business ISSUE 8.6

FEATURE | ALB 50 >>

â&#x2013;ş HONG KONG Rank

Firm

Deacons

Total lawyers & partners

Managing partner

177 Lindsay Esler

Total lawyers

Total partners

Offices

113

Woo Kwan Lee & Lo

77 William CY Kwan

Wilkinson & Grist

47 N/A

Gallant YT Ho & Co

40 Amanda Liu

Robertsons

25 Christopher Gordon

Arculli Fong & Ng

24 Ronald Arculli

Stevenson Wong & Co

20 N/A

Tanner De Witt

19 N/A

Hampton Winter & Glynn

18 N/A

Boase Cohen & Collins

15 Colin Cohen

So Keung Yip & Sin

13 N/A

â&#x2013;ş JAPAN Rank

Firm

Total lawyers & partners

Managing partner

Nishimura & Asahi

395 Akira Kosugi

Total lawyers 318

Total partners 77

Offices 1

Mori Hamada & Matsumoto

323 Multiple

250

Anderson Mori & Tomotsune

320 Multiple

256

Nagashima Ohno & Tsunematsu

305 Kenichi Fujinawa

244

www.legalbusinessonline.com

FEATURE | ALB 50 >>

► KOREA Rank

Firm

Total lawyers & partners

Managing partner

Total lawyers

Kim & Chang

380 Young Moo Kim

260

Total partners

Offices

120

Bae, Kim & Lee LLC

290 YS Oh

229

Lee & Ko

237 Yong Suk Yoon

154

Yoon Yang Kim Shin & Yu

181 Several

119

Shin & Kim

170 Doo-Sik Kim

125

► THAILAND Rank

Firm

Siam Premier

60 Phisud Dejakaisaya

Tilleke & Gibbins

58 Multiple

Chandler & Thong-Ek

33 Albert T Chandler

Kanung & Partners

26 Pricha Songsamphan

Blumenthal Richter & Sumet

21 Andreas Richter

minister Bob Hawke found himself in political strife after he declared that his country’s future security and prosperity depended upon Australia becoming “firmly enmeshed with the progress of China, South East Asia and the Pacific region”. The liberalisation of economies from China right through Vietnam, Indonesia and India, and the interconnected resource and consumer spending booms such reforms have touched off, have made such an economic enmeshment not only a reality but a necessity. Such enmeshment is occurring more and more in the legal industry as well, and is likely to continue through 2008 and beyond as Australian, British and American law firms team up with local Asian counterparts to create strategic alliances of one sort or another. Last year, the exclusive alliance between DLA Piper and Australian firm Phillips Fox made headlines; lately, such deals have been picking up pace. Recently signed alliances have seen

Total lawyers & partners

Managing partner

Total lawyers

Sydney-based Gilbert + Tobin team up with Chinese giant King & Wood at the end of last year – a move which was in many ways the formalisation of a relationship that had dated back to at least 2005 when the two firms worked on several competition and telecommunications projects together – and UK-based Lovells build the Sino-Global Legal Alliance with nine leading independent Chinese law firms. As Danny Gilbert, managing partner of Gilbert + Tobin, told ALB soon after inking his firm’s deal with King & Wood (which itself teamed up with Japanese firm Miyake Yamazaki in 2005): “For them to entertain relationships with one of the major global firms, I think would cause them some tension because global firms have their own strategies about establishing the dominance of their own brand.” To put it another way, legal alliances can be compared to those between airlines, with regional carriers able

Total partners

Offices

to grow their own traffic by teaming up with non-competitors who can feed passengers, or clients, into other markets. And while in the long run the best of these alliances will be those which bring together complementary, rather than competing, skill sets, in the shorter and more medium term, such groupings will likely have the further effect of tying up and solidifying the Chinese market.

Go (south and) west, young man! But while China certainly is, and will remain, the dominant player in the Asian legal market for a long time, the rest of the region is also poised for growth. But as that market matures, law firms which have already established themselves in that country are looking to consolidate their positions in Asia by growing elsewhere in the region, while many newcomers are attracted by the dynamism and fluidity which exists in India and South East Asia.

► TAIWAN

Rank

Firm

Lee & Li

Formosa Transnational

Total lawyers & partners

Managing partner

141 CV Chen

Total lawyers

Total partners

Offices

118

57 Ya-Fen Lin

Formosan Brothers

46 Several

LCS & Partners

40 Rich Lin

Tsar & Tsai

38 Jackie S J Lin

Asian Legal Business ISSUE 8.6

FEATURE | ALB 50 >>

â&#x2013;ş PHILIPPINES Rank

Firm

Total lawyers & partners

Managing partner

SyCip Salazar Hernandez & Gatmaitan

122 Llewelyn L Llanillo 111 Eusebio V Tan

Total lawyers 81

Total partners

Offices

Angara Abello Concepcion Regala & Cruz

Romulo Mabanta

74 N/A

Picazo Buyco Tan Fidler & Santos

56 Antonio A Picazo

Villaraza & Angangco

61 Multiple

Quisumbing Torres

52 Ricardo Castro Jr

Sigulon Reyna Montecillo & Ongsiako

47 Multiple

â&#x2013;ş INDONESIA Rank

Firm

Total lawyers & partners

Managing partner

Total lawyers

Total partners

Offices

Hadiputranto, Hadinoto & Partners

67 Sri Indrastuti (Tuti)

Soewito Suhardiman Eddymurthy & Kardono

51 Dyah Soewito

Ali Budiardjo Nugroho Reksodiputro

43 Mardjono Reksodiputro

Makarim & Taira S

41 N/A

Lubis Ganie Surowidjojo

39 Multiple

Mochtar Karuwin & Komar

32 N/A

Soemadipradja & Taher

24 Rahmat Soemadipradja

www.legalbusinessonline.com

FEATURE | ALB 50 >>

► INDIA Rank

Firm

Total lawyers & partners

Managing partner

Amarchand & Mangaldas & Suresh A Shroff & Co

430 Shardul Shroff

Total lawyers 390

Total partners

Offices

FoxMandal Little (FML)

366 Som Mandal

315

Luthra & Luthra

181 Rajiv K Luthra

155

Khaitan & Co

157 Multiple

127

J Sagar & Associates

137 Bergis Desai

111

► MALAYSIA Rank

Firm

Zaid Ibrahim & Co

Shearn Delamore & Co

3 4 5

Managing partner

Total lawyers

Total partners

Offices

135 Chew Seng Kok

94 Wong Sai Fong

Shook Lin & Bok

91 Too Ying Heap

Skrine

75 Lee Tat Boon

Zul Rafique & Partners

63 Dato' Zulkifly Rafique

Illustrating the money flows through India’s legal community, FoxMandal Little, India’s largest entry to this year’s ALB 50, recently announced dramatic salary increases across the board for its lawyers. Associates and senior associates will receive an increase of between 50% and 100%, while partners have seen an increment of between 30% and 60%. Salaries for newly qualified lawyers, meanwhile, have gone up by 45–50%. Meanwhile, a confluence of factors – from continued liberalisation in Vietnam, which has in the very recent past been the scene of a number of equitisation deals as the government in Hanoi seeks to divest itself of centralised control and ownership of the economy, to resource and manufacturing booms (complemented by increasing political stability) in nations like Indonesia – have made these countries attractive centres for dealmaking firms from Europe, the UK and Australia. September’s sale of a 10% stake in Bao Viet, Vietnam’s leading (and stateowned) insurance firm marked not only 34

Total lawyers & partners

the biggest M&A deal in the country’s history but has opened the floodgates to a tranche of other work. A report released in May by the Australian Strategic Policy Institute noted that while Indonesia has enjoyed impressive and sustained economic growth over the past several years, that growth is more impressive in that it takes place against a backdrop of decreasing government debt and relatively stable inflation. Even smaller nations such as Cambodia – which since 2000 has experienced an average 9.6% growth rate and last year saw foreign direct investment of US$600m – are attracting major players such as Allens Arthur Robinson, which has had a presence in that nation for over a decade and today has four lawyers on the ground there, including one new partner freshly minted as this magazine went to press. South East Asia is particularly poised for growth, says Allens Arthur Robinson’s Jim Dunstan, executive partner in charge of the firm’s Asian operations. “China is still vast and,

“The market in China is going to become increasingly competitive and an increasing number of firms are going to attempt to make a go of it over here” DAVID JACOBS, BAKERS because of its size and the amount of money involved, that’s going to be the natural target for really big work. But Indonesia, in particular, we think is a very exciting market going forward, with its large and growing resources practice, as are Vietnam and Cambodia, where large resource transactions are also starting to happen.” Says Dunstan: “I think South East Asia is really starting to come into its own after a difficult period.” ALB Asian Legal Business ISSUE 8.6

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Firm Proﬁle

WongPartnership

Leading Singapore Law Firm expands in the Middle East with a new office in Abu Dhabi Firm makes significant commitment to the Middle East Region with a second Middle East office WongPartnership LLP, one of the law firms in Singapore, has opened a new overseas office in Abu Dhabi making it its second Middle East branch in the flourishing Gulf Cooperation Council (GCC) region. As one of the most prominent Asian law firms, WongPartnership has continually pursued global opportunities, firmly establishing its footprint overseas. The Abu Dhabi office is the Firm’s third overseas office after its Qatar office which opened in May 2007, and Shanghai office, established in 2004. With over US$2 trillion worth of projects in the pipeline, the oil-rich GCC consists of some of the world’s fastest-growing economies. Recognising the tremendous growth potential in this region and the affluence of Abu Dhabi, the richest city in the world, WongPartnership has established the Abu Dhabi office as the centre of its Middle East operations. WongPartnership, first established in 1992, has rapidly expanded to become one of the largest law firms in Singapore, seeing a several-fold increase from 11 lawyers to over 230 lawyers within a short span of 16 years. WongPartnership has been consistently recommended by esteemed research publications and journals such as the International Financial Law Review 1000 – The Guide to the World’s Leading Financial Law Firms, Chambers Global – The World’s Leading Lawyers for Business and The Asia Pacific Legal 500 as a top Singapore law firm across all practice areas. WongPartnership has also won several awards for having been involved in the top deals in Singapore and the region, in the areas of capital markets, mergers and acquisitions (M&A), structured financing and securitisation and REITs, amongst others. In 2007, WongPartnership swept three Asian Legal Business South East Asia Deals of the Year www.legalbusinessonline.com

Awards, including winning the award for its involvement in the Singapore Deal of the Year. WongPartnership’s establishing of multijurisdictional operations is a natural step given that much of its work involves a cross-border element and close to 30% of its lawyers are non-Singaporeans, including lawyers from the People’s Republic of China, Malaysia, India, Brunei, Japan, Vietnam, Indonesia and Lebanon. Explaining WongPartnership’s strategy for its Middle East Practice, Managing Partner Dilhan Pillay Sandrasegara said, “While the Singapore market is undoubtedly still a very important one for us, the legal landscape has changed significantly and we are no longer confined by national boundaries and must expand overseas to serve our clients’ needs even better and also to tap into a pool of potential clients in the Middle East for their outbound business objectives in the key markets in which we operate. Whether in the Middle East or from our Singapore and China offices, we are ably positioned to assist our clients worldwide across the fields of capital markets, funds formation, M&A, real estate financing transactions and infrastructure, projects & construction work.” With its Middle East offices, WongPartnership offers legal services to both the Middle Eastern companies looking to make investments in South East Asia, China and India, and to global and regional corporations in their investments in the Middle East. Ng Eng Leng, a key senior M&A Partner, has relocated to the Abu Dhabi office to spearhead the development of the Firm’s M&A and transactional platform in the Middle East, highlighting the Firm’s commitment to establishing itself in the thriving Gulf States. Ziad Touma, who most recently worked at the leading UAE firm of Habib Al Mulla and is an experienced commercial and real estate lawyer has also been brought into the Firm’s Middle East team, bringing on board his fluency in the Arabic, French and English

Wong Meng Meng, Senior Counsel; Ng Eng Leng; Ziad ad Touma; Tan Chee Meng, Senior Counsel; Paul Sandosham

languages and years of working experience in the Middle East. Pooling together their experience and breadth of legal skills, the core team of Partners involved in the Middle East Practice comprises Ng Eng Leng, Ziad Touma and Carol Anne Tan in the areas of corporate and commercial transactions, M&A and real estate, and Tan Chee Meng, Senior Counsel and Paul Sandosham in the area of infrastructure, projects and construction. The team is further augmented by the involvement of the Firm’s Founder, Wong Meng Meng, Senior Counsel who has over 35 years of experience and whose principal focus is the development of the Firm’s Middle East platform with the core team. Drawing from the expertise of over 230 lawyers experienced in local and cross-border work spanning Singapore, South East Asia, China, India and the Middle East, WongPartnership’s Middle East Practice is well placed to serve clients with global and regional interests, in all fields of law and across a broad range of industries. Paul Sandosham, Head of WongPartnership’s Middle East Practice says, “With the opening of offices in the Middle East, WongPartnership will be on the ground in the Middle East which further strengthens our ability to assist clients from Singapore, Malaysia, China, India and the region, as they grow their business in the bustling Middle East.”

FEATURE | offshore law firms >>

Listing offshore The world’s appetite for emerging market investment opportunities remains strong, despite volatility in the capital markets. IPOs and secondary listings by Chinese companies on foreign exchanges have been meeting some of the demand. Key to these transactions are the boutique offshore law firms that provide access to key offshore jurisdictions used to facilitate foreign listings. Merran Magill reports

istorically, the word ‘offshore’ brought one concept to mind: tax advantages. Offshore jurisdictions typically offer low, or sometimes zero, taxation platforms for companies that choose to incorporate there.

The business case Due to the trend of using a vehicle incorporated in certain offshore jurisdictions to list a business on a foreign exchange, for many companies operating within emerging markets ‘offshore’ now means ‘access to investors’. This has resulted in boom times for offshore law firms, and much of the work is coming from China. Explains a partner with a Beijingbased PRC law firm: “Chinese stateowned enterprises are able to access domestic bank loans with ease. For privately owned companies, however, these loans are not as easy to obtain. As a result, private companies must look to the public markets or private equity to access the capital they need in order to grow.” For many reasons, they look to foreign public markets. “Tax advantages are a given, but tax alone isn’t a sufficient reason to list offshore. You need to find a jurisdiction accepted by the capital markets,” says Christopher Bickley, a partner based in the Hong Kong office of offshore firm Conyers Dill & Pearman. 38

Foreign investors want to invest using exchanges they know and feel comfortable with. The London, New York and Hong Kong markets in particular offer political and economic stability, and established legal and regulatory systems. Comfort is also important to underwriters and ratings agencies involved in the listing process. Practical requirements dictate other important considerations. A foreign listing can be completed more quickly using an offshore vehicle rather than a PRC company. Regulators in offshore jurisdictions are very responsive, in some cases meeting every day to consider and respond to issues. PRC lawyers believe that a foreign listing offers greater safety if the listed company plans on a secondary offering or a refinancing in the future. On some exchanges and using certain jurisdictions, shares can be listed in an uncertificated form, while others offer access to well-regarded settlement and clearing systems such as CREST. A foreign listing can bring exposure to the globalised business world and help a company develop a platform for international expansion. Other business issues may make the flexibility and control offered by offshore jurisdictions more attractive. In contrast, PRC law may render rights desired by investors – such as

shareholder, management, voting or preemptive rights – unenforceable. Similarly, JVs cannot be listed on PRC exchanges, and neither can different classes of shares, eg, preference shares. Compared to the legal framework offered by offshore jurisdictions and foreign exchanges, PRC company law is, in Bickley’s words, “not as flexible and user friendly”.

Finding your audience Tailoring a listing to appeal to an appropriate investor base is well illustrated by the admission of Beijingbased China Boqi Environmental Solutions Technology to the Tokyo Stock Exchange in August 2007. Advised by Guantao Law Firm, China Boqi was the first Mainland Chinabased company to go public on the Tokyo bourse’s first section. The technology at the core of the company was developed in Japan and, due to both Japanese investors being familiar with it and the company’s desire to cooperate with Japanese technology companies, Tokyo was a natural market. The company’s stock soared 61% in its first day of trading. China Boqi used a Cayman Islands-domiciled company as the listing vehicle, and Guantao used Conyers Dill & Pearman for advice and services in respect of the corporate structure. Asian Legal Business ISSUE 8.6

FEATURE | offshore law firms >>

The Tokyo Stock Exchange is just one foreign exchange that hopes to attract more Chinese companies. As noted by Greg Knowles, a partner in the Hong Kong office of Caymans firm Maples & Calder, the Tokyo exchange’s Mother’s Index, a secondary board, has generated some interest for Asian companies, with Maples & Calder advising several Cayman-incorporated companies looking to list there.

New provisions may affect trend At the time of China Boqi’s listing in Tokyo, neither the creation of the Caymans holding company nor the listing required approval from China’s securities regulator. However, a PRC lawyer interviewed by ALB believes the process would not be as straightforward if the same transaction were being considered today. This is due to the promulgation of the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by China’s Ministry of Commerce (MOFCOM) and five other ministries, which came into effect on 8 September 2006. These provisions permit a share exchange between a PRC company and an offshore company (a key part of establishing the listing vehicle), but make it difficult for the offshore vehicle to list on a foreign exchange. In addition to other approvals, the provisions require the listing company to receive pre-approval for the foreign listing from China’s securities regulator. Further, the pre-approval period is a relatively short 12 months. If the offshore company fails to complete its listing within that time, the pre-approval expires. Given the time these transactions take to complete and the delays often caused by market conditions, this time period is considered by Chinese lawyers as extremely short. The rationale behind the recent rule change is being hotly debated by PRC lawyers. Suggested reasons range from a heavy-handed attempt to bolster the size and liquidity of China’s domestic exchanges through to a desire to meet international standards and better understand the source of foreign investment in China within the context www.legalbusinessonline.com

“If the PRC company’s shares aren’t already located in an offshore entity, the process is going to be more difficult” CHRISTOPHER BICKLEY, CONYERS DILL & PEARMAN of the recent increase in inflow of foreign capital. Regardless of the policy behind the new provisions, Bickley predicts that the change in the rules will have an impact on the ability of PRC companies to list overseas but notes that the slowdown has not yet been felt: “If the PRC company’s shares are not already located in an offshore entity, the process is going to be more difficult.” Meanwhile, one PRC lawyer who spoke to ALB believes that Chinese companies are waiting to see how the rules play out. “It’s a quiet period, but it doesn’t mean that PRC companies will give up pursuing an offshore listing,” they say, conceding that because of the restrictions, the timeconsuming nature of an offshore listing and the likelihood that any preapproval period will expire before the listing is completed, one outcome may be that fewer PRC companies will seek a foreign listing. A domestic listing of a PRC company may prove easier and more appropriate once demand improves and onshore exchanges offer a more attractive price/earnings multiples. “China is like any other emerging market” says Marc Yates, an Ogier partner based in Jersey. “They really want to build their own structure and get it recognised, but the reality is that it takes time.”

Which offshore jurisdiction? The differing opinions held by offshore law firms about which offshore jurisdictions are preferred by Chinese companies tend to reflect each firm’s strengths, location, history and marketing strategy. However, the differences between each jurisdiction

► OFFSHORE FIRMS – WHO, WHERE AND HOW BIG Name: Appleby Locations: Bermuda, BVI, Cayman, Jersey, Mauritius, London, Hong Kong Total fee earners: 211 Web address: www.applebyglobal.com Name: Bedell Cristin Locations: Jersey, Guernsey, London, Dublin, Geneva Total fee earners: 74 Web address: www.bedellcristin.com Name: Cains Locations: Isle of Man, London, Singapore Total fee earners: 35 Web address: www.cains.co.im Name: Carey Olsen Locations: Guernsey, Jersey, London Total fee earners: 142 Web address: www.careyolsen.com Name: Collas Day Locations: Guernsey Total fee earners: 42 Web address: www.collasday.com Name: Conyers Dill & Pearman Locations: Anguilla, Bermuda, BVI, Cayman, Dubai, Hong Kong, London, Moscow, Singapore Total fee earners: 129 Web address: www.cdp.bm Name: Harneys Locations: BVI, Anguilla, London, Hong Kong Total fee earners: 55 Web address: www.harneys.com Name: Maples & Calder Locations: BVI, Cayman, Dubai, Jersey, Ireland, Hong Kong, London Total fee earners: 218 Web address: www.maplesandcalder.com Name: Mourant du Feu & Jeune Locations: Cayman, Guernsey, Jersey, London, New York Total fee earners: 132 Web address: www.mourant.com Name: Ogier Locations: BVI, Cayman, Jersey, Guernsey, Ireland, Hong Kong, London, Montevideo, New Zealand Total fee earners: 200 Web address: www.ogier.com Name: Ozannes Locations: Guernsey, Jersey Total fee earners: 44 Web address: www.ozannes.com Name: Walkers Locations: Cayman Islands, British Virgin Islands, London, Jersey, Hong Kong, Dubai Total fee earners: 151 Web address: www.walkers.com.ky

FEATURE | offshore law firms >>

are many, and geography and time zones do matter. Depending on the particular circumstances and objectives of the business seeking a foreign listing, there will be a “best fit” in terms of foreign exchange and offshore vehicle. Chinese companies must rely on their domestic legal, tax and accounting advisors to help them identify the best offshore jurisdiction through which to access their preferred exchange. Globally, the competition between exchanges to attract listings is fierce, particularly between those in the major financial centres – London, New York and Hong Kong. NASDAQ, the New York Stock Exchange (NYSE) and the Singapore Stock Exchange (SGX) have opened offices in Beijing to better compete against the Hong Kong Stock Exchange (HKEX), reflecting China as a major source of new listings. Yates for one, however, does not expect to see a big change in the main exchanges used. “A major shift away from the status quo is unlikely … ultimately it’s [dependent on] where your investors are,” he says.

London London: LSE, AIM and SFM The Alternative Investment Market (AIM) is a junior market of the London Stock Exchange (LSE) and the most common London exchange for offshore listings. AIM now has over 1,600 40

members, 20% of which are either domiciled or have their main business operations outside of the UK. Some 48 Chinese companies are listed on AIM. Nominated Advisors, or NOMADs, are responsible for ensuring that companies are suitable for admission and must continue to monitor regulatory compliance. According to a study by the LSE in 2007, 9.6% of AIM companies were incorporated in the Caymans, 9.6% in BVI and 7.8% in Bermuda. Similar numbers of Jersey, Guernsey and Isle of Man companies are listed on AIM. Several PRC lawyers stated a tendency for PRC companies to look to the AIM market. Companies choosing to list shares on AIM typically use Jersey or Guernsey structures, since BVI and Cayman companies can only list GDRs. In the experience of John Rainer, a Mourant du Feu & Jeune partner based in Jersey, Jersey, Guernsey and Cayman are the best jurisdictions in which to locate a listing vehicle for a London listing. There is consensus that the London market also appeals to Indian companies, which have a reputation of using Isle of Man companies as listing vehicles. “Several Indian companies started the trend and others have adopted the same structure. We noticed this trend at an early stage” says Mike Edwards, an Isle of Man partner at Cains. Edwards observes that the “appeal of AIM is the massive pool of liquidity. Access to capital through London is huge. Even in these turbulent times, there is huge interest in AIM.” Mourant recently advised on the first listing of a Malaysian company on AIM – Peninsular Gold Limited, a Jersey-incorporated company. In January 2008, meanwhile, Carey Olsen advised on the AIM listing of China Eastsea Business Software Ltd, an IT outsourcing service provider for the petrochemical and petroleum industries. Harneys acted on 10 AIM listings last year, including the US$368m AIM flotation of Canton Property Investment Limited, as well as two listings on the main market. In addition, the LSE’s new secondary market – the Specialised Fund Market – aims to target hedge funds, feeder funds and private equity vehicles. Jason Romer, a Guernsey partner with

Collas Day, believes that the SFM will handle listings in a more “fund-friendly manner” than would AIM, which tends to attract operating companies. To that end, several admission requirements have been relaxed, relying in part on the fact that investors should be confident that the listed funds are sufficiently regulated by their home jurisdictions.

New York

New York: NYSE and NASDAQ Market participants cite several concerns related to listing in the US, eg, costs associated with SarbannesOxley compliance and the threat of shareholder class actions. However, the prestige and the robust corporate governance offered by a US listing remains attractive to Asian companies. As to which offshore jurisdictions are preferred, Yates of Ogier, which has a substantial presence in each of the four main offshore jurisdictions (Jersey, Cayman, Guernsey and BVI) says the Asia market is more familiar with BVI and Cayman companies. He says: “It’s a quirk of history, arising from the demands of the colonial Hong Kong market for an offshore solution, the ease of incorporation and the familiarity among the US market. Much replicated, this created a dominant standard across the region.” Bickley, on the other hand, sees more Bermuda and Cayman companies Asian Legal Business ISSUE 8.6

FEATURE | offshore law firms >>

www.legalbusinessonline.com

FEATURE | offshore law firms >>

Regulators in offshore jurisdictions are very responsive, in some cases meeting every day to consider and respond to issues. PRC lawyers believe that a foreign listing offers greater safety if the listed company plans on a secondary offering or a refinancing in the future listing on NASDAQ and the NYSE but also sometimes BVI companies. As of April 2008, the NYSE Group (which now includes Euronext exchanges) has 52 companies from Greater China listed, including 42 from Mainland China, five from Hong Kong, and five from Taiwan. The total market capitalisation of the 42 NYSE-listed Mainland Chinese companies was US$1.5trn. There are approximately 46 companies from Greater China listed on NASDAQ, the second-largest overseas market for the exchange.

Hong Kong

Seventy-five percent of the companies admitted to the HKSE are offshore companies. “It’s a well-travelled path”, says Bickley. “Investors are familiar with the Hong Kong market.” Michael Gagie, a partner in the Hong Kong office of BVI-headquartered firm Harneys, notes that, until recently, BVI companies were not approved for listings in Hong Kong. Traditionally, Bermuda and Cayman companies were the listing vehicles, although BVI companies were often part of the corporate structure. HKSE has special rules for offshore companies that require, among other things, extra provisions to be included in incorporation documents to bring them up to the standard accepted by the HKSE. Another heavily oversubscribed IPO was the US$140m listing of Tianjin Port Development Holdings Limited on HKSE, on which Applebys advised. In the past, NASDAQ was the preferred exchange for China-based technology companies, but a major shift began to occur in 2006 as the NYSE and HKSE began to aggressively court Chinese companies. The decision by B2B portal alibaba.com to list in Hong Kong rather than on NASDAQ was something of a watershed. The company believed it could achieve a higher valuation because Hong Kong was closer to the operation and investors there better understood Alibaba’s business model. The company raised US$2.7bn and the listing was 251% oversubscribed.

Singapore: SGX and Sesdaq Hong Kong: HKSE HKSE has become a natural choice for Chinese companies, particularly for SOEs. Increasingly, companies that list on the H-Share market are doing so in connection with an A-share listing on the Shanghai Stock Exchange. 42

Foreign listings account for about onethird of listings on SGX and its junior Sesdaq board, by number and market capitalisation. Forty-eight percent of the foreign listings are by Chinese companies. SGX senior executive vicepresident and head of markets Gan Seow Ann reported that in 2007 new

Singapore

foreign listings accounted for about 70% of the total number of listings on SGX. SGX hopes that by 2012 more than half of its listings will be foreign companies. One of the largest recent deals for Cains was the listing of Genting International, the first Isle of Man company to list in Singapore. The region is a focus for Cains, which recently opened a Singapore office. “We hope to be able to replicate the success we have had on AIM,” says the firm’s Mike Edwards.

Convergence in the offshore market and the future Yates of Ogier says that his firm’s strategy is based on the convergence that they see happening within the offshore world. As the benefits of each jurisdiction become more homogeneous, “the driver for determining where a structure is located will depend on client factors: convenience, location – of both the business operations and management – and location of their investor base,” he says. Offshore firms that focus on only one jurisdiction recognise the need to broaden their scope. Collas Day, in particular, with its focus on the UK capital markets, is looking to build in London, Jersey and more broadly offshore and beyond to the emerging markets. Offshore firms, given their size and the friendly competition that exists among them, are reluctant to reveal financial information. However, all firms contacted for this overview reported revenue growth, Cont p46f Asian Legal Business ISSUE 8.6

FEATURE | offshore law firms >>

www.legalbusinessonline.com

FEATURE | offshore law firms >>

Asian Legal Business ISSUE 8.6

Firm Proﬁle FEATURE | offshore law firms >>

Walkers

Cayman Islands Unit Trusts – Some Commonly Asked Questions

he Cayman Islands unit trust continues to be the vehicle of choice for funds aimed at the Japanese market, primarily for tax and regulatory reasons. In the following, I will consider some of the commonly asked questions that clients and professionals alike have in relation to unit trust structures. The following note is necessarily general in nature and specific legal advice should always be sought on particular transactions.

Does the trustee need to be a Cayman Islands licensed trust company? In most cases the trustee of a unit trust is not required to be a Cayman Islands licensed trust company. The relatively rare exception is in respect of unit trusts which hold a mutual fund licence and in such cases the trustee must be a trust company licensed under the Bank and Trust Companies Law (2007 Revision).

Do I need to be concerned about the Retail Mutual Funds (Japan) Regulations (2007 Revision) (“Regulations”) if I am only targeting institutional investors in Japan? The short answer is no. The Regulations apply to retail mutual funds, defined as being mutual funds which are licensed pursuant to section 4(1)(a) of the Mutual Funds Law whose units have been or are intended to be offered to the public in Japan.

Are there any differences between a sub fund and a series trust? The term “sub fund” is generally used to refer to a separate portfolio within one unit trust. However, the term, “sub fund” is not a term of art and it is often used interchangeably with the term “series trust””. In a standard unit trust structure, all the assets of the unit trust are available to satisfy the debts and liabilities of the trustee in its capacity as the www.legalbusinessonline.com

trustee of the trust. However, clients generally require the unit trust to contain separate portfolios or sub funds within the unit trust so that an investor subscribing for, say, Class A units will be beneficially entitled only to assets in the portfolio or sub fund referable to the Class A units. In order to give effect to the concept of sub funds, the trust deed or the declaration of trust will as a matter of contract seek to “ring fence” the liabilities of each of the sub funds by the use of limited recourse language so once the assets of a sub fund are exhausted then the assets of another sub fund cannot be used to discharge the outstanding liabilities. This approach to limiting the liability of each sub fund to the assets of that sub fund is of course only contractually binding on the contracting parties, third parties will rarely agree to be similarly bound. So while the trustee and the unitholders are bound by the terms of the trust, a third party creditor will generally have recourse to all the trust property irrespective of its classification. The term “series trust” is generally used to describe each separate trust within an “umbrella” unit trust platform. While a trust is not as a matter of law a separate legal entity, each series trust within the platform is regarded as distinct from the other and once the assets of one series trust are exhausted the assets of the remaining series trust or series trusts cannot generally be used to discharge any outstanding indebtedness unless there is specific agreement to the contrary. The series trust structure is therefore a straightforward way of segregating the assets and liabilities of different portfolios.

Will the Financial Instruments and Exchange Law of Japan (the “FIEL”) have an impact on the popularity of Cayman Islands unit trusts? The FIEL took effect on 30 September 2007 as an amendment to the existing Securities and

Carol V. Hall

Exchange Law of Japan and related laws. All marketing and placement activities for units in offshore unit trusts must now be made within the new framework of the FIEL and therefore Japanese counsel should be consulted to ensure compliance with the FIEL. We understand that the relevant licensing and oversight requirements imposed by the Japanese regulators for units in offshore unit trusts are now more onerous than for interests in offshore limited partnership. It remains to be seen therefore whether this will have any impact on the popularity of Cayman Islands unit trusts with Japanese investors. Walkers are a Cayman Islands law firm and all issues in relation to the FIEL must be referred to Japanese counsel. Carol V. Hall Partner WALKERS Suite 1609-1610, Chater House 8 Connaught Road, Central Hong Kong Tel: 852 2596 3317 (Direct) / 852 2284 4566 (Main) Fax: 852 2284 4560 Email: carol.hall@walkersglobal.com Website: www.walkersglobal.com

FEATURE | offshore law firms >>

From p42

particularly in relation to work from emerging markets. Cains revealed that its revenues had increased by 33% over the last three years, and profitability was up 37%, due in large part to the growth it is experiencing in advising on international AIM admissions. Mike Gagin of Harneys said that in revenue terms the firm as a whole had had its “best year ever”, the Hong Kong office’s revenue almost doubling. Cains’ growth, meanwhile, is also coming from the east, mainly the emerging markets of India, Kazakhstan and China, which is the rationale behind their recent opening of an office in Singapore. Says partner Michael Edwards: “We realised that you can’t build an Asian practice from Europe. We looked at various locations, including Dubai and Shanghai, but chose Singapore because it’s increasingly being used as a hub for South East Asia and it has a very close relationship with India.” Any effects of the new Chinese laws

For many companies operating within emerging markets, ‘offshore’ now means ‘access to investors’ are yet to be felt. Market volatility, on the other hand, is already making an impact. Hugh O’Loughlin at Walkers has seen a huge amount of listing activity in the last 12 months, although a few transactions have been delayed. Bickley observes: “This year there has been a strong deal flow, but not like last year, which was very hectic. People are taking a bit more time to get their deals done and to get the timing right.” Knowles says his firm has a steady flow of work for listings on AIM, HK and NYSE, but that there is “no doubt that some people are holding off until later in the year”. Recent instructions on the proposed listing of a Malaysian biofuels business on AIM have been aborted due to market conditions, “like many others”

noted John Rainer of Mourant. It may be that strong domestic PRC markets become another threat to offshore business. The realities of the greater transparency and accountability that comes with an offshore listing, including possible personal liability of directors and officers, in addition to the new regulatory hurdles, may make a domestic listing more attractive. This concern was underlined by Yates: “The issue for PRC companies [when listing abroad] is the adoption of the necessary corporate governance regime and the rules that they have to comply with. In most cases it’s a step up … Some companies may not be ready for that level of regulation and scrutiny.” ALB

Asian Legal Business ISSUE 8.6

FEATURE | offshore law firms >>

www.legalbusinessonline.com

SPECIAL REPORT | China >>

ALB

CHINA 2008 Beijing: home to top talent and top firms The Chinese legal industry has delivered another year of laudable performance. Leading commercial firms in Beijing, Shanghai and Guangzhou have gone from strength to strength, as revenues, number of lawyers and fee rates continue to rise. China remains a good choice for international investors, and the influx of foreign firms coming to China is seemingly unstoppable. ALB takes a closer look at the development of the legal industry in a number of leading economic centres in China

he year 2008 will go down in history as the year the Beijing Olympic Games symbolised the rise of China. It will also be seen as the year when “the quantitative changes of the Beijing legal profession transform[ed] into qualitative changes”. Jiang Jiang, a partner with Hylands, is one of the lawyers using “qualitative changes” to describe the development of Beijing firms. Hylands was founded in early 2007 based on the merger of Hao Tian and Li Wen & Partners, two firms with strengths in different practices. Jiang notes that the merger of equals is a pattern that is emerging in the evolving Beijing legal services market. “The increased size of a firm can definitely add competitive advantages ► LIGHTNING GROWTH OF PRC FIRMS Firm

Head office

Revenue growth rate in 2007

Dacheng

Beijing

108%

Jincheng & Tongda

Beijing

99%

Zhonglun

Beijing

51%

Zhenghan

Shanghai

51%

Brighteous

Hangzhou

50%

Guantao

Beijing

41%

Fangda Partners

Shanghai

40%

Alpha & Leader

Guangzhou

38%

Grandall Legal Group

N/A

37%

Zhonglun W&D

Beijing

35%

Source: Fast 10, ALB China Issue 5.1

when bidding for large-scale transactions. But, more importantly, the merger of firms with different specialisations can expand practice areas and add specialised capabilities,” says Jiang. Hylands, the newly created force in Beijing’s legal services market, now has 26 partners and more than 100 lawyers across offices in Beijing, Shanghai and Nanjing. “The capability to provide the full spectrum of legal services for businesses by specialised practice groups is what has made Beijing firms the most sought-after legal advisors across the country, especially when companies face sophisticated and large-ticket legal issues,” Jiang says. Wang Ling of King & Wood agrees with the concept of “qualitative changes”, saying the traditional geographical advantage of Beijing firms is no longer the major determinant of clients’ decisions to bring Beijing firms on board in important projects and deals. “In the past, Beijing firms had an advantage in being chosen for some record-breaking transactions due to their proximity to industry regulators, lawmakers and government offices,” says Wang. “Today, although the geographical advantage still exists to an extent, Beijing firms’ biggest advantages have changed to the know-how and experience they’ve accumulated over 15 years, and the proven track-record and solid portfolio of landmark transactions.” Asian Legal Business ISSUE 8.6

SPECIAL REPORT | China >>

sustains growth momentum As a result of the “qualitative advantages”, PRC counsel in highprofile listings, M&A deals and international commercial dispute resolution are mostly Beijing firms. Having similar advantages to those that private practice firms had in the past decade, in-house departments in Beijing are widely considered to be more sophisticated and larger than in-house departments in other parts of the country, with Shanghai possibly the closest rival. “The majority of large SOEs and top 100 companies are based in Beijing, as well as the high-profile general counsel and CLOs,” says Liu Hongqiang, the China representative of the Association of Corporate Counsel (ACC) and the general counsel of Beijing-headquartered central SOE, the China Electronic System Engineering Corporation. “In-house practitioners in Beijing are usually more sophisticated and

functional than those in other cities. Of course, in Shanghai there are many good general counsel in multinational companies.” Based on an overall analysis, Liu says, ACC has decided to locate its China headquarters in Beijing where the global organisation can best facilitate its members in China. Knowing how to instruct external counsel and how to be selective, inhouse departments in Beijing have been helping to enhance the service quality of Beijing firms. At the same time, their rapid business development has caused a surge in demand for legal services, and pushed their external counsel to acquire more cutting-edge practices and services. “The past year has been a year of great success for our clients, and there have been many interesting and challenging transactions for us to deliver outcomes on,” says Zhang Xuebing, the managing partner of Zhong Lun.

BEIJING

“Today, although the Beijing geographical advantage still exists to an extent, Beijing firms’ biggest advantages have changed to the know-how and experience accumulated over 15 years, and the proven track-record and solid portfolio of landmark transactions” WANG LING, KING & WOOD www.legalbusinessonline.com

► BEIJING AND SHANGHAI IN COMPARISON Firm origin PRC

No. of firms: Beijing

No. of firms: Shanghai

1,100

759

Hong Kong

Japan

Singapore

Australia

Germany

France

Korea

Other

Source: Ministry of Justice, as at 30 July 2007

It is unarguable that the average charge-out rate of Beijing firms is usually higher than the average rate in other cities, but it is not stopping companies from using Beijing firms. “Most in-house counsel are very willing to pay because of the expectation of having a good result when cooperating with external counsel,” says Liu. Wang Lihua, managing partner of Beijing firm Tian Yuan, backs up Liu’s claim that the charge-out rate of Beijing firms is usually higher than in other cities. However, the efficiency and quality of work can add value to clients’ businesses and eventually justify the total cost. “To a large extent, increasingly selective clients with quality-driven approaches have been pushing the Beijing legal industry forward,” says Wang. 49

SPECIAL REPORT | China >>

SHANGHAI

Shanghai: bucking the global trend

espite the turmoil in the global markets and a looming recession in the US, law firms in Shanghai are profiting from the spike in corporate activity. Home to more than 3,500 banks and the country’s largest stock exchange, Shanghai has been firmly put on the map as one of China’s main economic powerhouses. Its confidence and success rests on two pillars: banking and finance. In 2007, the PRC banking industry experienced much reform and restructuring, and became more open to foreign investors. Many Shanghai firms have built on their relationships with domestic and international banking clients, and have closely followed the development of business in traditional and emerging product lines. Jun He Law Offices’ Shanghai office has reinforced its leadership in the banking sector by representing major banks in financing transactions totalling more than US$30bn, including acquisition finance, project finance, structured finance, asset finance and trade finance transactions. “Jun He’s Shanghai office has achieved another banner year, especially in the banking area. Although tight monetary policy will continue in 2008, the pipeline of lending and financing deals will remain strong,” says George Wang, partner with Jun He. As more foreign banks become locally incorporated, their demand for PRC legal services will continue to grow. “All the new laws, particularly the new property law and bankruptcy law, will have a significant influence on both international and local financial

institutions,” says Charles Qin, founding partner of banking & finance boutique firm Llinks Law Offices. “Increasingly, they’ll need local counsel to advise them on regulatory and compliance reviews, and on their consultation with the government authorities on general and specific issues.” Another trend witnessed by finance specialists is the rise of the funds management industry in Shanghai. In recent years, Jun He and Llinks have advised foreign and local banks and insurance companies on establishing joint venture and domestic funds management companies (FMCs), and have acted on FMC investments at home and overseas. “With more QDII and QFII licences being approved and the investment quota expanding, the funds management industry is a fast-emerging and cuttingedge practice area for Shanghai firms,” says Qin. “The amended Partnership Enterprise Law allows fund managers to adopt a more flexible investment structure and helps the industry to grow in strength and sophistication.” Currently there are 60 FMCs, half of which are joint ventures with foreign financial institutions. Twenty have secured their QDII qualifications. Shanghai Yuan Tai’s funds practice has a particular focus on QDII. The firm enjoys a large share of the market; it has advised China Southern Fund and ICBC-Credit Suisse AMC on their first QDII product launches and is currently advising 10 other leading domestic and joint venture FMCs on their QDII applications. “Despite the volatility in the world market, the pace of growth

“All the new laws and regulations will have a significant influence on both international and local financial institutions. Increasingly, [these institutions] will need local counsel to advise them on regulatory and compliance reviews, and on their consultation with government authorities” CHARLES QIN, LLINKS of QDII funds won’t be hampered. The QDII scheme is the government’s longterm investment strategy, so there’ll be more opportunities for dedicated funds management law firms to participate in this visionary outbound investment program,” says Hubert Tse, managing director of Yuan Tai and head of the firm’s international business group. In addition, the three sovereign wealth funds (SWFs) – China Investment Corporation, National Social Security Fund and China-Africa Development Fund – are reportedly planning to outsource a combined US$320bn to foreign asset managers over the next three years, according to a report by Z-Ben Advisors, experts on China’s investment management industry. Law firms in Shanghai are well placed to represent international and local fund managers in the outsourcing process. The symbolic Jin Mao Tower in Pudong financial district will soon be eclipsed by a new building nearby – the Shanghai World Financial Centre. The 101-storey, 492 metre-high building will be the tallest building in Asia and a new symbol of Shanghai’s rise to prominence as Asia’s international financial centre. Asian Legal Business ISSUE 8.6

Firm Proﬁle SPECIAL REPORT | china >>

Paul Weiss

TMT is dynamite for Paul Weiss

f someone could bottle Jeanette Chan’s energy, they would not only make a fortune many times over, they would put out of business every barista from Seattle to Sydney. Because Jeanette Chan, who heads up Paul Weiss’s China Practice Group as well as the firm’s Asia Communications and Technology Practice Group, is speaking to ALB from her Hong Kong office, where she has just stepped off a plane from New York City, and sounds as if she has just completed nothing more arduous than a leisurely Sunday morning bike ride – rather than a flight notorious among business travellers as the longest non-stop trip today’s airframe technology allows. Known as a serious rainmaker within the firm and, as this magazine once described her, a “household name” in the Asian dealmaking community, Chan has proudly led her firm from strength to strength in the highly competitive and fast changing field of technology, media and telecommunications. While Chan’s infectious enthusiasm for her work is part of the equation behind Paul Weiss’s capability in this field, the unique way the firm organises itself goes a long way towards explaining its success. Working across borders and across disciplines, Paul Weiss’s TMT attorneys do not sit in their silos but rather work actively on a spectrum of deals in a variety of places at any given time. “We have practice space, not office space”, explains Chan. “Our [TMT] practice runs out of different offices, something which is different from other firms and yet makes our expertise more coherent throughout the practice group.” It is this organisational trick which allows the firm to work on major TMT deals across mainland China, Hong Kong and Taiwan – a multi-jurisdictional empire with a

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sometimes-tricky political environment – and service major clients such as AmericaOnline, Microsoft and Motorola. Chan and her firm have worked on a number of deals, such as Lenovo’s acquisition of IBM’s personal computer business and work surrounding the sale of broadband internet cable in Taiwan. As well, Paul Weiss has become a leader in handling private equity deals in the region long before the term catapulted from the business pages to the front pages. This long experience (dating back at least to the early 1990s) in private equity and other matters across Greater China has blessed Paul Weiss with other advantages as well. With what might be called a “honeybee approach” to TMT work throughout the region, Chan and her team are able to crosspollinate deals across different jurisdictions in a way other firms cannot, making honey for themselves and their clients along the way. This activity has made Paul Weiss particularly strong at navigating the complex and oftenchanging thicket of regulation surrounding TMT across mainland China, Hong Kong and Taiwan, and has enabled the firm to provide a value added service to clients. “Just before our meeting I was on the phone to a client in Los Angeles who is working on a lot of projects in China centered around high-tech infrastructure, and he like every client asked if we got involved with the business side,” says Chan. “And of course I said yes, although lawyers usually don’t, but because we know the market so well and know the regulators so well, we find ourselves looking at business plans and assumptions and models. We are in a really unique position to ask questions about these things and give very practical advice”.

Jeanette K. Chan,Paul Weiss

Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Jeanette K. Chan, partner Email: jchan@paulweiss.com Ph: (8621) 5828-6300 or (852) 2536-9933

SPECIAL REPORT | China >>

Guangzhou: remaining in the top three

t has often been said that Guangzhou, the third most active commercial centre in China, is overshadowed by Beijing and Shanghai as a legal centre. In addition, it has had to contend with strong competition from firms in neighbouring Shenzhen. However, an increasing number of local firms are adopting strategies to further develop their practices. Also, they are looking beyond their local area to the possibilities of international practice. The optimism of Guangzhou lawyers is well founded, as seen in the continuing growth of the Canton Fair (the Chinese Import and Export Commodities Fair), the largest trade fair in China. In the spring of 2007, the 101st fair saw the participation of 314 different companies from 36 countries. While Shanghai is busy upgrading its city infrastructure for the 2010 World Expo, Guangzhou, to be the host city of the 16th Asian Games in 2010, is

GUANGZHOU

“The function of lawyers in corporate and investment areas is only being gradually understood and accepted by local entrepreneurs and by the government. It will take some time for the idea of using lawyers for noncontentious matters to reach the same level as it is now in Beijing, Shanghai and the Yangtze River Delta” PETE ZHANG, GUANGDA 52

spending approximately US$26.5bn to improve its infrastructure, build an athletes’ village and a new railway station, and complete the second phase of the new Baiyun International Airport. As the projects progress, law firms whose practices include project finance, construction and real estate are benefiting from the influx of work. And the most exciting development is yet to come. The Guangzhou government is changing the basic operations of the city’s foreign investment intakes and its economic development. The 2007 Guangzhou Foreign Trade White Paper sets out the changeover from a labourdriven economic growth to one that is based on technological developments. Investment in the automotive, petrochemical and electronic information industries will be encouraged. These fundamental changes will create opportunities for business law firms targeting the mid to high end of the value chain. “Compared to fi rms in Beijing and Shanghai, Guangzhou fi rms have fewer opportunities to develop a sophisticated cross-border transaction practice,” Sino-West Law Associates’ managing partner Gordon Lin says. “However, it’s relatively easy for a fi rm to succeed in Guangzhou, as long as it’s able to do its best with the opportunities that are present.” With location advantages, Guangzhou firms can slice through the competition in the greater Pearl River Delta (PRD) region. “If a deal doesn’t require central government’s approval, clients in the PRD region will most likely hire a local firm from the provincial capital city to be their legal advisor,” says Lin. Guangda Law Firm, winner of Guangdong Law Firm of the Year at the ALB China Law Awards in 2007 and 2008, had a record year with revenue growth of 30% in 2007. When asked about plans for the future, executive partner of Guangda Pete Zhang says the firm will retain its primary focus on Guangdong province, because it has seen the immense potential outside the traditional litigation work. “There’s no doubt at all that lawyers’ role in litigation has been

well established and understood by people in Guangzhou,” says Zhang. “The function of lawyers in corporate and investment areas, however, is only being gradually understood and accepted by local entrepreneurs and by the government,” he continues. “It will take some time for the idea of using lawyers for non-contentious matters to reach the same level as it is now in Beijing, Shanghai and the Yangtze River Delta. But that’s exactly what we should focus on, because it will be the main driver of our firm’s future growth. Guangdong’s economy is strong enough to foster a much larger and deeper legal services market.” Asian Legal Business ISSUE 8.6

SPECIAL REPORT | china >>

exclusively for in-house counsel and senior business leaders

ALB

IN-HOUSE LEGAL SUMMIT BEIJING BEIJING HONG KONG

www.theinhousesummit.com

MUMBAI SEOUL

BEIJING • 6 NOVEMBER 2008

SHANGHAI SINGAPORE

SWISSOTEL HOTEL NO.2 CHAO YANG MEN BEI DA JIE, BEIJING, P.R.CHINA

TOKYO

ALB In-house Legal Summits are elite forums tailored exclusively for the region’s leading in-house counsel. Following overwhelming success in Singapore, Hong Kong, India, Korea, China, ALB In-House Legal Summit will be staged in Beijing for the ſfth year. An extensive range of focused practice area workshops are combined with interactive panel discussions and networking opportunities at this “must attend” legal event of 2008.

GREAT REASONS TO ATTEND: • IN-DEPTH WORKSHOPS FOCUSING ON THE LATEST LEGAL ISSUES PRESENTED BY TOP LAW FIRMS • OPPORTUNITIES TO NETWORK AND MEET LEADING LEGAL EXPERTS AND COLLEAGUES • PANEL DISCUSSION ON THE VITAL ROLE OF IN-HOUSE COUNSEL BY SOME OF CHINA’S MOST DISTINGUISHED SPEAKERS

For further information and registration, please contact Gina Wong, gina@kmimail.com or tel: (852) 2815 5988 For sponsorship opportunities, please contact Brenda Lau, brenda@kmimail.com or tel: (852) 2545 9930 Peter Chau, peter@kmimail.com or tel: (852) 2545 8806 Yvonne Cheung, yvonne@kmimail.com or tel: (852) 3520 1361 Workshop Sponsor

Associate Sponsorship

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Luncheon Sponsorship

Ofſcial Media Partner

Another event organised by

SPECIAL REPORT | China >>

International firms shake up the market

here has not been further liberalisation in China’s legal service market for a number of years, but new licences allowing representative offices to set up in China are being granted to foreign and Hong Kong firms each month. “All international firms with offices overseas will look to China as a very important part of their international

plan and will want to take advantage of the growth. So foreign firms are still coming in and the ones doing well here are trying to expand,” says John Grobowski, former co-managing partner at Baker McKenzie’s Shanghai office who has joined Faegre & Benson as the head of the firm’s Shanghai office. However, as the market is getting more crowded and competitive, managing

INTERNATIONAL FIRMS

“All international firms with offices overseas will look to China as a very important part of their international plan and will want to take advantage of the growth. So foreign firms are still coming and the ones doing well here are trying to expand” JOHN GROBOWSKI, FAEGRE & BENSON

partners of international firms’ China offices find it is increasingly challenging to make the cut. “It’s a market that’s rapidly becoming more sophisticated, more diversified and more competitive. The challenge for all law firms, both local and foreign, increasingly will be to acquire and project an identity that differentiates them from their peers,” says Cutler Elliot, the resident partner in charge of Akin Gump’s Beijing office. The entrance of international firms is ostensibly welcomed by general counsel in China. “Under our company’s global strategy, our need for international legal services and foreign lawyers is growing significantly,” says Qiao Hai of Beijing-headquartered Udifa. “For responsive, cost-effective services and familiarity with the local market, we prefer to work with firms that have an office in Beijing.” More importantly, general counsel also appreciate the fact that increased competition can have a positive impact on local professional standards. ALB

Asian Legal Business ISSUE 8.6

SPECIAL REPORT | china >>

www.legalbusinessonline.com

FEATURE | China Law Awards coverage >>

ALB The thrill of victory… ALB, in conjunction with repeat title sponsor Omega, are proud to announce the winners of the 2008 China Law Awards, where the best of the best in the business were feted at the Westin Shanghai Hotel on 25 April

LB magazine is thrilled to announce the results of the fourth annual ALB China Law Awards, which were celebrated on 25 April at Shanghai’s Westin Hotel, where the cream of the crop of the mainland legal and dealmaking community gathered to honour the best work produced by their profession over the course of 2007. The results of this year’s awards reflected the changing nature of the Chinese legal market, which is on the one hand maturing and consolidating, and on the other opening a wealth of opportunities for niche players to gain a foothold in a number of specialist areas. Judges had their work cut out for them as well: not only were a record number of firms involved in this year’s awards, but there were a record number (36) of categories as well, thanks to the creation of a number of awards to recognise legal excellence in China’s regional centres. Among the big winners this year was Haiwen & Partners, which went home with six trophies on the night, thanks largely to its work in such groundbreaking deals as the historic Alibaba.com IPO, which not only took Equity Market Deal of the Year but was named Deal of the Year as well, Chinese legal giant King & Wood, which took home five trophies, and Jun He, which was close on its heels with three – including the coveted Beijing Firm of the Year and China Firm of the Year awards.

FIRMS OF THE YEAR

DEALS OF THE YEAR

Banking

Jun He

China Firm

Jun He

Dispute Resolution

King & Wood

Insolvency & Restructuring

Dacheng

Insurance

AllBright

Intellectual Property

Liu Shen & Associates

International Firm

Lovells

Managing Partner

Wang Zhongde (Dacheng)

Offshore

Appleby

Shipping

Wang Jing & Co

Tax & Trusts

Grandall Legal Group

Beijing Firm

Jun He

Guangzhou Firm

Guangda Partners

Hong Kong Firm

Deacons

Real Estate & Construction

Soho China IPO (Zhong Lun, Haiwen & Partners, Freshfields, Conyers Dill & Pearman, Commerce & Finance, Skadden Arps)

Project Finance

Fujian Refining and Ethylene Project (King & Wood, Latham & Watkins, Haiwen & Partners, Shearman & Sterling, White & Case)

M&A

CIC-Morgan Stanley (Sullivan & Cromwell, Davis Polk & Wardell)

IT/Telecommunications

Alibaba.com IPO (Fangda Partners, Freshfields, Sullivan & Cromwell, Maples & Calder, Haiwen & Partners, Slaughter & May, Simpson Thacher Bartlett)

Jiangsu Firm

FD Yongheng

North-East China Firm

Deheng Law Firm

Shenzhen Firm

Sincere Partners

International Dealmaker

Celia Lam (Linklaters)

Tianjin Firm

Winners (Jinnuo)

Energy & Resources

West China Firm

Tahota (Chengdu)

China Petrochemical oil refinery assets acquisition (Guantao, Herbert Smith)

Zhejiang Firm

T&C

Equity Market

Shanghai Firm

Grandall Legal Group

CITIC Bank IPO (King & Wood, Skadden Arps, Commerce & Finance, Freshfields)

Debt Market

Sinopec CB Issue (Herbert Smith, Haiwen & Partners, Skadden Arps, Commerce & Finance, Freshfields)

China Dealmaker

Bai Yanchun (King & Wood)

China Deal of the Year

Alibaba.com IPO (Fangda Partners, Freshfields, Sullivan & Cromwell, Maples & Calder, Haiwen & Partners, Slaughter & May, Simpson Thacher Bartlett)

IN-HOUSE TEAMS OF THE YEAR Banking & Financial Services

ICBC

China In-House Team

ICBC

Chinese Company

Sinopec

Foreign Company

Microsoft

Investment Bank

UBS

Asian Legal Business ISSUE 8.6

FEATURE | China Law Awards coverage >>

Grandall Legal Group, meanwhile, was named Shanghai Firm of the Year, while Dachengâ&#x20AC;&#x2122;s Wang Zhongde was named Managing Partner of the Year, in no small part for his leadership of his fi rm in a year when they opened five new offices and saw revenue more than double. Meanwhile, in the In-House categories, which recognise the special work of in-house counsels, ICBC was the big winner on the night, with judges keen to recognise the work the banking giantâ&#x20AC;&#x2122;s legal team, led by Zhang Wei, performed during 2007 which included not one but two major overseas M&A transactions. ALB magazine would like to once again extend its heartiest congratulations to all the winners, as well as thank its panel of judges and the hundreds of legal professionals, bankers and in-house counsel who participated in our research and whose continued dedication ensures that these awards provide a vehicle for the Chinese legal industry to speak with one voice. ALB

THE BIG WINNERS Haiwen & Partners

King & Wood

Jun He

Commerce & Finance

Fangda Partners

Dacheng

Grandall

www.legalbusinessonline.com

FEATURE | law firm associations >>

► CHINA Lex Mundi Meritas MSI Global Alliance TerraLex

Jun He Law Office Grandfield Law Offices Lehman Lee & Xu Hylands Law Firm; Liu, Shen & Associates; AllBright

► HONG KONG Lex Mundi Meritas MSI Global Alliance TerraLex

(currently recruiting) Gallant Y.T. Ho & Co. ONC Lawyers Boughton Peterson Yang Anderson

► BANGLADESH Lex Mundi Meritas MSI Global Alliance TerraLex

Amir & Amir n/a n/a Amir & Amir

► PHILIPPINES Lex Mundi Meritas MSI Global Alliance TerraLex

Romulo Mabanta ACCRA n/a ACCRA

► THAILAND Lex Mundi Meritas MSI Global Alliance an TerraLex

Tillek & Gibbins Tilleke ns Russin ussin & Vecchi Hutter tter & Dhira Ltd KSeriri Man Manop Ma & Doyle le

► INDONESIA I DONESIA Le ex Mundi Mu

Ali Budiardjo, iardjo, d Nugroho, Nug o o RReksodiputro dip tro Meritas itas Hanafi anafiah PPonggawa nggawa & Partners MSI Global a Alliance Al n/a TerraLexx Kartini a n Muljadi ulja & Rekan R

► INDIA Lex Mundi

Amarchand & Mangaldas & Suresh A. Shroff S & Co. Meritas Khaitan & Co C MSI Global Alliance Chandan Associates; Rajinder Narain & Co; Surana & Surana International Consultants Private TerraLex n/a

► MALAYSIA Lex Mundi Meritas MSI Global Alliance TerraLex

Skrine Zain & Co Chooi & Company Azmi & Associates

► SINGAPORE ► SRI LANKA Lex Mundi Meritas MSI Global Alliance TerraLex

F. J. & G. De Saram n/a John Wilson Partners n/a

Lex Mundi Meritas MSI Global Alliance TerraLex

(currently recruiting) Joyce A. Tan & Partners Low Yeap Toh & Goon Kelvin Chia Partnership

► AUSTRALIA TRALIA Lex ex Mundi Mu Meritas MSI Global Alliance TerraLex

Clayton Utz Various (one firm per state) Various (one firm per state) Middletons

Asian Legal Business ISSUE 8.6

FEATURE | law firm associations >>

► KOREA Lex Mundi Meritas MSI Global Alliance TerraLex

Hwang Mok Park Lee & Ko n/a Yoon Yang Kim Shin & Yu

► JAPAN Lex Mundi Meritas MSI Global Alliance TerraLex

Nishimura & Asahi Kojima Law Offices Kojima Law Offices Yuasa and Hara; Kikkawa Law Offices

► TAIWAN Lex Mundi Meritas MSI Global Alliance M n TerraLex r

Tsar & Tsai Law Firm Russin & Vecchi c n/a Pamir Law L Group

Joining the alliance As more Asian economies reach a level of maturity that enables local corporations to look for investments beyond their national borders, global law firm associations are doubling their efforts in this region to make sure their members secure a piece of the advisory pie

► NEW ZEALAND Lex Mundi Meritas

Simpson Grierson son Martelli McKeggg Wells W & Cormack MSI Global Alliance Wynyard Wood TerraLex n/a

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ross-border M&As in Asia are on the rise. As emerging markets continue to develop, not only do more opportunities for investments and takeovers present themselves, but local corporations also gain enough confidence to test the international waters. “Companies today are increasingly seeking targets in more far-flung destinations,” conclude the researchers of the Economist Intelligence Unit in a survey into global M&A activity, held in January. “The rapid development of some countries in Asia, the Middle East and Latin America has created a whole host of new opportunities for acquirers in these regions, while at the same time turning local companies into acquirers in their own right.” Several countries in particular have come under the spotlight, with Vietnam, Korea and Thailand becoming increasingly attractive destinations. Their renewed interest is part of a global trend. The Economist’s survey asked 670 executives worldwide which region they considered as the most attractive destination for M&A, and 57% mentioned China, India and South East Asia as their preferred destination over the next 18 months. The attractiveness of the Australian resource sector and its nexus with Asian development is of course

well known. Western Australia, for example, has seen Chinese corporations hunting for mining and natural resources companies to secure the continuous supply of minerals. There is also anecdotal evidence that Japanese corporations have ramped up their investments in construction projects in recent months, especially in Queensland.

Joining forces For law firms that do not have an extensive network of international offices, the question is how they can tap into this source of cross-border advisory work, without having to set up costly new offices. Teaming up with an international player is one approach, but such opportunities are rare. Meanwhile, there is another alternative – membership of a global alliance. James Mendelssohn, CEO of MSI Global Alliance, says he has seen an increase in applications for membership over 2007. “We received 250 cold applications in 2007 – those are applications from law firms that we had never heard of before.” And where globalisation is the name of the game, it is not hard to see why independent firms are scrambling to join an alliance. “The key advantage for today’s independent law firm is 59

FEATURE | law firm associations >>

► GLOBAL ALLIANCES: QUICK FACTS ON THE MAIN PLAYERS Lex Mundi

• Established 1989 • 160 member firms in 99 countries • Members are prominent local law firms recognised for the breadth and depth of their legal expertise and their reputations in their jurisdictions • All members are full-service commercial law firms Meritas

• Established 1990 • 170 member firms in 60 countries • Firms practise in all business areas, both transactional and litigation MSI Global Alliance

• Established 1990 • Over 250 independent member firms in 100 countries • Membership includes accounting firms • Caters for full-service, commercial firms which are independent and medium sized in their market and focused on one specific geographic region TerraLex

• 158 firms in 100 countries • Members are full-service law firms. Occasionally has two firms with different practice profiles in same market • Typically has only single member in each market, however some jurisdictions may have multiple distinct markets

that it can service and retain larger clients that have international business interests, without going through the pain of a merger or being swallowed up by a larger firm,” says Mendelssohn. “Without membership of an organisation such as MSI Global Alliance, the firm may have lost its most important clients to larger national or international law firms.” And that is the key point. Much of the increase in interest stems from the realisation that law firms need to have an international network to not only attract new clients, but also retain existing clients. This, says Mendelssohn, applies especially to mid-sized law firms. “Clients say that they want to stay with these firms because they enjoy the personalised service, but they need international representation. The benefit of joining an alliance isn’t just about waiting for a phone call and signing up a big new client from Hong Kong; it’s also about retaining existing clients.” The other advantage of membership, says Mendelssohn, is the kudos which

accompanies it. “So for an independent firm, promoting one’s status as a carefully selected, exclusive member of one of the more high profile associations is an increasingly important business development resource; MSI members are regularly winning work from nationally or internationally focused companies that would previously have been the exclusive domain of the big firms.” MSI is also looking to build stronger ties with the Asia-Pacific region, in particular greater China. Three months ago, it welcomed a new Hong Kong member, Or Ng & Chan, to its ranks. It has also scheduled a meeting of member firms in Beijing for October.

No guarantees Despite the seemingly growing interest from law firms to join alliances, the options are often limited, especially when seeking memberships with some of the more established alliances. Most alliances allow only one member per jurisdiction, in order to provide members with exclusivity.

Asian Legal Business ISSUE 8.6

FEATURE | law firm associations >>

www.legalbusinessonline.com

FEATURE | law firm associations >>

► HOW MEMBERSHIP OF A GLOBAL ALLIANCE CAN WORK EXAMPLE ONE A Japanese staffing company employed the services of a TerraLex member firm when it decided to go ahead with a major acquisition of a well-known provider of corporate training, recruiting and office outsourcing in the UK. The transaction involved participants in three major time zones (Japan, Europe and the US). The team cooperation between member firms in the US and the UK enabled the transaction to be completed in just one week from the date when the green light was given for implementing the deal.

EXAMPLE TWO New Years Eve, December 2006: A TerraLex representative from Stoel Rives in Boise, Idaho, received an urgent message from his client, whose auditors had identified an important legal question that needed to be answered by midnight. The matter involved a Chinese trust, a transfer of stock from Singapore to Mauritius, and questions arising under Singapore corporate law. Through TerraLex connections in Taiwan and Singapore, the question was resolved less than six hours after it was raised. A huge potential tax liability was avoided, to the client’s immense relief. Interestingly, the matter had also been referred to a large international law firm, which had been unable to assist at such short notice.

“We’re a fairly mature network and therefore don’t allow many new members,” says Carl Anduri, president of Lex Mundi, a well known global alliance of full-service firms. Anduri says the alliance receives regular enquiries from law firms wanting to join the association. Only occasionally new positions become available. Lex Mundi reviews its members every eight years and has expelled law

firms from the network in the past for allowing their quality standards to slip. “Membership isn’t guaranteed,” Anduri says.

Member services There are also a number of more practical benefits of joining an association. Members of Lex Mundi, for example, can contact each other for up to 30 minutes of free legal

advice. All associations provide a host of seminars and professional development opportunities – along with the chance to build those all-important international contacts. Other services are perhaps less commercially oriented. Pro bono work is an important part of any firm’s profile and global associations can help members gain access to pro bono opportunities. Lex Mundi, for example, has a Pro Bono Foundation which is focused on providing pro bono assistance to what it describes as “social entrepreneurs” or change makers – people who use an entrepreneurial approach to solve social problems on a local or global scale. Examples of work that members have been involved in include defending the developer of a bamboo gasifier to produce environmentally clean electricity from administrative action, and providing legal assistance to Kiva Microfunds, a US-based organisation that facilitates microlending to economically disadvantaged people worldwide. ALB

Asian Legal Business ISSUE 8.6

FEATURE | law firm associations >>

www.legalbusinessonline.com

8.6_la_alb_hk hi-res.pdf

5/22/08

10:50:15 AM

PRIVATE PRACTICE

IN-HOUSE

FUNDS – HONG KONG

GENERAL COUNSEL – HONG KONG

Global leader in the funds arena, this leading international law firm seeks a dynamic mid/senior level lawyer. Impressive client base you will have direct access to leading financial services institutions. Chinese language skills preferred. (PT1867) 4 YRS+ PQE

A senior lawyer is required by this global manufacturing group to take the lead in advising on commercial, corporate finance, intellectual property and litigation matters. Competitive Remuneration. (IS963) 10 YRS+ PQE

COPORATE – HONG KONG

REGIONAL COMPLIANCE DIRECTOR – HONG KONG

Join a leading practice within a leading international UK law firm. Access to high profile work within a supportive team. You must have broad corporate experience inclusive of M&A and PE work. Exceptional career development opportunity. (PT1868) 2-5 YRS+ PQE

The asset management arm of this leading investment institution is looking for a compliance professional to take up this leadership position. You should have relevant experience, gained at a bank or fund. Superb career prospects. (IS965) 6 YRS+ PQE

US SECURITIES – SHANGHAI

INVESTMENT FUNDS – HONG KONG

International firm seeks skilled associate with mix of M&A, FDI and securities listings experience to join their practice. Friendly team and US rates salary package. PRC lawyer with international law firm experience to qualify. (PT1870) 4 YRS+ PQE

This global futures fund provider invites a sharp and dynamic lawyer. You will advise a wide range of financial intermediaries, institutions and qualified investors throughout Asia. Experience in compliance matters is essential. (IS962) 5 YRS+ PQE

PARTNER – CORPORATE TRANSACTIONS – SHANGHAI

SECURITIES / INVESTMENTS – HONG KONG

Top ranking global US firm seeks talented partner or counsel with international experience to lead its PRC practice and provide advice to blue-chip clients on a range of corporate transactions. Genuine equity partnership on offer. (PT1863) 8 YRS+ PQE

Elite global financial services group seeks a Regional Counsel to handle the legal and compliance functions with respect to its fund matters in Asia. Relevant securities knowledge is essential. Superb package. (IS968) 7 YRS+ PQE

COMMERCIAL LITIGATION / IP – BEIJING

PRIVATE EQUITY / INVESTMENTS – HONG KONG

Leading UK firm with impressive litigation team requires lawyer skilled in both litigation and IP to act as a crucial link in their expanding commercial practice in China. High degree of autonomy and career progression. (PT1862) 3-5 YRS PQE

A private equity lawyer is required by this global institution to advise the investment business. Experience in private equity and M&A transactions and fluency in English is required. Rare in-house prospect for career development. (IS955) 6 YRS+ PQE

CORPORATE – TOKYO

FUNDS / INVESTMENTS – HONG KONG

High Profile US law firm requires Corporate lawyer to join its leading team. Broad variety of work on offer. Friendly working environment and first class training. Japanese language skills are not required. Attractive remuneration package. (PT1873) 3-5 YRS PQE

Investment giant seeks a funds lawyer. You will provide legal advice and support for this conglomerate’s businesses in Asia. Experience at an international law firm or funds house is a must. English is essential. Lucrative package on offer. (IS970) 4 YRS+ PQE

CMY

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

www.law-alliance.com Visit our website to see the latest in-house and private practice vacancies worldwide.

IN-HOUSE

Compliance, Hedge Fund – Hong Kong

Senior Legal Counsel – Hong Kong

Our client is one of the world's biggest hedge funds. A compliance professional well-versed with policy-making and implementation is sought as a new addition to the existing legal team currently composed of 20 legal and compliance professionals. If you are tired of traditional banks, this would be an exciting opportunity that comes with a great package.

A leading international media company is currently looking for an in-house senior legal counsel with 6-10 years' PQE. The ideal candidate will have solid corporate/corporate finance, M&A and PRC-related experience. Candidates who have experience in advising on media and telecoms related transaction experience will have a distinct advantage. Fluent English and full set of Chinese language skills are essential. Interesting working environment.

PRIVATE PRACTICE Corporate Finance Lawyer – Hong Kong/Singapore

ISDA Documentation Specialist – Hong Kong This European bank is looking to grow its derivatives' support team. As an ISDA Documentation Specialist, you will work closely with the derivatives' legal team. You will be responsible for drafting and negotiating a wide range of master agreements. Individuals with a legal or paralegal background without ISDA experience will be considered. Terrific opportunity to specialise in an area of the law which is interesting and in high demand in the global financial markets.

Funds Lawyer – Hong Kong/Singapore Our client is amongst the top tier investment banks globally. Its asset management division is seeking to add an additional mid-ranking to senior funds lawyer to its expanding team in Asia. Work experience in a reputable law firm or financial institution of international exposure in structuring, distribution, management and investment of retail and institutional funds would be ideal. Transactional experience in private equity, real estate and M&A would be helpful as well. Candidates with experience in investment-linked products from insurance companies will also be considered, as well as more junior candidates (for another role within the same team).

Top international law firm is seeking to expand its corporate finance team. Candidates with between 3-8 years’ PQE and an excellent track record with international firms are invited to apply. The successful candidate should ideally have strong equity capital markets experience, in particular, transactional experience in cross border/China IPOs. Attractive salary and top potential for private practice career advancement.

Senior Corporate Lawyer – Shanghai Magic Circle firm seeks a high quality PRC practice lawyer with solid international experience to join its PRC practice group in Shanghai. Must have at least 4 years’ PQE in extensive M&A, FDI, IPO and general corporate transactions. Fluent Mandarin and written Chinese are a must. Excellent career path plus competitive package.

Employment Lawyer – PRC US law firm well-established in the region is seeking a senior employment and labour lawyer to join its world-renowned employment team. You should have minimum 6 years' PQE and be familiar with PRC employment and labour law. Based in Shanghai, you will be leading a team of local PRC lawyers. Partnership role depending on your level of experience.

IP (Patent) Specialist – Hong Kong/China

US Capital Markets Lawyer – Hong Kong

MNC is looking for a Brand Protection Manager who will be largely responsible for the company's counterfeit prevention efforts. These efforts are focussed on policy implementation through to investigation and enforcement of the company's IP rights. You will work closely with external counsel, private investigators and law enforcement. The role is a regional one and travelling to China will be required. A background in engineering/manufacturing and IP law is clearly an asset. Mandarin a must.

Top US firm is seeking a mid-ranking capital markets lawyer to join its established team in HK. JD preferred and Chinese language skills ideal. Excellent remuneration and interesting transactions on offer.

Litigation Partner – Hong Kong Wall Street Firm is looking to build a solid litigation practice. You should not only have at least 7 years' PQE in litigation but also a book of business. Senior associates with great entrepreneurial skills will also be considered.

Please contact Eunice Chiu – Director, Head of Legal Practice, Asia at +852 2531 2209, Mb: +852 6077 1707 or email eunice.chiu@asia.psdgroup.com

PSD Group Hong Kong: 5107 Central Plaza, No. 18 Harbour Road, Wanchai, Hong Kong General Line: +852 2531 2200 Singapore : 77 Robinson Road, #14-02 Robinson 77, Singapore 068896 General Line: +65 6738 3088

http://asia.psdgroup.com PSD is part of the OPD Group & listed on LSE

Singapore • Hong Kong • Shanghai • Dubai • London • Paris • Munich • Frankfurt

Sign off >> UN and A&O prove most popular with students

he United Nations and Allen & Overy have come up as winners in the popularity stakes for students interested in a career in law. The survey, taken out by market research company Trendence, marked Clifford Chance as the second most popular law firm – ranked joint sixth alongside the Government Legal Service – along with Linklaters, which was the only other law firm to make the top 10. According to the 1,500 students interviewed for The Graduate Recruitment Review Law Edition 2008, bad work-life balance (45%), lack of diversity (25%) and a narrow range of work experience (20%) are putting students off from applying to law firms. Money, however, featured at the bottom of the list, with just over 8% of students putting low salaries down as their reason for not wanting to work for law firms.

I ► MOST POPULAR EMPLOYERS – ALL UNIVERSITIES Ranking

Company

United Nations

Allen & Overy

International Court of Justice

Crown Prosecution Service

Civil Service

Government Legal Service

Clifford Chance

Linklaters

Amnesty International

PricewaterhouseCoopers

Source: The Graduate Recruitment Review Law Edition 2008

Committee ship-shape or listing badly? W hile the South China Morning Post (SCMP) has for years exercised admirable restraint and conservatism in the face of the frontpage gore fests and sensationalist revelations of some of its competitors, the grand old dame of Hong Kong journalism does occasionally trip up. Such as on 20 May, when it tried to neatly sidestep the judiciary and send poor old Carlson Tong Ka-Shing, joint chairman of KPMG China, directly to jail without passing go.

Reporting on the recent change in the chair of the HKSE’s listing committee, the SCMP wrote: “The stock exchange yesterday announced the appointment of William McAfee, managing director of GE Asia Pacific Capital Technology Fund and Asia Pacific Capital (HK), as chairman of the listing committee for one year. He replaces Carlson Tong Ka-shing who has been jailed for six years.” What the SCMP of course meant to say was:

T mastermind E James Perullo is not one to shy away from a few hard yards. At 42 years of age, he decided to switch careers to law. Realising it would be no easy task, he decided to keep his day job – and build an evening-hours law firm on the side. Branded and trademarked as AfterHours Law, Perullo’s firm – Bay State Legal Services – is built on convenience for clients and is a collection of 14 lawyers and four paralegals who meet clients at the downtown Boston office Monday through Friday between 6pm and 10pm.

“He replaces Carlson Tong Ka-Shing, who has served the maximum term of six years.” The SCMP apologised and issued a clarification the next day. ALB’s 2007 China Dealmaker of the Year and Freshfields China managing partner Teresa Ko, who was named one of the deputies of the committee, will be pleased not to be making regular visits to Stanley Prison for advice from the former chairman.

Dirty habits C

areers service TheLadders.co.uk recently polled 250 lawyers on a topic slightly off centre – colleague pet hates and filthy habits. According to the report, stealing a colleague’s food (100%), and flossing teeth with a paperclip and picking of noses (95%) came in as the most hated habits of staff, followed by bad hygiene, foul breath and dirty clothes. These were followed by: • bad language (86%) • eating smelly food (79%) • loud talking (78%) • leaving the office without telling colleagues (75%) • drinking at lunchtime (73%) A few past pet peeves that used to make the ranking are now acceptable it seems, with personal instant messaging at work, gossiping and the making of personal calls all coming in below the 70% mark.

Asian Legal Business ISSUE 8.6