Asian Legal Business (SE Asia) May 2009

ISSUE 9.5

Middle East How will client demands affect the industry?

Offshore firms Why they are faring better in the downturn

Special Report: Singapore Meet the new kids on the block

ALB ASIAN LEGAL BUSINESS

Korean 2009 KOREA

DEAL OF THE YEAR 2009

Deals of the Year:

Leading in-house lawyers select the deals that have shone in Korea during the past year

PLUS:

M&A beckons in Asia

Financial services deals get smaller, faster… and more challenging

ISSN 0219 – 6875 MICA (P) 065/09/2008

MARKET Analysis LATERAL MOVES DEALS ROUNDUP REGION-wide PERSPECTIVES UK, US REPORTS

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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.

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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.

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Indonesia BT Partnership is a dynamic and result oriented law firm specialized in corporate-financial restructuring and litigation practices with full-length and great detailed of experiences in safeguarding multinational clients from complex legal issues including for their M&A, FDI, Funds and Structured Finance transactions. In 2007, the firm has been awarded as Dispute Resolution Firm of the Year and further, Employer’s of Choice for Indonesia jurisdiction while its Partner has been inaugurated as one of the Asia Hot Lawyers of the Year 2008.

Vietnam Indochine Counsel is a commercial law firm focusing on business law practice in the Indochina region. Our areas of practice include: Foreign Investment, Corporate & Commercial, M&A, Securities & Capital Markets, Banking & Finance, Property & Construction, Taxation, Intellectual Property, Information Technology & Internet, International Trade, Outward Investment & Offshore Incorporation, and Dispute Resolution.

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Competition / Intellectual property ATMD Bird & Bird 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 Bird & Bird 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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Employment law Freehills’ strong reputation for delivering the best commercial legal advice has been developed over more than 150 years, becoming one of the largest and most respected law firms in Australia and Southeast Asia. Freehills has offices in Sydney, Melbourne, Perth and Brisbane. It was one of the first Australian firms to establish an Asian practice and has an office in Singapore and correspondent offices in Hanoi, Ho Chi Minh City and Jakarta.

Financial services 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 feebased alternative setting us apart in an industry that is dominated by commission driven sales.

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Established in 1889, Drew & Napier is one of Singapore’s leading law firms. Consistently rated top tier in dispute resolution, the firm has 7 senior counsel, the largest number of any Singapore law firm. The firm is headed by CEO, Davinder Singh, SC, one of Singapore’s foremost lawyers. Drew & Napier is also highly rated in Insolvency & Restructuring, IP, Tax, Banking & Corporate, Competition Law, TMT, and Shipping.

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Islamic Finance Azmi & Associates is reputably known as one of Malaysia’s leading firms in the areas of Mergers & Acquisitions, Capital & Debt Market, Corporate & Commercial, Energy & Utilities, Restructuring, Projects, Construction, Privatisation and Financing, Litigation and Arbitration and is also rapidly building its reputations in the areas of Intellectual Property and information technology.

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1

EDITORial >>

The GFC scapegoat

T

he trend, it seems, is to use the global financial crisis (GFC) as a scapegoat for the failures, mistakes and discomfort being faced by businesses, governments and individuals at the moment. From the likes of Bernie Maddoff and Lehman Brothers to the proprietors of Freddie Mac and Fannie May and the US government, all have found comfort in justifying their own foibles by suggesting that it was not they but rather economic meltdown which is to blame.

The legal industry has also seen its fair share of finger pointing and GFC scapegoating. From Heller Ehrman to Thelen and more recently on the issue of layoffs, redundancies, and salary freezes, law firms have also sought solace in the assertion that it is the broader macroeconomic climate that has catalysed such discomfort rather than anything they have done (or failed to do as the case may be).

In an interview with ALB, Bradford Hildebrandt, chairman and founder of international law firm consultants Hildebrandt International, disagrees with such views and asserts instead that law firms are as much to blame for the discomfort they are experiencing at the moment as the GFC. Hildebrandt contends that while the GFC has slowed the demand for legal services across the globe, law firms across the globe may have been able to weather the storm without needing to result to such drastic reactive cost-cutting measures if they had invested in the establishment of viable organizational structures which can effectively resolve the age old problem of costs versus revenues.

Instead of taking temporary refuge in counter-cyclical areas like litigation, insolvency and restructuring, law firms, says Hildebrandt, could have emerged from the current crisis in a much stronger financial and market position. But as much as structural change is required, just as important is attitudinal change.

From things such as management style, marketing and business development to the perception of the law as a profession rather than a business, wholesale change is needed, and it is change that by no means will be easily achieved.

Hildebrandt offers law firms in the region a good starting point: look in-house.

Look to establish organizational structures that are not rigid, tired or old, but dynamic. And start planning for the next crisis now so you won’t be using it as a scapegoat the next time around.

Instead of taking temporary refuge in counter-cyclical areas like litigation, insolvency and restructuring, law firms could have emerged from the current crisis in a much stronger financial and market position

2

IN THE FIRST PERSON “You can’t say you’re in Asia if

you’re not in China”

Gibson Dunn & Crutcher’s Asia & Pacific managing partner on his firm’s plans to expand into North Asia (p43)

“The Chinese are definitely interested in investing now, and they’re not about to wait,” Mallesons Stephen Jaques’ Stephen Minns on why FDI won’t remain quiet in China for long (p45)

“The process of offshore firms taking on more jurisdictions is bound to continue and whether that be through mergers, tie ups or opening completely new offices we don’t know. But what we do know if that the process will not be scaled back” Conyers Dill & Pearman’s John Colliis on how the global financial crisis is driving expansion rather contraction for offshore law firms (p50)

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Asian Legal Business ISSUE 9.5

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News | deals>> >> CONTENTS

contents

ALB issue 9.5

54

48 COVER STORY 48 Korean Deals of the Year 2009 ALB reveals Korea’s top deals of 2009, as selected by a panel of experts

ANALYSIS 8

Strategic M&A Financial services companies are vigilantly looking to expand their operations by engaging in strategic M&A in the year ahead

10 Infrastructure funds The Asian funds industry is showing vital signs in the economic gloom and may just be the industry’s beacon in the storm 12 Employment boost Indian firms are reaping the benefits of the contracting legal market abroad by recruiting top talent from international firms 13 Middle East restructuring Clients are demanding more from their firms, and increased competition in the region will mean firms will have to listen and learn

FEATURES 34 ALB Special Report: Singapore 2009 ALB finds that Singapore’s new firms are not focusing on just the Lion nation 42 ALB Managing Partner Series Find out why Gibson Dunn & Crutcher’s Jai Pathak says the firm’s Asian strategy may be perceived as a little odd 44 China FDI: Two-way street

Chinese FDI is not all one way and firms are

still anticipating strong inbound activity

4

44 54 Offshore firms What is next for offshore law firms and how do they market themselves in a downturn?

Regulars 14 • • • • • •

NEWS Indian legal market ‘not for sale’ Clyde & Co partner sets up Saudi alliance Allens Arthur Robinson boss says there will be no forced layoffs Malaysia to let five foreign firms set up locally Four-day week gets thumbs up Korean partial liberalisation puts mergers back on the agenda

Regulars 16 UK report 18 US report 28 Mergermarket M&A update 84 Sign off 20 International tax Azure 21 Financial Services Howarth 22 Intellectual Property ATMD Bird & Bird 23 International arbitration Drew & Napier

42 25 Islamic Finance Azmi & Associates 26 Employment Freehills 27 IT Guidance Software 30 REGIONAL UPDATES • China Paul Weiss • Philippines SyCip Salazar Hernandez & Gatmaitan • Malaysia Tay & Partners • Singapore Loo & Partners • Indonesia BTPartnership • Vietnam Indochine Counsel

PROFILES 41 KhattarWong 46 Loo & Partners 58 Harneys

ALB ASIAN LEGAL BUSINESS

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Asian Legal Business ISSUE 9.5

NEWS | deals >>

deals in brief | INDONESIA/THAILAND | ►► PTT Group - Straits Asia stake acquisition Value: US$325m

►► CJ Home Shopping Star Group JV Value: US$27m

Firm: Allen & Gledhill Client: PTT International Lead lawyers: Prawiro Widjaja

Firm: Bae Kim & Lee Client: CJ Home Shopping Lead lawyers: Joonki YI, Michael H. Lee, Ellen Y. Hong

Firm: Deacons Client: PTT International Lead lawyer: Shaun McRobert

• CJ Home Shopping has established a 50:50 JV with Star Group to start a home shopping business in India Shaun McRobert

Firm: Deacons WongPartnership Client: Straits Asia Lead lawyers: Ng Wai King, Dawn Law Firm: Shook Lin & Bok Singapore Client: JPMorgan • Thailand multi-national energy company PTT International acquires 60% stake in Straits Bulk & Industrial (SBI) • Deal gives PTT access to SBI’s coal asset interests in Brunei, Madagascar and Indonesia • Deacons team advised on cross-border due diligence, JV negotiations and competitive bidding structure

| JAPAN | ►► Morgan Stanley Japan Securities - Mitsubishi UFJ Securities JV Value: Undisc Firm: Sullivan & Cromwell Client: Mitsubishi UFJ Financial Group Lead lawyers: Donald Toumey, Stanley Farrar Firm: Freshfields Client: Morgan Stanley Lead lawyers: James Lawden, James Wood, Naoki Kinami • Formation of a securities joint venture combining Morgan Stanley Japan Securities and Mitsubishi UFJ Securities • The two securities businesses will operate as single as yet unnamed JV in Japan, with a management team drawn from both companies • Mitsubishi UFJ will own a 60% stake, Morgan Stanley 40% stake

6

| INDIA/KOREA |

• Initial investment by each company is US$27m • CJ Home Shopping is first global company to enter home shopping industry in India

| CHINA | ►► Grand Point Investment - Tianjin Port Company stake acquisition Value: US$1.8bn Firm: Freshfields Bruckhaus Deringer Client: Grand Point Investment Firm: Global Law Office Client: Tianjin Port Development Holdings

| SINGAPORE/CHINA |

Firm: K&L Gates Client: Tianjin Port Development Holdings

►► Atlantis Resources Corporation - Statkraft JV

• Grand Point Investment Limited signed an agreement to acquire 56.81% stake in Tianjin Port Company

Firm: Drew & Napier Client: Atlantis Resources Corporation

| CHINA/TAIWAN | ►► Unimicron Technology Corp - Phoenix Precision Technology Corp acquisition Value: US$362m Firm: Chen & Lin Client: Unimicron Technology Corp Firm: PuHua & Associates Client: Phoenix Precision Technology Corporation • Tawainese firm Unimicron Technology has agreed to acquire Phoenix Precision Technology for US$362m, to expand market share

Value: Undisc

Firm: Freshfields Bruckhaus Deringer Client: Atlantis Resources Corporation Lead lawyers: Connie Carnabuci, Stuart Grider Firm: Eversheds Client: Statkraft Lead lawyers: Paul Lowe, Tom Ferguson • Atlantis Resources Corporation strategic collaboration with Statkraft, European renewable energy company, to develop tidal current electricity projects in Europe • Freshfields previously advised Morgan Stanley on sale of Current Resources to Atlantis Resources Corporation

| korea | ►► SK Telecom convertible notes offering Value: US$332m Firm: Cleary Gottlieb Steen & Hamilton Client: SK Telecom Firm: Kim & Chang Client: Bookrunners Firm: Yulchon Client: SK Telecom Firm: Davis Polk James Lin & Wardwell Davis Polk & Client: Lead Wardwell managers Lead lawyers: Eugene C Gregor, James Lin • Barclays Bank, Citigroup, Credit Suisse and Nomura International were joint bookrunners, and HSBC and SK Securities as joint lead managers of offering by SK Telecom of its 1.75% convertible notes due 2014 Asian Legal Business ISSUE 9.5

NEWS | deals >>

• Seoul-headquartered SK Telecom is Korean wireless telecommunications services provider

►► Your month at a glance Firm

Jurisdiction

Deal name

Allen & Gledhill

Indonesia/Thailand

PTT Group - Straits Asia stake acquisition

325 M&A

Amarchand & Mangaldas

India/US

Tech Mahindra - Satyam Computer Services acquisition

404 M&A

Bae Kim & Lee

India/Korea

CJ Home Shopping - Star Group JV

Chen & Lin

Taiwan/China

Unimicron Technology Corp - Phoenix Precision Technology Corp acquisition

362 M&A

Firm: Pillsbury Winthrop Client: Gmarket directors

Cleary Gottlieb Steen & Hamilton

Korea

SK Telecom convertible notes offering

332 Equity market

Firm: Orrick Client: Gmarket Lawyers: Mark J Lee, David Cho

Davis Polk & Wardwell

Korea

SK Telecom convertible notes offering

332 Equity market

Firm: Kim & Chang Client: eBay

Deacons

Indonesia/Thailand

PTT Group - Straits Asia stake acquisition

325 M&A

Drew & Napier

Singapore/China

Atlantis Resources Corporation - Statkraft JV

Undisc Corporate

Eversheds

Singapore/China

Atlantis Resources Corporation - Statkraft JV

Undisc Corporate

Freshfields Bruckhaus Deringer

Japan

Morgan Stanley Japan Securities Mitsubishi UFJ Securities JV

Undisc Investment funds

Singapore/China

Atlantis Resources Corporation - Statkraft JV

Undisc Corporate

China

Grand Point Investment - Tianjin Port Company stake acquisition

1,800 M&A

Global Law Office

China

Grand Point Investment - Tianjin Port Company stake acquisition

1,800 M&A

Hwang Mok Park

Korea/US

eBay - Gmarket acquisition

1,000 M&A

Jones Day

India/US

Tech Mahindra - Satyam Computer Services acquisition

404 M&A

Kim & Chang

Korea

SK Telecom convertible notes offering

332 Equity market

Korea/US

eBay - Gmarket acquisition

1000 M&A 1,800 M&A

| KOREA | ►► eBay - Gmarket acquisition Value: US$1.2bn

Firm: Hwang Mok Park Client: Gmarket directors Lead lawyers: Brendon Carr, Doil Son

• eBay to acquire 100% of Gmarket, Korea’s leading internet trader, commencing cash tender offer to purchase shares at US$24 per share • eBay to combine Gmarket with its Korean subsidiary, Internet Auction Co, to double its sales in Korea • Acquisition will help eBay push into Japan and across Asia over the next six to 12 months

| INDIA | ►► Tech Mahindra - Satyam Computer Services acquisition Value: US$404m

Value (US$m)

Deal type

27 Media, FDI

Firm: Amarchand Mangaldas Client: Satyam Computer Services

K&L Gates

China

Firm: Latham & Watkins Client: Satyam Computer Services Lead lawyer: John Huber

Grand Point Investment - Tianjin Port Company stake acquisition

Latham & Watkins

India/US

Tech Mahindra - Satyam Computer Services acquisition

Firm: Jones Day Client: Tech Mahindra Lead lawyers: Peter Izanec, Robert Profusek, Tom Smith

Orrick

Korea/US

eBay - Gmarket acquisition

P&A Law Offices

India/US

Tech Mahindra - Satyam Computer Services acquisition

Firm: P&A Law Offices Client: Tech Mahindra Lead lawyer: Anand S Pathak

Pillsbury Winthrop

Korea/US

eBay - Gmarket acquisition

PuHua & Associates

Taiwan/China

Unimicron Technology Corp - Phoenix Precision Technology Corp acquisition

362 M&A

Shook Lin & Bok Singapore

Indonesia/Thailand

PTT Group - Straits Asia stake acquisition

325 M&A

• UBS Securities India as financial advisor for TM, Goldman Sachs (India) Securities and Avendus Advisors for Satyam

Sullivan & Cromwell

Japan

Morgan Stanley Japan Securities Mitsubishi UFJ Securities JV

WongPartnership

Indonesia/Thailand

PTT Group - Straits Asia stake acquisition

325 M&A

• Follows ex-chairman Ramalinga Raju’s admittance to board after being accused of falsifying company accounts

Yulchon

Korea

SK Telecom convertible notes offering

332 Equity market

• Tech Mahindra Limited to acquire 51% stake in Satyam Computer Services at INR58 per share

www.legalbusinessonline.com

404 M&A 1,000 M&A 404 M&A 1,000 M&A

Undisc Investment funds

Does your firm’s deal information appear in this table?

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7

NEWS | analysis >>

ANALYSIS

Strategic M&A beckons for

Asian financial sector A recent survey has shown that despite the downturn many companies are still expecting expansion – albeit in a very different way to previous years

N

o sector of the world economy has been harder hit by the global financial crisis than the financial services sector (FSS). And while Asia is yet to see any of its FSS heavyweights go the way of Lehman Brothers, Freddie Mac or Fannie May, that’s not to say they aren’t experiencing some serious discomfort.

But, as the results of a recent study conducted by PricewaterhouseCoopers (PwC) and Economist Intelligence Unit show, as much as financial institutions in the region are looking to sure up their current operations, they are also looking to expand by engaging in strategic M&A in the year ahead.

However, this is not the same type of financial services M&A that has occurred in the past – this time around it will be smaller and faster, target different sectors and locations, and will be driven by different imperatives.

The task confronting M&A lawyers who want a piece of this action is correspondingly more complex.

Expanding in the downturn

According to the survey, 42% of all financial services respondents said 8

Asian Legal Business ISSUE 9.5

NEWS | analysis >>

their company plans to make an acquisition in the year ahead. By jurisdiction, Taiwan and China claimed to be the most acquisition-hungry, with 70% and 68% of respondents respectively saying they would be looking to pick off cheap assets both domestically and overseas in the year ahead. Respondents in Japan and Hong Kong, however, noted that they were only 25% and 22% likely to look to strategic acquisitions this year.

Meanwhile, respondents in Australia and China are both actively looking to take advantage of opportunities to grow their business (both 63%), while those in Singapore (37%) and Japan (26%) seem to be more inclined to sit on the sidelines until calm returns to the economic landscape.

Somewhat surprisingly, only 22% of survey participants said their companies had frozen all investment.

Rather, expansion was cited by 48% of respondents as the key to their business strategy, with more than a third of respondents saying that they would be looking to enter into new markets or business lines.

Asia: strong financials but caution needed

For many, statistics such as these confirm the innate strength of Asia’s domestic financial services sector – most boast impressive balance sheets and the ability to effect such strategic acquisitions. But according to PwC partners Christopher Chan and Matthew Phillips, we shouldn’t expect a flurry of outbound activity in the sector just yet. For although Asia’s banks and financial institutions are in a stronger position to make acquisitions abroad than their www.legalbusinessonline.com

counterparts in the US or Europe, the same problems apply to financial services M&A as to M&A in other sectors: namely forex fluctuations and difficulties in valuing assets.

“Domestic Asian institutions are expected to dominate M&A activity in the region as foreign institutions consolidate and even withdraw,” Phillips says.

But according to Chan a number of factors will limit activity. “[Hurdles to M&A in the region include] problems in home markets and recent currency movements [which] make investment outside their home markets comparatively more expensive,” he says, noting that, in addition, almost half of all respondents identified difficulty in valuing assets in the current environment as the principal barrier to undertaking M&A deals in Asia. A lack of clarity on the financial position of many institutions was cited as the most significant obstacle in this regard, as was continued market volatility.

Smaller deals, newer players

Phillips says the deals that do come to fruition will almost certainly be smaller, with more activity from China and other emerging markets in the region. “I now expect to see an increased number of smaller deals to build share in underweight markets

or segments, rather than the gamechanging deals that one might have expected at the beginning of the crisis, as western players retreat,” he says. “While activity from China has been low, we are seeing some signs of renewed confidence and I would not be surprised to see the resumption of outbound deals by Chinese institutions within a matter of months.”

Companies in China’s financial services sector had previously been some of the most acquisitive in the region. After cleaning up their balance sheets and taking on foreign investors, many conducted IPOs and followed them with one of the largest foreign buying sprees on record. Some of the more notable deals were China Merchant Bank’s takeover of Hong Kong bank Wing Lung for US$4.6bn, ICBC’s US$5.5bn acquisition of 20% of the shares in Standard Bank and Minsheng Bank’s purchase of up to 20% of shares in US bank UCBH Holdings.

On the inbound side, both China and India have fallen down the pecking order as favoured destinations for financia services M&A. Only 12% of respondents expected to do a deal in China in the coming year while only 8% were looking to India for strategic acquisitions. Indonesia, meanwhile was set to become the most popular, according to 18% of respondents.

“Domestic Asian institutions are expected to dominate M&A activity in the region as foreign institutions consolidate and even withdraw” Matthew Phillips, PricewaterhouseCoopers 9

NEWS | analysis >>

ANALYSIS Where lawyers fit into the picture

Even so, closing such deals is expected to become even more arduous, not least because more than a third of respondents said they would be targeting distressed assets both at home and abroad.

The task confronting lawyers who want to pick up their share of the work emanating from this sector is clear. The deals they work on will need to be closed in tighter timeframes and with more attention paid to making transactions bankruptcy-proof. In addition, lawyers can expect much more of their time to be occupied doing due diligence, something nearly three-quarters of

“[Hurdles to M&A in the region include] problems in home markets and recent currency movements” Christopher Chan, PwC respondents identified as something they would be doing more ‘robustly’ than perhaps was the case in the past.

Similarly, regulatory change, especially that aimed squarely at the financial services sector, will become the focus of attention, with many companies waiting to see how this pans out before embarking on their strategic expansion plans. “There is, in particular, still a degree of uncertainty about the future in terms of the impact of tightened regulation,” Phillips says. “Respondents remain relatively neutral as to the areas that would have the most impact, but two-thirds point to further and more timely disclosures of market, credit and liquidity exposures and tighter liquidity management. Time will tell if these alone will be sufficient to offset the procyclical bias of the past or whether more radical steps will be required.”

Either way, M&A lawyers can expect to see a lot less of their time spent being deal makers and a lot more of it spent being regulatory advisors – a trend that is already noticeable in M&A practices across the region. ALB 10

Infrastructure: key to riding out recession Asian infrastructure funds might just be recession proof. Despite gathering storm clouds on the economic horizon, they continue to exhibit signs of healthy growth – and there is plenty more to come

T

he Asian funds industry may have been decimated by the global financial crisis over the past 12 months but some pockets of the sector are still showing very sound vital signs. Asian infrastructure funds may just be the industry’s beacon in the current storm.

Good fundamentals

The past 12 months in particular have been strong for private equity funds raising capital for investment into Asia and this year is expected to be no different, according to John Sullivan, a partner with Mallesons Stephen Jaques, who says that wholesale infrastructure funds with well credentialed sponsors will still proceed.

“Although market condition are challenging, the underlying demand and supply factors encouraging the establishment of infrastructure funds for emerging Asian economies

remain,” he says. For example, while the IMF recently revised down its forecasts, it still predicts that both the Indian and Chinese economies will grow by 5% and 7% respectively this year with both likely to increase further still in 2010.

It is no secret that both countries are experiencing rapid urbanisation and population growth, and the governments there realise infrastructure development is both necessary and inextricably linked to further economic growth.

“Infrastructure investment requirements for India alone over the next five years are expected to exceed US$500bn. Given the pressures on government spending, this is likely to translate into a significant need for private sector funding,” Sullivan says, adding that he expects the recent spate of stimulus packages to further magnify this opportunity.

Asian Legal Business ISSUE 9.5

NEWS | analysis >>

Other bright spots

Sullivan says that superannuation and pension systems still represent something of a sound investment in the current climate, with most still generating money for investment.

“There remains appetite among institutional investors for wholesale unlisted exposure to alternative assets like infrastructure, especially those offering strong returns over the medium term. Unlisted infrastructure funds have not been affected as badly as listed funds. Certainly at the investment level, current markets offer good buying opportunities for funds because the prices are considered favourable.”

Sullivan adds that funds for Asian infrastructure have tended to follow a private equity model whereby they are often established using one or more hub jurisdictions – he points to Mauritius as a particular popular hub for investment into India.

“The main ‘regulation’ of the fund is often contractual, with a suite of documents governed by an internationally accepted legal regime – most commonly English law,” he says. www.legalbusinessonline.com

Further regulation

In this instance, investments which follow such a model have often attracted the ire of those who claim that the level of private equity regulation is low.

John Sullivan “This sentiment Mallesons may have prompted some of the recent calls for greater regulation of private equity funds but it is not entirely accurate in this context,” Sullivan says. “Here, there is typically a range of securities, licensing, foreign investment and tax laws in the fund, target and investor jurisdictions which need to be navigated.” Nonetheless, many predict that one of the more immediate consequences of the global financial crisis will be increased regulation in this area.

However, we shouldn’t expect an immediate run to this area. According to Sullivan, current market conditions mean that sponsors will face tough competition for would-be investors and they may be best served by paying closer attention to individual investor needs.

“Although market conditions are challenging, the underlying demand and supply factors encouraging the establishment of infrastructure funds for emerging Asian economies remain” John Sullivan, Mallesons “Market conditions mean sponsors face considerable competition for investors. In the current environment, investors are focusing on well credentialled sponsors and their requirements are evolving. Devoting time to anticipating likely investor questions and needs will be time well spent by potential sponsors,” he says. ALB 11

NEWS | analysis >>

ANALYSIS

Indian firms take carpe diem approach to downturn Leading firms on the Subcontinent have seen an increasing number of accomplished lawyers looking towards them as international firms struggle in their home markets

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aw firms in India are reaping the benefits of the contracting legal market abroad by recruiting top talent from major international firms.

The trend has emerged as new data reveals the US legal industry shed almost 3,000 jobs in March alone, while, at the same time, Indian lawyers who joined UK firms during boom periods are now being sent home.

India firms such as Khaitan & Co, Amarchand & Mangaldas and Nishith Desai Associates (NDA) are either in the process of recruiting or have recently boosted their numbers with significant hires in recent months.

Vivek Kathpalia, a partner at NDA, says his firm has received several enquiries from lawyers overseas, particularly Indians who normally seek positions abroad after completing their LLM degrees.

“We’ve received a number of enquiries and we’re very excited with this development,” Kathpalia says.

“We’ve responded positively and look forward to them joining us soon.”

Delhi-based Khaitan & Co has also received a significant boost by appointing former Freshfields senior associate Bharat Anand. He had been with the Magic Circle firm since 2001, based in the London office.

Rabindra Jhunjhunwala, a partner at the firm, says that, as economic conditions deteriorate overseas, both Indian and foreign lawyers are looking to India as the country’s influence groqws, and it emerges as a significant legal market.

“The economic environment may have started a trend, but more importantly, I believe, those that come here, establish themselves and identify those firms that will be the most sought after,” he says. “There will be one set of lawyers who arrive here with the foreign firms, and another set of lawyers who, after having seen the [growth], would want to join Indian law firms who have an alliance with foreign firms.”

Last year, Khaitan & Co made headlines after announcing it had appointed lawyers from an international firm.

“I think we started the trend in September last year,” Jhunjhunwala says. “We made a number of hires from Ashurst, first the firm’s India group head [Murali Neelakantan] and then… other corporate lawyers.”

NDA, which has offices in both India and the US, recently hosted a group of Harvard law interns. “They spent time with us in Mumbai and it was an enriching experience both

“The economic crisis may actually be a catalyst for that overall trend, but the growth in the Indian economy will [also] increase this flow of talent” Vivek K athpalia, NDA

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Asian Legal Business ISSUE 9.5

NEWS | analysis >>

ANALYSIS

Restructure on the horizon for them and for us,” Kathpalia says. “The economic crisis may actually be a catalyst for that overall trend, but the growth in the Indian economy will [also] increase this flow of talent.”

The hiring trend seems to be a two-way movement. While Indian firms are hiring top overseas talent, it seems international firms are also scouting India’s universities for graduates. Firms such as Clifford Chance, Allen & Overy, Linklaters, and Herbert Smith in early April were on the hunt for fresh talent, with the National Law School of India University (NLSIU) placing at least 18 students to the firms. Norton Rose and Ashurst were also reportedly hiring for the first time from an Indian campus.

International firms are accelerating efforts to capture a slice of the Indian economy as it fares relatively better in the downturn.

US firm Morris, Manning & Martin has recently joined the long list of firms to have expressed interest in the market. “We want to forge US-Indian business and technology alliances that will help both our clients and our region’s economy as a whole,” says the firm’s technology practice head, John Yates. ALB

www.legalbusinessonline.com

Firms working in the Middle East face impending change as the competition for clients continues to heat up

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iscally conscious clients may cause firms in the Middle East this year to restructure practices and implement changes such as alternative billing methods and to shift their focus to other jurisdictions.

Lisa Hart, CEO of research firm Acritas, says the economic crisis will lead more regional law firms to restructure practices. “Legal buyers from the Gulf region feel that as a result of current economic conditions… there will be increased pressure on firms to reduce costs and provide transparency of fees. Firms will need to streamline and make redundancies in order to survive.”

According to recent data from Acritas, 50% of legal industry clients in the Gulf region expected their legal spending in oil & gas-related practices to decrease, but this may be offset by increases in the real estate, telecommunications & technology practices, as more than 40% of those industries’ clients anticipated their external legal spending to rise.

Clients also favoured fixed legal fees (46% of clients), compared to the 23% who preferred hourly rates.

The positive news for Gulf-based law firms is that overall legal spending is expected to rise by 7%.

However, this is a staggering drop from the 44% increase that was seen in 2008. Firms may also look to expand to Gulf jurisdictions that will witness the most legal spending – 47% of clients in Oman expected their spending to rise, followed by 39% in Bahrain and 36% in Dubai.

Surprisingly, while the majority of clients (81%) across the region believed that fees do not need to be reduced, the figure dropped in jurisdictions where law firms are more concentrated, such as Dubai.

And despite data showing Gulf lawyers were the highest paid in the world – with average hourly

rates topping those of the UK and US – competition between firms in the region will inevitably lead to reductions in hourly rates.

Hart said as the financial crisis tightens their legal spending, Middle East clients will expect the region’s firms to be more customer-friendly.

“Companies will undoubtedly be more careful with their legal spend – buyers are looking for firms to provide a better client service in addition to offering better value for money,” she says. “Renegotiating fees and billing methods is just one outcome buyers will be expecting and that law firms will need to implement.” ALB 13

NEWS | news >>

news in brief >> JV brings grapes of Rothschild to china French vineyard Domaines Baron de Rothschild (DBR) has invested in China, where wine consumption is expected to reach 1.1 billion bottles a year by 2011.

DBR, the parent company of Chateau Lafite, has established a joint venture with China International Trust and Investment Company (CITIC) to develop 25 hectares of vineyards on the Penglai Peninsula in Shandong province, an area regarded as one of the most promising for the industry in terms of both its climate and geological conditions.

Gide Loyrette Nouel (GLN) and Shanghai firm Llinks advised DBR on all legal aspects of the deal.

GLN’s team consisted of partner Guillaume RougierBrierre, and senior associates Guillaume Jeannet and Jiang Chuan.

india >>

lawyers lend hand on pro bono project More than 130 volunteers from 13 international law firms have spent a day participating in a pro bono activity with a difference in Hong Kong.

Members of the Hong Kong Legal Community Roundtable swapped their suits for overalls, working in teams on manual labour such as painting containers and walls, laying interior flooring, loading a container with household furniture and goods destined for those in need in Israel, and helping with administrative office work.

Allen & Overy initiated the event, and was joined by participating firms Baker & McKenzie, Clyde & Co, Davis Polk, Freshfields, Mallesons, Minter Ellison, Morrison & Foerster, Orrick, Pinsent Masons, Skadden, Weil, Gotshal & Manges, and White & Case. onshore firm makes offshore move UK-based firm Withers has made an unprecedented move, becoming the first onshore law firm to enter the offshore market after announcing it will open in the British Virgin Islands (BVI).

The office – which will provide a range of crossborder services including corporate and trust disputes, insolvency & restructuring, funds, and banking & finance – will be staffed by litigation partner Jeremy Scott and corporate partner John Greenwood.

“Our clients, our key contacts on the ground and the firm have all noticed an increase in litigious work in the BVI,” said Samantha Bradley, managing director of the firm’s Hong Kong office.

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Legal industry not ‘up for sale’ T

he Indian legal profession is not “up for sale”, and foreign law firms should not be allowed to enter the local industry, the president of the Society of Indian Law Firms (SILF) has said.

Lalit Bhasin, a lawyer from Bhasin & Co and president of SILF, in an opinion piece countered industry suggestions that India’s legal profession should be considered more of a business instead of simply a “noble profession”.

“If [the legal profession] is a business then it can be acquired, merged, amalgamated, taken over and sold to global players… the suggestion is totally unacceptable,” he said. “India and China offer good prospects – but the problem is that, in India, the legal profession is not a business and it is not up for sale.”

Instead, he suggested that foreign law firms should work only on a referral basis with Indian firms.

“An effective, transparent and clean referral arrangement is a far better alternative to allowing foreign law firms to open offices in India. So far, and by and large, [the] referral system has worked satisfactorily.”

Due to India’s WTO commitments, the liberalisation of the legal market is widely anticipated by both local and foreign industries.

“The general elections are coming up and until we have a new government there’s nothing new going to happen,” said Rabindra Jhunjhunwala, a partner at New Delhi-based Khaitan & Co. “There are two nationalist parties in India and we feel that, if one in particular of these comes to power, the market will begin to open up in the next year.”

Bhasin countered that liberalisation pressures come from regions where the growth of the legal sector is currently contracting, such as the UK. “The demand for opening the legal services sector in India does not come from Indian businesses or professionals or even foreign multinational companies.

Strangely, the demand comes from foreign lawyers and particularly those from the UK. It is obvious that the UK is witnessing a negative growth so far as the legal profession is concerned,” he said. ALB Asian Legal Business ISSUE 9.5

NEWS | news >>

asia >>

Linklaters unveils new regional chief L

inklaters has promoted Zili Shao, the firm’s current managing partner for Greater China, to Asia managing partner, succeeding Giles White, who is retiring from the partnership to take on the role as group general counsel at Jardine Matheson.

As the new Asia managing partner, effective as of 1 May, Shao joins the firm’s executive committee, which is responsible for the management of the firm. He will also relocate from Shanghai to Hong Kong.

Shao has been the managing partner of the firm’s practice in Greater China since 2003 and headed the firm’s China practice from 1998 to 2003, during which time he helped to establish the firm’s Beijing and Shanghai offices. He is a renowned dealmaker in the region and has advised on a number of major deals, including Carlyle’s acquisition of a stake in China Pacific Life and RBS’s US$100bn takeover of ABN AMRO.

Shao’s promotion is a reflection of the firm’s continued commitment to the China market and he noted that the Asia practice as a whole plays an increasingly important part in Linklaters’ global business.

“Asia has been a key growth market for the firm and it is increasingly important in today’s challenging economic climate,” Shao said. “The number of transactions between Asian countries, particularly China outbound investment into neighbouring countries, Zili Shao has become more active Linklaters and that has created many new business opportunities for us.”

Several other Magic and Silver Circle firms have also made adjustments to their Asia management structures. For example, Freshfields recently appointed London-based

partner Simon Marchant as its new Asia managing partner, a position which had previously been left vacant for three years, while Herbert Smith established two new Asia management positions designed to improve regional collaboration earlier this year.

Although he has significant experience, Shao said leaving his comfort zone for new challenges could be hard work. He will start his new role by studying more about other key markets in the region.

Another challenge for Shao during his four-year term will be finding the balance between servicing clients as well as focusing on managing the firm’s operations in Asia.

Following Shao’s appointment, the firm has made up three new partners and appointed four new counsel to the firm’s Asia offices. The firm now has 51 partners and more than 280 lawyers in its six offices across Asia. ALB

saudi arabia >>

Clyde partner sparks new Saudi alliance R

iyadh-based firm Abdulaziz A Al-Bosaily (AAB) has found a new partner in Clyde & Co, after breaking off its alliance with DLA Piper in January. The common thread is a former DLA Piper lawyer involved in establishing both the old and new alliances.

Management differences led to the termination of the six-month old partnership between AAB and DLA Piper earlier this year, with the latter losing the two lawyers who spearheaded the alliance – Oliver Agha and Peter Hodgins – in the same month. Hodgins moved to Clyde & Co and was involved in the firm’s new alliance with AAB. Hodgins confirmed the break up of DLA Piper’s alliance with AAB was caused by differing management views.

“Essentially it was a difference in

www.legalbusinessonline.com

opinion as to how that Saudi affiliation would run, how work would be dealt with, and really a different direction that Abdulaziz and the team working in Saudi Arabia wanted to go,” Hodgins said. “There were a number of departures

“My friendship with Abdulaziz has been a factor that has assisted in getting this affiliation on the ground” Peter hodgins, clyde & co around the time of the breakdown of the affiliation and my colleague Oliver Agha also left at the same time.”

Hodgins said his friendship with AAB’s Abdulaziz, formed during the alliance with DLA Piper, contributed to the formation of the new alliance.

“I used to work with Abdulaziz at DLA Piper both in Dubai and when he established his new office in Saudi Arabia. I introduced him to Clyde & Co and [although] he was known to the firm prior to my involvement, obviously my friendship with him has been a factor that has assisted in getting this affiliation on the ground,” he said.

The new partnership will rejuvenate AAB’s international market presence and broaden Clyde & Co’s regional reach, since foreign firms are not legally allowed to open a Saudi office alone. Clyde & Co will be making secondments to Riyadh in the next few months.

The firms will be working together to capture Saudi clients in corporate and Islamic finance-related transactions. ALB 15

NEWS | news >>

cambodia >>

Firms have to

uk report Firms still floundering in credit crunch UK firms are still feeling the pressure to cost cut in the midst of the global recession and even Magic Circle firms have been forced to implement salary freezes across offices.

Clifford Chance recently reversed salary bands for its junior lawyers, with all associate pay frozen at current levels until the end of the 2009-10 financial year.

The move to effectively reduce salary rates across the firm will affect all non-partner lawyers and support staff across the firm’s global network, with the exception of trainees, who will still have their pay increased come their second year.

The initiative follows in the footsteps of Slaughter and May, and Freshfields Bruckhaus Deringer, who made a similar announcement in February, reversing salary bands for all junior lawyers with the exception of trainees.

Lovells has also jumped on the pay freeze bandwagon and will keep salaries for all lawyers, support staff and legal PAs at this year’s levels.

Only trainees who qualified in March will not see a reduction in their salaries, with the level remaining at £65,000.

Double cutbacks at Eversheds Eversheds has asked forthcoming trainees to defer their start dates, while simultaneously slashing numbers from its real estate practice group in a bid to cut costs in the economic slowdown.

The firm has offered 31 out of 73 of its September 2009 trainees £5,000 to defer entry or be employed as a paid paralegal for one year and soon afterwards cut 10 lawyers from its real estate division.

Magic Circle firm Linklaters also recently asked 15 volunteers to defer their start dates from September 2009 and March 2010, saying it would like to “fine tune” its trainee intakes.

Cameron McKenna welcomes new partners CMS Cameron McKenna has added 17 new partners to its ranks the new ‘office partner’ salary rung.

The new office partner position, which allows the firm three levels of partnership, was introduced last month as part of a shake-up and represents the first stage of progression for senior associates, followed by a three-year salaried gateway level before partners join the equity.

The office partner role has been used in Eastern Europe for several years but this is the first year it has been introduced in the City.

Herbert Smith swings the axe Herbert Smith has announced it is to slash up to 84 members of its City office and will be reversing all associate pay bands, with salaries to remain at 2008-09 levels as an added cost-cutting measure.

The cuts will reportedly be made across the firm’s corporate and real estate practice, with fee earners, professional support lawyers and paralegals all likely to be affected. Secretarial roles across all fee-earning areas and up to 21 support staff will also be at risk.

Middle East-focused firm, Trowers & Hamlins also made 17 members of staff redundant recently – all in its London office. This is the third consultation at the firm and brings the total number of redundancies at the firm to 28, with the cuts affecting both feeearning and support departments.

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ambodia’s legal industry is struggling to serve the country’s growing business community and must adapt to survive, according to local lawyers.

Lay Vicheka, a Phnom Penh-based legal consultant at BNG – Advocates & Solicitors said that local lawyers must evolve in order to survive in the “increasingly complex legal marketplace”.

Vicheka said the country’s development has divided an older generation of lawyers previously unaffected by globalisation from a younger generation who will have to compete with international law firms.

“The previous generation has been quite isolated from the world, as Cambodia was not a member of ASEAN and WTO then, and business was also slower,” Vicheka said. “It will be very hard, working on cross-border transactions across the generations now, since the younger generation need to learn new laws and gain understanding of other cultures across the border. We need to adapt our services [in line with] the international firms.”

Marae Ciantar, a Phnom Penhbased partner at Allens Arthur Robinson, agrees that progress is needed in the legal industry. “The legal market is generally quite small

“The legal market is generally quite small here, and most firms are too small to support investment” marae ciantar, allens arthur robinson

 ROUNDUP

• Linklaters project finance partner Stuart Salt is set to take over as managing partner of Emerging Europe, Middle East and North Africa (EEMENA) following the retirement of Nick Eastwell from the role after 20 years of service • Eric Schwartz – Dewey & LeBoeuf’s Paris former managing partner – will soon join arbitration senior counsel James Castello of King & Spalding to launch the Atlanta-based firm’s first office in France • Norton Rose has offered staff a part-time option of working four-day weeks on 85% of pay, or taking a sabbatical of up to 12 weeks on 30% of pay • SJ Berwin has its eye on an international title. The firm recently set up an office in Dubai less than a month after launching in Hong Kong • Ashurst recently unveiled its 2009 promotions, revealing a decrease in partner promotions – only 10 lawyers were made up this year compared with 17 in 2008 • Berwin Leighton Paisner has welcomed seven to its partnership, with real estate the biggest beneficiary

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here, and most firms are too small to support investment and the kind of infrastructure and resources needed for lawyers,” he said. “Both externally and internally, to be able to support lawyers, there must be provisions such as training programs and knowledge management systems, and firms need to be of a certain size to meet those needs.”

Ciantar said that the development of the legal industry is restricted by the type of work coming in. “It’s very difficult to develop specialist skills as Asian Legal Business ISSUE 9.5

NEWS | news >>

adapt to survive, say lawyers

there just isn’t enough flow of work or progress of new laws to develop those specialist skills,” said Ciantar. “It’s complicated and limited by the state of development of the economy, but there have been some changes. The new bar president is working on a new training program and opportunities to share knowledge between lawyers, such as setting up law journals, and they’re certainly positive programs.”

According to Vicheka, legal work will likely move to bigger law firms as cross-border work in the country increases with Cambodia’s ASEAN membership. “Regional law firms are coming in and they are really much more competitive, not just in their understanding of the language of law, but of financial business operations and their technologies. The FTAs will increase the flow of business, but we’re not competitive enough to deal with cross-border contracts,” he said.

Despite the country’s steady growth, Ciantar said the lower amount of www.legalbusinessonline.com

work in Cambodia compared to other regions would limit competition.

“We’re the only international firm which has a presence in Cambodia, which is a position in the market we’re very happy with,” Ciantar said. “We don’t see that it’s particularly likely that anybody else is going to enter the market because we’re not sure that there’s room for more than one or two international firms on the ground.” ALB ►► Firms in Cambodia

Allens Arthur Robinson BNG – Advocates & Solicitors Bou Nou Ouk & Partners Clough Thuraisingham International Co Delaney & Co Indochina Limited DFDL Cambodia Dirksen Flipse Doran & Le HBS Law Firm & Consultants Law Offices of Benson Samay Pana Asean Law Office Poblador, Azada & Bucoy Sciaroni & Associates Stringfield & Cheng PLC

news in brief >> asia not affected by bakers’ redundancies Baker & McKenzie has confirmed that its Asia offices have not been affected by the firm’s latest round of redundancies.

The firm’s official statement announced that the redundancies will affect its ‘Global Services’.

The statement read: “Our management in North America and Global Services today has informed 38 attorneys and 86 paralegals and professional staff that their positions are being eliminated due to the economic downturn. These changes involve various practices, offices and Global Services departments in North America.”

The spokesperson reiterated that the latest redundancies only affected employees in its North American offices, even though the Global Services department is comprised of professional services staff across the firm’s worldwide offices.

This is the third round of redundancies for the firm, following January’s initial cut of eight associates in New York, and March’s slashing of about 85 jobs in London.

DUo catch tram transfer work Gide Loyrette Nouel (GLN) and Pinsent Masons have played pivotal roles in the transfer of Hong Kong’s iconic tramway which saw Veolia Transport China and Wharf (Holdings) enter into a 50-50 partnership to operate Hong Kong Tramways.

The iconic Hong Kong Tramways has been operating tram services in HK since 1904 and currently has a fleet of 163 tramcars. It boasts the world’s largest operational fleet of double-decker tramcars, which transport an average of 240,000 passengers per day.

Veolia Transport will be responsible for the operation and management of the network.

A GLN team led by Rebecca Silli acted for Veolia Transport on the deal while Peter Bullock led a Pinsents team responsible for the due diligence and Hong Kong aspects of the transaction.

brazilian firms continue push into china Brazilian firm Felsberg e Associados has been granted a license from the Ministry of Justice allowing its Shanghai office, which opened last year, to practice Brazilian law in the country. It firm becomes the third Latin American law firm to obtain a license in the country, after Noronha Advogados and Duarte Garcia, Caselli Guimaraes e Terra.

“This is a very important step forward, as many firms remain waiting for their license for more than two years and others even have their requests rejected,” said Rodrigo do Val Ferreira, who is responsible for the firm’s Shanghai office.

Before the licence was granted, most of the Chinarelated legal issues have been handled by the China desk in its Sao Paulo office.

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NEWS | news >>

asia >>

AAR chief says there will be no sackings

us report Fresh wave of layoffs hit US firms US firms continue to crumble under the weight of the credit crunch, with O’Melveny & Myers, Pillsbury Winthrop Shaw Pittman, King & Spalding, Paul, Hastings, Janofsky & Walker, New York-based Chadbourne & Parke and Venable all recently announcing layoffs across their offices in response to the economic instability.

O’Melveny & Myers bid farewell to 90 lawyers, including associates and counsel, and 110 staffers in March, while King & Spalding laid off 37 associates and counsel as well as 85 staff firmwide, and Pillsbury saw 55 lawyers and 100 staff lose their jobs.

Paul Hastings, Chadbourne & Parke and Venable also slashed numbers by 131, 25 and 64 employees respectively.

Bryan Cave hunts for London merger US firm Bryan Cave has revealed it is searching for a UK counterpart to expand its budding presence in London.

The firm launched in the UK in 1982, but is reportedly keen to enter into a merger with a London-headquartered firm as a way to develop its standing in the European legal market.

The UK merger will be one of many changes to develop this year. The firm announced job cuts totaling 134 in February, and has been working to revamp its restructuring and outsourcing and



finance practices in the City following the hire of former Mourant chief executive Stephen Ball.

Redundancies comntinue at Bakers Baker & McKenzie has continued its slashing spree, recently making 38 associates and 86 support staff redundant in the US. The latest cuts come shortly after the firm initiated a second consultation in London, which is likely to lead to the loss of 85 jobs, including between 20 and 30 lawyers.

Six New York associates were already made redundant this year as the firm reviews its salary bill in response to the economic downturn.

Another US firm, Mayer Brown, also recently initiated a second round of job cuts, with 45 lawyers and 90 support across its US offices losing their jobs as a result of a review of its global operations.

Skadden loses lawyers to boutique Recent redundancies at Skadden, Arps, Slate, Meagher & Flom have reportedly prompted the departure of 11 of the US firm’s attorneys for new boutique BuckleySandler.

The Washington DC office of Skadden and the US offices of Gibson, Dunn & Crutcher both confirmed employee layoffs – 25 staff positions at Skadden’s DC office and 36 staff members across the nine US offices of Gibson, Dunn & Crutcher.

ROUNDUP • US firm McGuireWoods is to merge with the 36-lawyer firm of Grundberg Mocatta Rakison, gaining a London presence and adding to its 900 lawyers in 17 offices • Chicago firm Arnstein & Lehr has taken over seven-lawyer, Florida-based firm Fieldstone Shear & Denberg • Clifford Chance has made 24 transactional attorneys in New York redundant • Boston-based Edwards Angell Palmer & Dodge aid off approximately 25 lawyers and 35 staffers across six offices due to declining work • Jeffrey Stone and Peter Sacripanti will begin their roles as joint chairman of McDermott Will & Emery in January 2010, replacing incumbent chairman Harvey Freishtat who has held the position since 2003 • Linklaters recently hired UBS managing director Lewis Steinberg to co-head its US practice and head up its tax practice group • Chicago private equity partner Bert Krueger was recently nominated to succeed James Holzhauer as chairman of Mayer Brown. Holzhauer is stepping down after two years at the helm • Fried Frank Harris Shriver & Jacobson has confirmed it is to reduce its US workforce by a total of 99 people, losing 41 associates and 58 administrative staff

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oluntary redundancies and salary freezes at Australian firm Allens Arthur Robinson (AAR) are not a forerunner to forced layoffs, AAR boss Michael Rose has said.

Michael Rose “I’ve said it is not our Allens Arthur agenda to respond to Robinson the likely downturn by instituting a firm-wide redundancy program. The voluntary redundancy program has absolutely no targets in terms of numbers, positions or any specific roles in the firm. It is just one of the options being made available.”

Rose said the firm’s plans across Asia would vary. “Our response will most likely vary from office to office and country to country, depending on the nature of our practice, whether or not we have a joint venture and the impact of the downturn on the country concerned.” AAR is currently in a number of joint ventures with local firms across the region. In Singapore the firm is in a formal joint-law venture with TSMP Law Corporation, in Thailand it has an alliance with Siam Premier, while in Indonesia it is allied with Widyawan & Partners.

The steps being taken are all about maintaining growth in the long run, according to Rose, who cites the firm’s recent graduate intake as evidence of this trend. “We just took on 77 graduates last month and we have a pipeline running out for the next two years… The steps we are taking are positioning the firm for the long-term and inevitable recovery in the economy.”

However, Rose admitted that no firm was immune from one of the deepest recessions in living memory. “Our firm has been one of the strongest performers in the Australian legal market over the last year and in Asia we’ve seen good work in a number of our offices…

However, we have predicted, and been preparing for, a downturn in the legal services market,” he said. ALB Asian Legal Business ISSUE 9.5

NEWS | news >>

news in brief >>

fiji >>

Anger at ‘unlawful’ foreign appointments F

oreign lawyers are being appointed to ‘unlawful’ legal posts under Fiji’s new military regime, regional legal bodies have said.

After sacking the entire judiciary, Fiji’s military regime made new posts mid April, re-appointing seven out of nine magistrates. The appointments include New Zealand lawyer Christopher Pryde, who was sworn in again as solicitor-general.

However, law bodies have condemned the reappointments, which they deem to be illegal under Judicature decree.

The president of the Fiji Law Society (FLS) – who was detained on charges of sedition – said that the appointments were unlawful since the previous posts prior to the abrogation of the constitution were “proper”.

New Zealand’s Law Society head John Marshall urged all Kiwi lawyers to refuse any posts with the new regime. “My view is that the regime is unlawful and that it would be wrong for New Zealand lawyers to give support to that regime by taking appointment in a government office and particularly in position of a judge,” Marshall told ALB. “The regime is unlawful so any appointments it makes must also be unlawful.”

The debate intensified as Pryde hit back at criticism about his acceptance of the post, claiming that despite the current state of affairs, the judiciary must ensure stability for the people.

“It seems paradoxical for the NZ Law www.legalbusinessonline.com

Society president to say on the one hand that Fiji should be supported in its efforts to return to the rule of law as soon as possible, but on the other hand to say that NZ lawyers should not assist with that goal by accepting office,” Pryde said. “It is precisely at this time that Fiji needs good, competent lawyers to assist it and I am pleased that all NZ lawyers… have committed themselves to staying on and seeing the country through this difficult period.”

And Marshall partially agreed with this view. “I can see the argument for good people taking appointments as officials in Fiji on the basis that they would endeavour to ensure that the rule of law is upheld,” he said.

Glen Ferguson, president of legal organisation LAWASIA, said that while the independence of the courts may be questionable, there is nothing worse than Fiji falling into civil dispute, and for Fijians to lose faith in the legal system. “There seems to be no separation of powers, and from a local’s perspective, that’s very disturbing because if you don’t have faith in the judicial system I don’t know where you can any faith,” he said. “You just cannot have situations occurring like this because for stability in the whole region it’s very important that Fiji is strong too.

I think it’s very noble [of the legal bodies’ opinions] but at the end of the day, sanctions only hurt one group and that’s the people of Fiji.” ALB

Us firm in double office opening Mid-tier US firm Morris, Manning & Martin (MMM), has opened two offices in Greater China. The firm launched its Taipei and Beijing offices in early April, but until they are approved they will operate as business development centres.

The firm’s Taiwan practice is headed by US-based of counsel Raymond Ho, who joined from Hogan & Hartson. Asia practice partner Ming Jiang will reside at the new Beijing office to serve as its local administrator. “[China] is an integral part of our long-term strategic plan,” said the firm’s managing partner Robert Saudek.

“We view our approach as twofold: first assisting with intellectual property patent prosecution and potential litigation; and second, assisting with corporate and securities matters.”

The practice is primarily focused on representing Chinese, Taiwanese, and other Pacific-rim-based companies and institutions with their operations in the United States.

taiwanese to resolve chinese disputes A Taiwanese businessman has been appointed by a mainland Chinese court to resolve Taiwan-related legal disputes on the mainland.

Chen Long-Feng, a Taiwanese native with business interests in China’s Fujian province, will serve a twoyear period as a consultant in the Zhangzhou county court. The appointment is significant as it is may be the first of its kind, and is another attempt to bridge relations across the Straits.

Chen will act as a mediator in Taiwan-related business and civil cases in the local court, and although he reportedly has no formal legal background, the courts have approved Chen’s appointment due to his industry experience and knowledge.

“Mr Chen knows much about policies and laws in the mainland. He has a good reputation in local Taiwan business circles and is willing to work for the public,” said Hu Shaoyin, the Zhangzou court vice president.

All THE latest legal news

Keeping up to date with legal news has just become easier.

The ALB team now gives you the opportunity to read the current edition of ALB magazine online.

Each regional edition of ALB can be viewed online www.legalbusinessonline.com. Each week ALB legal news brings you the latest in industry updates to help keep you informed.

19

NEWS | news >>

Update >>

malaysia >>

Finance chance

International Tax UK Budget Update

T

he main UK Budget headlines from Chancellor Alistair Darling’s recent UK Budget are .

• From April 2010, a 50% Income Tax rate for those with taxable income over £150,000 will be put into effect.

• No UK personal allowance for those earning over GBP100,000.

• In effect the marginal UK Income Tax rate for those earning between GBP100,000 to GBP114,000 is 67% • The UK Trust rate of tax to increase to 50% from April 2010 • Tax relief for pension contributions restricted for those earning over £150,000, to 20% • Employers National Insurance increases to 11.5% from 5 April 2011; as previously announced.

• Increased ability to carry back Enterprise Investment Scheme (EIS) income tax relief • Extension to 3 year carry back for business losses up to £50,000 • First Year Allowances of 40% for capital expenditure • Tax breaks for Furnished Holiday Lettings (FHL) to be repealed from 2010/11 • VAT to return to 17.5% from 1 January 2010 • Stamp Duty Land Tax (SDLT) exemption for properties up to £175,000 to be extended until 31 December 2009 • Worldwide debt cap rules to begin for companies with accounting periods beginning on or after 1 January 2010 • Naming and shaming of persons who have evaded GBP25,000 of tax, and who have subsequently been assessed.

The shortfall, of GBP200B, between expected Government revenue and spending of GBP10,900 for every man, woman and child in the UK, will be made up from UK Government Gilt sales of GBP220B in the coming year.

By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

M

alaysia will permit up to five foreign law firms to set up local offices as part of a partial liberalisation of its formerly restricted legal industry.

To promote the country as an Islamic finance hub, the Malaysian government has decided to allow up to five foreign law firms specialising in Islamic finance to set up local offices.

However, the firms will not be allowed to branch out into other practice areas, restricted to advise only on Islamic finance transactions.

In a move similar to the Singapore government’s recent QFLP licence grants, foreign firms’ applications will be judged on their “credibility” and the business plan of their Malaysian office.

“By permitting foreign law firms to set up on a stand-alone basis, there is no necessity for such firms to share or transfer any technology or knowledge to Malaysian practitioners,” said Ragunath Kesavan, the MBC’s president.

Kesavan also raised doubts as to whether the objective behind the liberalisation – to establish UAE >>

Debbie Annells

‘Rejuvenation’ leads to six U nited Arab Emirates (UAE) firm Hadef & Partners (previously known as Hadef Al Dhahiri & Associates) rebranded itself early last month in a move described by its managing partner, Sadiq Jafar, as necessary to make

20

Malaysia as Asia’s Islamic finance hub – would be achieved, since it is unlikely that the approved foreign firms will bring more clients and business to the country.

The announcements come as competition intensifies between Asian countries keen to capture market share in the booming Islamic finance market. According to Azmi Mohdi Ali, managing

it more recognisable to an international audience. Now it has cut six of its corporate finance lawyers and plans to shift a number of key partners between its Abu Dhabi and Dubai offices.

Jafar said that despite the move, the “rejuvenated and

Asian Legal Business ISSUE 9.5

NEWS | news >>

for foreign firms

Update >>

Financial Transfer your UK pension to Asia!

O

n 6 April, 2006 Her Majesties Revenue & Customs introduced Qualifying Regulated Overseas Pension Schemes (“QROPS”) legislation, which basically simplified pension transfers.

QROPS legislation allows expatriates, or foreign nationals who have accrued pension benefits in the UK, to transfer all their UK pension provision (except state pensions) to a more flexible ‘offshore’ pension arrangement.

The benefits • Overseas pension income is not subject to UK tax (but a UK pension is - whether or not you are UK resident).

• Pension funds are free of UK Inheritance Tax (for UK domiciled individuals).

• The pension fund monies may be freely invested in a wide variety of investments.

• There will no longer be a compulsion to purchase an ‘annuity’ at retirement to provide an income.

• The full value of your pension fund will be passed to your beneficiaries on your death.

Is your UK pension at risk?

partner of Malaysian firm Azmi & Associates, Singapore’s recent launch of a global Islamic bond program indicated that it was fast catching up to Malaysia’s lead in the market. Ali said that Singapore had an advantage due to its better access to international customers and its accommodation of foreign law firms.

“In the near future, Malaysian law firms may need to play catch-up with Singapore lawyers as fast as possible,” Ali said.

“The Islamic banking gap between Malaysia and Singapore is narrowing and the position that Malaysia enjoys as an international Islamic financial hub may soon be achieved by Singapore.” ALB

lawyers losing their jobs modernised” firm will look to continue to grow in the region. “We’ve restructured in various practice groups.

For example, some people have moved to our Abu Dhabi office, which at the moment is much more dynamic. This is mainly www.legalbusinessonline.com

in the banking & finance team. We expect to see growth in our dispute resolution group, financial and restructuring.”

Jafar was also quick to point out that the firm had hired 12 new lawyers over the past six months. ALB

‘Defined Benefits Schemes’ in the UK form part of the Balance Sheet of the employer – which is a risk. 125,000 people have already lost 100% of their pension monies due to the liquidation of their respective employers! Whilst there is some statutory protection by virtue of the Pension Protection Fund (PPF), the PPF itself is under threat. The collapse of Waterford Wedgewood for example, will put on extra £50 million strain on the already heavily loaded pensions industry lifeboat. The fund already has 67 pension funds under its wing including the huge MG Rover scheme, Lehman Brothers UK and Woolworths.

Free-of-charge assessment There are various jurisdictions that you could choose to transfer your UK pension, and we have already arranged several transfers amounting to many GBP millions. In order to safeguard your position and to explore your options, feel free to take advantage of our free-of-charge initial assessment. Contact me now, before you miss the boat!

David R. Bojan, Managing Director Horwath Financial Services Ltd. Tel: (852) 2511 8337 Fax: (852) 2802 7613 Email: drb@hfs.com.hk Website: www.hfs.com.hk

David R. Bojan

21

NEWS | news >>

Update >>

global >>

Intellectual Property Singapore Court of Appeal Considers Revocation and Invalidation Provisions in the Trade Marks Act

I

n the recent case of Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd and Another and Another Appeal [2009] SGCA 9, the Singapore Court of Appeal had to decide on various issues surrounding trade mark revocation and invalidation.

The Appellant argued that a “Rooster” device trade mark registered for inter alia, cordyceps (the “Rooster” Mark) was liable for revocation on grounds that it had become a common name in the trade due to the registered proprietor’s acts or inactivity (section 22(1)(c) of the Singapore Trade Marks Act). The Court of Appeal found that there was no evidence to show that the word “Rooster” has become commonly used for denoting cordyceps from the People’s Republic of China (PRC), regardless if the cordyceps bear the Rooster Mark. Hence, the Appellant had not discharged its burden of showing that the “Rooster” Mark was a generic mark in the trade for cordyceps from the PRC. The Court further expounded that it is insufficient for the Appellant to show that the “Rooster” Mark was a popular mark used to denote cordyceps from the PRC. “The mere fact that a mark is popular or even the only brand used to market a particular product or service does not ipso facto render the mark a generic mark and thus undeserving of protection.” (at [65]) Despite its finding that the basis for revocation under section 22(1)(c) was not made out, the Court went on to consider whether the Registrar of Trade Marks and the Court, in trade mark revocation and invalidation proceedings, have a residual discretion not to revoke or invalidate the registration of a registered trade mark even though one or more of the grounds for revocation or the grounds for invalidation have been made out. The Court of Appeal overruled the lower court’s finding that discretion was conferred by the word “may” in the relevant provisions in the Trade Mark Act. It opined that the correct interpretation of the word “may” in the relevant provisions does not confer any such residual discretion on the part of the Registrar or Court.

The Court of Appeal’s views on the correct interpretation of “may” in the relevant revocation and invalidation provisions in the Trade marks Act is significant as this is the first time a final appellate court has the opportunity to consider the issue.

Joyce Ang, Associate Intellectual Property and Technology Group ATMD Bird & Bird LLP 39 Robinson Road #07-01, Robinson Point, Singapore 068911 Phone +65 6428 9422 Email: joyce.ang@twobirds.com

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Joyce Ang

Four-day week L

aw firms are adopting a four-day week to avoid redundancies and as alternatives in firm cost cutting measures.

Norton Rose has recently received a 96% vote from lawyers in support of its new Flexible Working Scheme, which will allow staff to either adopt a four-day week on 85% of their salary, or take paid leave for up to 12 weeks at 30% of base salary.

The scheme began on 1 May and includes partner as well as salaried staff.

The firm’s chief executive Peter Martyr said that the aim of the scheme was to “protect jobs”.

UK-based firms, Ashurst and Simmons & Simmons are also known to have

invited lawyers to adopt the reduced-hours for reduced-pay alternative.

Top-tier Australian firms such as Mallesons Stephen Jacques, Minter Ellison and Freehills said that flexible working schemes have been options for their lawyers for some time now, but the financial crisis has nevertheless prompted a closer consideration of the schemes.

“We’re continuing to pay very close attention to our

“[The schemes] are policies we’ve had in place for a few years now; it’s not a response to the crisis” Spokesman, mallesons stephen jacques

korea >>

Partial liberalisation puts mergers back on agenda A

s Korea’s legal market edges closer to liberalisation, domestic law firms are finding that mergers are a viable way to bulk up and remain competitive.

Korean law firm Hwang Mok Park has agreed to merge with boutique litigation practice Hanseung Law Firm. The merged firm, which will retain the name Hwang Mok Park, will become Korea’s eighth largest law firm, boasting around 120 Korean lawyers, foreign legal consultants, patent attorneys, CPAs, tax accountants and custom brokers.

Hanseung, which will contribute 35 lawyers of its own to the union, specialises in lawsuits, mediation and corporate affairs and has a number of high-profile lawyers in its ranks, including former heads of the patent, family and administrative courts and a former justice of the constitutional court.

“This acquisition of Hanseung puts us into the top tier of law firms in Korea,” said the firm’s senior partner Hwang Ju-myung. “By virtue of this merger, our corporate clients will enjoy even stronger litigation services, in the civil, criminal, family and administrative areas.” ALB Asian Legal Business ISSUE 9.5

NEWS | news >>

gets thumbs up cost base and discretionary spending, as part of the normal budget planning process to…

John Weber preserve jobs,” Minter Ellison said Minter Ellison’s Chief Executive Partner, John Weber. “We’re also encouraging staff to consider flexible work options where their workloads have changed because of the market downturn.”

A firm spokesman at Mallesons said the firm was implementing flexible work policies that have been in place for a number of years. “[The schemes] are policies we’ve had in place for a few years now; it’s not

a response to the crisis,” he said. “There haven’t been any changes to the policy – our only response in terms of the current environment has been that we’ve not replaced contracts where they’ve expired.”

A Freehills spokesman said that due to the downturn, the firm will be more closely managing existing arrangements – such as part-time work, varied hours, job sharing, and working from home.

“Because of the financial crisis and requests from staff for more flexible work options, we’ve extended the flexible working options, like career breaks and purchased extra leave,” the spokesman said. ALB

UAE >>

Dubai latest office to be hit by DLA layoffs R

edundancies at DLA Piper have now reached its Middle East operations, with the firm announcing that eight associates have been cut from the Dubai office.

The redundancies will affect the corporate, finance and projects practices, amounting to an 8% cut of its fee earners.

Middle East managing partner David Church told ALB the firm had been working on methods to minimise the job losses but the cuts were inevitable.

“We discussed a range of alternative solutions with our people, many of which have been implemented, such as reducing the number of hours worked, transfers to other offices in the region [Abu Dhabi, Doha and Kuwait] where there is more demand, sabbaticals and secondments, and offering volunteer leave to enable people to assist on CSR projects around the world,” Church said.

Church added the redundancies were caused by waning client demand in the region. “There has been a reduction in the demand for legal services in Dubai,” he said.

The news follows the firm’s announcement in March of 54 lay offs affecting its Asia offices, and a number of other. ALB

www.legalbusinessonline.com

Update >>

International Arbitration Supportive and Supervisory Powers of the Singapore High Court for International Arbitrations seated in Singapore

S

ingapore’s status as a premier arbitration centre is robustly supported not only by its judicial philosophy and the presence of top arbitral institutions, but also its legislative framework for the conduct of international arbitrations.

International arbitrations are governed principally by the International Arbitration Act (the “IAA)” and the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), which is implemented by the IAA on an “optout” basis.

As noted in the second reading speech to the International Arbitration Bill, the IAA seeks to “facilitate arbitrations”. To this end, the Singapore High Court has been conferred an array of powers to assist the arbitral tribunal and parties in arbitration. The more significant supportive and supervisory powers of the Singapore High Court are:

Key supportive powers include:

• staying court proceedings instituted by a party to an arbitration agreement against another party to the arbitration agreement in respect of any matter which is the subject of that arbitration agreement. This includes the power to make any interim or supplementary orders to preserve the parties’ rights in relation to any property which is the subject of the dispute or to retain previously arrested property as security for the satisfaction of any arbitral award (ss 6 and 7 of the IAA); • making orders for security for costs, discovery of documents, interrogatories, obtaining evidence by affidavit, preserving or selling property and assets, securing the amount in dispute and interim injunctions or other interim measures (s 12(7) of the IAA); and • making orders to compel the attendance of witnesses (including prisoners) in Singapore before the arbitral tribunal, e.g. by the issuance of subpoenas to testify or subpoenas to produce documents (ss 13 and 14 of the IAA).

Key supervisory powers include:

• setting aside an arbitral award on any ground listed in s 24 of the IAA or Art 34(2) of the Model Law; • deciding on any challenge to an arbitrator on grounds of partiality or lack of independence or qualifications (Art 13(3) of the Model Law); • deciding on the termination of an arbitrator’s mandate if he becomes unable to to perform his functions or fails to act without undue delay, unless the arbitrator withdraws from office or the parties agree on the termination of the mandate (Art 14(1) of the Model Law); and • deciding whether the arbitral tribunal has jurisdiction over a matter, if the arbitral tribunal rules as a preliminary question that it does (Art 16(3) of the Model Law).

In line with the legislative intent behind the IAA, judicial intervention to exercise these powers is kept to a minimum.

Mr Christopher Anand Daniel is a Director of Drew & Napier’s International Arbitration Group. His areas of practice include international commercial arbitration, commercial and corporate litigation, banking litigation, and public law litigation. Christopher has successfully argued at all levels of the Singapore courts, and before international arbitral tribunals. He can be contacted at +65 6531 2760, or christopher.daniel@drewnapier.com.

Christopher Anand Daniel

23

NEWS | appointments >>

Gebran Majdalany

appointments ►► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Donald Francoeur

Gebran Majdalany

Norton Rose

Banking & finance

Riyadh

Todd Bissett

O’Melveny & Myers

Sheppard, Mullin

Corporate

Shanghai

Frank Marinaro

Merrill Lynch

Loeb & Loeb

Corporate

Beijing

Zhou Jun

RayYin & Partners

Private equity

Shenzhen

Zhang Jiachun

China National Pharmaceutical Industry Corporation

East Associates

Corporate

Beijing

Jessica Fei

WongPartnership

Fulbright & Jaworski

Dispute resolution

Hong Kong

Qi Bin

Run Ming

Shimin law office

Japan practice

Shanghai

Kathy Yang

O’Melveny & Myers

Run Ming

Corporate, finance

Beijing

Charles Liang

Alstom

Run Ming

Corporate, FDI

Beijing

Akio Yamada

Japan Fair Trade Commission

Jones Day

Antitrust and competition law

Tokyo

Prashanth Sabeshan

Freehills

Norton Rose

Energy & resources

Singapore

Fraser Hern

Allen & Overy

Walkers

Insolvency & restructuring

Hong Kong

Ray Wearmouth

Harney Westwood & Riegels

Ogier

Corporate

British Virgin Islands

John Inge

Hogan & Hartson

Orrick

IP

Tokyo

Bharat Anand

Freshfields

Khaitan

Corporate

New Delhi

Firm

Partner

From

To

Fulbright & Jaworski

Richard Hill

London

Hong Kong

Fulbright & Jaworski

Stefan Ricketts

London

Hong Kong

Clifford Chance

Simon Cooke

London

Hong Kong

Simmons & Simmons

Damon Le Maitre-George

China

London

Simmons & Simmons

Charles Mayo

Hong Kong

London

Simmons & Simmons

Jane Newman

Shanghai

London

White & Case

Sebastian Buss

London

Singapore

►► Promotions

24

Norton Rose boosts Riyadh office Norton Rose has appointed Donald Francoeur as a senior counsel to its Riyadh banking & finance practice.

Francoeur joins from Qatari firm Gebran Majdalany, and has also worked with Canadabased firm Fraser Milner Casgrain and in Stikeman Elliot's Montreal office.

Norton Rose hopes the appointment will assist the firm in its regional growth strategy.

"Saudi Arabia's plans for the development of its infrastructure, privatisation, the creation of public companies and the investment of some of its wealth outside the country are… enormous,” said Stephen Parish, the firm's global head of banking.

Sheppard Mullin

Sheppard Mullin strengthens China-US practice Sheppard, Mullin has added partner Todd Bissett to the firm’s Shanghai corporate practice.

Bissett, a private equity and mid-market M&A specialist, will split his time between Shanghai and Silicon Valley, to strengthen the link between the two US and China offices.

Merrill Lynch

►► Promotions

Name

Firm

Promotion

Practice

Location

Umesh Kumar

Linklaters

Partner

Financial markets

Hong Kong

Jiro Toyokawa

Linklaters

Partner

Corporate transactions

Tokyo

Samantha Thompson

Linklaters

Partner

Corporate transactions

Hong Kong

Wilson Ang

Linklaters

Counsel

Litigation

Hong Kong

Rosamund Barker

Linklaters

Counsel

Capital markets

Hong Kong

Howard Lam

Linklaters

Counsel

Banking

Hong Kong

Sophie Mathur

Linklaters

Counsel

Corporate, M&A

Singapore

Jiannan Zhang

Cadwalader

Partner

Corporate

Beijing

Zili Shao

Linklaters

Asia managing partner

Corporate

Hong Kong

Norton Rose

Loeb & Loeb

Loeb & Loeb makes Beijing corporate move Loeb & Loeb has appointed the former first vice president of Merrill Lynch, Frank Marinaro, as a partner in the corporate department.

Marinaro is to head the soon to be launched office in Beijing, where he will become the firm’s chief representative in China.

Frank Marinaro

RayYin & Partners

New partner for RayYin & Partners RayYin & Partners has announced that Zhou Jun has joined as a partner in Shenzhen. “[The] Shanghai office will serve as a base for works focused on both domestic and international clients,” said Zhou Yi, founder and chairman of the management committee at Zhou Jun RayYin. “Foreign investment, trusts, real estate and intellectual property protection are the main areas of advice we provide for foreign clients.”

Asian Legal Business ISSUE 9.5

NEWS | appointments >>

Orrick

Hogan & Hartson

Orrick boosts IP offering with lateral hire Orrick has strengthened its Tokyo IP offering after announcing John Inge will join the firm as an of counsel.

Inge, who joins the firm from the Tokyo office of Hogan & Hartson, has acted for a number of high-profile Japanese corporates, primarily in the electronics and semiconductor fields, in patent litigation cases and other IP matters.

Update >>

Islamic Finance A short note on forum non conveniens

What is the doctrine of forum non conveniens?

According to Black’s Law Dictionary, forum non conveniens (“FNC”) is the discretionary power of court to decline jurisdiction when the parties’ convenience and ends of justice are better brought and tried elsewhere.

What is the relationship between FNC and the jurisdiction of the court?

A court may have jurisdiction to try and hear cases and decline its jurisdiction over the same due to the ground of FNC.

Linklaters

Linklaters embarks on promotions drive Linklaters has made up three new partners and appointed four new counsel to the firm’s Asia offices.

The firm has elevated three Asia-based lawyers to partnership – financial markets lawyer Umesh Kumar in Hong Kong, as well as corporate transactions attorneys Jiro Toyokawa in Tokyo and Samantha Thompson in Hong Kong.

Additionally, the firm has also elected 18 new counsel across its 10 offices, four of whom are based in Asia. Hong Kong-based lawyers Wilson Ang, Rosamund Barker and Howard Lam have been appointed from the litigation, capital markets and banking practices respectively, along with Singapore-based corporate & M&A lawyer Sophie Mathur.

When does a Malaysian Court have jurisdiction to try a case?

The jurisdiction and power of the Malaysian Courts to preside over any case are provided for under Section 23 of the Courts of Judicature Act 1964.

Do the Malaysian Courts recognise FNC?

In the case of American Express Bank Ltd. V. Mohamad Toufic Al-Ozeir & Anor [1995] 1 CLJ 273, the Supreme Court ruled that even though a Malaysian court has jurisdiction to entertain the claim between the parties, the court still has the discretion to decide whether to deal with the case or otherwise, based on FNC principles.

Do the English Courts recognise FNC? various

Fulbright & Jaworski

Fulbright adds to HK office with new hires Fulbright & Jaworski has added six lawyers to its Hong Kong office. The firm has hired WongPartnership’s former head of dispute resolution in China – Jessica Fei – as counsel, transferred international dispute partners Richard Hill and Stefan Ricketts from London to Hong Kong, and added three new associates – Eric Wong, Fung Lin Leung and Pengfei Fu. “We have seen rapid growth, market liberalisation and Jessica Fei the transformation of the Chinese economy during the past decade,” said Jeffrey Blount, the head of Fulbright’s China and Asia-Pacific practice groups. “As Asian markets have matured, attracted vast amounts of foreign capital and otherwise become more integrated into the global economy, we have seen a predictable increase in complex disputes.”

Run Ming

Shanghai Shimin

Former partner rejoins Shanghai Shimin Japan practice veteran Qi Bin has rejoined Shanghai Shimin law office as a partner, leaving Run Ming where he was a founding partner and helped build up the firm’s Shanghai branch.

Qi was a partner at Shimin for a number of years before leaving three years ago to head up Junyi’s Shanghai office. He became a founding partner of Run Ming when it was established based on a merger between a Junyi team and a new start-up Beijing firm, Runbo, in April 2007.

Qi cited a major adjustment in Shimin’s business structure, after it separated from the CAST Group, as the main driver behind his return. “The new business model allows us to continue to develop our Japan practice, but also frees us up to expand our client base to include companies from Europe and the US,” he said. www.legalbusinessonline.com

By virtue of the celebrated case of Spiliada Martime Corp v Cansulex Ltd [1987] A.C. 460, 475-478, the House of Lords declared that the English Courts also recognise the FNC doctrine as a discretionary power of the court.

What are the basic principles laid down in the case of Spiliada?

In Spiliada, Lord Goff set out the basic principle as follows: “The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having jurisdiction, which is the appropriate forum for trial of the action, i.e. in which the case may be tried more suitably for the interest of all the parties and the ends of justice.”

Do the courts in the European Union (“EU”) recognise FNC? Pursuant to the Brussels Convention 1968, the courts in EU countries have exclusive jurisdiction to hear any claim between the parties where one or more of whom is domiciled in any EU country, where the parties have agreed that the courts of EU countries are to have jurisdiction. It is also provided that the courts in EU countries have no discretion to decline jurisdiction even on the ground of FNC.

Conclusion

FNC is well recognised under the administration of justice system in Malaysia as well as in England. However, as far as the EU countries are concerned, FNC is not applicable when the case falls within the ambit of the Brussels Convention 1968.

Written by Arni Ariffin and Ahmad Syahir Yahya Arni Ariffin Senior Associate Corporate Commercial Practice Group Azmi & Associates 14th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia Tel: +6 03 2118 5000 Fax: +6 03 2118 5111 www.azmilaw.com

Arni Ariffin

25

NEWS | appointments >>

Update >>

Employment Update on Singapore Bank Defection Case

I

n an Employment Update last year, we reported on the criminal proceedings that were brought against 7 former employees of Citibank in January 2008.

The individuals had worked in Citibank’s private banking division until mid-2006 when a number of them left the bank to join a competitor, UBS. It was alleged that in the months leading up to their departure, the individuals accessed Citibank’s computers without authority and printed out certain information, and sent data to their personal e-mail addresses. A total of 1,223 charges were brought against the former employees, relating to alleged unauthorised access to computer data, disclosure of customer information, and destruction of evidence.

Five of the former employees involved have now been fined for their actions, and one has been acquitted with a warning. Proceedings against the one remaining former employee, the former manager in charge of the group, are pending.

The first to be fined was a former Vice-President, who pleaded guilty to 21 charges. The court imposed a total penalty of $173,000. According to media reports, the court heard in the course of the proceedings that she had already paid $180,000 to the bank to settle the related civil claim.

The second employee to be fined was the personal assistant to the Vice-President. She had acted on the Vice-President’s instructions in compiling and keeping Citibank customer information in the months leading up to their departure. She admitted to 6 charges, and was fined a total of $40,000.

The remaining three former employees were each Relationship Managers, who were prosecuted in relation to the unauthorised extraction of bank and customer confidential information from Citibank’s computer database.

Two of the former employees pleaded guilty to 20 charges and were fined $160,000 and $130,000 respectively. The third pleaded guilty to 10 charges and was fined $70,000.

The cases are significant as they are the first of their kind in Singapore. It is clear that the court has not taken lightly the conduct engaged in, given the significant penalties imposed, though it chose not to sentence any individual to jail.

The cases have drawn widespread interest given the propensity for movement of personnel between employers in the banking industry, and the severe stance that has been taken by the regulators and the courts to the conduct engaged in. It may give some comfort to employers to know that they not only have civil remedies available to them in these circumstances, but may also seek the involvement of the police and/ or other relevant regulatory bodies in protecting their confidential information.

George Cooper, Practice Leader Workplace Law & Advisory – Asia Freehills Direct +65 6236 9941 Telephone +65 6236 9939 Facsimile +65 6538 2575 http://www.freehills.com

26

Run Ming

various

Run Ming adds two partners on anniversary Run Ming Law Office celebrated its two-year anniversary in early April, and marked the occasion with the appointment of two new partners in Beijing – Charles Liang and Kathy Yang.

Liang, previously the general counsel for Alstom in China, has joined Run Ming as an executive partner. Liang co-founded Jingtian & Gongcheng before moving to in-house roles in Motorola, Agilent Technologies, Intel and Alstom.

Charles Liang Yang joins from O’Melveny & Myers’ Beijing office, where she was a senior counsel in the firm’s M&A practice. Her practice focuses on M&A, private equity, securities offerings, bonds issuance and foreign direct investment in China. Prior to joining O’Melveny, she worked in the Chicago office of another major international law firm.

Fair Trade Commission

Jones Day Tokyo appoints competition advisor Akio Yamada has joined Jones Day’s Tokyo antitrust and competition law practice as a senior advisor.

Yamada previously held a number of key positions within the Japanese business community and academia, including secretary general of the Japan Fair Trade Commission and affiliated professorships at Kyoto, Doshisha, and Waseda universities.

Phillip Proger, global head of the firm’s antitrust and competition practice, said Yamada’s appointment will help it stay ahead of changes to Japan’s competition law regime.

Simmons & Simmons

Simmons bucks trend to relocate three Simmons & Simmons has moved three senior corporate partners back to London from its China offices, which has resulted in a number of local associate redundancies in the region.

The three partners leaving for London are head of the Asia corporate practice Damon Le Maitre-George and corporate partner Charles Mayo in Hong Kong, and partner Jane Newman in Shanghai.

Hong Kong partner Tom Deegan will replace Le MaitreGeorge as the new regional corporate head.

Damon Le Maitre-George

White & Case

White & Case aviation lawyer flies to Singapore White & Case aviation lawyer Sebastian Buss has been transferred from the firm’s London office to its new QFLPlicensed office in Singapore.

Buss has also been appointed partner in the firm’s Asia energy, infrastructure, project and asset finance practice, and will raise the Singapore office’s number of lawyers to 24.

“The Asia-Pacific asset finance and aviation finance market is growing and it is essential for our continued success within the market to continue to grow our practice as well,” Buss said.

A&O George Cooper

Jones Day

Sebastian Buss

Walkers

Insolvency lawyer heads for Hong Kong Walkers has secured a coup after announcing Fraser Hern had joined its Hong Kong office as part of its insolvency, restructuring and corporate recovery group.

Asian Legal Business ISSUE 9.5

NEWS | appointments >>

Hern, who joins from Allen & Overy where he was a senior associate, advises insolvency practitioners, turnaround professionals, bank creditors, debtors, shareholders, bondholders and other stakeholders on corporate and financial restructuring and insolvency matters.

“We are seeing a substantial increase in restructuring work given the current economic climate,” said Guy Locke, global head of the restructuring, insolvency and corporate recovery group.

Harneys lawyer returns to old firm Former Harney Westwood & Riegels lawyer Ray Wearmouth has re-joined his old firm Ogier and will be based in the British Virgin Islands (BVI) office.

After serving seven years as an equity partner at Harneys and later establishing its Hong Kong office, Wearmouth returned to Ogier’s corporate, commercial and banking practice.

Ray Wearmouth

Norton Rose

Freehills

Freehills lawyer joins Norton Rose Singapore Norton Rose has secured the services of former Freehills senior energy lawyer Prashanth Sabeshan, who will it join its Singapore office as an of counsel.

Indian-admitted Sabeshan advises on energy and infrastructure projects in the subcontinent and throughout the Asian region. His appointment is timely as Norton Rose intends to bolster its India practice after obtaining a QFLP licence.

“India is very important to our Singapore practice, and Prashanth brings an in-depth knowledge of Indian energy and infrastructure deals - he will play an important role in the continued growth of our business in Asia,” said Jeff Smith, a Singapore-based partner in the firm’s energy practice.

Clifford Chance

PE partner trades London for Hong Kong Clifford Chance private equity (PE) partner Simon Cooke will relocate from the company’s London office to Hong Kong as the firm strengthens its PE offering.

Cooke will work closely with HK-based partner Andrew Whan in what is one of the region’s largest PE teams. Whan says that Cooke’s relocation is evidence that there are still deals to be struck for sophisticated PE investors in the region. “Like our clients, we remain upbeat and believe that the private equity market in this region will continue to weather the global financial storm,” Whan said, noting that investors have recently been setting their sights on the Asia PE market as well as public markets across the region. www.legalbusinessonline.com

IT column

TM

Preserve in Place vs. Collect to Preserve

Can you explain the distinction between the preserve-in-place and collect-to-preserve approaches, including how this might cause you to recommend one type of eDiscovery solution over another? – Senior Litigation Support Specialist, Fortune 500 Biotechnology Company

Ogier

Harneys

Update >>

“P

reserve in place” refers to preservation of archived data formats, such as back-up tapes, email archives and scanned document repositories—items that are not altered in the normal course of business. However, recently the term has been expanded to refer to “locking down” files currently in use wherever they are found, including files on custodians’ computers. The risk and inconvenience of using “preserve in place” for documents currently in use by the custodian limits its usability for eDiscovery preservation.

“Preserve in place” does not actually collect files in a forensically defensible manner. Once a document is “locked down,” the custodian must make a copy of the file to edit and use for business purposes. If the file is on a computer of a custodian who is also an “administrator” on that computer, it may be possible to override the inplace preservation. In addition, leaving a file in place on a computer in the possession of a custodian exposes the data to greater risk of accidental or purposeful destruction.

Finally, the metadata and unique hash value of the file may be altered when “locked down,” rendering proof of chain of custody and duplicate identification difficult or impossible. “Collect to preserve” is the method that data forensics and eDiscovery professionals use when preserving potentially relevant evidence.

This method uses digital investigation or eDiscovery software to create a copy (which is an original under the Federal Rules of Evidence) of the target data (often filtered by keywords, dates, or other parameters). The software verifies the accuracy of that copy by generating a Hash or CRC value, then preserves the copy, along with its exact state and metadata, within a court approved file format. By quickly preserving data out of the stream of use in the regular course of business, you can minimize business disruption, the burden of “preserve in place” data management and the risk of spoliation. If you are collecting data for submission in court or for proof of compliance to regulators, use an eDiscovery solution that uses the “Collect to preserve” method.

Written by Michael Rhoden, Product Manager EnCase eDiscovery, Guidance Software, Inc

Andrew Whan

For more information, please contact: Carl Kimball, General Manager, Asia Pacific Guidance Software, Inc Phone: +65 6248 4527 Email: apac.sales@guidancesoftware.com

Carl Kimball

27

News | deals update >>

mergermarket M&A deals update

28

Asian Legal Business ISSUE 9.5

News | deals update >>

www.legalbusinessonline.com

29

News | regional update >>

Regional updates

CHINA

30

CHINA

Paul Weiss

Philippines

SyCip Salazar Hernandez & Gatmaitan

MALAYSIA

Tay & Partners

SINGAPORE Loo & Partners

INDonesia BT Partnership

Vietnam

Indochine Counsel

Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region

New Focus and New Thresholds for Chinese Outbound Investments On March 16, 2009, China’s Ministry of Commerce (“MOFCOM”) issued the Measures on the Administration of Overseas Investments (the “Measures”), replacing the regulations issued in 2004. The Measures apply to investments by entities established in China in non-financial enterprises outside China.

At the heart of the Measures is MOFCOM’s determination to focus the central government’s caseload on large scale or politically sensitive investments and allow other applications to be approved more easily. The 2004 framework authorized provincial level MOFCOM authorities to approve investments by enterprises under the local government in certain designated countries; investments in other locations or by enterprises under the central government required national level MOFCOM approval.

Under the Measures, applicants should instead follow one of three tracks, depending on the significance of the investment. A fast track applies for investments of less than US$10 million and which do not fall into the categories requiring provincial or central approval (see below). Such applications do not require a full review and should obtain approval within three business days after submission of an application form (but not full documentation) to either a provincial or the central MOFCOM bureau. On the second track, provincial MOFCOM bureaus may approve (i) investments of between US$10 million and US$100 million; (ii) investments in energy and natural resources and (iii) investments that involve “raising external funds” (a term left undefined

by the Measures) within the PRC. Finally, central MOFCOM approval is required for investments that (i) are in an amount of US$100 million or more, (ii) involve the establishment of an overseas special purpose vehicle for the listing of PRC assets, (iii) involve the interests of several jurisdictions, (iv) are in designated jurisdictions (to be set forth in a separate list), or (v) are in jurisdictions without diplomatic relations with the PRC. Despite the welcome clarifications and streamlining detailed above, the Measures may impose unanticipated barriers to outbound investment. For example, the Measures provide that any agreement relating to the outbound investment will only become effective once the relevant governmental approvals have been obtained and not upon execution. Careful drafting will be required to ensure that key contractual provisions retain their enforceability pending receipt of such approvals.

Written by Peter Davies, associate Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong Email: pdavies@paulweiss.com Ph: (852) 2536-9933

Philippines

Overhauling Foreign Exchange Regulations As a measure to further liberalize and streamline the foreign exchange regulatory framework of the Philippines, the Bangko Sentral ng Pilipinas (“BSP”, Central Bank of the Philippines) issued Asian Legal Business ISSUE 9.5

News | regional update >>

BSP Circular No. 645 on 13 February 2009. This is pursuant to an earlier Resolution of the Monetary Board (Monetary Board Resolution No. 61 dated 15 January 2009) where it approved additional reforms to the foreign exchange regulatory framework and consolidated all existing rules on foreign exchange transactions thru the issuance of the new “Manual of Regulations on Foreign Exchange Transactions”, replacing Central Bank Circular No. 1389 dated 13 April 1993.

BSP Circular No. 645 amended existing regulations by limiting the application of the rules on the sale of foreign exchange to sales made by authorized agent banks (AABs) and their subsidiary/ affiliate forex corporations.

Government entities should now submit their foreign borrowings plan for the following year every end of September to the BSP International Department, regardless of amount.

Private entities should submit their own plans if their borrowings will at least be USD10 million.

BSP approval of foreign loans must now be secured prior to signing of loan documents and/or drawdown of loan proceeds. Also, non-residents’ issuance of notes or bonds in the domestic market now requires prior BSP approval.

Loan prepayments to be serviced with foreign exchange purchased from AABs or AAB-forex corps should be approved first by the BSP. However, prior BSP approval for foreign loans of private banks with maturities longer than one year that are intended for relending is no longer necessary.

Custodian banks are delegated to register foreign investments in pesodenominated government securities and peso time deposits with tenor of at least 90 days. Earnings from outward investments should be inwardly remitted and sold for pesos through AABs within seven banking days from receipt of the funds abroad together with submission of required documents, unless the earnings are reinvested within two banking days from receipt.

Offshore banking units are prohibited from depositing in their peso deposit accounts with AABs the peso equivalent of foreign exchange remitted and converted to pesos through them, related to inward foreign investments for www.legalbusinessonline.com

payment to designated investee firms/ beneficiaries in the Philippines.

To ensure timely and immediate information of foreign currency movements, the BSP imposed stiffer penalties on custodian and remitting banks for late reporting of transactions in BSP-registered investments.

Written by Jesusa Loreto A. Arellano-Aguda Sycip Salazar Hernandez and Gatmaitan SSHG Law Centre, 105 Paseo de Roxas Makati City, Manila, Philippines Tel: +63-2-817-98-11 loc. 261 Fax: +63-2-817-38-96 E-mail: sshg@syciplaw.com, syciplaw@globenet.com.ph Website: www.syciplaw.com

MALAYSIA

Stimulus for the Malayasia Bond Market On 10 March 2009, Malaysia announced a second economic stimulus package amounting to a whopping RM60.0 billion (approximately USD16.7 billion).

This package accounts for almost 9% of Malaysia’s GDP and is on top of the RM7.0 billion first fiscal stimulus package announced as recently as November 2008.

The size and the swiftness of the second package underscore the rapidly deteriorating global economic environment which the Malaysian economy is facing and which it is neither immune nor insulated from.

Malaysia is the third most export dependent country in Asia after Hong Kong and Singapore, relative to the size of its economy. In the face of declining exports and declining prices of its major exports of crude oil, gas and palm oil, the second package is timely indeed.

The centerpiece of the second package is the plan to get credit flowing again.

Since the Asian financial crisis of 1997, there has been a conscious shift towards the bond market as Malaysian corporations’ source of financing for long-term funds and for infrastructure/ project financing. As a result, Malaysia now has the largest bond market in Asia ex-Japan.

However, in the face of deteriorating economic indicators and a tight credit environment, issuance of Ringgit bonds is expected to drop to RM25.0 - RM30.0 billion in 2009, as compared to RM49.0 billion in 2008 and from a record high of RM54.0 billion in 2007.

Under the current market conditions, even viable companies are facing difficulties in accessing credit. To that end, the second package has allocated RM25.0 billion of guarantee schemes for working capital and capex purposes.

Significantly for the Malaysian bond market, the scheme includes the establishment of a Financial Guarantee Institution by the first half of 2009.

The FGI will be a government-owned corporation and assisted by the Central Bank of Malaysia. It will act as a bond guarantee agency that will provide guarantees for the bonds issued, thereby providing credit enhancements to corporate bond issuances which assists in raising the credit ratings of the issuers. The guarantees will reduce financing costs, assist viable companies to raise much need funds and encourage corporations to make a return to the bond market.

The FGI is expected to assist the raising of some RM15.0 billion worth of bonds which would hopefully have the desired economic multiplier effect to avert a full-blown economic slowdown.

Written by Ronald Tan, Partner Head of Debt Capital Markets Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Phone: +603-2050 1888 DID : +603 2050 1969 Fax: +603-2031 8618 Email: ronald.tan@taypartners.com.my

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News | regional update >>

SINGAPORE

Regulatory Aspects of Islamic Financing – Murabaha Monetary Authority of Singapore (“MAS”) advocates that Islamic finance products shall receive similar regulatory treatments as the conventional finance products.

However, MAS has not opted to have a separate Islamic finance regulatory regime that exists in parallel with the conventional framework. MAS accordingly serves as the driving force behind the change in the laws and regulations pertaining to the governance, validation and enhancement of Islamic finance transactions.

Prior to the enactment of Regulation 23 of the Banking (Amendment No.2) Regulations 2006, licensed Banks are only permitted to carry out banking business defined as “the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of the Banking Act, Chapter 19.” As such, it was at the material time unlawful to trade in real estate property or asset in capacity of a bank.

In the present regime, all licensed Banks may enter into “sale based” transactions with customer and in particular, Murabaha financing (which is commonly referred to as cost-plus financing). Further, there will be no double payment of stamp duty and goods and services tax for Murabaha financing transaction with a real estate underlying asset.

Pursuant to the Shariah concepts of Murabaha, this contract involves the sale of an item on a deferred payment basis whereby the customer is allowed to pay the sale price by agreed instalments.

The relationship between the parties is as “vendor and purchaser” instead of as “creditor and debtor”.

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Murabaha financing is essentially about “real transactions” which transpired between the bank and its customer. Islamic finance is based on Shariah principles which must be strictly adhered to. It is therefore fundamental to understand that, in Islamic finance documentation, the Islamic finance products do not merely replace interest with profit in its documentation.

Ideally, all Islamic concepts of finance products (given the various interpretations adopted in different financial markets) must be approved by a “qualified Shariah Scholar” or “a board of Shariah Scholars” (both of which are not officially constituted under any legal enactments or by-laws). Further, the parties should execute and perform the transaction “Islamically”, in form, substance and spirit throughout the entirety of the transaction.

Given that the fundamental differences between a conventional finance transaction and Islamic finance transaction lie in the Shariah principles, the writers are of the view that the regulatory authority may wish to consider incorporating the following:i. Shariah concepts and its interpretations which should be clear and consistent; ii. a statutory Shariah advisory board and an infrastructure for the issuance of fatwa for Islamic financial transactions; and iii. guidelines/directives/ practice notes on implementation, products development and enforcement procedures, to be issued on timely basis.

The writers are mindful that the regulatory authority may have considered and may have decided to only incorporate certain Shariah principles and its related supervisory measurement in the present regime.

Written by Ms Lee How Fen and Mr Nicholas Chang

By Ms Lee How Fen Foreign Counsel, Legal Associate (Corporate Practice) Ph: (65) 6322-2205 Fax: (65) 6534-0833 E-mail: leehowfen@loopartners.com.sg and Mr Nicholas Chang Corporate Finance Executive Ph: (65) 6322-2236 Fax: (65) 6534-0833 E-mail: nicholaschang@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

INDonesia

Enforcement of Foreign Arbitral Award in Indonesia (Part 1) Since 5 August 1981 and pursuant to Presidential Decree No. 34 Year 1981, Indonesia accessed to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards dated 10 June 1958 (or the New York Convention).

This accession then registered at the UN Secretary General on 7 October 1981. Notwithstanding such Presidential Decree, enforcement of foreign arbitral award in Indonesia at the time still faced many obstacles especially since the Supreme Court was in opinion that such Presidential Decree was not sufficient to apply as guideline for enforcement of foreign arbitral awards and as such still required implementing regulations.

Considering these reasoning, the Supreme Court then issued Supreme Court Regulation No. 1 Year 1990 dated 1 March 1990 regarding Guideline for Enforcement of Foreign Arbitral Awards (PERMA 1/1990).

As a development, Indonesia then enacted Law Number 30 Year 1999 regarding Arbitration and Alternative Dispute Resolution (Law No. 30/1999) to govern all substantial and procedural matters concerning arbitration and alternative dispute resolutions. This law basically adopts the previous rules and regulations with a few modifications.

These adoptions and modifications are, inter alia: a. PERMA 1/1990 states that the award can be enforced if there is an exequatur from the Supreme Court.

This is different with the regime of Law No. 30/1999 which regulate that the exequatur shall be issued by the Chief of the District Court of Central Jakarta except if the Republic of Indonesia is involved in the award then exequatur shall be issued only by the Supreme Court. b. Law No 30/1999 compiles all registration requirements contained in Asian Legal Business ISSUE 9.5

News | regional update >>

Article 3 and 4 of PERMA 1/1999. c. PERMA 1/1999 never specify who should register the award to the Chief of the District Court of Central Jakarta. This is later regulated by Law No. 30/1999 which stated that the registration shall be conducted by arbiter or his/her representative/s.

The execution of foreign arbitral award in Indonesia shall be conducted in 2 (two) steps of Court-mechanisms.

Those steps are Registration and Execution. a. Registration Every foreign arbitral award shall be registered by the arbiter or its representative/s in the District Court of Central Jakarta as the authorized court pursuant to Law No 30 /1999. Since there is no specific rule regarding the time limit for registration of foreign arbitral award, one can conclude that the time limit is similar with the registration of national arbitral award which is 30 (thirty) days subsequent to the declaration of the award. The registration shall be made by providing certain required documents. b. Execution After registration, the Chief of the District Court of Central Jakarta will examine whether the foreign arbitral award can be recognized and enforced or not. There are several considerations in this examination, namely: a. The award was adjudicated by an arbiter or arbitration board in a State which bound by treaties, in this matter the New York Convention; b. The award is, according to Indonesian law, considered to be within the scope of business law which covers activities in the field of trading, banking, finance, investment, industry and intellectual property; and c. The award shall be in conformity with public order.

Written by Tyana Asri Martianti BT PARTNERSHIP BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210, Indonesia Tel. 62 21 5700 777 Fax. 62 21 5700 877 Email: martianti@btplawfirm.com Web: http//www.btpartnership.com

www.legalbusinessonline.com

Vietnam

New Rules for foreign stock investors The Minister of Finance (MOF) issued Decision 121/2008/QD-BTC (Decision 121) on 24 December 2008 setting forth new rules to govern activities of foreign investors in the Vietnamese stock market.

The new rules apply to (i) individuals with foreign nationalities wherever residing; (ii) organizations established and operating under foreign law, and branches of such organizations whether or not operating in Vietnam; (iii) wholly foreign-owned enterprises established and operating under Vietnamese law and branches of such organizations; (iv) investment funds established and operating under foreign law or under Vietnamese law but with one hundred percent foreign-owned capital; and (v) others as may be specified by the Prime Minister.

With the new rules, foreign investors may directly conduct the investment in the Vietnamese stock market by (i) purchasing and selling shares, bonds and other types of securities listed on the Ho Chi Minh or Ha Noi Stock Exchanges, or registered for trading at securities companies; (ii) purchasing and selling shareholding and securities not listed on the bourse or not registered for trading at securities companies; (iii) participating in auctions to purchase securities and in auctions to purchase shareholding in enterprises undergoing equitization; (iv) contributing capital to establish securities investment funds at the permitted capital contribution ratio of foreign parties as per the current laws; or (v) contributing capital to Vietnamese enterprises at the permitted capital contribution ratio of foreign parties as per the laws. In addition, foreign investors may indirectly conduct the investment by delegating management of investment capital to a fund management company as per an investment management contract entered into by two parties.

Pursuant to the previous rules, only

foreign investors investing in listed securities market were required to obtain a securities trading code (STC) from the Vietnam Securities Depository (VSD).

Under Decision 121, this requirement is expanded. Particularly, each foreign investor except those whose investment is solely made through a fund management company is required to obtain an STC. Decision 121 also requires foreign investors to notify the VSD for changes in banks where they have opened their indirect investment capital account; their head-office addresses, locations of business registration, or contact addresses; their names or passport numbers; their legal status or organizational structure due to division, separation, merger, acquisition or other changes related to companies’ reorganization; or any contents of the dossier submitted to apply for the STC. Especially, in respect of changes by a foreign investor in the depository member, trading representative or securities company where such foreign investor opens its trading account, each of such changes is required to obtain a prior approval from the VSD. Under the new rules, each foreign investor shall be permitted to open only one indirect investment capital account denominated in Vietnamese dong with a depository bank licensed to conduct foreign exchange business. All transactions by the foreign investor must be made through this account.

After obtaining a STC, the foreign investor shall be permitted to open a unique securities depository account via which all payments shall be made. In the event that a foreign investor is a securities company established under foreign law or a 100-per-cent foreign-owned insurer, the investor may be permitted to open two securities depository accounts in accordance with regulations on securities registration, depository, clearance and settlement issued by the MOF. Decision 121 shall be of full force and effect 15 days after its publication in the Official Gazette.

Written by Ho Phuong Luan, Associate Indochine Counsel Unit 4A2, 4th Floor, Han Nam Office Bldg.

65 Nguyen Du, District 1 Ho Chi Minh City, Vietnam (Tel) +8483 823 9640 (Fax) +8483 823 9641 luan.ho@indochinecounsel.com www.indochinecounsel.com

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special report | Singapore 09 >>

SINGAPORE 09 34

Asian Legal Business ISSUE 9.5

special report | Singapore 09 >>

New kids on the block Not since Singapore Inc opened its doors for business some 40 years have so many new law firms entered the market. The past 12 months alone have seen no less than nine international firms make the move, with more tipped to open later this year. ALB looks at what to expect from some of these newcomers

T

he legal community in Singapore was abuzz for most of last year with predictions about which firms would be selected by the Singapore government as recipients of licenses under its Qualifying Foreign Law Practice (QFLP) scheme. Most were put out of their misery late last year when Herbert Smith, Norton Rose, Clifford Chance, Allen & Overy, Latham & Watkins and White & Case were confirmed as licensees. But amidst this, a number of other foreign firms were still planning their entry into the Singaporean legal market.

Ask the managing partner of any of the new firms that have opened up in Singapore over the past 12 months and chances are they will tell you their move into the country is governed by a number of factors:

Singapore-related work; it is a stepping stone for regional domination.

“Singapore is the place to be,” says Rhonda Hare, the Singapore managing partner of Australian firm Blake Dawson. “Our move into Singapore was client led and we act for a number of Singapore clients in the hotels, tourism and hospitality sectors, but the move is equally about what we can gain from the region. Singapore is well known as being the business and financial hub of South East Asia and we want to expand our operations in the region by being here.”

Denton Wilde Sapte closed all of its Asian offices – Singapore, Tokyo and Hong Kong – in 2004, but Jonathan Solomon, the partner in charge of resurrecting the firm’s Singapore office, cites similar reasons behind his firm’s move back there, saying that it is being looked at as the

“We have started seeing a good stream of instructions from not only Singapore, but from places like Indonesia and Vietnam, so for our trade finance group it made sense to open up here ” Jonathan Solomon, Denton Wilde Sapte client demands, broader or regional strategy, and revenue potential.

But irrespective of what answer is given, moving into Singapore is not so much about the local work will be generated as it is about the possibilities on offer across the south and Southeast Asia.

India via Singapore

International law firms who operate in the Lion nation realise that being there offers far more than the possibility of just picking up www.legalbusinessonline.com

firm’s launching pad to penetrate the emerging markets in the region.

“At the time of closing the Asian offices, it was seen as a strategic and financial decision. The strategy did not see the Far East being profitable enough,” he says. “What has changed is that we have started seeing a good stream of instructions from not only Singapore, but from places like Indonesia and Vietnam so for our trade finance group it made sense to open up here. The Singapore relaunch comes in response to client requests. They wanted to continue to

►► Foreign law firms who have entered Singapore in the Past 12 months* Name Blake Dawson Cains Denton Wilde Sapte Eversheds Hill Dickinson K&L Gates Lexygen O’Melveny & Myers Stuart Isaacs QC

Home jurisdiction Australia Isle of Man UK UK UK US India US UK

*This list does not purport to be exhaustive

instruct us here, but said we needed people on the ground.”

But as much as Singapore is a gateway to Southeast Asia, it also offers international firms unprecedented access to the closed Indian market. This is cited by managing partners of new Singapore entrants as perhaps the most exciting development. Each of the new kids on the block already boasts relatively well developed India-related practices, but being in Singapore presents an opportunity to further develop this aspect of their practice with a view to entering a liberalised Indian legal services market.

“We have had a deliberate focus on India for about two years John Rogers, now,” says John Rogers, Walkers co-managing partner of Walkers’ Singapore office. “It makes sense now that most of this work will be done through our Singapore office owing to geographic proximity and the presence of Indian clients here.”

Rogers is keen to keep a close eye on the Indian market. “We are looking at what is on offer in India, but we have been making regular trips there on the back of increased demand for British 35

•

F

reehills is a leading Australian and International commercial law firm with a long history working in Asia.

The firm has demonstrated a longstanding commitment to Singapore in particular, having maintained its regional headquarters in the City State since 1985.

Led by Managing Partner, John Dick, who has spent the past 20 years with Freehills in Asia, the Singapore office now comprises 15 staff, including two partners and 8 lawyers.

The firm’s Singapore client base includes multinational companies, financial institutions and government agencies from Asia and Australia, the US and Europe, who undertake significant and often groundbreaking transactions and investment projects throughout ASEAN and India.

Locally, Freehills is renowned as a market leader in the fast-growing Public Private Partnership sector in Singapore.

While this significant experience and expertise covers various industry sectors, the firm has a particular focus on and capability in the infrastructure, corporate real estate, energy (oil and gas) and resources sectors.

Freehills offers a truly regional service from its hub in Singapore. Through strong relationships with local counsel in Singapore and elsewhere, including having an on-theground presence with its partner offices in Indonesia (Soemadipradja & Taher) and

36

Vietnam (Frasers Law Company), Freehills Singapore provides a one-stop-shop for cross-border transactions.

The firm’s service scope has widened with the development in recent years of a strong corporate real estate and property funds capability, and the establishment of a workplace law & advisory practice covering all of Asia. An international dispute resolution service is also available.

These adjuncts to the existing Freehills Singapore practice mean a more complete international counsel service offering to all clients with investments and projects throughout the region.

Some recent matters of note undertaken

by Freehills Singapore acting as international counsel include: • Indonesia – resources: Acting for an Indian MNC in acquiring a billion dollar interest in certain coal assets in Indonesia.

Freehills Singapore and Soemadipradja & Taher combined to meet the client’s needs in India, Indonesia and Singapore. The work undertaken included due diligence of complex structures and international financing issues.

• India – energy: Acted for a Malaysian MNC in acquiring an interest in certain electricity assets in India. This involved a team of around 40 Freehills lawyers led

by Freehills Singapore, working closely

•

•

•

•

•

•

with local Indian counsel to deliver the Indian project to the Malaysian client.

PPP – advising as international counsel on a number of water, waste, defence and social infrastructure projects in Singapore and across the region.

Singapore/Malaysia/Vietnam – corporate real estate funds: Acting for foreign funds establishing and marketing property funds in Singapore, Malaysia and Vietnam, including a recent scoping study for a prospective REIT to be based out of Singapore.

Vietnam – oil & gas: Acted for a foreign MNC establishing a joint venture with PetroVietnam.

Australia – inward investment: Acted for a Singapore listed company in a major hotel redevelopment project in Western Australia. Freehills Singapore was able to provide Australian law services locally for the Singapore client.

Banking and finance: Acting for the Singapore branch of a major Australian bank as arranger of an AUD 77 million syndicated loan facility.

Workplace relations matters: Numerous multi-jurisdictional employment contract and policy reviews for MNC clients, covering Singapore, Malaysia, Indonesia, Thailand, Hong Kong SAR, PRC, Japan and India.

India – comprehensive workplace relations auditing: Acted for a major multinational banking corporation’s BPO and IT operations in India in relation to a comprehensive audit of its workplace relations practices.

Asian Legal Business ISSUE 9.5

Firm Profile

Freehills

Freehills Contacts John Dick

George Cooper

Andrea Wookey

Tel +65 6236 9948 john.dick@freehills

Tel +65 6236 9941 george.cooper@freehills.com

Tel +65 6236 9948 andrea.wookey@freehills.com

John Dick is Freehills' managing partner, South-East Asia, and is based in Singapore.

John has spent over 20 years in SouthEast Asia advising on regional investment projects, particularly in infrastructure and energy and resources. With a focus on cross-border regional investment projects, John has represented clients in a number of industries and investment destinations in South-East Asia. John is named as a leading individual for Projects in the Singapore section of Asia-Pacific Legal 500 *(2008–2009 edition). He is the immediate past President of the Australian Chamber of Commerce, Singapore.

George Cooper is based in Singapore and leads Freehills’ workplace law & advisory – Asia practice. George has specialised in workplace relations for many years. He works with corporate employers to identify and implement solutions to their workplace law and strategy issues across the Asian region.

He is experienced in both contentious (including advocacy) and non-contentious workplace matters, ranging from individual engagements and terminations, and multijurisdictional employment contract and policy reviews, through to larger scale M&A and project-related work, retrenchments and out-sourcing. He has worked on matters in Malaysia, Indonesia, Thailand, the Philippines, Vietnam, the PRC, Hong Kong SAR and Japan. George is a member of the Singapore Human Resources Institute, Law Institute of Victoria (Litigation and Workplace Relations Sections), Australian Human Resources Institute and Industrial Relations Society of Victoria.

Andrea Wookey leads the Banking and Projects group based in Singapore.

Andrea previously spent 3 years in Vietnam. Andrea has considerable experience in banking and finance law across Australia and Asia, with particular emphasis on preparation of finance and security documentation, assignments of debt and security, security audits, debt recovery, receivership appointments and general insolvency issues.

Simon Taskunas Tel +65 6236 9946 simon.taskunas@freehills.com Simon Taskunas is a Partner in Freehills’ Banking and Projects group and has spend 5 of the last 9 years based in Singapore.

Simon practises predominantly in the area of corporate real estate development and investment (including REITs), and also advises clients undertaking cross-border investment projects in other sectors including infrastructure and resources.

www.legalbusinessonline.com

Nicholas Watts Tel +65 6236 9970 nicholas.watts@freehills.com Nicholas Watts leads the Dispute Resolution Team in Singapore.

Nicholas practises in a broad range of general commercial litigation and international arbitration disputes, including cross border disputes in Asia, particularly in Indonesia and Singapore. His arbitration experience includes arbitration proceedings conducted ad hoc and under the rules of the Singapore International Arbitration Centre, International Chamber of Commerce, American Arbitration Association and the Indonesian Centre for International Arbitration (BANI). Nick has also practised in the area of investment treaty arbitration.

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special report | Singapore 09 >>

Virgin Islands and Cayman law advice on Indian transactions. Mauritius is still the preferred destination for investment into India, but as domestic Indian banks start to lend in transactions there will be more work on offer,” he says.

Setting their own agenda

The managing partners at these new entrants into the market all claim the partners at firm headquarters have not set any arduous targets to be fulfilled over the next 12 months. Rather, each of them told ALB they have been given a proverbial blank sheet of paper – no financial targets, no headcount targets, no timeline to break even – just a direction to make the office a successful and integral part of their firm’s global network. But that is not to say these managing partners haven’t set their own ambitious targets.

“We need at least 15 people to come on board and I am looking to have achieved critical mass within 12 months,” says Desmond Ong, Eversheds’ Singapore managing partner.

“This will probably occur through hiring former colleagues and lateral hires or a mixture of both.”

All lawyers firmly agree that bringing new talent on board is much easier in the current economic climate. If 2007 and the first half of 2008 were an employees’ market then the situation has now very much reversed.

“Its an employer’s market now, there is no doubt about that,” Ong says. “Driven by international firm retrenchments and layoffs there is a surplus of talent in the market at the moment, and this makes expanding new offices a little easier.”

Ong estimates he has at least 200 CVs on his desk at the moment, and while this should come as no shock, what is surprising is the seniority and experience of some candidates.

“I have certainly been surprised by the quality of some of the candidates I am receiving CVs from,” he says. “[At] partner and of counsel level, and lawyers with very, very impressive track records and a lot of experience under their belt would account for maybe 70% of the CVs I have on my desk.”

The managing partners of other new entrants into Singapore cite similar experiences, but many have been looking to fill vacancies by relocating lawyers from overseas offices instead of 38

dipping into the local talent pool – for one very good reason.

“I am always a little suspicious when I get a CV from a lawyer who is not gainfully employed at the moment,” says one international firm’s manging partner, who declined to be named. “But in Singapore I am doubly suspicious. Domestic firms here have a relatively low turnover rate, international firms maybe marginally higher. A lot of due diligence is needed when looking at lawyers who are currently out of work,” he continues, noting this is just as applicable to a would-be associate as a would-be partner.

The last roll of the dice?

Singapore is a hospitable place. No country knows the value of opening its markets more than the Lion nation – it has thrived on the back of more than 600 years of open markets and free trade has been critical in establishing it as both the financial and legal hub of south Asia. But while domestic firms extend the warmest of wishes to their foreign counterparts, there is a sense that for some the opening of a Singapore office may be a bit of a last resort in increasingly difficult economic conditions.

“Some of the firms that have opened up, or some of those that are planning to open in Singapore, have been hit hard in their home markets,” says a partner at one Singapore domestic firm. “You really do get the impression that is the last throw of the dice for some of them.”

The same partner questions whether the move into Singapore is guided more by the amount of work on offer rather than a pre-existing stream of client instructions. “The view in the market is that some firms are entering Singapore for its capacity to deliver new work and of course no one can fault that. But is there enough work to keep lawyers in the new office occupied in the interim? That’s the question – some may be sitting idly by for a while waiting for the instructions to come in.”

The implication is clearly that as soon as times get tough, these new entrants may be among the first to go.

On the other hand, the new arrivals are, ostensibly at least, impressive in their commitment to Singapore.

Time, and the markets, will reveal the answer.

The China Despite cultural and economic ties However, as ALB discovers, this

T

he numbers are staggering.

Thus far in 2009, China has logged 22 announced outbound M&A deals, including two of the largest on record, achieving a cumulative deal value of US$16bn – a new record, according to Dealogic.

Still boasting a relatively robust economy, China continues to be lucrative market for both international and local firms, but just where do Singaporean firms fit into the picture?

Listings

In years past, a major source of work for Singapore firms was Chinese companies looking to list offshore. “This was until September 2006, when a new requirement was introduced where PRC domestic companies effectively needed to seek MOFCOM and CSRC approval to list overseas – that put a dampener on this type of work,” says Drew & Napier director Boon Ann Sin. There was a transition period, whereby companies who had already transferred their assets prior to September 2006 were permitted to list without approval, but this window has now closed. Drew & Napier had an office in Shanghai but it closed in 2008.

“Prior to September 2006, business was picking up nicely and we had a number of clients looking to list offshore, ►► Singapore firms in China * KELVIN CHIA PARTNERSHIP - SHANGHAI Entered market: 2004 Chief representative: Sim Siew Kiang KHATTARWONG - SHANGHAI Entered market: 2003 Chief representative: Tan Chong Huat RAJAH & TANN - SHANGHAI Entered market: 2003 Chief representative: Yang Lih Shyng RODYK & DAVIDSON - SHANGHAI Entered market: 1996 Chief representative: Hoh Li Hia Josephine WONGPARTNERSHIP - SHANGHAI Entered market: 2004 Chief representative: Gan Kain Koon Gerry * Information correct as at August 2008 Asian Legal Business ISSUE 9.5

special report | Singapore 09 >>

connection that span 600 years, only a few Singaporean firms have offices in China. simply means servicing the dragon economy can best be done from home

but the regulatory changes have basically made this difficult,” Sin says.

Outbound M&A

Loo Choon Chiaw of Loo & Partners says there has been a shift in the direction of Chinese investment. “Since the early 1980s, the PRC has been the biggest beneficiary of foreign direct investment.

The statistics suggest that the trend may soon be reversed as PRC enterprises begin to venture abroad ,” he says.

Over the past nine months, Loo & Partners has been instructed by PRC State-linked conglomerates on several substantial acquisitions of coal and other minerals in Boon An Sin, Mongolia, Russia and Drew & Napier Indonesia, the building www.legalbusinessonline.com

of an electricity and heating plant in Russia on a BOT basis, and the design and building of a coal dedicated port terminal in Russia.

“Prior to September 1996, business was picking up nicely and we had a number of clients looking to list offshore” Boon An Sin, Drew & Napier There is little doubt that outbound China M&A will continue to rise. “It has not fully taken off yet, but there

is an increasing level of interest,” Sin says. “The bigger Chinese companies are resource hungry and there will be opportunistic buying – we’ve had queries, for example, from oil and gas entitles looking to buy assets.”

Loo agrees: “I expect our Greater China practice to receive more instructions from our PRC clients on outbound FDI in the natural resources and energy space,” he says. “The negative impact of the global financial crisis may ironically turn out to be a catalyst in expediting the PRC outbound FDI as the costs of overseas acquisitions become cheaper to our PRC clients.”

However, some suggest that if the predicted M&A spree does occur, it will not necessarily prove a bonanza for Singaporean firms. “If prices fall, Singapore is only one of many potential target countries,” Sin 39

special report | Singapore 09 >>

says. “Particularly with the focus on commodities, other markets such as Australia and South Africa will be more attractive.”

Inbound M&A

In contrast to outbound FDI from China, the inbound side of the equation has been somewhat slow. Thomson-Reuters calculated in April that China’s crossborder inbound volumes had reached US$3.4bn from 103 deals, down 42% from the same period last year.

But the work is still there for firms who choose to look for it – particularly

“Our international China practice has seen an increase in arbitration work and we predict that… will continue” Hee Theng Fong, KhattarWong

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those based in Singapore. “China and Singapore have enjoyed a strong trading relationship for many years,” says Lin Song, co-head of KhattarWong’s international China practice. “According to International Enterprise Singapore, China has been Singapore’s top foreign investment destination since 1997. For the past three years, bilateral trade has been growing by more than 25%, making Singapore the eighth largest investor in China.”

Sin says that there is still a significant level of interest from Singapore firms looking to invest in China. “They are at saturation point in Lin Song, KhattarWong Singapore, so they are looking to invest in China – often in a different area of business.”

There may also be opportunity in other areas. “Our international China practice has seen an increase in arbitration work and we predict that workflow in this area will continue to grow strongly. Thus far this year, our firm has handled multi-million

dollar claims involving parties from America, Asia and Europe,” says Hee Theng Fong, head of international China practice at KhattarWong. “While the global financial crisis may affect M&A activities adversely, it is a factor that has contributed to the rise of arbitration cases.”

Relationships with local firms

Given the prohibition on foreign firms advising on local law, Singaporean firms need to have close relationships with their local counterparts. Drew & Napier works with a number of Chinese firms. “We work together on long drawn projects, and quite often we are in daily communication,” Sin says. “Having worked on other transactions together, the partners know each other fairly well.”

KhattarWong has formed relationships with local firms which Song describes as “counting as family.” are by and large the bigger “Essentially, we have grown our capabilities to be an offshore firm with onshore capabilities and an international outlook,” he says.

Asian Legal Business ISSUE 9.5

Firm Profile

KhattarWong

KhattarWong sets its sights on the global stage

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s geographical boundaries blur and multinationals continue to set up offices around the world, KhattarWong continues to expand its reach globally, ensuring the Asian law firm is well-placed to meet the global needs of businesses and individuals. Founded 35 years ago, KhattarWong is based in Singapore and boasts an international outlook with offices in Shanghai, Hong Kong and Ho Chi Minh City. It is also a member of respected international associations of law firms and tax professionals, Interlex and Taxand, and works closely with associate offices in key Asian cities in Hong Kong, Indonesia, Malaysia, Thailand as well as the Middle East and India.

Lawyers in the firm are also qualified to practice in several jurisdictions.

“We realised very early on that if we wanted to grow we would have to venture beyond Singapore’s shores and regionalise, and then, globalise, and that is what we have done,” says Managing Partner, Tan Chong Huat.

“As Singapore’s economy regionalised, we followed our clients to the rest of the region, eventually setting up offices in Hong Kong, Mainland China and Vietnam. Our presence in these countries allows us to meet the needs of our expanding client base who now require more.”

A key step in the firm’s regionalism was the establishment of its offices in China and Hong Kong. Through its offices in Singapore, Shanghai and Hong Kong, KhattarWong effectively serves the Greater China region, boasting one of the largest representations by a Singapore firm with a team of more than 30.

The International China Practice has vast experience in a wide range of Chinarelated matters, having frequent and regular involvement in China-related transactions, including M&As and foreign direct investments, initial public offerings (IPOs), due diligence exercises, cross-border financing, dispute settlements and intellectual property.

The firm is also involved in a significant volume of arbitration work, handling multi million dollar claims in China involving parties from America, Asia and Europe.

“KhattarWong’s International China Practice is one of the largest and our team constantly keeps abreast with the latest developments in the Chinese legal and regulatory environment.

We are also very familiar with China’s cultural environment. In addition, our team comprises lawyers who are effectively bilingual, allowing us to effectively serve clients who invest in

www.legalbusinessonline.com

China and the region,” says Hee Theng Fong, head of KhattarWong’s International China Practice, who is a well-respected senior lawyer in the Chinese community.

“Overall the Chinese economy has been affected by the global economic downturn.

In terms of corporate practice, the current global economic negatively affects activities such as IPOs, foreign direct investments and cross-border financing. However, we have seen more opportunities for reorganisation work and insolvency work. M&As and private equity investments remain active,” adds Lin Song, co-head of KhattarWong’s International China Practice, who is a qualified PRC lawyer and partner with KhattarWong.

KhattarWong’s office in Vietnam was established in January 2008 and is the first foreign law firm established by a Singapore law firm after Vietnam’s ascension to the World Trade Organisation in 2006.

Working in collaboration with PBC Partners, a firm with offices in Ho Chi Minh City and Hanoi, the firm’s Vietnam Practice has a team of more than 30 lawyers capable of handling a wide range of local and international legal work.

“Vietnam as a fast emerging economy in Asean has vast potential of growth and expansion. Our presence in Ho Chi Minh City and our co-operation with PBC Partners helps us harness the opportunities posed by these developments,” said Patrick Chee, a Senior Consultant with the firm and Chief Representative of Vietnam.

"KhattarWong and PBC Partners have a lot of synergy in terms of types and profiles of client base, approach and complementary skills. Further, the presence of Mr Luong Van Tu, the former Vice Minister of Trade and Chief Negotiator of Vietnam's accession to the WTO, as their Senior Advisor, and Mr Phan Huu Thang, who is the Chief of Foreign Investment Agency under the Ministry of Planning and Investment in Vietnam, adds to our portfolio. We are especially well placed to meet clients’ legal needs in the areas of Foreign Direct Investment (FDI) and Mergers & Acquisitions (M&A), Corporate and Commercial laws, Banking and Finance and Intellectual Property legal services."

“While we have expanded physically in China, Hong Kong and Vietnam, we have also widened our presence globally through our alliances and friendships with law firms in Asean, the Middle East, India and globally,” says Mr Tan.

“Our alliances better position us to serve our clients as we can meet clients’ needs for seamless legal services across borders more effectively and continue in our bid to better the manner in which we expedite accurate, comprehensive and pertinent legal knowledge to them,” adds Mr Tan. Significantly, in a move that speaks volumes of KhattarWong’s standing and reputation in the legal industry, the firm was the sole firm from Singapore approached by Interlex.

Interlex comprises about 70 leading law firms around the world that co-operate to provide a complete range of international legal business services to clients.

KhattarWong’s ties with Interlex add to the international ties they enjoy as a member of Taxand, a global network of independent tax advisors. Taxand was formed in 2005 and has over 300 tax partners in over 40 countries.

The global network offers sophisticated tax advisory services to companies around the world and 78% of Taxand member firms are ranked in the top tiers of World Tax 2008, the International Tax Review’s global guide to the world’s leading tax firms.

Since joining Interlex, KhattarWong has collaborated with member firms on several occasions. Its recent deals include advising on a S$300 million term loan to a company based in the United States and the acquisition of business and assets of a Japanese company.

“I am confident that our initiatives to grow and establish ourselves in the international arena will stand us in good stead in the years to come,” says Mr Tan.

Singapore Office (Main) 80 Raffles Place #25-01 UOB Plaza 1 Singapore 048624 Tel: (65) 6535 6844 Fax: (65) 6534 4892 E-mail: kwp@khattarwong.com Shanghai Office Shanghai Stock Exchange Building South Tower 528 Pudong South Road, #22-06 Shanghai 200120 Tel: (86) 21 6869 0028 Fax: (86) 21 6881 7668 E-mail: tanchonghuat@khattarwong.com Vietnam Office Bitexco Office Building 19-25 Nguyen Hue Boulevard District 1, Suite 1501, 15th Floor Ho Chi Minh City, Vietnam Tel: (84) 8 3915 1624 / (84) 8 3915 1626 Fax: (84) 8 3915 1627 E-mail: kwp@khattarwong.com

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profile | managing partner >>

Jai Pathak tells ALB why there is much more to his firm in Asia than just the subcontinent

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Asian Legal Business ISSUE 9.5

profile | managing partner >>

Clients only give you one opportunity and you have to capitalise on that.”

Competition, relationships and liberalisation

alb 2009 managing partnerS series

Jai Pathak, Gibson Dunn & Crutcher:

To India, ASEAN and beyond

W

hen Gibson Dunn & Crutcher (Gibson Dunn) announced that it had taken Jai Pathak and, three months later, followed it up by taking three of his former fellow partners, Emad Khalil, John Viverito and Saptak Santra, away from rival US firm Jones Day to launch its first and only Asian office in Singapore in May 2008 it was obvious to many where the firm’s priorities lay- south east Asia: the booming yet embryonic emerging economies scattered throughout the region and, of course, India. Pathak was hailed by many, including ALB at the time, to be the epitome, if not the personification of, these goals.

But while the firm’s work in India- its representation of some of India’s largest conglomerates and its work for international blue-chip clients in their investment in the subcontinent, has garnered the most attention, Pathak tells ALB that there is much more to Gibson Dunn in Asia than just India.

The odd one out Pathak readily admits that Gibson Dunn’s Asian strategy may be perceived as a little odd. It stands, to this day, as the only major international firm operating in the region to have established Singapore as its hub in Asia. It doesn’t have an office in Greater China- on the Mainland or in Hong Kong and its only other office that could be loosely termed as being part of the strategy in the extended region is in Dubai. But, according to Pathak, the single office presence was just the way it was planned.

“Asia is vitally important to the firm’s global strategy. But when we talk about expanding in Asia it’s not a case of expanding all over the entire continent. We prudently chose to focus on where the immediate needs of our clients are, and where we could add initial fundamental value. Thus far this has involved assisting clients in expanding their operations across Asia’s southern belt- which covers South East Asia, the subcontinent and goes as far as the Middle East.” www.legalbusinessonline.com

But Pathak is all too aware that clients needs are dynamic and for many of them the opportunities on offer in China and South Korea are becoming too good to ignore.

For Pathak, this means that the writing is on the wall for the firm in Asia and northward expansion is a reality. “You can’t cover Asia without being in China so we know we have to be there sooner rather than later. That is something we are looking at but we will take our time to find the right team to work with our clients.”

Expansion But we shouldn’t expect to see Gibson Dunn commence operations in North Asia simply on the back of increasing client work.

Pathak says that even if client demand is compelling, for a law firm to open an office in a new location a high level of deliberation and pragmatism is required. In the current economic environment, for a firm to open an office in a new jurisdiction only to see it close soon after for want at the outset of proper planning and resources is an anathema.

“If clients are pressuring you, that in itself may well be a compelling reason to open new offices,” he says. “But just how do you put this into action? This is often a question that is not given the proper consideration.”

The answer is all about people, skill sets and value add, he says, giving ALB a glimpse into the deliberative process in play at Gibson Dunn. “Law firms sell people and their unique talent and skills, and in a competitive environment like Asia, especially in China, this is the key. We would likely start with a small team of key people on the ground initially which fulfil those requirements and to then build a critical mass around this core.”

Selecting the best quality personnel is the most vital ingredient in ensuring a good return on investment. “New offices and regional expansion have to be long term plays. In times like these when you sink in capital you need the people you bring on board to be the best.

Gibson Dunn is considered by many in the legal fraternity to be among only a handful of US law firms to make any prospective Indian venture a success. The others which are thought to be in the same category are Pathak’s former firm Jones Day, Latham & Watkins, Dorsey & Whitney and Baker & McKenzie. And while all are usually competing for the coveted international advisory roles on many of India’s largest transactions, Pathak says the relationship between all is not as cut-throat as people perceive.

“The competition is at times fierce, yes, but India affords huge opportunities and there is more than enough to go around. I continue to have good friends among what are now my former colleagues at Jones Day, and our other competitor firms.”

And while all law firms are expected to open in India if the regulations currently prohibiting them from doing so are relaxed, Pathak suggests that market opening may not be as close as some are predicting.

“Liberalisation of the legal services industry in India is a complex and sensitive question,” says Pathak. “Of course we would certainly consider opening in India if the client needs are there and if the applicable local regulation permit us to do so but I don’t think opening of that legal market is as imminent as we given to believe in the press. I’m not sure legal market liberalisation would merit a high rating on the list of things to do for Indian legislators and regulators in current circumstances.”

In the meantime, Pathak says that Gibson Dunn is able to cover India through various offices, primarily Singapore, with its lawyers frequently spending time on the ground in India and working closely with a number of Indian law firms. He says the firm does not have or believe in establishing an exclusive relationship with Indian law firms- as UK firms Clifford Chance, Allen & Overy and Linklaters have all done. Instead, Gibson Dunn prefers to instruct firms which are best able to deal with a particular transaction or litigation matter regardless of their size.

“Working with Indian law firms for us is a horses for courses proposition,” he says. “Our India-focused lawyers in London, New York, Los Angeles and Singapore have their own lawyer relationships in India with whom they are familiar, but essentially we are looking for a firm which can best fulfil what our clients need; this can be the largest firms in the country, a mid-size one, a firm with only two or three lawyers or even sole practitioners.”

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FEATURE | Chinese FDI >>

China FDI: Two-way street Outbound deals like Sinosteel and Chinalco are grabbing the headlines, but let’s not forget that China is still a leading recipient of FDI. ALB reports

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s lawyers ponder Hunan Valin Iron & Steel Group’s A$1.2bn investment in Fortescue Metals or Chinalco’s US$19.5bn courting of Rio Tinto, there is no doubting the potency of the continuing outbound Chinese FDI behemoth. However, Chinese FDI is not a one-way street and firms are still anticipating strong inbound activity.

Greenfields investment

M&A is the type of FDI which generally attracts the most discussion, but there are also other forms which also warrant attention, such as franchising and greenfield investment.

Stanley Jia, managing partner of Baker & McKenzie's Beijing office, says there are several drivers for greenfield investments in China, which could take the structure of wholly-owned foreign enterprises as well as joint ventures.

“A greenfield investment is attractive to those foreign investors who would like to avoid inheriting legacy issues 44

and historical liabilities of an M&A target,” he says. “Whether a foreign investor would consider greenfield to be a more suitable investment option will depend on how steep start-up costs are as compared to acquisition costs, the importance of having an already-established sales and distribution networks, and whether there is a tight timeline for starting up the business.”

Another significant Stanley Jia, Baker & McKenzie type of FDI into China, says Zhang Danian, managing partner of Baker & McKenzie’s Shanghai office, is franchising or licensing agreements.

“This is attractive for companies that are interested in building brand recognition without the need to invest considerable manpower or capital in a foreign jurisdiction, especially if companies are able to work through concerns of possible IP infringement,” he says. “This will be

an attractive means of FDI this year, especially for foreign companies hesitant to invest in a new market during volatile economic times.”

Strategic investment

Outbound Chinese investment has captured headlines across the region in recent times – but has the tide of work shifted directions for firms? “There is not so much a shift of work towards China outbound investment, but rather more attention given to it,” says Tao Jingzhou, partner at Jones Day in Beijing. “While inbound investment has been going on for a long time, outbound investment activities in recent times – such as Chinalco, Minmetals and Lenovo – have received much attention due to their novelty and large values.

Indeed for some firms, outbound Chinese investment is nothing new.

“For our firm, this is not a shift,” Jia says. “We have already been advising Chinese clients with their investments abroad for a number of years now.”

Asian Legal Business ISSUE 9.5

FEATURE | Chinese FDI >>

What has changed, perhaps, is the volume of work. “The volume and size of overseas investments by Chinese companies will definitely continue to increase,” Jia says. “This is just in line with the Chinese government's policy of encouraging Chinese companies to ‘go global’ and invest overseas. In addition, compared to their western counterparts, many Chinese companies are in much better financial shape and better equipped to take advantage of the low valuations of targets now.”

Outbound Chinese investment is beginning to take a strategic path.

“Chinese companies have been making outbound investments for the purposes of gaining brand recognition as well as access to overseas distribution networks and technological knowhow in the technology and automotive sectors,” Jia says. “In the technology sector, notable transactions include Lenovo's acquisition of IBM’s personal computer division in 2005. More recently, Beijing West Industries announced that it would acquire the US-based Delphi Corporation’s global suspension and brakes business, giving the Chinese automaker access to Delphi's patents and markets.”

Shift in balance

Lawyers advising on inbound investment have found themselves on a new playing field.

“For a start, foreign companies who used to be cash rich are now finding their financial resources drying up; two, there is often a discrepancy

The China-Australia connection

One country that lies directly in the path of the outbound China investment tidal wave is Australia. The sheer size of China’s acquisitive power means that inbound FDI from Australia to China is dwarfed by the outbound stream from China to Australia, says Mallesons partner Stephen Minns. And while the level of outbound FDI is on the rise, he says that Stephen Minns, Mallesons Stephen the inbound work has Jacques been more modest.

“Australian investment is going into a whole range of industries – manufacturing, consumer products, financial services, for example,” he says.

Outbound investment from China into Australia has been almost exclusively in the resources sector. “Certainly the outbound work is a lot more significant than what it was even a year ago, and the importance of resources [for China] and the decline in prices has made Australian assets more attractive,” he says. And while there has been some uncertainty among purchasers about the right time to buy and some occasionally unrealistic valuations from vendors, there is no evidence of a stalemate between buyers and sellers.

“The Chinese are definitely interested in investing now, and they’re not about to wait,” Minns says.

Waiting, however, is not always a matter of choice, with the ultimate

“It is clear that the PRC authorities will take concerns of small and medium competitors as well as any possible threat to Chinese consumers very seriously” Zhang Danian, Baker & McKenzie between Chinese and foreign parties in their value assessment of the same Chinese assets; and three, the recent awareness of China’s huge market potential has put [Chinese parties] in a position to impose conditions in a deal,” Tao says. “Only five years ago, the roles were the reverse and it was the foreign company that had the upper-hand.

These factors cause renegotiation or sometimes the end of negotiations.” www.legalbusinessonline.com

approval usually resting with Australian treasurer Wayne Swan and the Foreign Investment Review Board (FIRB), which is currently reviewing a backlog of highly significant proposed deals (see box). “It’s clear that the government wants to be comfortable that Australian companies continue to operate independently,” Minns says.

The challenge for legal advisers is to structure deals in a way that reflects

►► The adventures of Australia’s FIRB

Growing Chinese interest in the Australian resource sector has created a backlog of work for the Foreign Investment Review Board (FIRB), which examines and rules on proposals by foreign interests to undertake direct investment.

March: FIRB approves subscription of new shares in Fortescue Metals Group by Hunan Valin Iron & Steel Group, a China-based manufacturer of steel pipes and related products. The deal will see Valin pay A$1.2bn to increase its stake in Fortescue to 17%.

Present: China Minmetals’ revised bid for OZ Minerals’ assets still under consideration by FIRB at time of press. Original bid was rejected on 27 March on “national security” grounds, with particular emphasis on fact that OZ Minerals’ Prominent Hill mine in South Australia was in relative proximity to weapons testing range used

by Australian Defence Department.

FIRB currently reviewing proposal which would see Chinalco pay US$19.5bn to increase its stake in Rio Tinto to18% Also under review at time of press is Chinese Anshan Steel’s proposed investment in Australia-based Gindalbie Metals.

this requirement – not an easy feat and one which requires some layers of complexity.

“There is a strong desire on the part of the Chinese companies to understand these regulatory requirements so that their deals can go ahead,” Minns says, describing this as one of the most important parts of his work. The issue of protecting national interest, of course, is not limited to Australia. China also vets foreign investment and recently vetoed a bid

by Coca-Cola to take control of China Huiyuan Juice, China’s biggest juice maker, a decision that was seen by some commentators as a reflection of renewed Chinese nationalism and a corresponding aversion to large scale foreign investment.

However, Zhang says that there was more to the decision than simply sentiment alone: “What the Coke/Huiyuan rejection shows is that government authorities will increasingly vet proposed foreign investments thoroughly on both national security and antitrust grounds. In addition, it is clear that the PRC authorities will take concerns of small and medium competitors as well as any possible threat to Chinese consumers very seriously in determining whether to grant antitrust approval,” he says. ALB 45

FEATURE | Chinese FDI >>

China FDI Q&A

China FDI: Will 2009 be when the dragon economy wakes?

Loo Choon Chiaw

Loo & Partners LLP 88 Amoy Street, Level Three, Singapore 069907 Tel : (65) 6322-2288 | Fax : (65) 6534-0833 Email : ccloo@loopartners.com.sg Website: www.loopartners.com.sg

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ALB: It seemed like only yesterday that when we spoke of any China direct foreign investment (FDI), we were only referring to investments into China, but this trend has been reversed over the last few years, now it has been all about Chinese outbound investment.

LCC: I certainly agree with your general observations. Since the early-80s, the PRC has been the biggest beneficiary of FDIs, which have brought advanced technology and latest know-how into the PRC. Recently, there has been a fall in FDI inflows, which ended three decades of rapid growth in FDI inflows to the PRC. A survey of U.S. companies in the PRC published by the American Chamber of Commerce in China on 10 March 2009 found that 39% of the respondents were either postponing or had cancelled planned investments this year, while 21% indicated that they would shrink their China work force. Thus, even the PRC is not totally immune to the adverse impact of the global financial crisis (GFC).

The statistics clearly confirm that the trend will soon be reversed as the PRC enterprises begin to venture abroad. The numbers released by the PRC Ministry of Commerce (MOFCOM) (商务部) on the total amount of PRC out-bound FDIs: USD2.5 billion in 2002, and USD52.1 billion in 2008, speak for themselves.

ALB: What are the reasons behind the shift and how much more of this can we expect to see in 2009?

LCC: There is a host of reasons behind the pendulum swing. To start with, the enterprises in the PRC are relatively less exposed to the sub-prime crisis. There is an abundance of lowly-geared, well capitalised and well managed enterprises in the PRC. The RMB has been strong. The current GFC has therefore presented a window of opportunities for these PRC enterprises to exploit the low market value of quality businesses and assets abroad as their oversea counterparts are busy deleveraging and in great need of refinancing.

It is noteworthy that the PRC Government has also shown its strong support behind the internationalisation drive of the PRC enterprises via the promulgation of new regulations. Thus, the MOFCOM has issued new regulations on 16 March 2009 (“16 March Regulations”) primarily designed to encourage PRC enterprises to go international.

Under the new regulations, the MOFCOM will only review any application by a PRC enterprise for an oversea investment in excess of USD100 million or where the proposed investment relates to special purposes. When one extrapolates from the relevant statistics in 2008, it has been estimated that approximately 85% of such oversea investment applications shall be processed at the local commerce administration at the provincial level (省级商 务部主管部门). Furthermore, the timeline to process an oversea investment application has been greatly shortened. The review procedures have also been simplified and streamlined.

On any account, the 16 March Regulations shall greatly speed up the approval process for out-bound FDIs by the PRC enterprises, thereby helping to accelerate the internationalisation drive of these enterprises.

Recently, the PRC National Development and Reform Commission (发改委) predicted a 13.2 % growth in total quantum of the PRC out-bound FDIs over the 2008 number (which as mentioned earlier, stood at USD 52.1 billion) notwithstanding the negative impact of the GFC. ALB: How did the PRC MOFCOM justify its rejection of Coke’s proposed buyout of Huiyuan?

LCC: The MOFCOM has stated that its rejection of the proposed buyout by Coke (可口可乐) of Huiyuan (汇源) was based on its concerns that the proposed buyout, if to be proceeded with, would cause an adverse impact on market competition and might restrict the healthy development of the beverage industry as a whole.

It is not in dispute that at the material time, both Coke and Huiyuan held massive shares in the PRC domestic market, namely, Coke had some 50% market share of the carbonated drinks sector; and Huiyuan, on the other hand, had 46% and 39.8% market share, respectively, of the pure fruits and medium concentration beverages sectors. The MOFCOM thus concluded that the proposed buyout, if permitted, would lead to market monopolies. It was of the view that not only would the proposed buyout, if effected, create unfavorable conditions for other local beverage manufacturers, small and medium-sized ones in particular, it would also hurt the interests of both the consumers and the fruit farmers.

Furthermore, the MOFCOM held the view that if the acquisition were approved, the Asian Legal Business ISSUE 9.5

FEATURE | Chinese FDI >>

ALB discusses with Loo Choon Chiaw, Loo & Partners LLP controlling power of Coke over the juice market would be markedly increased so that other companies would be incapable of entering it.

ALB: What are your views on MOFCOM’s ruling?

LCC: The MOFCOM is a market regulator and has a duty to discharge its responsibilities. Prima facie, its decision to ban the Coke’s buyout of Huiyuan was in line with the PRC AntiMonopoly Law 2007, which came into effect on 1 August 2008 (the “AML”)(反垄断法), which has its ultimate goal in the maintenance of fair play in the marketplace and the protection of the overall interests of all parties concerned.

Critics of the ruling have raised serious concerns on the sweeping nature of Article 27(6) of the AML, which empowers the MOFCOM, when making a ruling on a matter, to take into account any important factor which may have an impact on market competition which MOFCOM deems fit (认为 应当考虑的影响市场竞争的其他因素).

Be that as it may, on the surface, the prescribed procedures, in strict compliance with the AML， have been fully followed in the review process. One could only make any objective and fair critique on the MOFCOM’s ruling if one were furnished with the same information as those before the MOFCOM at the material time, thereby placing one in the same factual matrix as the MOFCOM was.

ALB: What about government intervention in relation to Chinese outbound investments, for example, Australia’s blocking of China Minmetals’ acquisition?

LCC: Australian Treasurer Wayne Swan delivered a blow to Minmetals’ proposed USD1.7 billion acquisition of the world’s second-largest zinc producer when he said the state-owned company would not be allowed to buy Oz Minerals’ Prominent Hill mine in the Woomera Prohibited Area, a military weapons testing range.

Following the rejection, Minmetals put up a revised offer, which was approved by Swan on 23 April 2009. It is noteworthy that the approval excludes, amongst others, the Prominent Hill mine.

The approval was also made conditional upon Minmetals’ undertakings to use mostly Australian managers, price products produced

by OZ Assets in Australia at arms-length basis, comply with industrial relations law, honour employee entitlements, to expand production www.legalbusinessonline.com

at some sites and to support Indigenous Australian communities.

As emphasised by Swan, the undertakings were designed to protect around 2,000 Australian jobs and ensure consistency with Australia’s national interest principles in accordance with the Foreign Acquisitions and takeovers Act 1975.

ALB: What are your views on the Minmetal’s acquisition?

LCC: This case is perhaps unique as the initial rejection was purportedly made on national security ground, which no sovereign country would look upon lightly.

Swan when, approving Minmetals’ revised offer, had no qualms in stating expressly that the conditions imposed on Minmetals were design to protect Australian jobs and to safeguard Australia’s national interest in accordance with Australian law.

I find Swan’s candidness refreshing. It will be interesting to see how the Australian Regulators will deal with Chinalco’s (中国铝业) proposed investment of USD19.5 billion in Rio Tinto!

ALB: Many in the industry expect FDI out of China to remain high. Would the intitiative be from the private public sectors? Are we likely to see more interests in one sector of the economy than another?

LCC: The FDIs to be undertaken by the PRC enterprises would continue to be dominated by the PRC state-owned enterprises (SOEs).

These are the enterprises with a deep pocket.

Many of them possess a strong management team led by a dynamic and ambitious Chairman or CEO, who has an international exposure. These SOEs shall be in the pursuit of oil and gas, minerals and other natural resources abroad to ensure the steady supply of energy, raw materials and processed commodities essential to the PRC’s economic independence and political stability.

ALB: Despite high levels of investment into the PRC, many still feel that elements of the regulatory regime in China are still found wanting in key areas. Can you identify some of them?

LCC: Foreign investors have been criticising the PRC for the deficiencies of its regulatory regime since the early 80s. Much water has flowed under the bridge since then. Although things have improved substantially, foreign investors

still feel that the PRC fails to provide them with an equal access to the market and a level playing field for them to carry on their businesses in the PRC. Serious concerns have regularly been raised in several areas, including: (1) inadequate protection of intellectual property rights; (2) the unfair treatment frequently received by foreign-invested firms when they bid for public procurement projects; (3) the restriction imposed on foreign investment in a wide range of sectors, eg, the petrochemical sector; (4) the lack of transparency in rule-making. Recently and since the Coke’s failed buyout of Huiyuan, serious reservations have also been levied against the AML over its potential for abuse by over-zealous officials at the MOFCOM in view of the wide discretionary power vested in MOFCOM by virtue of the sweeping provisions of Article 27(6).

ALB: Are the PRC authorities aware of these deficiencies? Have measures been taken to improve things on this front?

LCC: The PRC authorities are certainly aware of the deficiencies. They also realize that in the absence of any improvement, there will be a further decline in the quantum of the inbound FDIs, which will in turn adversely affect their long-term plan to channel more FDIs into the relatively underdeveloped areas in the western and central regions.

To improve investment conditions, the MOFCOM via its circular on “further improving examination and approval of foreign investments” (进一步改进外商投资 审批工作的通知) dated 5 March 2009 (the “5 March Circular”) has streamlined the approval process for in-bound FDIs. It has also empowered the local competent commercial authority (地方商务主管部门) to process an FDI application of up to USD100 million.

Like the 16 March Regulations, the 5 March Circular is expected, to greatly speed up the approval process for in-bound FDIs. ALB: As a specialist legal practitioner advising on PRC matters, how do you feel about their deficiencies?

LCC: The lack of transparency in the judicial decision making coupled with the vagueness or ‘fuzziness’, a term recently used by the Economist Intelligence Unit when reviewing the legal and regulatory risk of doing business in the PRC, ofsome of the PRC legislations have made the life of many legal practitioners who advise on such matters very difficult indeed!

47

FEATURE | Korean Deals of the Year >>

ALB ASIAN LEGAL BUSINESS

KOREA

DEAL OF THE YEAR 2009

ALB

Korean 2009 ASIAN LEGAL BUSINESS

Deals of the Year:

Judged by a panel of leading in-house counsel, ALB presents the best Korean deals of the past year

W

hichever way you look at it, the South Korean economy took a beating in 2008. More exposed than other economies in the region to the global financial crisis, the won depreciated at a rate unseen since the Asian financial crisis in the late 90s, exports plunged a record 32.8%, the current account deficit exceeded $US6bn for the first time in a decade, both the KOSPI and one-year forward EPS estimates dwindled 37% and 11% respectively, and Korea earned the infamous tag of being the worse performing G20 nation after its economy shrunk by 2%.

Dealflow, somewhat predictably, ground to a halt. Thomson Reuters statistics indicated that the number of deals transacted fell by 35% in 2008, yielding a total value of just US$42bn compared to the US$64.5bn only a year earlier. The second, third and fourth quarters of 2008 merit special mention in this regard. No more than US$500m worth of offshore capital entered the domestic market in the second quarter of 2008 and while

48

in the third quarter capital inflows brought in just over US$1bn, things returned to normal in the fourth

“Korea’s chaebol were behind some of the most innovative… exciting deals on the market in 2008”

quarter when outbound investments plummeted to US$400m – their lowest in the past five years.

However, inbound is only half the story. The outbound deal landscape was very much alive and kicking last year as the inaugural ALB Korean Deals of the Year indicate. From Doosan’s acquisition of Ingersoll Rand to the Korea Investment Corporation’s acquisition of a stake in Merrill Lynch, and LS Cable’s acquisition of Superior Essex, the strength of Asian Legal Business ISSUE 9.5

FEATURE | Korean Deals of the Year >>

The finalists: by practice area

►► Methodology

Law firms from across the region were invited by email to nominate and detail the most outstanding Korea-related deals they have been involved in during the calendar year 2008. In addition, the ALB team conducted interviews with leading in-house counsel and corporate leaders, collected third-party information and drew on their own stock of industry knowledge.

Upon completion of research, shortlists of the finalist deals in each practice area were compiled by the ALB team and sent to a panel of judges comprised of corporate counsel drawn from Korea’s top listed companies. These judges were asked to examine the information, and objectively rate each deal according to its size, complexity, breadth and innovation, and make their votes for top deal within each practice area.

Using a simple points system to aggregate and weight the judges’ votes, ALB’s Korean Deals of the Year: 2009 were decided. In-house judges participated on the condition of anonymity.

Asset & Corporate Finance Name of deal KOMARF- sale and restructuring

Kim & Chang

Value (US$m)

3,900 Bae, Kim & Lee, Linklaters, Kim & Chang, Paul, Weiss, Sullivan & Cromwell

CMA CGM Ship financing

1,068 Allen & Overy, Norton Rose, Orrick, Yulchon, Kim & Chang

Name of deal

Value Firms involved (US$m)

Korea Midland Power Euro bond offering

300 Allen & Gledhill, Kim & Chang, Segye Law Offices, Simpson Thacher & Bartlett, Taylor & Co

Korea Rail Road Corporation notes offering

300 Allen & Overy, Davis Polk, Kim & Chang, Shin & Kim

Hyundai Capital Services MYR denominated MTN program

543 Yulchon, Zul Rafique & Partners

Shinhan Card Company MTN program

2,000 Allen & Overy, Bae Kim & Lee

Industrial Bank of Korea Commercial Paper programmes

2,000 Lee & Ko, Allen & Overy

Capital Markets: Equity market Name of deal SK Telecom- Hanaro Telecom Share sale & acquisition

No. of Deals

United Techologies HK listing 22

19,7102

13

Lee & Ko

13,329

9

Shin & Kim

10,152

8

Cleary Gottlieb

6,700

4

Allen & Overy

6,420

6

LS Cable- Superior Essex acquisition

Linklaters

5,333

3

Yulchon

3,868

3

Halla Consortium- Mando Corporation acquisition

Simpson Thacher & Bartlett

2,675

3

Orrick

1,500

4

Source: ALB Deals database * This list does not purport to be exhaustive

Taewoong Co Ltd GDS offering

Value Firms involved (US$m) 1,200 Shin & Kim, Kim & Chang, Baker & McKenzie, Yulchon, Cleary Gottlieb 132 DS Cheung & Co, Lee & Ko 75 Bae, Kim & Lee, Davis Polk, Kim & Chang, Simpson Thacher & Bartlett

M&A Name of deal

Value Firms involved (US$m) 1,200 Bae Kim & Lee, Cleary Gottlieb, Kim & Chang, Wachtell, Lee & Ko 652 Allen & Overy, Bae Kim & Lee, Kim & Chang, Milbank, Shin & Kim

E-land Group- Homever sale

2,200 Bae Kim & Lee, Kim & Chang

C&M Co LBO

2,300 Shin & Kim, Bae Kim & Lee, Lee & Ko, Kim & Chang, Simpson Thacher & Bartlett, Cleary Gottlieb, White & Case, Maples & Calder, Squire Sanders & Dempsey

Korea Investment Corporation- Merrill Lynch stake acquisition

2,000 Kim & Chang, Cleary Gottlieb, Shearman & Sterling, Sullivan & Cromwell, Wachtell

Dongbu Group share disposal

Korea’s chaebol was on show in 2008 and similarly 2009 is predicted to be another year in which they continue to flex their muscle both domestically and internationally.

“Korea’s chaebol dominate the Deals of the Year and so they should,” said one of our in-house judges.

“They were behind some of the most innovative, some of the most exciting deals on the market in 2008, but this isn’t to say that the biggest deals by value won. There are plenty of pitfalls in closing deals in a deflated market.

If you look at the winning deals, it is those deals that closed off the possibility that acquirers might get their fingers burnt in the long run, the deals which are the most market focused that took the prize.” ALB www.legalbusinessonline.com

417 Lee & Ko, Kim & Chang, Sewha Park & Goo

Capital Markets: Debt market

22,277

Bae, Kim & Lee

171 Kim & Chang, Norton Rose, Watson Farley Williams

Doosan- Ingersoll Rand acquisition finance

Y22 Parc1 Project

Legal advisors to Korean deals By value Name

Value Firms involved (US$m)

800 Bae Kim & Lee, Shin & Kim, Horizon Law Group

Eugene Corporation- Himart acquisition

1,600 Bae Kim & Lee, Yulchon, Lee & Ko

Kumho Asiana consortium- Korea Express acquisition

4,100 Bae Kim & Lee, Shin & Kim, Lee & Ko

Project finance Name of deal Hyundai Green Power Co. Ltd loan facility New Songdo International City development

Value Firms involved (US$m) 394 Kim & Chang 2,700 Kim & Chang, Bae Kim & Lee, Sewha Park & Goo

KEXIM ship financing

483 Bae Kim & Lee, Linklaters

Busan New Port Project Phase 2-3

950 Lee & Ko, Kim & Chang, Kim & Company, Linklaters

Kangnambeltway project financing

630 Lee & Ko, Kim & Chang

Structured finance & securitisation Name of deal

Value Firms involved (US$m)

Value Master 2008-1

300 Kim & Chang, Orrick

Global 2008 asset securitization

320 Kim & Chang, Simmons & Simmons, Horizon Law Group

Lotte Card FRN and SN offering

300 Kim & Chang, Shin & Kim, Orrick

Shinhan Bank RMBS & senior bond offering

500 Kim & Chang, Shin & Kim, Orrick, JSM

KEXIM Structured finance facility

400 Kim & Chang, Allen & Overy, Seward & Kissel

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FEATURE | Korean Deals of the Year >>

ALB

ASIAN LEGAL

BUSINESS

The winners

Capital Markets: Debt Market

Asset & Corporate finance Doosan- Ingersoll Rand acquisition finance

ALB

ASIAN LEGAL

BUSINESS

Complex cross-border financing and acquisition across 20 jurisdictions and 70 companies

ALB

ASIAN LEGAL

BUSINESS

SK Telecom- Hanaro Telecom Share sale & acquisition

Unique Regulation S, Rule 144A commercial paper offering

Competitive auction share sale attracts antitrust attention

Value US$3.9bn

Value US$2bn

Value US$1.2bn

Firms involved Bae Kim & Lee Kim & Chang Linklaters Paul Weiss Sullivan & Cromwell

Firms involved Allen & Overy Lee & Ko

Firms involved Baker & McKenzie Cleary Gottlieb Kim & Chang Shin & Kim Yulchon

The deal in brief • Korea Development Bank lent and arranged for a US$3.9bn senior secured loan facility for the global acquisition of the compact equipment business of Ingersoll-Rand Company by the Doosan group of companies • Facilities were divided into a US$2.9bn facility to an Irish holding company established for the purpose of the acquisition, with the proceeds of this facility subsequently used for equity injections, and inter-company loans to other holding companies established in Ireland and the US • Second facility, worth US$1bn was offered to the Doosan group and the proceeds of this facility were used for the equity injection in the holding companies • Acquisition involved either assets or shares of 70 companies located across more than 20 jurisdictions, complex security and guarantee structure was devised in order to overcome financial assistance and other restrictions in various jurisdictions • Was one of the initial transactions to finance Korean company’s acquisition of foreign target companies on global basis Our judges said:

“As one of the largest simultaneous financing and acquisitions of 2008, this deal stands out as a clear winner in this category. Having to strike a balance between the differing regulatory regimes across some 20 different jurisdictions would have been an enormous challenge, but the use dual financing facilities, as well as the creative use of offshore holding companies, ensured that these challenges were overcome”

50

Industrial Bank of Korea Commercial Paper programmes

Capital Markets: Equity Market

The deal in brief • Comprised of two projects: a euro-commercial paper notes offering of up to a maximum aggregate amount of US$1bn or its equivalent in alternative currencies under Regulation S, and a US-commercial paper notes offering up to a maximum aggregate amount of US$1bn or its equivalent in alternative currencies under Rule 144A • Helped Industrial Bank of Korea to plan and manage its liquidity operation through the timely creation of commercial paper programs that can be used in Euro market and US market, respectively • Issuer raised more than $US500m through both programmes and is utilising these programs very efficiently to raise funds promptly • Program is significant because it allows obtaining financing from both US and Europe financial markets of up to US$2bn despite global financial crisis Our judges said:

“In a market where it is extremely difficult to raise funds and even harder to do so using debt, this deal is a standout. The structuring of the deal, however, meant that the issuer not only had access to the US market, but the European market as well – this will set a path forward for future transactions of this kind in Korea”

ALB

ASIAN LEGAL

BUSINESS

The deal in brief • Consortium of nine sellers, comprising Texas Pacific Group, AIG, GIC, TVG and Newbridge Capital, sell their equity shares (representing approximately 38.89% of the total outstanding common shares in Hanaro Telecom Incorporated) to SK Telecom • Auction process (involving multiple bidders) was used and attracted interest from would-be purchasers in multiple jurisdictions • Nature and size of the company meant sale raised complex regulatory issues that needed to be decided prior to the completion of the auction process • Transaction was also complicated by a change in the Korean law and regulation pertaining to the telecommunications industry between the signing of the share purchase agreement and the closing Our judges said:

“Far from your average, vanilla transactions, this deal presented a number of pitfalls for counsel. Not only would the lawyers have had to deal with a competitive auction process, but would have also had to deal with regulatory complexities emanating from it – antitrust issues and regulatory approvals, not to mention tax issues, would have been the most challenging aspects of this deal. This deal truly deserves to be called the deal of the year in this category”

Asian Legal Business ISSUE 9.5

FEATURE | Korean Deals of the Year >>

ALB

ASIAN LEGAL

M&A C&M Co LBO The largest LBO by a Korean PE fund and the largest TMT M&A in Korea for 2008

Project finance ALB

ASIAN LEGAL

BUSINESS

Value US$2.3bn Firms involved Bae Kim & Lee Cleary Gottlieb Kim & Chang Lee & Ko Maples & Calder Shin & Kim Simpson Thacher & Bartlett Squire Sanders & Dempsey White & Case The deal in brief • Deal saw a consortium of private equity funds including MBK Partners, Macquarie Korea Opportunities Fund and Mirae Asset Partners complete a US$2.3bn leveraged buyout of C&M Co, the second-largest multisystem cable operator in Korea • Consortium acquired 95.6% of C&M from its founder Min-Joo Lee, his affiliates and Goldman Sachs Capital Partners following approval by the Korea Broadcasting Commission and the Ministry of Information & Communication, making it the first time a private equity fund has been permitted to acquire a controlling stake in a cable service provider • Deal was the largest LBO by a PE find in the Asia Pacific (excludign Japan & Australia) in 2008, the largest LBO by a Korea PE fund, the first club deal by a Korean PE fund and the largest TMT M&A in Korea in 2008 Our judges said:

“A standout deal and a clear winner in this category not only because it represented so many firsts, consider the market conditions in which the deal was struck and you can understand how significant it was. Aside from the regulatory approvals, which the market knows were hard to secure, it represents something like 80% of the total PE deal flow in Korea in 2008”

www.legalbusinessonline.com

New Songdo International City development

Structured finance & securitisation

ALB

ASIAN LEGAL

BUSINESS

BUSINESS

Multi-billion dollar financing deal for the city of the future

Value US$270m Firms involved Bae Kim & Lee Kim & Chang Sewha Park & Goo The deal in brief • Deal saw Shinhan Bank extend a US$2.7bn senior secured loan facility to New Songdo International City Development – a JV between the Gale Company and POSCO Engineering & Construction for the development of New Songdo International City on approximately 10,000 acres of reclaimed land located in Yeonsu-gu, along Incheon’s waterfront • It is located 40 miles south of Seoul and will be connected to Incheon International Airport by a seven-mile highway bridge • Project has an estimated total cost of approximately US$20bn, making it the largest private development project ever undertaken anywhere in the world • Deal required the balancing of the interests of a number of interested parties including central and local governments • All of these issues were required to be resolved prior to the commencement of the project so that the relevant assets could be provided as collateral for the lenders Our judges said:

“A watershed project finance deal in Korea.

Eco-city developments such as this often have many traps for lenders but in this deal it seems these have all been dealt with – a worthy winner”

Global 2008 asset securitiSation

ALB

ASIAN LEGAL

BUSINESS

A unique on-tier structured cross border ABS deal

Value US$320m Firms involved Horizon Law Group Kim & Chang Simmons & Simmons The deal in brief • Unlike typical cross-border ABS transactions, the issuance of the CDO securities in this deal was based on a one-tier structure • Substantial legal review and analysis was required in relation to this structure and the method of creating security interests over different kinds of underlying assets for ABS bondholder in a manner that complies with Korean law • Based on the credit facility provided by Hana Bank, the ABS bondholder engaged in a credit default swap transaction as a protection seller, based on the ABS bond issued by the domestic SPC, with the credit facility provider as the reference entity Our judges said:

“A really innovative deal. Not only is it unique in that it was structured differently from typical cross-border ABS transactions but that fact that the deal was structured so as to allow the credit facility to qualify as a guarantee under the ISDA Credit Derivative Definitions and comply with Korean law in a deflated market make it the standout”

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FEATURE | Korean Deals of the Year >>

ALB

ASIAN LEGAL

BUSINESS

Liberalisation looks set to swell lawyer ranks

T

he number of lawyers practising in Korea is expected to double in the next seven years as the Korean government steps up moves to liberalise its legal services market in line with its obligations under the recent free trade agreement with the US. In 2007, the Korean bar association stated there were 10,176 attorneys registered to practise in Korea, of whom less than 200 were foreign. Both figures are expected to increase by as much as 20% in the years ahead due to the influx of foreign attorneys and changes to law school testing, which would see the admission of 2,000 new lawyers by 2012. These statistics do not bode well for domestic lawyers.

“The job market for lawyers is one of the most competitive in the world,” says a senior partner at one of Korea’s

52

biggest firms. “Because of the nature of transactions happening in Korea at the moment, there is no real need for counsel to be admitted here, so unless some of the younger lawyers are particularly brilliant, they may find themselves having to serve independently.” Of the lawyers who pass the Korean bar exam each year, only the

top 30–40% find gainful employment as state prosecutors or judges, or associates at the top seven law firms.

“It is really tough for lawyers at the moment,” the source said. “We see a lot of them having to resort to street-peddling and eventually falling into bankruptcy… many lose face and can’t go on.” ALB

Asian Legal Business ISSUE 9.5

feature | offshore >>

Offshore firms: riding out the economic storm Specialist firms are often the best at avoiding general downturns and offshore firms are no exception. Their diversity, both in terms of practice area and geographical location, means they continue to thrive

54

O

n paper it may seem like offshore law firms are up against it at the moment.

Not only do they, just like their onshore counterparts, have a global financial crisis to grapple with, they also have to deal with finger pointing from regulators across the world who are placing much of the blame for the current worldwide recession squarely with offshore jurisdictions.

But, in reality, things have never

looked better for offshore firms.

Instructions and referrals remain largely unaffected; many cite a distinct upturn in insolvency and restructuring matters involving offshore jurisdictions; and all claim to have more than enough work to keep them occupied as the BRIC plans implemented as long as 30 years ago begin to reap dividends. It seems the only thing offshore firms are struggling to keep up with is client demand.

Asian Legal Business ISSUE 9.5

feature | offshore >>

The global financial crisis: diversity key

Where onshore law firms have been badly hit by the global financial crisis, and have seen their head count and revenue figures slip, the situation confronting offshore firms is a little different. They too have their eye on their bottom lines, but many report the focus of their business development activities has shifted more to keeping up with client demand, with their appetite for offshore legal advice not waning despite the global recession.

“Our business is by nature cyclical,” says Michael Gagie, Hong Kong managing partner of Harney Westwood & Reigels. “In a downturn there will be work. There is a lot of activity on the restructuring side at the moment, as you would Michael Gagie, expect, with the prospect Harney Westwood of a spike in private equity & Reigels activity to come as well, but its probably fair to say that the offshore practices are strongest when everyone is making money.”

Frances Woo, the Hong Kong managing partner of Appelby, cites a similar trend and says that while work in some areas has dropped off, the work

“While corporate law matters may be slower as a result of the global recession, litigation is booming” Robert Briant, Conyers Dill & Pearman in litigation, work-outs, and insolvency & restructuring is more than enough to keep some firms going.

“There is certainly an overall reduction in instructions for new companies and structures, and a decline in the number of transactions coming to market from the US, the UK and Asia. But litigation is strong and our global funds team is busy with work-outs and restructuring,” she says.

Robert Briant, the British Virgin Islands (BVI) managing partner of www.legalbusinessonline.com

Conyers Dill & Pearman, agrees that litigation is busier than normal, and says that apart from the rise and fall of work by practice area, some jurisdictions are also shining more brightly than others at the moment.

“While corporate law matters may be slower as a result of the global recession, litigation is booming.

[Because this] is a global recession, certain parts of the world are busier than others and different opportunities arise in different parts of the world,” he says, singling out Asia as being particularly ebullient.

But while the focus of offshore firms has, in some respects, shifted away from their core business in favour of picking up some of the recession-related work on offer at the moment, Richard Collis, Conyers’ global managing partner, says that banking solely on the upturn in these areas may not make for a sound long-term strategy for some.

“Some offshore law firms will face a degree of downsizing – that is inevitable in a global recession,” he says.

“Some of them that found themselves in a niche, for example those that exclusively did securitisation work,

►► The Offshore world Name

Partners

Lawyers

Offices

Maples and Calder

66

222 BVI, Cayman, Dubai, Dublin, HK, Jersey, London

Appleby

55

165 Bermuda, BVI, Cayman, HK, Jersey, London, Mauritius, Zurich

Walkers

53

105 BVI, Cayman, Dubai, HK, Jersey, London, Singapore

Conyers

40

157 Anguilla, Bermuda, BVI, Cayman, Dubai, HK, London, Mauritius, Moscow, Sao Paolo, Singapore

Ogier

38

214 Auckland, Bahrain, BVI, Cayman, Dublin, Guernsey, HK, Jersey, London, Montevideo, Tokyo

Arendt & Medernach

32

250 Brussels, Dublin*, Dubai*, London*, Luxembourg, New York*

Homburger

31

103 Zurich

Carey Olsen

29

85 Guernsey, Jersey, London

Bedell Cristin

27

61 Dublin, Geneva, Guernsey, Jersey, London

Mourant du Feu & Jeune

26

95 Cayman, Guernsey, Jersey, London

Elvinger Hoss & Prussen

26

80 Luxembourg

Cains

17

30 Isle of Man, London, Singapore

Harneys

15

63 Anguilla, BVI, Cyprus**, Cayman, HK, London

Maitland Advisory

26

25 Cape Town, Cayman, Dublin, Isle of Man, Paris, London

Hassans

26

75 Gilbraltar, Madrid

Ozannes

20

61 Guernsey, Jersey

Triay & Triay

14

28 Marbella, Sotogrande

Dickinson Cruickshank

12

42 Isle of Man, London

Oostvogels Pfister Feyten

10

55 London, Luxembourg

Collas Day

8

22 Guernsey, London

This list does not purport to be exhaustive; accurate to February 2009 *Denotes representative office **Denotes formal alliance with local firm

55

feature | offshore >>

►► Onshore goes offshore UK-based firm Withers has made an unprecedented move, becoming the first onshore law firm to enter the offshore market after announcing that it will open in the British Virgin Islands (BVI).

The office – which will provide a range of cross-border services including corporate and trust disputes, insolvency & restructuring, funds, and banking & finance – will be staffed by litigation partner Jeremy Scott and corporate partner John Greenwood, both of whom will relocate from the firm’s London office.

Commenting on the move, Samantha Bradley, managing director of the firm’s Hong Kong office, said that it was motivated by a distinct upswing in insolvency & restructuring work involving offshore elements.

“Our clients, our key contacts on the ground and the firm have all noticed an increase in litigious work in the BVI. The latest statistics show that in 2004 there were some 550,000 companies incorporated in the BVI but now that figure is closer to something like 860,000. As business becomes more globalised, we expect to see more clients finding a BVI dimension to their international disputes.”

But do not expect Withers to be making an all-out assault on the offshore market. According to Bradley, the firm’s office in the BVI will be focusing on the niche area of international litigation, such as insolvency litigation and fraud and asset tracing.

“Our approach with this office is to focus on insolvency and disputes and is extremely targeted. We are responding to the needs of our international clients who find a BVI component to their litigation in London or New York and need joined up advice. We will continue to work closely with the local BVI law firms,” Bradley says.

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either by design or by accident, will start to find holes in their capacity and now will be the time for them to address this. It probably won’t suffice for a firm to say, ‘We are solely looking to pick up the work in litigation and insolvency and restructuring that is emanating from the crisis.’ This drives specialisation and overdependence on one area and will create a problem Frances Woo, when markets rebound Appleby and work in core areas returns.”

Indeed, offshore firms have long known of the need to diversify their practices, with all the firms ALB interviewed for this report having devoted the greater part of a decade to finding this geographical and practice area balance.

BRIC and beyond

Brazil, Russia, India and China (known collectively as the ‘BRIC’) remain the focus for most offshore

see why offshore firms remain brazen about their operations despite the global financial crisis.

Collis says the past 15 years have been marked by BRIC clients’ increased appetite for offshore products, so much so that the firm found it necessary to open in Moscow and Mauritius (which is widely known as a hub for Indian clients) and Sao Paulo in the past year.

“We opened in Sao Paulo in March 2008, Moscow in April 2008 and Mauritius later in October and Sao Paulo in March 2009; all three openings were probably a long time coming,” he says. “We had noticed for sometime that our Latin American, Russian, including the CIS and India as well as those clients looking to do business in those regions were substantially increasing their use of offshore structures more than they perhaps had been in the past.”

Appleby, which along with Conyers, is the only offshore law firm to have offices in Mauritius, says that while the bulk of instructions it receives in Mauritius are India-related, there is a healthy demand

“We had noticed for sometime that our Latin American, Russian and CIS clients, as well as those from India, were really substantially increasing their offshore structures more than they perhaps had been in the past” John Collis, Conyers Dill & Pearman firms across the world – and rightly so according to lawyers.

The past 10 years in particular have seen a sea change in mainstream attitudes to offshore financial centres.

Their label as ‘tax havens’ and hotbeds of borderline illegal financial practices has dissipated, if not disappeared completely, and most realise their utility and importance in the world economy.

An attitude shift that is perfectly evidenced by their role as conduits for the ever-growing flow of capital between new world economies and the west and the explosion in the number of BRIC-owned offshore incorporated companies (the latest statistics indicate that as many as 80% of companies incorporated offshore are BRIC companies). In this context, it is easy to

for advice coming through the tiny island from Africa as well.

“We are seeing new jurisdictions emerging,” Appleby’s Woo says.

“Appleby was the first offshore firms to establish itself in Mauritius [and through this] develop a strong foothold in the African region.”

Evidence, comments from offshore lawyers suggest, that many opportunities lie outside the BRIC for offshore firms as lie within it. Last year, Ogier made the unprecedented move of becoming the first offshore firm to open offices outside the traditional offshore heartland by venturing into Bahrain, Tokyo and Auckland – moves which the firm’s chairman, Jonathan White, said were all about being on the ground where clients were and being Asian Legal Business ISSUE 9.5

Firm Profile

Harney Westwood & Riegels

Harneys: From BVI to Cayman… and beyond Whichever way you look at, 2008 was a stellar year for Harneys and according to the firm’s Hong Kong managing partner 2009 will be even better

I Michael Gagie

Harney Westwood & Riegels 1507 The Centre 99 Queen’s Road Central Central Hong Kong Michael Gagie, Partner Email: Michael.gagie@harneys.com Tel : +852 3607 5300

t has been a year of significant growth for Harneys, with the addition of both a Cayman Islands practice through its takeover of CS Gill & Co and Cypriot expertise through its close strategic alliance with Cyprus firm Aristodemou Loizides Yiolitis & Co (ALY).

Since early 2008, the firm has made up an unprecedented 12 new partners and brought in 2 more partners as lateral hires. Included in the more than 20 new lawyers also hired are a number of senior lawyers brought on to strengthen the firm’s BRIC focus. Amongst them, Indian lawyer Chetan Nagendra now heads up the firm’s India desk; native Russian speaker Marina Kozlova was brought in to support the firm’s already thriving Russia desk, and the hire of Horacio Woycik has strengthened the firm’s rapidly growing Latin America desk headed by Brazilian partner Marco Martins. The firm’s Hong Kong office has seen the elevation of Leon Mao to partner, and the hire of partner Paul Lau from a rival offshore law firm.

All moves which according to the firm’s Hong Kong managing partner, Michael Gagie make Harneys the offshore firm of choice in the region.

Harneys: Now in Cayman “2008 was a great year for us in terms of expanding our offering to better serve our clients needs,” he says. “We have probably been without peer in the British Virgin Islands (BVI) and with our move into Cayman we are looking to replicate our top tier BVI reputation in Cayman.”

The ability to offer advice on the laws of both offshore jurisdictions, it seems, has never been more important. “The ability to offer our clients seamless advice covering both jurisdictions is a tremendous boost for our practice and will enable us to compete more effectively in the market place,” says Gagie.

Building BRIC by BRIC In addition to its expansion into the Cayman Islands, Harneys made considerable strides executing its BRIC strategy. This commitment to clients in emerging economies was achieved most notably in 2008 through the completion of a full set of BRIC desks staffed by specialists in Asian, Latin American, Russian and Indian markets.

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“The BRIC countries are assuming increased importance not only because of some of the failures of western countries that the global financial crisis has exposed,” explains Gagie. “but there is a new generation of wealth creators coming through in these countries who are choosing to use offshore and to incorporate their businesses in either the BVI or Cayman.”

Similarly, the firm’s tie-up with ALY in Cyprus will serve Harneys clients in India as the addition of a Cyprus-based tax treaty will be a valuable resource for clients in Asia.

The Harneys competitive advantage Gagie says that Harneys differentiates itself from other offshore law firms in the market by providing the same high level of client service to all clients regardless of whether they are a Fortune 500 company or a local private company or individual—something which is of vital importance in an increasingly competitive Asian market.

“In Asia, we understand that speed of response, provision of real time advice and competitive pricing are key criteria for clients look for legal advisors. You could say these are even more important in light of the current economic climate.”

Moreover the firm’s commitment to recruiting senior lawyers well versed in the customs and culture of emerging economies like India and Russia means Harneys clients can access the best no matter which part of the world they are doing business in.

“A number of our recently recruited lawyers were targeted by us for their legal and linguistic backgrounds. We are working towards having full service teams of lawyers who themselves come from the jurisdictions in which our clients operate and who understand the local market requirements and conditions. Our recent hires of Chetan Nagendra, a senior Indian lawyer and Marina Kozlova, who joined our growing Russian practice, are good examples of this.”

So what’s next for Harneys? Gagie predicts 2009 will be another good year for the firm.

“We will continue to grow in 2009,” says Gagie. “We will deliver the same excellent service for Cayman that we offer clients across the world for BVI and look to strengthen our Hong Kong office by bringing on board a couple more lawyers with local language capability.”

Asian Legal Business ISSUE 9.5

Timing.

Timing.

Is a combination of awareness, responsiveness and action.

At Harneys we understand that timing is everything. That’s why the world’s leading law firms, financial institutions and corporates call on us when they need fast, accurate and commercially astute legal advice. With offices and affiliates in the British Virgin Islands, Cayman Islands, Hong Kong, and London, Harneys has jurisdictional expertise and business knowledge that spans the globe. Let us put it to work for you.

www.harneys.com

British Virgin Islands | Cayman Islands | Hong Kong | London

feature | offshore >>

able to respond to their demands in real time.

“In pursuit of our strategy, we felt it critically important to establish a strong presence in both the Middle East and Japanese markets so that we can provide the full range of Ogier’s services to our clients in their own time zone and in a manner that is responsive to local conditions and practices,” he said.

The firm’s Bahrain office is a JV with Two Seas Trust, which will work on the establishment of trust funds in the region. Chartered secretary Paul Perris, as general manager of Ogier

Bahrain and managing director of Two Seas Trust, will head both the office and the JV company. The Tokyo office, which is headed by former Deutsche Securities analyst Skip Hashimoto, will provide a link to the firm’s Hong Kong operation and integrate its Cayman and BVI experience for its Japanese clients.

Not to be outdone, both Conyers and Maples and Calder also have offices in the Gulf with Appleby’s Woo pointing out that they are monitoring events there closely with a view to opening there should client demand compel them to do so.

“The process of offshore firms taking on more jurisdictions is bound to continue and whether that be through mergers, tie ups or opening completely new offices we don’t know. But what we do know is that the process will not be scaled back” John Collis, Conyers Dill & Pearman

“We have announced our intent to open an office in the Gulf region and that opening is imminent,” Woo says.

Competition increases in key offshore financial centres

Much of the geographical diversification in the offshore world is both a function of the globalisation of legal practice and the increased competition that offshore firms are facing in their home jurisdictions. And while many of the top offshore firms have the capacity to advise on the laws of more than one offshore jurisdiction, even this is not enough to stave off the competitive pressures.

According to lawyers ALB spoke to, competition between offshore firms is most apparent in the more established offshore financial centres and is likely to remain that way in the near future.

“There will always be strong competition in the key offshore jurisdictions such as Bermuda, Cayman and Jersey,” Woo says.

Conyers’ Briant agrees with Woo, adding the British Virgin Islands (BVI)

Navigating offshore options can be tricky. Appleby offers our clients skilled advice and a depth of knowledge across our offshore jurisdictions, guiding you to the best jurisdiction to meet your business needs. Our Hong Kong office provides a strong link and greater options for Asian, Indian and African investment. Experienced counsel providing trusted guidance. Appleby.

Bermuda British Virgin Islands Cayman Islands Hong Kong Jersey London Mauritius Zurich

For further information, please contact: Frances Woo Managing Partner, Hong Kong Tel: +852 2523 8123 Email: fwoo@applebyglobal.com

THE RIGHT PEOPLE. THE RIGHT PLACES. THE RIGHT GUIDANCE. Offshore Legal, Fiduciary & Administration Services

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applebyglobal.com

Asian Legal Business ISSUE 9.5 ALB_guidance_right.indd 1

5/8/2009 10:29:27 AM

feature | offshore >>

to his list while noting that increased competition in these locations often translates into fierce competition in places like London and Hong Kong.

“The competition between offshore law firms is most intense in both the BVI and Cayman, where virtually all offshore law firms have offices,” he says. “This competition is then reflected in the onshore city offices of such firms, such as London and Hong Kong, where there is competition by the law firms providing advice on BVI and Cayman law.”

Collis believes that competition will only increase in the near future as more offshore firms seek to advise on the laws of more than one offshore jurisdiction.

“It’s very rare to find an offshore firm who only advises on the laws of one jurisdiction anymore,” he says. “The process of offshore firms taking on more jurisdictions is bound to continue and whether that be through mergers, tie ups or opening completely new offices we don’t know. But what we do know is that the process won’t be scaled back and all offshore law firms are looking closely at their core markets to see where the competition will come from.”

However, competition in offshore jurisdictions need not only come from other offshore firms.

Earlier this year, UK firm Withers announced that it would be opening John Collis, Conyers an office in the BVI Dill & Pearman making it the only onshore firm to practice offshore law (see box on p48). Far from crying foul, however, the general consensus from offshore firms seems to be that the move will only prove beneficial for offshore jurisdictions, and aid in raising their international profile.

“We look forward to the opening of Withers’ office in the BVI,” Briant says. “We welcome the competition and believe that it will only enhance the reputation of the jurisdiction as well as the offshore product.”

But that is about where the spirit of cooperation stops. Lawyers remain coy on whether this move is the start of a wholesale assault on the offshore law firm world, saying instead that the need for offshore firms would remain even if their onshore counterparts were www.legalbusinessonline.com

In addition to Ogier both Conyers and Maples and Calder also have offices in the Gulf with Appleby’s Woo pointing out that her firm is monitoring events there closely with a view to opening there should client demand compel them to do so to enter the market en masse.

“I am not certain that there is such a trend,” Briant says. “The onshore firms have not opened up offices in the offshore jurisdictions as a result of the high level of legal services already provided in these places. Further, it is unlikely that an onshore firm will use the offshore office of its onshore competitor. It is the ability of the offshore law firms to cater to the requirements of all the onshore law firms

which allows the offshore firms to exist.”

Woo concurs adding that should such a situation eventuate, onshore firms will find the going tough. “As markets contract, firms will consider other potential opportunities for growth, but onshore firms will face inherent difficulties when trying to enter an established offshore jurisdiction to practice offshore law,” she says.

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Going straight to the client

Offshore practice development has come a long way, with clients, especially those in Asia far more comfortable instructing their offshore lawyers directly, than they perhaps were in the past, so much so that many have cut onshore lawyers out of the picture all together.

And, its a change that says as much about the development and growth in reputation of offshore legal practice as a discrete discipline, as it does about the changes in the client mindset, but its not without its own problems. This circumvention of the traditional flow of instructions is causing waves and debate within the legal profession.

“It’s true that we’ve seen a growing trend where the ultimate client is instructing us directly, particularly where such client is already familiar with offshore jurisdictions and structures,” says the Hong Kong managing partner at one offshore firms who preferred not to be named.

ALB’s source, who receives a good mix of briefs from both onshore firms

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and in-house departments, adds that this trend is symbiotic. “We’re typically the second port of call for the client with the first port of call being a local legal services provider. However, if we’ve worked closely with a client for a number of years that client may well liaise directly with us. This doesn’t often bother the local provider as it goes both ways.”

the end of the day, if a client comes to us directly then we can’t very well turn them away. We have good relationships with the onshore firms and will refer non-offshore related work to them, so it’s not a question of the onshore law firms being cut out of the loop.”

However, other offshore lawyers ALB spoke to say that this trend – which can result in onshore firms briefing their

“We have good relationships with the onshore firms and will refer non-offshore related work to them, so it’s not a question of the onshore law firms being cut out of the loop” Offshore law firm managing partner But the partner contends that onshore firms claims that they are being unfairly cut out of the process are not warranted. “We have seen a number of onshore law firms become quite irritated at this process but, at

offshore counterparts late in the deal, so that the latter is unable to form a strong relationship with the client – will eventuate whether the offshore firms are receiving direct instructions or not. ALB

Asian Legal Business ISSUE 9.5

feature | ALB Law Awards >>

SE Asia Law Awards

Awards season is upon us again and here is the complete list of the finalists who will battle it out for this year’s BMW Asia ALB SE Asia Law Awards 2009, to be held in Singapore on 5 June

deals of the year ASSET & CORPORATE FINANCE DEAL OF THE YEAR

Partners; Latham & Watkins; Makes & Partners; Milbank; Stamford Law Banks: ABN Amro; Chinatrust Commercial Bank; CIMB; DBS; OCBC; PT Bank Central Asia Tbk; PT Bank Mandiri (Persero) Tbk; Standard Chartered Why: • Deal saw Indonesian cellular tower operator PT Profesional Telekomunikasi Indonesia Tbk (Protelindo) obtain US$360m senior and US$65m mezzanine financing

FINALISTS ►► GMR - Intergen financing and acquisition Firms: Allen & Overy; Allen & Overy Shook Lin & Bok; Appleby; Cains; DeBreau Westbrook; Luthra & Luthra; Mallesons Stephen Jaques; Sidley Austin; SyCip Salazar; White & Case Why: • Deal involved GMR securing term loan financing in for the acquisition of a substantial equity stake in Intergen NV • At approximately US$22bn, this was the largest ever acquisition of a global energy company by an Indian company ►► Merrill Lynch & Symphony - DLF Group investment Firms: AZB & Partners; J Sagar & Associates; Linklaters; Luthra & Luthra Why: • Deal was a series of structured finance transactions by Merrill Lynch in six development projects across India promoted by the DLF group • US$1bn transaction total represented largest structured finance investments in real estate sector in India ►► MISC Capital loan facility Firms: Norton Rose; Raslan Loong; Watson, Farley & Williams Why: • US$1bn transferable syndicated loan facility was structured as a US$750m loan facility with a US$250m green shoe • Further US$75m facility provided on a bilateral basis by BTMU ►► PT Profesional Telekomunikasi Indonesia senior and mezzanine financing Firms: Allen & Overy; Hadiputranto, Hadinoto &

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INSOLVENCY & RESTRUCTURING DEAL OF THE YEAR FINALISTS ►► FR8 Holdings insolvency Firms: Allen & Gledhill; Clifford Chance; Drew & Napier; Gorrisen Federspeil Kierkegaard; Rodyk & Davidson; Shook Lin & Bok; Watson Farley & Williams; White & Case; WongPartnership Banks: ING Belgium NV Accountants: Grant Thornton Why: • Complex cross-border insolvency involving companies in Belize, Singapore, US and UK in which some of the companies were subject to worldwide Mareva injunctions • Claims against the companies in Belize and Singapore alone exceed US$100m ►► IJM Land Corporation Restructuring Firms: Zaid Ibrahim & Co; Zain & Co Banks: AmInvestment Bank Berhad Why: • Deal involved share swap of IJM’s investment in RB Land (comprising ordinary shares and redeemable preference shares) for ordinary shares in enlarged IJM Land as listed and quoted on Main Board of the Bursa Malaysia Securities • Transaction was devised to realise and convert investments in unlisted property development company into investments in enlarged listed property development entity known as IJM Land

►► Nomura - Lehman Brothers (Asia) acquisition Firms: Allen & Gledhill; Allen & Overy; AZB & Partners; Freshfields Bruckhaus Deringer; Khaitan & Co; Linklaters; Mallesons Stephen Jaques; Rajah & Tann; Skadden; Weil Gotshal & Manges; White & Case; WongPartnership Banks: Rothschild Accountant: KPMG Why: • Deal saw Nomura acquire Lehman Brothers’ stock broking and investment banking operations in Asia following its collapse in September 2008 in which it filed for bankruptcy protection • Nomura emerged as the successful bidder; competing bids were submitted by Standard Chartered and Barclays ►► UEM World Restructuring Firms: Kadir Andri & Partners Banks: CIMB; Public Investment Bank Berhad Accountant: Ernst & Young Why: • US$1.6bn corporate restructuring exercise sought to de-layer the holding by Khazanah Nasional Berhad in the UEM Group of companies • Restructuring was effected by way of restricted offer for sale of a basket of shares comprising shares of four listed subsidiaries in UEM so that public shareholders in UEM World directly hold shares

Assetton Award PROJECT FINANCE DEAL OF THE YEAR FINALISTS ►► Adani Power project finance Firms: Clifford Chance; Luthra & Luthra Banks: Axis Bank; Bank of India; Corporation Bank; IOB; Punjab National Bank; SBI; Standard Chartered; State Bank of Mysore; State Bank of Patiala; State Bank of Saurashtra; State Bank of Tranvancore; Tamilnadu Mercantile Bank Why: • Tamilnadu Mercantile Bank Deal involved the financing of 1320MW power project being undertaken by Adani Power at a SEZ in Mundra, Gujarat Asian Legal Business ISSUE 9.5

feature | ALB Law Awards >>

2009 – the finalists

• Financing related to phase 3 of coal based thermal power project being implemented at Mundra, with phase 1 and 2 financings already having been undertaken • Total cost of project estimated to be US$1.4bn and is proposed to be funded through combination of equity (25%), senior debt (75%) and subordinate debt (5%); senior debt comprised of rupee loans, letter of credit facilities and foreign loan facilities

►► Tanjung Jati B Power Plant expansion Firms: Ali Budiardjo, Nugroho, Reksodiputro; Cleary Gottlieb; Denton Wilde Sapte; Makarim & Taira S; Milbank; Nagashima Ohno & Tsunematsu; Paul, Weiss; WongPartnership Banks: Bank of Tokyo MUFJ; BNP Paribas; Sumitomo-Mitsui Accountants: PwC

►► ITE West College PPP Firms: Allen & Overy Shook Lin & Bok; Ashurst; Linklaters Allen & Gledhill; WongPartnership Banks: Dexia; DZ Bank; HSBC; Sumitomo-Mitsui; Bank of Tokyo MUFJ

Why: • Deal saw PT Central Java Power acquire project financing for restructuring of Tanjung Jati B power project, a coal fired power plant in central Java • Valued at US$2.3bn, this was first big power project in Asia to be completed at start of global financial crisis

Why: • Project is first PPP for a Singapore educational institute and also first such project that Britain’s largest construction conglomerate, Balfour Beatty, is undertaking outside UK • Deal itself saw syndicate of banks offer senior financing of more than S$300m to Gammon Capital (West) for construction of new 10-ha campus for ITE West College ►► Mundra Power project finance Firms: Chadbourne & Parke; J Sagar & Associates; TSMP; Watson Farley & Williams Banks: Asian Development Bank; BNP Paribas; KEXIM; State Bank of India Why: • Deal saw a PF loan of US$4.25bn for the 4000MW Mundra coal fired ultra mega power project being developed in India

by Tata Power Company • Nine ultra mega power projects of 4000MW each have been announced by the Government of India and this deal is first of those to execute loan agreements for financing ►► Resorts World Sentosa project finance

Firms: Cains; Conyers, Dill and Pearman; Drew &

Napier; Lovells Lee & Lee Banks: Bangkok Bank; Bank of Tokyo MUFJ; BNP Paribas; Calyon; CIMB; Commerzbank AG; DBS; DZ Bank; HSBC; JPMorgan; Malayan Banking Berhad; NAB; OCBC; RBS; Sumitomo-Mitsui Why: • US$3bn project financing is one of largest non-traditional syndicated project financing deals ever undertaken in Singapore’s banking history with first tranche successfully closed amidst global financial crisis • Project will allow construction and development of integrated resort (casino) www.legalbusinessonline.com

DEBT MARKET DEAL OF THE YEAR FINALISTS ►► CapitaLand CB offering Firms: Allen & Gledhill; Allen & Overy Shook Lin & Bok; Linklaters Allen & Gledhill; WongPartnership Bank: JPMorgan Why: • CapitaLand Limited issue S$1.3bn 3.125% convertible bonds due 2018 which are convertible into ordinary shares of issuer which has option, upon redemption of bonds in certain circumstances, to redeem bonds by delivering shares of the issuer to holders in satisfaction of its obligation to pay redemption amounts • At the time, deal was largest CB deal in Singapore of 2008 ►► CIMB stapled securities program

Firms: Adnan Sundra & Low; Zaid Ibrahim & Co Banks: CIMB Accountant: PwC Why: • US$1.01bn deal comprises issuance of Capital Securities (stapled to subordinate notes) by CIMB Bank to be issued by wholly owned subsidiary of CIMB • Capital Securities are structured to be Tier 1 capital • Fact that Capital Securities are structured not only for sophisticated investors but also for retail distribution is first for unlisted debt securities ►► City Development Islamic trust certificate program Firms: Allen & Gledhill; WongPartnership Banks: Bank of New York Mellon; CIMB

Why: • Deal saw City Development through its wholly owned SPV Citidev Nahdah enter into in Singapore’s first unsecured Islamic capital markets transaction involving a corporate issuer, through the establishment of a S$1bn Islamic Trust Certificate Programme • Deal involved fusion of traditional Islamic financing principles into conventional medium-term note framework, in order to create Islamic securities which replicate the economic features of unsecured conventional bonds ►► Standard Chartered Medium-Term Note program Firms: Kim & Chang; Slaughter and May; Zul Rafique & partners Banks: KEXIM; Standard Chartered Why: • Deal was issuance of subordinated notes and/or senior notes under an MTN programme of up to RM3.5bn with tenure of up to 20years by Standard Chartered First Bank, a corporation incorporated in Korea ►► Vedanta Securities CB offering Firms: Amarchand & Mangaldas; Latham & Watkins; Shearman & Sterling Banks: Barclays Capital; Citi; Deutsche Bank; JPMorgan; Morgan Stanley Why: • US$1.25bn was one of India’s largest ever corporate bond offerings and widely regarded as one of best high-yield bond deals of 2008 • Transaction marked by short time in which underwriters and issuer had to bring this deal to market

equity market DEAL OF THE YEAR FINALISTS ►► Transcu-Eng Wah Holdings RTO Firms: Drew & Napier; Duane Morris; Heller Ehrman; Miyake & Yamakazi; Stamford Law Corporation; TMI Associates Banks: CIMB; KBC Bank Accountants: Deloitte; Ernst & Young; KPMG Why: • US$443m deal saw Eng Wah acquire entire issued and paidup capital, and outstanding options of Transcu, in return for allotment by Eng Wah of not less than 91.5% of issued share capital of Eng Wah to Transcu’s shareholders

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feature | ALB Law Awards >>

• Pursuant to reverse takeover, Eng Wah conducted capital reduction exercise as well as series of disposals of its existing assets and businesses, which were taken private ►► Esso Thailand IPO Firms: Baker & McKenzie, Davis Polk & Wardwell Banks: Morgan Stanley; Phatra Securities Why: • Largest IPO in Thailand since May 2006, and was only equity offering from Thailand targeted at US and international investors since second half of 2007 • Innovative deal structure included extraordinary dividend payout after listing and an undertaking to maximise distributions going forward • IPO also involved both recapitalisation and restructuring of issuer so that certain petrochemical assets could be incorporated, and stake sale by the Thai Ministry of Finance ►► PT Adaro Energy TBK IPO

Firms: Hadiputranto, Hadinoto & Partners; Hendra

Soenardi & Rekan; Latham & Watkins; Lubis Ganie Surowidjojo; Milbank; White & Case Banks: PT Danatam Makmur Accountants: PwC

Why: • US$1.3bn IPO was, in rupiah terms, Indonesia’s largest ever IPO, and Asia’s third largest IPO in 2008 outside Japan • Issue involved substantial corporate reorganisation, which streamlined group’s corporate organisation and preserved intact Indonesian and foreign shareholding post-IPO ►► PT Bakrie & Brothers rights issue & acquisition Firms: Allen & Overy; Hadiputranto, Hadinoto & Partners; Soebagjo Jatim Djarot Banks: Credit Suisse Why: • Two-stage deal saw PT Bakrie & Brothers Tbk launching initial US$4.4bn rights issue • Proceeds were used to acquire shares in three major listed companies enabling consolidation of various companies in Bakrie group to value of US$5.5bn ►► Reliance Power IPO Firms: Amarchand & Mangaldas; Cleary Gottlieb; J Sagar & Associates Why: • Ground breaking US$2.9bn listing was fully subscribed within one minute of opening and by close was oversubscribed 73 times after having received applications from over 5 million retail investors ►► Telekom Malaysia demerger - TM International listing Firms: Adnan Kelana Haryanto Hermanto; Atieh Associates; Crawford Bayley & Co; DFDL Mekong/ Mekong Law Group; Dr Kamal Hossain and Associates; Herbert Smith; Nithya & Partners; Orr, Dignam & Co; TM&S Gujadhur Chambers; WongPartnership; Zul Rafique & partners Banks: CIMB; UBS Accountants: PwC Why: • Deal involved internal restructuring and distribution by TM to TM’s shareholders of all shares in TMI, including shares issued pursuant to internal restructuring • After completed, all shares in TMI were listed on Main Board of Bursa Malaysia • Deal was one of largest of its kind it Malaysia

Chivas 18 AWARD SE ASIA M&A DEAL OF THE YEAR FINALISTS ►► Maybank - Bank Internasional Indonesia stake acquisition Firms: Assegaf Hamzah & Partners; Drew & Napier; Hadiputranto, Hadinoto & Partners; Latham & Watkins;

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Melli Darsa & Co; Rodyk & Davidson; WongPartnership Banks: Malayan Banking Berhad Why: • Deal saw Maybank secure a controlling stake in Indonesia’s 6th biggest bank, Bank Internasional Indonesia (“BII”) for US$1.5bn • Most of 56% stake was purchased from Singapore state investment firm Tema ►► Maybank - Kookmin Bank share acquisition Firms: Drew & Napier; Rodyk & Davidson; Shin & Kim; Wong Partnership Banks: Kookmin Bank; Maybank Why: • US$1.4bn deal saw Kookmin Bank sell held shares in Sorak Financial Holdings by Fullerton Financial Holdings and Kookmin Bank to Maybank • Sorak Financial Holdings was vehicle for a majority stake in Bank Internasional Indonesia • Deal structured to allow both Malaysian licensed bank to acquire Indonesian licensed bank via Singapore incorporated entity, following auction process undertaken by Fullerton Financial Holdings (as majority shareholder) to dispose of its interest in Singapore entity despite detoriating economic conditions ►► NTT DoCoMo - Tata Teleservices investment Firms: AZB & Partners; J Sagar & Associates; Khaitan & Co; Shearman & Sterling; Skadden Why: • US$2.7bn deal saw NTT enter India’s telco market by acquiring common shares in Tata Teleservices • Deal also saw NTT launch open offer to acquire percentage of outstanding equity shares through joint offer with Tata Sons ►► PT Bank Lippo - PT Bank Niaga Tbk merger Firms: Albar & Partners; Hadiputranto, Hadinoto & Partners; Melli Darsa & Co; Rajah & Tann Banks: CIMB Accountants: PT Ernst & Young Advisory Services; RSM AAJ Associates Why: • US$1.4bn deal saw PT Bank Lippo merge with PT Bank Niaga to form PT Bank CIMB Niaga • In addition to navigating conflict of interest issues (both banks are directly and/or indirectly owned by Khazanah Nasional Berhad) deal also needed to be structured so as to comply with Indonesia’s Single Presence Policy

Why: • US$3.1bn deal saw China Huaneng acquire Tuas Power • Deal involved blend of cash and debts, as well as lengthy negotiations between parent companies and their subsidi aries • Deal is largest overseas purchase by Chinese power company to date ►► Gaz de France - Power Gas JV

Firms: Allen & Gledhill; Herbert Smith; Rajah & Tann Why: • Deal saw Gaz de France enter into a JV agreement with PowerGas to build and operate Singapore’s first LNG terminal, pursuant to which Gaz de France will hold 30% minority interest in joint venture company ►► Lion Power Holdings - Senoko Power financing & acquisition Firms: Allen & Gledhill; Allen & Overy; Latham & Watkins; Rajah & Tann; Rodyk & Davidson; WongPartnership Banks: ANZ Investment Bank; Bank of Tokyo MUFJ; DBS; Dexia; Dresdner Bank; KBC Bank; Mizuho Bank; Natixis; Royal Bank of Scotland; OCBC Accountants: PwC Why: • US$ 3.2bn deal saw Lion Power Holdings acquire Senoko Power from Temasek Holdings (Private) • Deal comprised of bridge loan facility and JPY67bn repowering loan • Deal was closed on expedited schedule, with only two days between bid submission and signing and additional seven days between signing and closing ►► The Cairns - Straits Trading acquisition Firms: Allen & Gledhill; WongPartnership Why: • Deal saw The Cairns launch voluntary conditional offer which was subsequently converted to mandatory unconditional cash offer for all the issued shares in The Straits Trading Company for US$1.5bn

BMW Asia Award SE asia DEAL OF THE YEAR FINALISTS Full list to be revealed on the evening

singapore DEAL OF THE YEAR

►► Tata Motors - Jaguar/Land Rover acquisition Firms: Allen & Overy; Hogan & Hartson; Rodyk & Davidson Accountants: Deloitte

FINALISTS Full list to be revealed on the evening

Why: • US$2.3bn deal saw Ford Motor Company sell two of its subsidiaries, Land Rover and Jaguar Cars, to Tata Motors • Deal was first acquisition by Indian company of auto business divisions relating to two marque brand name

in-house awards

IPP Financial Advisers Award SINGAPORE M&A DEAL OF THE YEAR FINALISTS ►► Ascott Group privitisation Firms: Rajah & Tann; WongPartnership Why: • US$2.2bn privitisation deal involved voluntary offer which ultimately led to compulsory acquisition by Somerset Capital of shares of remaining shareholders who did not accept offer • Ascott Group is world’s largest international serviced residence owner-operator ►► China Huaneng - Tuas Power acquisition Firms: Allen & Gledhill; Drew & Napier; Haiwen & Partners; Herbert Smith; Lovells; Shook Lin & Bok; Sullivan & Cromwell Banks: BNP Paribas; Calyon; Credit Suisse; DBS; Fortis; Morgan Stanley; OCBC

Banking & Financial Services In-House Team of the Year FINALISTS

Citi DBS HSBC ICICI Bank Maybank OCBC Standard Chartered

Braun Büffel Award Investment Bank In-House Team of the Year FINALISTS

Credit Suisse Asian Legal Business ISSUE 9.5

feature | ALB Law Awards >>

Deutsche Bank Goldman Sachs JPMorgan Merrill Lynch Morgan Stanley UBS

IT/Telecommunications In-House Team of the Year FINALISTS

At&T Bharti Televentures Nokia SingTel StarHub Telekom Malaysia Berhad

De Dietrich Award Real Estate & Construction In-House Team of the Year FINALISTS

CapitaLand DLF Far East Organisation Fraser Centrepoint Unitech

Shipping In-House Team of the Year FINALISTS

Malaysian International Shipping Berhad Neptune Orient Lines Pacific Carriers Shipping Corporation of India Titan Orient Lines

Singapore In-House Lawyer of the Year FINALISTS

Boon Chin Aun, Golden Agri Resources Damian Yeo, Nokia Jeffrey Wong, UBS Lena Chia, Temasek Holdings Sharon Goh, Pacific Carriers www.legalbusinessonline.com

Gibson, Dunn & Crutcher LLP Award Singapore In-House Team of the Year

Harry Elias Partnership

FINALISTS

• Its involvement in some of largest construction projects in Singapore to date make HEP automatic inclusion in this category • Latiff Ibrahim, the firm’s managing partner and head of its construction, engineering & infrastructure projects group comes highly recommended

Full list to be revealed on the evening

Rajah & Tann

firm awards

• Winner in this category in 2006, firm is mainstay on construction law front • Sundaresh Menon SC was held in high regard by respondents with many noting that since his appointment in 2007 firm has continued to increase its footprint in this area

COMMERCIAL LITIGATION LAW FIRM OF THE YEAR FINALISTS

Allen & Gledhill

WongPartnership • Christopher Chuah’s team spoken of very highly by number of in-house lawyers across region • Winner in this category last year, firm’s work on such projects as Jurong Town Corporations divestment ensures it is again a worthy finalist

• Synonymous with high-end litigation, this firm was singled out for depth and breadth of its key personnel • Still has the ability to mix it with other litigation heavyweights in Singapore

ENERGY & RESOURCES LAW FIRM OF THE YEAR

Drew & Napier

FINALISTS

• Powerhouse commercial litigation outfit and winner in this category for the previous four years • Boasts number of highly-regarded litigators, including Jimmy Yim SC, Cavinder Bull SC and Davinder Singh SC

Clifford Chance

Rajah & Tann • Perennial finalists in this category; has more than 100 lawyers dedicated to this practice area • Boasting its fair share of senior counsels, firm is consistently near top for having highest number of applications heard in supreme court from month to month

WongPartnership • Widely praised by number of region’s in-house counsel, firm’s strengths in this area were perhaps best demostrated by its work on Yukos Oil saga

Merrill Legal Solutions Award CONSTRUCTION LAW FIRM OF THE YEAR FINALISTS

Allen & Gledhill

• Always favorite to take home this award, firm’s work for oil companies, power developers and banks on projects in south and southeast Asia have won it respect of in-house lawyers and peers alike • Work on the Adani Power Project financing (shortlisted for Energy & Resources Deal of the Year) is just one of many highcalibre projects that firm closed in 2008

Latham & Watkins • Extremely successful year for this QFLP licensee was topped off by its work on Singapore’s second genco sale - Lion Power’s acquisition of Senoko • Singapore managing partner Mark Nelson highly recommended

Linklaters Allen & Gledhill • Came highly recommended in peer review process for its work across gas and petrochemical industries and its ability to integrate banking, project finance and dispute resolution skills into this practice area where requiredd

Lovells Lee & Lee

• Top-tier performer in this category, firm was singled out for its specialty teams who have ability to handle construction and property arbitration matters

• Singapore office managing partner James Harris steered his energy & resources practice to another solid year in 2008 • firm acted on sale of Singapore genco Tuas to China Huaneng and scored highly among peers in this category

Drew & Napier

Milbank

• Local powerhouse Drew & Napier again polled highly in this category • Tan Liam Beng again singled out by clients who liked his hard market approach to problem solving in the area

• Perennial finalists in this category and winners in 2006, Milbank will again be in the running this year • Not only did it act on Tanjung Jati B Power Plant Expansion but it also played pivotal role in Indonesian coal mining giant PT Adaro Energy’s US$1.3bn IPO

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feature | ALB Law Awards >>

Norton Rose • A winner of this category in 2005, firm returns to finalists list this year on back of extremely strong year • Alex Cull, head of firm’s global gas initiative, comes highly recommended as is its Singapore office head Jeff Smith

IP LAW FIRM OF THE YEAR FINALISTS

AMICA Law • Since braking away from Allen & Gledhill in 2006 to form their own IP boutique practice, AMICA Law has gone from strength to strength • Named as one of best five firms for IP in Singapore by ALB last year; set to make a challenge for top prize at this year’s awards

ATMD Bird & Bird • The winner in this category every year since 2005, this IP powerhouse became even stronger last year after striking global alliance with British firm Bird & Bird, a move which survey respondents felt will only enhance its reputation as one of Singapore’s premier IP firm

Baker & McKenzie.Wong & Leow • Considered to be leading firm when it comes to IT and commercial disputes, firm also boasts strength in biotech area • Principal Andy Leck comes highly recommended

FINALISTS

Allen & Gledhill • IA practice has become big part of nation’s drive to establish itself as hub of arbitration in the south east Asian region • Has continued to excel despite departure of K Shanmugam SC to Singapore Ministry of Law last year

DLA Piper • Making a comeback in this category, firm had stellar 2008 in which it acted on many high-profile IA cases in the region • Earlier this year firm lost Desmond Ong to Eversheds, but has continued strongly

Drew & Napier • International arbitration practice considered by many to be head and shoulders above others in Singapore • Highly regarded Jimmy Yim SC, managing director of the firm’s dispute resolution practice, and his team were regarded highly for their excellent service, poise and ability to handle highest of high-profile international disputes • Hri Kumar and Cavinder Bull were both appointed to SC post in 2008

Herbert Smith

• A perennial finalist in this category, 2008 was yet another marvelous year for this full-service firm having represented SingTel and others in high-profile trademark infringement matters • Dedar Singh Gill and Morris John were both acclaimed for their industry knowledge and commercially oriented advice

• Late last year Herbies was one of six international firms granted qualifying foreign law practice license (QFLP) by Singapore government, allowing it to practice Singapore law in limited areas • Maurice Burke, joint head of the firm’s IA practice in SE Asia, comes highly recommended and Bangkok-based Alastair Henderson was also singled out for special mention

Lee & Lee

Norton Rose

Drew & Napier

• The winner in this category every year since 2005, this IP powerhouse became even stronger last year after striking global alliance with British firm Bird & Bird, a move which survey respondents felt will only enhance its reputation as one of Singapore’s premier IP firm • Lee & Lee’s strengths rest in the fact that it provides equally as strong representation in contentious and non-contentious matters • Noted for its particular strengths in brand protection and portfolio management • Respondents singled out head of IP Tan Tee Jim SC as leader in the field

Rodyk & Davidson • Considered a heavy hitter in IP, the firm boasts one of most well developed IP departments in the country, possessing capability to cover services ranging from portfolio management to transactional and contentious work • Head of firm’s IP & technology practice group Lee Ai Ming comes highly recommended

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Merrill Legal Solutions Award INTERNATIONAL ARBITRATION LAW FIRM OF THE YEAR

• Guy Spooner heads up Norton Rose’s international commercial arbitration and dispute resolution practice that is renowned for its shipbuilding, energy, international trade, commodity, insurance infrastructure and transportation dispute capabilities • Secured a QFLP license late last year

Rajah & Tann • The winner in this category last year, firm’s ability to offer expertise in technology and shipping matters means it is again natural inclusion as finalist • Stephen Chong SC highly recommended for his excellent results

Shearman & Sterling • Jon Savage, co-managing partner of firm’s Singapore office and deputy head of IA practice, was held in high regard by voters • Perennial finalist in this category, firm is considered, along with Herbert Smith, to be one of only handful of firms in Singapore capable of dealing with niche area of investorstate arbitrations

OFFSHORE LAW FIRM OF THE YEAR FINALISTS

Appleby • Another solid year for this leading offshore firm • Firm worked on GMR’s record breaking acquisition of Intergen NV and Frances Woo, managing partner of its Hong Kong office, comes highly recommended by peers for her work in region

Cains • Firm opened its first office in region mid-last year in Singapore and has since worked on number of important deals, eg GMR’s acquisition of Intergen NV, Resorts World at Sentosa project financing • Singapore office head Mike Edwards come highly recommended

Conyers Dill & Pearman • A winner in this category in 2006 and 2007, firm’s Singapore office is considered to be pivotal in Asia, as evidenced by its work on Resorts World at Sentosa project financing deal • Singapore office head Tan Woong Tiang noted for his expertise in corporate finance transactions

Maples and Calder • A winner in this category last year, firm will once again be fighting for the top spot this year • Christine Chang, firm’s HK office managing partner, comes highly recommended for her work in region

Walkers • A new entrant in this category but a winner of this award at the ALB Hong Kong Law Awards in 2007 and 2008, Walkers excelled in the South East Asian region in 2008 according to respondents • Clients point to the firms funds and private equity work in the emerging markets in the region as its greatest strength

REAL ESTATE LAW FIRM OF THE YEAR FINALISTS

Allen & Gledhill • Two-time winner once again came through the balloting for finalists in strong position • Peers described firm’s commercial real estate practice as one of best in business especially noted for its work with REITs

Drew & Napier • Winner in this category last year, firm’s all round capabilities in the area were noted highly in the peer review process • Both David Chin and Chan Yee Min come highly recommended for their experience in all aspects of conveyancing and property law

KhattarWong • Winner of the award in 2005, KhattarWong returns to the list of finalists this year on the back of excellent 2008 • Clients and peers alike note that its key strengths rest with advising on en-bloc deals where co-head of banking, finance and property Carla Barker is considered highly Asian Legal Business ISSUE 9.5

feature | ALB Law Awards >>

Lee & Lee

Haridass Ho & Partners

• Always a contender in this category, peers believed firm’s strengths to be in leasing and financing side of the area • Partner and head of firm’s real estate department Ow Yong Thian Soo comes highly recommended

• Perennial finalist in this category, this boutique shipping practice believed to be expert in all areas across practice • Led by named partner Ajaib Haridass; Randhir Ram Chandra, firm’s managing partner and Thomas Tan also come highly recommended

Rodyk & Davidson

JTJB

• Finalist in this category previous years, real estate practice of this firm advises on diverse range of property transactions for many of major developers in Singapore • Strengths include ability to handle most complex and innovative of deals and work for consumer banks on housing loans

• Always strong contender in this category, this boutique firm continues to press larger firms for most lucrative of work not only in Singapore but across region • Founding partner Dato’ Jude Benny praised for his knowledge and experience and for remaining one of most hands-on of industry’s elder statesmen

WongPartnership • Perennial nominee in this category, 2008 was another good year for WongPartnership • Head of international real estate Carol Anne Tan highly regarded for her work on REITS and her expertise in property related corporate disposals

SE ASIA SHIPPING LAW FIRM OF THE YEAR FINALISTS

Clyde & Co • Two-time winner in this category, firm boasts top-tier experience in wet and dry aspects of practice • Capabilities in areas aligned to shipping, namely asset finance and offshore oil & gas work, are considered second to none; John Champion, Chris Edwards and Cpt Bruce Ewen are all highly praised

Ince & Co • A name that is synonymous with all things shipping in the region, Ince & Co almost automatic inclusion in this category • Peers spoke very highly of firm’s wet practice where it regularly acts on most high-profile contractual and liability issues; Chris Greiveson, James Drummond and Richard Lovell all come highly recommended

Holman Fenwick Willan • Widely regarded as region’s experts on all admiralty matters, firm had another strong year representing owners and underwriters on number of high-profile collision cases • Simon Davidson and Bill Kerr both regarded as experts in their fields

Stephenson Harwood • New entrant in this category, 2008 was a stellar year for this firm in the region as it continued to act for some of shipping’s most high-profile clients like Maersk and Swire • Durai Shunmugam said to lead this practice expertly, while Singapore office head Martin Green noted for his expertise on asset finance side of practice

Watson, Farley & Williams • Winner in this category last year, firm’s regional shipping practice went from strength to strength in 2008 • Not only did it act on some of most high-profile contentious shipping and project finance matters of last year but peers felt its had two of best all-round asset finance lawyers in region in Chris Lowe and Goh Mei Lin

SINGAPORE SHIPPING LAW FIRM OF THE YEAR FINALISTS

Allen & Gledhill • Firm boasts equally strong expertise on contentious and noncontentious side of the area • Vivian Ang, a partner in seven-strong team, comes highly recommended

Drew & Napier • Regular finalist, peers spoke very highly of shipping head Ian Koh, not only for his expertise in shipping matters but also his excellent manner in disputes side of the practice • Firm’s corporate finance director Valerie Kwok also comes highly recommended for her work on finance side of practice

www.legalbusinessonline.com

Rajah & Tann • Four-time winner of this award, firm widely recognised to be leader in field • Led by Senior Counsel Steven Chong, admiralty and shipping practice group is a dominant maritime law practice in Singapore

TAX & TRUSTS LAW FIRM OF THE YEAR

MALAYSIA DEAL FIRM OF THE YEAR FINALISTS

Albar & Partners Azmi & Associates Kadir Andri & Partners Shearn Delamore Zaid Ibrahim & Partners Zul Rafique & Partners

PHILIPPINES DEAL FIRM OF THE YEAR FINALISTS

Accra Law Quisumbing Torres Romulo Mabanta Buenaventura Sayoc & De Los Angeles SyCip Salazar Hernandez & Gatmaitan

FINALISTS

Allen & Gledhill • Four-partner tax practice includes highly regarded Nand Singh Gandhi who specializes in appeals and objections on tax issues for major corporations and financial institutions

Baker & McKenzie . Wong & Leow • Winner in this category at last year’s ALB SE Asia Law Awards and last year’s ALB Hong Kong Law Awards, peers recommend this firm for its stable of tax professionals as well as its international reach • Edmund Leow, head of tax practice in Singapore, is highly regarded

Drew & Napier • Past nominee in this category and winner in 2005 and 2006, Drew & Napier can rightly claim to be only firm in Lion nation with full-service capability across both areas • Recruitment of Ong Sim Ho early last year has been instrumental in cementing its position in this regard

KhattarWong • Finalist again in this category, firm boasts fully-fledged tax department staffed by eight dedicated tax professionals • Head of department Leon Kwong Wing comes highly recommended as does senior partner Gurbachan Singh

THAILAND DEAL FIRM OF THE YEAR FINALISTS

Baker & McKenzie Chandler & Thong-Ek Clifford Chance Hunton & Williams Siam Premier

VIETNAM DEAL FIRM OF THE YEAR FINALISTS

Allens Arthur Robinson Baker & McKenzie Frasers Freshfields Bruckhaus Deringer VILAF Hong-Duc YKVN

INTERNATIONAL DEAL FIRM OF THE YEAR

WongPartnership • A winner in this category last year and a finalist for the past two years, the firm once again polled strongly in this category • Offering the full gamut of tax services in a number of practice areas clients and in-house alike singled out the firm’s transactional and advisory work as its greatest strength

INDIA DEAL FIRM OF THE YEAR FINALISTS

Amarchand & Mangaldas AZB & Partners FoxMandal Little J Sagar & Associates Khaitan & Co Luthra & Luthra Talwar Thakore & Associates

INDONESIA DEAL FIRM OF THE YEAR

FINALISTS

Baker & McKenzie Clifford Chance Latham & Watkins Linklaters Milbank White & Case

SINGAPORE DEAL FIRM OF THE YEAR FINALISTS

Allen & Gledhill Drew & Napier Rajah & Tann WongPartnership

FINALISTS

Ali Budiardjo Nugroho Reksodiputro Hadiputranto, Hadinoto & Partners Hendra Soenardi & Rekan Lubis Ganie Surowidjojo Makarim & Taira S Makes & Partners Melli Darsa & Co

THE ALB LAW AWARDS 2009 To find out about the finalists and winners of the China and Japan Law Awards 2009 go to our website at www.albawards.com

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feature | ALB Law Awards >>

event partner BMW BMW Group Asia in Singapore is the regional hub of the Group in Southeast Asia.

Established in 1985, it has two major roles.

The first is market responsibility for Southeast Asia, with the management of the BMW Group subsidiaries in Singapore and Indonesia as well as all importers in the Asia-Pacific region.

Second, the office in Singapore is the regional base for key corporate functions like purchasing, corporate audit, corporate sales, direct sales and special vehicles, as well as corporate affairs. In 2006, the regional office added new corporate capabilities to its portfolio: the Asia-Pacific

Treasury Centre (one of three BMW Treasury Centres worldwide), the Asian studio for BMW DesignworksUSA, a strategic design consultancy within the BMW Group and BMW Group Financial Services.

In addition, the BMW Group also established an Asia-Pacific regional office for Rolls-Royce cars in Singapore. Since January 1st 2003, the RollsRoyce brand has been part of the BMW Group, which presents itself with three brands: BMW, MINI, and Rolls-Royce.

Contact details: Cindy Chia P: (65) 6838 9629 | F: (65) 6838 9611 E: Cindy.Chia@bmwasia.com W: http://www.bmwgroup.com

sponsors Assetton Assetton is an investment company that focuses on Real Returns from Real Assets.

We offer Bordeaux's (France) Blue Chip Wines, Alberta's (Canada) Developable Land, and the Baron of Batik's (Singapore) Limited Works of Art, to complement existing forms of investments offered by banks and financial advisories.

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Contact details: Valencia Teo, Promotions Manager P: (65) 6322 1686 | F: (65) 6225 4727 E: valteopl@Lianbeejeco.com W: www.braunbuffel-asiapac.com

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DE DIETRICH From the initial forge acquired in 1684, to today’s internationally acclaimed brand, De Dietrich continues to bring you a comprehensive range of kitchen and home appliances. Known for its products quality & innovations, the new range of cooking, washing & cooling appliances combine aesthetical appeal and avant-garde features. Visit La Galerie De Dietrich today to see to believe!

Contact details: Claudia Ko P: (65) 6508 4600 | F: (65) 6273 0422 E: claudia.ko@fagorbrandt.com W: www.dedietrich.com.sg GIBSON, DUNN & CRUTCHER LLP Gibson, Dunn & Crutcher LLP is an international law firm with litigation, corporate, real estate and tax expertise. We have 15 offices located throughout Asia, the United States, Europe and the Middle East, and are consistently ranked among the world’s top law firms in industry surveys and major publications.

Contact details: Henry Huang, Office Administrator P: (65) 6507 3600 | F: (65) 6507 3650 E: inquiries@gibsondunn.com W: www.gibsondunn.com

by MAS and offer clients the full range of services from life insurance and medical cover, to savings plans and wealth management, right through to legacy planning and will writing. Based in Singapore, IPP also has licensed offices in Hong Kong and Malaysia.

Contact details: Ian Pryor P: (65) 6309 1038 | F: (65) 6309 0127 E: eag@ippfa.com W: www.ippfa.com MERRILL LEGAL SOLUTIONS Merrill Legal Solutions (WordWave International Asia Limited) is a global litigation support company specialising in high quality verbatim court reporting, transcription and document management services for court proceedings, arbitrations and depositions.

We can produce transcripts in real-time - using the award winning LiveNote® service - or on a daily or next day basis. We also offer document scanning and coding for case materials, courtroom consultancy, digital audio recording and transcription services and can arrange interpreters and videographers. We are the appointed contractor in the Supreme Court of Singapore.

Contact details: Lilian Goh, General Manager P: (65) 6720 0103 | F: (65) 6720 0104 E: singapore@merrillcorp.com W: www.wordwave.com.sg | www.merrillcorp.com/mls

IPP FINANCIAL ADVISERS IPP Financial Advisers Pte Ltd is Singapore’s largest independently owned financial advisory. Founded in 1983, it is also Singapore’s oldest and most established, with a reputation for impartial advice and high levels of ongoing service rather than just simple product implementation. All representatives are licensed Asian Legal Business ISSUE 9.5

• CHINA • SE ASIA • AUSTRALASIA • JAPAN • Hong Kong

5 June 2009, The Ritz-Carlton, Millenia Singapore

Secure your seat for this sell-out event Don’t miss your chance to attend the most popular night in the legal industry calendar.

Book Now Spaces are Limited

Reserve your table as soon as possible to avoid disappointment Yes! I want to attend the BMW Asia ALB SE Asia Law Awards dinner & presentation ceremony – 5 June 2009  Please reserve  Please reserve

table(s) at SGD1795 incl GST - 1 table seats 10 people seat(s) at SGD235 incl GST

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For your tuxedo requirements, please contact Mohan Amarnani, Maharaja’s Custom Tailors at 442 Orchard Road #01-12A Orchard Hotel Shopping Arcade Singapore 238879 | Tel: 6737 6474

Fax Back to (65) 6423 4632

For table bookings: Rozidah Jambari +65 6423 4631 (ext 229) email: rozi@keymedia.com.sg

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FEATURE | travel survey >>

Business travel survey: ALB Editor’s Choice 2009 Travel could provide a saving grace for law firms this year, and with the travel industry increasing their incentives, ALB’s annual survey provides a guide to the best airlines, hotels and restaurants

I

t is no surprise that in the past year business travel trends have changed significantly. Fiscally conscious clients and managers are trimming budgets, and are demanding more from their travel companies, whether it is a higher level of service or the incentives currently being offered. However, firms are also realising that travel may just be the ticket to help generate business in a downturn.

Lawyers are essentially service providers and part of meeting client needs includes taking the long haul to meet them face to face. Research from US Travel Association (USTA) has shown that companies are recognising that travelling to service clients on the ground where their competitors may not be, can better position them in an increasingly competitive market.

“In this global economy, firms should be fighting for business, not holding back, and should be out there networking,” says Chris Flynn, pacific regional director of non-profit travel association, Pacific Asia Travel

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Association. “It’s not a time to cease travelling, the world economy is based on trade and that includes travel.”

Although it may appear beneficial in the short term, business may be lost to other firms who are out there servicing clients on the ground and developing their contacts, methods recognised as the gateway to bring more work into the firm. “Travel plays an important role in business growth in a down economy, by helping businesses connect with their customers,” says Suzanne Cook, vice president of research at USTA. “It’s also clear from our [research] that the old maxim remains true; if you don’t take care of your customers, someone else will.”

Traveller’s check

Lower rates, higher service levels, more incentives. Travel companies are rolling out the perks. In the next few months travellers will see loyalty rewarded in frequent flyer points, or two for one deals. “It’s likely that the travel industries will Asian Legal Business ISSUE 9.5

FEATURE | travel survey >>

Business travel survey: Editor’s Choice 2008 be value-adding, with free upgrades or through loyalty programs,” Flynn says. While airline, lodging and booking prices have never been more attractive, the choice remains large.

Best business hotels

RANT

BEST HOTEL

Views, facilities, and comfort were all high on the list for readers. Survey respondents also said that location and service efficiency lure them back to hotels such as the Conrad in Hong Kong, which proved a favourite. Some hotels were voted not just for one location, but two – the Grand Hyatt’s Seoul and Beijing branches and the Shangri-La in Singapore and Hong Kong are certainly keeping readers happy. Service staff was highly valued in Seoul, as was room space and amenities in Beijing, especially after a long haul flight and the bustle outdoors.

“One of best views,” was how one respondent rated Island Shangri-la in Hong Kong, with another praising the hotel’s combination of room spaciousness and high level of service. Tokyo’s Park Hyatt hotel was rated highly for location and views, but the “excellent coffee”, sealed the deal for one respondent.

Nikko Hotel in Kuala Lumpur was acknowledged for the quality of the food at its Benkay Japanese Restaurant and Serena Brasserie.

Best Business Hotel in North Asia

Best serviced apartments

Fraser Place, Tokyo

Asia’s serviced apartments are becoming increasingly popular for business travellers in the current environment, with enquiry rates growing by 24% last year, according to research by Hogg Robinson Group. Apartments have become an ideal choice for lawyers extended stays or generally for those staying for long periods.

Apartment atmosphere, location and facilities proved the biggest selling point for most respondents, with a significant number of apartments from the PRC in the north Asia top five – Ascott, Four Seasons Hong Kong, Opposite House and Regalia Serviced Residence were all highly recommended. Singapore’s Orchard Parksuite and Great World 76

BEST RESTAU

BEST AIRLIN

E

BEST AIRLIN

E

BEST AIRLIN

E

BEST AIRLIN

E

/RESORT

Conrad Hong Kong Grand Hyatt, Beijing Grand Hyatt, Seoul Island Shangri-la, Hong Kong

BEST RESTAU

RANT

Park Hyatt, Tokyo BEST HOTEL

/RESORT

Best Business Hotel in Southeast Asia/Middle East Ritz Carlton, Jakarta Conrad, Singapore Shangri-La, Singapore BEST RESTAU

Nikko Hotel, Kuala Lumpur

RANT

Burj Al Arab, Dubai BEST HOTEL

/RESORT

Best Serviced Apartments in North Asia Opposite House, Beijing Four Seasons Place, Hong Kong Ascott Beijing

BEST RESTAU

RANT

Regalia Serviced Residence, Shanghai BEST HOTEL

/RESORT

Best Serviced Apartments in Southeast Asia/Middle East Ascott, Jakarta Fraser Suites, Hanoi Orchard Parksuites, Singapore Great World Serviced Apartments, Singapore

Asian Legal Business ISSUE 9.5

FEATURE | travel survey >>

Business travel survey: Editor’s Choice 2008 Service Apartments also received commendations for amenities including wifi. Fraser Place in Tokyo and Vietnam was voted for its modern design and service.

Best restaurants

Unsurprisingly, there were a significant number of votes in this category, as Asia’s restaurants not only provide the most variety, but high service quality and, of course, great food. These were the main reasons provided by respondents for voting restaurants such as Hong Kong’s Huton, Vabene, and Spoon by Alan Ducasse, while Singapore’s Indochine and Taste Paradise were also praised, along with Malaysia’s Nero Vivo, Kampachi Restaurant and Latest Recipe Restaurant for their “delicious meals and good service”. M on the Bund in Shanghai not only provided good views, but ambience was also a significant selling point.

BEST RESTAU

RANT

BEST HOTEL

BEST AIRLIN

E

BEST AIRLIN

E

/RESORT

Best Restaurants in North Asia Hutong, Hong Kong M On the Bund, Shanghai Vabene, Hong Kong Spoon by Alan Ducasse, Inter Continental Hong Kong

BEST RESTAU

RANT

Otowa – Tei, Hilton Tokyo BEST HOTEL

/RESORT

Best Restaurants in Southeast Asia/Middle East Indochine, Singapore Taste Paradise, Singapore Latest Recipe, Le Meridien Hotel, Kuala Lumpur Nero Vivo, Kuala Lumpur

BEST RESTAU

RANT BEST AIRLIN

E

BEST AIRLIN

E

Kampachi Restaurant, Equatorial Hotel, Kuala Lumpur

Business class airlines

Developing a number of loyal passengers requires a checklist in certain areas. Value, modern amenities and service were the basics, but reputation and consistency of service also weighed in. Devotees of Singapore and Malaysian airlines said they offered good rates and convenience in purchasing tickets, while British Airways garnered favour for its industry reputation and its business class program ‘Club World’. This year’s new favourites, Emirates and Etihad, were rated for their modern seating and cabins. The service at Korean Air came highly recommended from readers, some of who placed the friendliness of cabin staff as a major reason for their choice.

Other airlines commended for their service were Cathay Pacific and Qatar Airways, who came in top once again, with both rating highly for in-flight entertainment. And for flyers of long haul flights, the airlines’ flat beds were much appreciated. Meanwhile, value for money proved a winner for enthusiasts of Virgin Atlantic and Malaysian Airlines. ALB 78

BEST HOTEL

/RESORT

Best Business Class Airline for North Asia British Airways Emirates Korean Air Cathay Pacific Virgin Atlantic

BEST RESTAU

RANT

BEST HOTEL

/RESORT

Best Business Class Airline for Southeast Asia/Middle East Etihad Airways Malaysian Airlines Singapore Airlines Qatar Airways Emirates

Asian Legal Business ISSUE 9.5

Girl interrupted

Simmons guarantees you never fall asleep sleep on the job

Your performance in the day is by and large dependent on the quality of sleep you get at night.

Getting uninterrupted quality sleep may not be as easy as you think - unless it is with a Simmons® Beautyrest®. Renowned for providing unsurpassed support and conformability, the patented Pocketed Coil® system offers you the unique “Do-Not-Disturb®” difference. Now enhanced with the motion-deadening Bloc Foam, each Simmons® Beautyrest® mattress can minimize motion transfer even more than before, offering you and your partner hours of uninterrupted rest. Tonight and every night after, banish all tiredness for good when you snuggle up to a Simmons, and indulge in your best sleep ever.

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BRUNEI

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JAKARTA

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KUALA LUMPUR

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MANILA

z

SHANGHAI

z

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Paragon #04-06 Tel: 6734 0660

SINGAPORE

z

TAIPEI

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TOKYO

PRIVATE PRACTICE

COMPLIANCE / IN-HOUSE

M&A – SINGAPORE

LEGAL COUNSEL, CONSTRUCTION – SINGAPORE

Top-10 UK firm boasts an unrivalled track record in Asia and needs a Singapore qualified M&A lawyer to join them. Technical excellence in Singapore law matters and perhaps some experience with another international firm would be well regarded. (PTS1844) 6 YRS+ PQE

A process management giant in Singapore seeks a junior lawyer to be based in Singapore and to work on a large project in Algeria.

Candidates need construction litigation experience, native level English and spoken Mandarin. (ISSJSK1167) 3 YRS+ PQE

CONTRUCTION LITIGATION – SINGAPORE

LEGAL COUNSEL, CORPORATE – SINGAPORE

Due to the increase in contentious work, this international firm seeks a senior contentious construction lawyer. You must exhibit a strong insurance related background in construction. Regional portfolio needed for immediate partnership. (PTS1851) 6 YRS+ PQE

World class projects company seeks legal counsel to be based in Singapore office. Incumbent required to work closely with management team on legal matters for all business units. In-house experience essential. (ISSJSK1164) 6 YRS+ PQE

SHIPPING LITIGATION – SINGAPORE

LEGAL COUNSEL, BUSINESS INFORMATION – SINGAPORE

Ideal candidates for this role will have worked on dry shipping matters and will be familiar with LMAA arbitrations. Strong academics and regional experience are key to securing this position working with a highly regarded partner. (PTS1859) 2-5 YRS PQE

Our client is a recognized brand within the business information market place. Reporting to the General Counsel, you will take responsibility for legal activities in Asia. A proven track record in Asia is essential. (ISS1154) 6 YRS+ PQE

CORPORATE – SINGAPORE

HEAD OF COMPLIANCE, BANKING – SINGAPORE

US firm with global offices will open in Singapore soon. This opportunity is for a senior corporate lawyer who wants to be instrumental in opening and guiding this office’s growth. Senior Associates and Of Counsel candidates are encouraged to apply. (PTS1792) 6YRS+ PQE

Our client stands out as a market leader in banking and are now seeking a candidate to oversee compliance operations in Singapore.

Knowledge of Financial Markets products is essential and a knowledge of wholesale bank compliance is preferred. (ISS1162) 9 YRS+ PQE

HEAD OF TMT PRACTICE – MIDDLE EAST

TRADE SURVEILLANCE, BANKING – SINGAPORE

This strong practice in the Gulf is looking for a lawyer with a regulatory and commercial background to join one of its largest offices as Head of Telecoms. Arabic language skills would be an advantage. (ME674) PARTNER/PARTNER TRACK

If you have Trade Surveillance or similar experience, then step up and join this global bank. Possessing in-depth knowledge of Exchange rules and regulations, you will conduct training, provide business advice and manage a team. (ISS1148) 7-10 YRS PQE

PROJECTS – MIDDLE EAST

CONTRACT MANAGER, CONSTRUCTION – SINGAPORE

A stellar opportunity has arisen with this leading international player in the Middle East. Energy experience gained while working with another strong practice is essential, as are solid business development skills. (ME673) PARTNER TRACK

MNC specializing in civil, structural and building projects urgently seeks an experienced contract manager. You should have solid experience providing legal advice on construction and contractual issues. (ISSLL1166) 5-8 YRS PQE

SINGAPORE OFFICE Please contact Jeremy Small at (65) 6829 7155 or email sing@law-alliance.com

HONG KONG OFFICE Please contact James Garzon at (852) 2521 0306 or email hk@law-alliance.com

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

Legal Opportunities – Singapore Talent2 International Limited, an Australian-Listed entity, is Asia-Pacific's first end-to-end Human Resources Outsourcing (HRO) solutions business and one of the leading recruiters of choice for a growing number of businesses across the region. Led by the hugely successful and visionary Geoff Morgan and Andrew Banks (formerly of Morgan & Banks), Talent2 combines a contemporary and ethical approach to recruitment with a lineage stretching back more than 20 years.

Singapore – Legal Senior Legal Counsel (Oil & Gas)

> 5 PQE

»» Our client, a Houston based Oil & Gas company is seeking a regional legal counsel based in Singapore. This role reports to a General Counsel based in Houston. »» Ideally, you would have substantial corporate and commercial legal experience either in-house or within practice. You would be familiar with the oil & gas industry especially jack-up rigs, FPSOS and semisubmersible rigs. »» You will have very strong communication skills conjoined with a consensus-building approach to negotiations Candidates with experience in JV/M&A and business integration experience are encouraged to apply.

Ref: ALB 23799/PJ

Legal Counsel, Banking

> 3 PQE

Legal Counsel (Private Banking/Derivatives)

> 3 PQE

»» O ur client, one of Asia’s top investment banks is presently seeking a legal counsel to join a growing regional legal function based in Singapore. »» The role involves supporting a corporate legal function focusing on merchant banking, commercial issues and general corporate legal matters. »» Candidates with prior banking experience are advantaged for this role, however, Candidates with excellent academic credentials and general corporate experience would also be strongly considered.

Ref: ALB 22525/PJ

»» Our client, a renowned private and investment bank is currently seeking a qualified lawyer to join their regional legal function supporting the private bank. »» The coverage of the role will include structured products, funds and f/x. In this role you’ll be responsible for drafting and reviewing legal forms and agreements, dealing with complex cross-border legal questions on the execution and settlement of structured products and investment funds. »» You will ideally have private banking expertise, but barring that, candidates with knowledge of derivatives (OTC or otherwise), exotic Options and Forward Strategies are encouraged to apply.

Ref: ALB 20009/PJ

Senior Legal Counsel (Insurance)

> 5 PQE

»» Our client, a global international insurance giant, is presently seeking to build up their regional (APAC) legal function. »» You will ideally have a mix of insurance litigation and corporate/ commercial experience within an in-house function. You would also leverage experience dealing with regional financial regulatory issues as there is also significant funds (both mutual and alternative) exposure. »» You will have key business responsibilities for managing the product development teams from a legal and regulatory perspective in regional markets.

Ref: ALB 20007/PJ

Senior Legal Manager, (Property & Real-Estate) > 5 PQE

»» O ur client, one of Asia’s largest property giants is seeking a legal counsel for their group legal function. »» Primary responsibilities include transactional advice on diverse matters such as structured lending, DCM-related work as well as advice on existing REIT structures. »» This is a great opportunity to move into one of the most highly-regarded corporate legal teams in Singapore. The ideal candidate will have top-tier law firm exposure as well as excellent academic credentials.

Ref: ALB 23458/PJ

Legal Counsel (Private Banking/Derivatives) > 3 PQE

»» Our client, a renowned private and investment bank is currently seeking a qualified lawyer to join their regional legal function supporting the private bank. »» The coverage of the role will include structured products, funds and f/x. In this role you’ll be responsible for drafting and reviewing legal forms and agreements, dealing with complex cross-border legal questions on the execution and settlement of structured products and investment funds. »» You will ideally have private banking expertise, but barring that, candidates with knowledge of derivatives (OTC or otherwise), exotic Options and Forward Strategies are encouraged to apply.

Ref: ALB 22365/PJ

Senior Legal Counsel, US IT MNC

> 5 PQE

Senior Legal Counsel, US IT MNC

> 5 PQE

»» Our client, an international business consulting MNC, is presently seeking a senior technology lawyer to join their regional in-house function based in Singapore. »» This role would revolve around the review, drafting and negotiating medium to complex client transactions. You’ll be tasked with identifying and advising senior management on legal and commercial risks associated with such transactions, assessing their potential impact and to provide proactive and creative solutions. »» Transaction experience within an IT environment is essential for this role. Ideally, you would hail from an IT services vendor environment and understand the industry from a holistic view.

Ref: ALB20011/PJ

»» Our client, an international business consulting MNC, is presently seeking a senior technology lawyer to join their regional in-house function based in Singapore. »» This role would revolve around the review, drafting and negotiating medium to complex client transactions. You’ll be tasked with identifying and advising senior management on legal and commercial risks associated with such transactions, assessing their potential impact and to provide proactive and creative solutions. »» Transaction experience within an IT environment is essential for this role. Ideally, you would hail from an IT services vendor environment and understand the industry from a holistic view.

Ref: ALB 22456/PJ

Corporate Attorney, Technology & Internet > 5 PQE

»» This globally recognised ‘brand-name’ needs a commercial, creative, detail-oriented attorney to join their regional operations in Singapore. »» Ideally, you would be well-versed with technology and financial services with a critical eye towards risk and regulatory issues. You would have a broad range of experience ideally with financial services and/or technology background »» You will be working closely with the risk, product, marketing, compliance and business development teams regionally and report to a regional legal director.

Ref: ALB 20014/PJ

For a confidential discussion of any of these roles or if you’re considering a move, please contact

Prem John at Talent2 on (65) – 6511 8555 or e-mail him at prem.john@talent2.com Please visit: www.talent2.com

hmaBlaze117205

Sign off >> ►► The world’s top 10 airports Rank

Come fly with me

T

ravelling for business plays a big part in many lawyers’ lives, as demonstrated by our Business Class Travel feature on pages 66–70, and, according to Skytrax, these airports are the best around.

Airport

I

Why/Facilities

1 Hong Kong International Airport

Efficiency and comfort

2 Singapore

Massage/swimming, Ambassador Transit Hotel in Terminals 1, 2 and 3.

3 Seoul

Business centre, shower and massage services, hair salon

4 Kuala Lumpur

Facilities for passengers, comfort and cleanliness of terminals

5 Munich

Miniature golf, a 60-seat cinema, and cosmetic and physiotherapy services

6 Kansai

WiFi and internet facilities, check in ease, transport services

7 Copenhagen

Transport services, auto machine check-in facilities, restaurants.

8 Zurich

Shopping, airport views, ease of facilities

9 Helsinki

Helpful staff

10 Cape Town

Spacious terminal spaces, helpful staff

t appears Eversheds is into staff protection. The UK firm recently requested that associates stay in the safety of their own homes during the G20 summit period, stating that they put “staff safety first” as anti-capitalist protesters threatened to overthrow the City of London.

Those who attended Eversheds’ Cheapside office on the edge of the City were also asked to dress down for two days of the summit.

The firm is one of three UK firms who briefed staff on safety precautions.

Clifford Chance warned staff to be prepared to work from home and to avoid its Coleman Street office, while Ashurst urged staff to take public transport rather than drive into work to avoid the risk of being spotted by protesters.

Source: SkyTrax

A passion for fashion

Asia-Pacific, Japan banking fees fall

I

t seems even lawyers have been swept away by the spirit of Australian Fashion Week.

The offices of leading commercial law firm Kemp Strang doubled as a catwalk and cocktail lounge recently as the firm became the venue for the Leona Edmiston Winter 2009 collection.

The glamorous night was a fundraising event for the Wayside Chapel in Kings Cross, Sydney.

• Year-on-year decline of 28.4% for fees in AsiaPacific, Japan (excluding Central Asia) region • Equity market, M&A and syndicated loans are down. Loans hit most – 35.6% decline Debt market was only segment to experience increase in fees, posting gain of 48.8% from same quarter last year • Mizuho Financial Group topped investment banking fee charts in Asia-Pacific, Japan (excluding Central Asia), with US$136m in revenues (3.7% increase from fees earned in same period last year) • Top fee destination is from the M&A market, with 49.7% of total fees paid for in the AsiaPacific, Japan (excluding Central Asia) region

Crime doesn’t pay for jailed US lawyer A

former partner with a prominent New Orleans law firm, Adams and Reese, has landed himself behind bars after pleading guilty to stealing millions of dollars from the firm and a casino operator.

The partner, James Perdigao, 46, pleaded guilty to charges that included fraud and money laundering. He was sentenced to just over 15 years in prison and ordered to repay about $23 million.

Perdigao was awaiting trial in the fraud case last year when a grand jury pressed new charges, stating that he hacked into his former firm’s computer system and stole confidential correspondence between prosecutors and the firm. He resigned from Adams and Reese in September 2004.

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Asian Legal Business ISSUE 9.5