Lijun Cao

Zhong Lun Law Firm

Beijing www.zhonglun.com

caolijun@zhonglun.com Tel: +86 10 5957 2288

Biography

Lijun Cao is a co-head of Zhong Lun’s dispute resolution department. He has extensive experience both as counsel and as arbitrator. Lijun is a panellist of CIETAC, HKIAC, SIAC, AIAC, ICDR, WIPO and CMAC. He is also a member of the SIAC Court of Arbitration and a member of the CRCICA Advisory Committee. He was a key member of the legal team that successfully defended the PRC government in an ICSID case (Ansung vs China).

What inspired you to pursue a legal career in arbitration?

During my studies at the UIBE Law School, some of the professors were CIETAC arbitrators, and they would often talk about arbitration and the cases that they were handling. That was how I became interested in arbitration. Early on in my career, I pursued this interest through work at CIETAC. After spending 13 years at CIETAC, including as deputy director, I decided to move to private practice. It is now my 14th year at Zhong Lun. The international elements and the strategy involved in dayto-day work for our clients keeps me going.

How did your previous deputy directorship at China International Economic and Trade Arbitration Commission complement your practice?

My previous work at CIETAC gave me unique perspectives on how to conduct arbitral proceedings properly. I had ample opportunities to witness the decision-making for various procedural issues and typical substantive law issues. Such experiences have nourished my career deeply in my current roles as arbitrator and counsel. With that experience, it is possible for me to understand the essence of complicated procedural issues, anticipate the concerns of arbitral institutions and tribunals, and come up with effective suggestions for our clients.

To what extent has covid-19 had an impact on commercial arbitration? Are parties willing to be flexible in procedure and approach to get it over the line?

When the pandemic started, people were concerned that it would harm arbitration. However, life went on and cases went on despite travel restrictions. There was no reduction in commercial arbitration work. At first, CMCs were held by teleconference, hearings proceeded remotely, and awards were issued from across the world. Then, over the past year, we have had many in-person arbitration hearings in Beijing. Once travel opens up further in China, we expect the business and commercial arbitration work to grow further. Over the entire period, I have found that most parties are willing to accommodate the inconveniences and would try to work out alternative action plans with counterparties and arbitral tribunals.

What role do you see thirdparty funding playing in arbitration moving forward?

My understanding is that third-party funding will evolve and play a more important role in arbitration in the global market. Nevertheless, its development in China may take a longer time and require more effort. There may be cultural reasons behind it. One thing to note is that China allows lawyers to charge legal fees under contingency models, where the client needs to pay an upfront fee first, and a success fee later subject to the outcome of the litigation/arbitration. Under this model, it is the law firm that offers a kind of “funding” to the clients.

How has the market developed since you first started practising?

The dispute resolution market always follows and reflects the trends of business and transactions. For example, when I first started practice, there were not so many cross-border investments, and relevant disputes were few. After years of vigorous development of foreign investment in China, some foreign capital has been retreating from China, and joint venture disputes are decreasing. Instead of establishing joint ventures or WFOEs in China, foreign companies nowadays prefer to do cross-border business transactions with Chinese parties by other means, including through international sales of goods, distribution and licensing, and disputes concerning those aspects began to increase in the market.

What green arbitration trends are currently prevalent in the market?

The current green arbitration trends in the market mainly focus on promoting electronical correspondence and encouraging the use of videoconferencing facilities. For example, CIETAC has incorporated a standard provision in its notice of arbitration, where upon mutual consent of both parties, all documents, notices, and written materials may be delivered electronically. To my knowledge, such e-correspondence is welcomed by most parties in practice.

Could the rise of virtual hearings lead to a greater mixing of different legal systems?

Recent years have indeed seen more mixing of different legal systems but I do not think that is caused by the rise of virtual hearings per se. Increased usage of digital communications over the past decade have enabled parties and counsel to have online meetings, CMCs, etc., without traveling across countries. This has facilitated both the rise of virtual hearings in light of the pandemic and the greater mixing of different legal systems. For instance, although CIETAC arbitration hearings typically follow the Chinese procedural traditions with a heavy focus on documentation, in a recent CIETAC virtual hearing we had with European opposing counsel during the midst of the pandemic, the hearing was conducted in four days with extensive witness examinations as may be expected in common law arbitrations.

What is the best piece of career advice you’ve ever received?

The best piece of career advice I have received is to maintain critical thinking in every aspect of practice, namely to remain sceptical and cautious when reviewing case materials, evaluating situations and offering legal advice. In practice, the matters that we handle typically involve complicated commercial transactions, which means long pre-contract negotiations and sophisticated deal structures. In such transactions, when interpreting a specific contractual clause, we sometimes have to consider the underlying background, compare different versions to see how it has been amended and how it interplays with other clauses, in order to discover the parties’ true intentions at the time of conclusion of the contract, instead of relying solely on the literal meaning of the clause.

WWL says: Lijun Cao comes highly recommended as “a well-regarded lawyer in China” who has “fantastic experience in commercial arbitration”.