CLB Aug 2012 by Yvette Chiu

Fosun Q&A: Goalkeepers against risk

复星问答

：风险把关人

august2012 WWW.LEGALBUSINESSONLINE.COM

亚洲法律杂志 - 中国版 CHINA

Rising tide

Antitrust litigations increasing

风起潮涌反垄断诉讼增长

HOT JUNK Optimism for SME private bond market 前景乐观：中小企业私募债市观察

PAGE 18

MIDDLE EAST SPOTLIGHT Strong growth predicted in the coming year 中东焦点：来年强势增长预期

PAGE 30

DOMESTIC FOCUS Jun He’s managing partner opens up 优势在中国：君合管理合伙人专访

PAGE 42

INSIDE n Deals SPOTLIGHT

n THE BIG STORY

n LAW FIRM LEAGUE TABLES

n SUNDRIES

INTERNATIONAL BAR ASSOCIATION

ANNUAL CONFERENCE DUBLIN 30 SEPTEMBER – 5 OCTOBER 2012

teeped in history, yet buzzing with youthful energy, Dublin’s medieval, Georgian and modern architecture provide a backdrop to a bustling port where the cosmopolitan and charming meet in delightful diversity.

Serving as Ireland’s historical and cultural centre, as well as the nexus of Irish education, administration, economy and industry, Dublin is perfectly suited to host the IBA’s 2012 Annual Conference.

What Will Dublin 2012 offer? • The largest gathering of the international legal community in the world – a meeting place of more than 4,000 international legal professionals • More than 180 working sessions covering all areas of practice relevant to international legal practitioners • The opportunity to generate new business with the leading firms in the world’s key cities • Registration fee which entitles you to attend as many working sessions throughout the week as you wish • Up to 25 hours of continuing legal education and continuing professional development • A variety of social functions providing ample opportunity to network and see the city’s key sights • Excursion and tours programme

OFFiCiAL COrpOrATE SUppOrTErS

To register, please contact: International Bar Association 4th Floor, 10 St Bride Street, London EC4A 4AD, United Kingdom Tel: +44 (0)20 7842 0090

Fax: +44 (0)20 7842 0091

www.ibanet.org/conferences/Dublin2012

CONTENTS

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NEWS Deals

Briefs

League Tables

Appointments

japan law awards

Index

Sponsored Updates — International Tax Azure Tax — Shanghai Victory Legal Group — Singapore Loo & Partners

COVER STORY The antitrust litigation tide

反垄断诉讼潮流

As companies increasingly go to battle on the anti-monopoly front in China, lawyers play a key role in the cavalry. With several high-profile cases grabbing headlines in recent months, including Qihoo 360 v Tencent, antitrust litigations are notably on the rise. Candice Mak reports 中国公司之间的反垄断纠纷正在增多，其中可以看到律师冲锋陷阵的身影。近期奇虎360与腾讯等重大案件不断抢占媒体头条，反垄断诉讼业务成为显著的增长点。Candice Mak报道

72 73 73

Sponsored Profiles — Yongheng Partners

— Zhonglun W&D Law Firm

— Guangdong Sun Law Firm

— Cadwalader, Wickersham & Taft LLP

— King & Wood Mallesons

SUNDRIES

FEATURES It’s not junk: SME private bonds hot on sale 并非垃圾债：中小企业私募债热销

中国颁布新的行政措施强化医药强制许可体系，此举引发热议。但是律师们指出新的法规并无革命性变化，更为明确的规定只是将令外国制药公司增加多一层风险。Candice Mak报道

Since its launch in early June, the vigorous offerings and hot subscriptions of China’s SME private bond market reveal an optimistic future, with relatively lowerthan-expected yield and risk, finds Liu Zhen

Middle East country report 中东地区报道

欧美“垃圾债券”的区别。刘蓁报道

Despite sensational headlines regarding new administrative measures strengthening China’s compulsory licence framework, lawyers tell Candice Mak plainly that there is nothing revolutionary in the new law. The clearer provisions will

As the West suffers through an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east, finds Shaheen Pasha

从六月份中国开始中小企业私募债券试行以来，活跃的发行和踊跃的认购展示了这一市场的乐观前景。当前相对预期较低的利率与风险，也说明它与

Don’t believe the hype 冷眼旁观

ventures, Jun He Law Offices continues to adhere to its strategy of being an independent China-focused practitioner. Managing partner Xiao Wei discusses his firm’s challenges with Liu Zhen

simply add another layer of risk to foreign pharmaceutical players.

India’s hour of doubt 印度之惑

当西方国家正经历前所未有的经济动荡和金融丑闻，中东地区却不断证明自身的增长潜力。Shaheen Pasha 报道

Domestic focus 优势在中国 Defiant against pressure from competitors’ speedy expansions and bold overseas

虽然身负同行快速规模扩张和国际化的压力，君合律师事务所仍然坚持立足于中国优势独立发展的策略。管理合伙人肖微律师与本刊探讨律所当下的挑战。刘蓁报道

India’s lustre has noticeably faded in the last few months, with growth slowing, the deficit gap widening, and the rupee falling through the floor as a result of stalled reform, government paralysis, and a variety of other factors that have made investors circumspect. Ranajit Dam explores 印度的光环正在褪去。过去数月间，由于改革停滞，经济增速放缓，赤字猛增，卢比暴跌，政府瘫痪，众多因素令投资者顾虑重重。Ranajit Dam报道

ASIAN LEGAL BUSINESS august 2012

2 ON THE COVER

MANAGING DIRECTOR Andrew Goldner andrew.goldner@thomsonreuters.com NORTH ASIA REGIONAL EDITOR Candice Mak candice.mak@thomsonreuters.com SOUTHEAST ASIA REGIONAL EDITOR Ranajit Dam ranajit.dam@thomsonreuters.com MIDDLE EAST REGIONAL EDITOR Shaheen Pasha shaheen.pasha@thomsonreuters.com JOURNALISTS Seher Hussain seher.hussain@thomsonreuters.com Zhen Liu zhen.liu@thomsonreuters.com Kathryn Crossley kathryn.crossley@thomsonreuters.com Kanishk Verghese kanishk.verghese@thomsonreuters.com copy editor Vasundhara Chatterjee REUTERS/Enrique Castro-Mendivil

associate copy editor Sanchita Ghosh director OF SALES Andrew Smart andrew.smart@thomsonreuters.com

THOMSON REUTERS TRUST PRINCIPLES 01 That Thomson Reuters shall at no time pass into the hands of any one interest, group or faction; 02 That the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved; 03 That Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts; 04 That Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and 05 That no effort shall be spared to expand, develop and adapt the news and other services and products so as to maintain its leading position in the international news and information business. Please contact Andrew Goldner with any questions. andrew.goldner@thomsonreuters.com

HEAD OF SALES May Wong may.wong@thomsonreuters.com DIRECTOR, EVENTS Lucinda Maguire lucinda.maguire@thomsonreuters.com ACCOUNT MANAGERS William Lo (North Asia and Global Business Development Manager, North Asia) Yvonne Cheung (Senior Account Manager, China) yvonne.cheung@thomsonreuters.com Rebecca Ng (Account Manager, North Asia) rebecca.ng@thomsonreuters.com Brian Chu (Account Manager, North Asia) brian.chu@thomsonreuters.com Wendy Tan (Account Manager, Southeast Asia) wendy.tan@thomsonreuters.com Alison Towle (Account Manager, Middle East) alison.towle@thomsonreuters.com DESIGNERS John Agra Yvette Chiu TRAFFIC MANAGERs Rozidah Jambari (Singapore) Ivy Tsang (Hong Kong) intern Jacob Michael Wildstein

ASIAN LEGAL BUSINESS is available by subscription. Please call +852 3762 3269 (Hong Kong), +65 6775 5088 (Singapore) for details or visit www.legalbusinessonline.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as ALB can accept no responsibility for loss. THOMSON REUTERS 10/F, Cityplaza 3, Taikoo Shing, Hong Kong T (852) 3762 3269 | F (852) 2154 6425 www.thomsonreuters.com

EDITORIAL

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

Learning from the leaders When we spoke to our readers in China, they told us they wanted to learn more about what leading in-house counsel and law firm managing partners had to share – from strategic visions to daily management and the implementation of legal functions. That is why we introduced our rotating series of general counsel and managing partner interviews several months ago. The response has been very positive (for example, one UK firm expressed that our interview with Shanghai Electric’s chief legal officer was compelling and very helpful for insights into China’s power sector SOEs), and we will continue to bring original and interesting interviews with China’s legal leaders. In this issue, Jun He’s managing partner talks to reporter Liu Zhen about why his firm is eschewing rapid growth and how the firm’s leadership has a different focus from that of major competitors (see page 42). We also delve into the inner workings of the legal team at Fosun International, China’s largest privately-owned conglomerate (see page 7). Two months ago, we featured the landmark Qihoo v Tencent case and its implications on the growing practice of antitrust litigation. This month’s cover story explores how the legal market is adapting to this specialty field’s rise in prominence and how firms are positioning themselves to capture this work (see page 62). I sincerely hope youALB_186x119.5mm_bleed5mm.pdf enjoy this issue and are1 able to enjoy 2011-8-13 17:12:41the summer holidays.

CMY

向行业领袖学习我们从与中国读者的交流中得知，他们希望更多分享到主流大企业法律顾问以及顶尖律所管理合伙人的经验——从战略眼光到日常管理，以及对法律功能的执行等各个方面。这正是我们从前几个月起开始轮流刊登企业法务和管理合伙人专访栏目的原因。这一尝试也已经收到了非常积极的反响。例如一家英国律所表示，我们对上海电气总法律顾问的访谈非常吸引人，有助于他们更深入了解中国国企的情况。因此，我们将继续为您带来对中国法律界领袖人物的的第一手深入访谈。在本期刊物中，君合律师事务所的肖微主任对本刊剖析了君合之所以不选择快速扩张规模的原因，以及君合区别于主要竞争对手的战略重点（见第42页）。我们同时深入探访了中国最大的民营财团之一复星国际的法律团队（见第7页）。两个月前，我们曾介绍了互联网两巨头奇虎360与腾讯的官司及其对中国反垄断诉讼的影响。本月的封面故事则进一步讨论法律市场将如何适应这一新兴专业领域的崛起，以及律所将如何定位以赢得竞争先机（见第62页）。我衷心希望您能够喜欢本期刊物，并在本刊的陪伴下享受一个愉快的夏日。

CANDICE MAK North Asia Regional Editor, Asian Legal Business Thomson Reuters

DEALS

ASIAN LEGAL BUSINESS august 2012 n your month at a glance Firm

Value ($ mln)

Jurisdiction

Deal name

Deal type

Hong Kong/ China

AVIC International’s RMB Bond offering

235 (RMB 1.5 billion)

Debt

Hong Kong/ Singapore

Cheung Kong’s HKD corporate perpetual bond

129 (HK$1 billion)

Debt

Simmons & Simmons

Hong Kong

China Asset Management’s RQFII A-Share ETF

N/A

Equity

Baker & McKenzie

China/ Singapore

China Fishery Group’s bond issuance

300

Debt

China / France

CITICS’s purchase of CLSA from Crédit Agricole CIB

1,252

M&A

China/ Canada

CNOOC’s proposed acquisition of Nexen

15,100

M&A

Mongolia

GE’s Mongolia wind farm project

Hong Kong

Stanley Black & Decker’s acquisition of Infastech from Asia Trading Holdings

Deacons

Hong Kong

Wharf and Wheelock’s subscription of Greentown China shares and other securities

Skadden, Arps, Slate Meagher & Flom

Hong Kong/ Macau

Wynn Resorts financing

Hong Kong/ China

Yitai Coal’s Hong Kong IPO

Hong Kong/ China

Yongda Automobiles’ Hong Kong IPO

Linklaters

$1.25 billion M&A CITICS’ purchase of CLSA from Crédit Agricole CIB • The first phase involved the sale by Crédit Agricole CIB of 19.9 percent of CLSA’s capital to CITICS International for $ 310.3 million. • For the second phase, CITICS International granted Crédit Agricole CIB a put option to sell the remaining 80.1 percent interest in CLSA to CITICS International for $941,680, subject to regulatory and shareholder approvals. • The parties underwent more than two years of negotiations before reaching the agreement.

Beijing Sunlight Conyers Dill & Pearman Jingtian & Gongcheng Davis Polk & Wardwell Baker & McKenzie Clifford Chance

Kirkland & Ellis Gide Loyrette Nouel Davis Polk & Wardwell

$15.1 billion M&A CNOOC bid for Canadian oil producer Nexen • China’s largest foreign takeover bid and CNOOC’s most notable move in North America since its failed bid for Unocal in 2005. • CNOOC is offering $27.5 cash per share for Nexen, a 61 percent premium. However, it said Nexen’s $4.3 billion debt would remain outstanding. • Deal is subject to the Canadian government’s approval.

Paul, Weiss Herbert Smith Hogan Lovells Skadden, Arps, Slate Meagher & Flom Clifford Chance

Freshfields Bruckhaus Deringer Clifford Chance

122

850

Projects

M&A

654 M&A (HK$ 2.55 billion) 2,300

Finance

861 (HK$6.679 Equity billion)

Jingtian & Gongcheng Davis Polk & Wardwell Paul Hastings Walkers Grandall

215 (HK$1.67 Equity billion)

08.2012

BRIEFS

REUTERS/Siu Chiu

the big story

FORUM

ZTE probe an alert to the Chinese By Liu Zhen

criminal investigation by the FBI has cost ZTE Corp (ZTE) its steepest share price tumble in years and has left it open to more risk of a severe penalty. The world's fifth-largest telecommunications equipment maker was alleged to be selling banned computer products to Iran. The Shenzhen-based company was reported to have had a $120 million contract in 2010 with Iran's largest telecom firm, Telecommunication Co of Iran (TCI), offering hardware and software products from some American computer companies including Microsoft, Hewlett-Packard and Oracle. Another report said in 2011 that ZTE also had an agreement with a unit of the consortium that controls TCI to sell millions of dollars worth of additional embargoed U.S. computer equipment. As a result, the second-largest telecoms equipment producer of China is also under investigation by the U.S. House of Representatives’ Intelligence Committee over whether its equipment represents a threat to U.S. national security. “Despite the political elements in the case, it indeed alerts the Chinese companies to keep high vigilance when doing business overseas,” says partner Zhang Mingjie of Zhong Lun Law Firm. Chinese companies should carefully research the relevant international laws and market rules, and analyse potential political risk, particularly at a time when an increasing number of Chinese firms are seeking opportunities overseas, lawyers suggest.

“As Chinese companies are going out, cross border risk rises. Such problems should not be overlooked,” says Xie Xianghui, a partner of Grandall Law Firm. Penalty and relief The U.S. law authorising U.S. sanctions against Iran allows for a civil penalty up to twice the value of a transaction, which in ZTE's case would translate to $240 million or more. Individuals, such as company employees, convicted under the law can be sentenced to 20 years in prison, and companies in the most extreme cases can be cut off entirely from commerce with the United States, Reuters cited legal experts as saying. The U.S. Commerce Department is also probing the case, and the Chinese Ministry of Commerce said it hoped ZTE would receive fair and proper treatment from the U.S. “If a Chinese company in such a situation finds itself being treated unfairly, it could launch a lawsuit or appeal to the U.S. court,” says Xie. However, when there is political involvement, legal relief such as filing for arbitration or an appeal to the court becomes complicated and difficult. “Sometimes there is inescapable political intervention in the globalisation era,” says Zhang. “Hence to become real multinationals, the Chinese companies have to really have a global vision to take all of these into account in advance.”

What should Chinese companies do to avoid risks while growing their overseas business?

“An all-round risk evaluation is indispensible, which should not only include the legal risks, but also the political risks. It is a problem that few companies have been fully aware of.” Zhang Mingjie Zhong Lun Law Firm

“I would suggest our clients hire foreign lawyers to get more specific advice regarding each particular case according to the law of the relevant jurisdiction(s), as neither Chinese companies nor Chinese law firms are as familiar.” Xie Xianghui

Grandall Law Firm

BRIEFS

08.2012

业界讨论中国公司应怎样避免海外业务中的风险？

“全面的风险评估是必不可少的。不光是国内法，还有国际法和相关条约，不光是法律相关风险，更应该包括政治相关问题。这是现在很多企业有局限性的地方。” REUTERS/Siu Chiu

本月要闻

张明杰中伦律师事务所

中兴案警示中国企业刘蓁

在

遭到美国联邦调查局展开犯罪调查消息传出之后，中兴（ZTE）通讯的遭遇了近年来最严重的股价暴跌，并且还可能面临严厉处罚。这家世界第五大通讯设备制造商被控向伊朗出售了禁运产品。据报道，总部在深圳的中兴2010年同伊朗最大的电信公司伊朗电信（TCI）签订了一份总值1.2亿美元合同，其中包含了向后者提供部分包括微软，惠普，甲骨文等美国计算机公司的软硬件产品的内容。另有报道称，2011年，中兴还与TCI的控股财团达成协议，继续出售被禁运的价值数百万美元的美国电脑设备。因此，美国众议院情报委员会同时也在对这家中国第二大电信设备厂商进行调查，评估这些设备是否对美国国家安全构成威胁。 “虽然本案涉及的政治问题比较复杂，但中国企业的确需要在海外投资中提高风险意识，” 中伦律师事务所合伙人张明杰律师说。律师们建议，在当今越来越积极的寻求海外发展机会的同时，中国公司也应当认真研究相关的国际法和市场规则，并且分析可能的政治风险。 “随着中国企业走出去，跨国政治风险也上

升了。对这些问题应该更多关注。”国浩律师事务所的谢湘辉律师说。处罚与救济

据路透社援引有关法律专家的说法，授权美国对伊朗实施制裁的相关美国法律条款规定，允许对违背禁令的交易最多处以交易额两倍的民事罚款，在ZTE的本案中，这一数字可能达到2.4亿美元以上。而被认定有责任的公司雇员等个人，则可能被判处20年徒刑。在最极端的情形下，违规的公司可能被完全禁止从事与美国相关的商业活动。美国商务部也参与了本案的调查。而中国商务部发言人表示，希望中兴公司能够得到美方公平合理的对待。 “如果一家中国公司认为受到了不公正的对待，他可以向美国的法院提起申诉或起诉。”谢律师说。但是，当案件涉及政治因素的时候，类似仲裁或上诉等法律救济手段可能变得十分困难和复杂。 “全球化的时代，有时候政治因素的干扰是避不开的。”张律师说“所以要真正走向国际，中国公司需要有更开阔的视野，把各国不一样的情况都考虑在内。”

“我会建议客户在当地聘请律师，根据当地法律提供对具体案子有针对性的意见，因为国内的企业和律师可能都不掌握情况。”

谢湘辉国浩律师事务所

BRIEFS

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

GC INTERVIEW

Fosun delivers

Tang Jianlong General Counsel Fosun Group

唐建龙

总法律顾问复星集团

Tang Jianlong is the general counsel of the Fosun Group. He graduated from Fudan University’s School of Law, and during his 25-year long professional career, Tang has worked as a judge, a private practice lawyer, and an arbitrator. He speaks to Liu Zhen about his current role and the challenges and thrills of managing the Fosun legal team. ALB: Please introduce your legal team and describe its characteristics, strategy, and goals. TJ: The legal team of Fosun has three levels: The legal departments of the group headquartersin Shanghai, the industrial groups and the invested companies. On the first and second level there are about 80 people, of which 17 are working in the group’s headquarter as associates in the domestic and international investment departments. Seventy percent of

these 17 people are below 35 years of age, and half of them have masters degrees. We can say that the legal team at Fosun is a young team of excellent educational backgrounds. The company culture of Fosun believes in "assembling the power of growth". In Fosun's 2010 global strategy, the core idea was "Chinese experts and global capabilities". Since 2010, Fosun has recruited five counsels from overseas, who brought in dynamic as well as professional

support to the foreign-related business of the company. Bearing in mind the group’s prospect of "being the world's first class investment group", the legal department targets corporate governance, and contributes to the fulfillment of strategic goals and annual plans. A signature of the Fosun legal support system has been built with unique concepts and methods of risk control.

复星闪耀唐建龙先生毕业于复旦大学法律系，从事法律工作25年，历任法官、律师、仲裁员的角色，现为上海复星高科技（集团）有限公司等提供专业法律服务工作，擅长企业并购、私募股权投资及企业内部风险控制等法律事务。 ALB: 复星法务部门的人员构成，团队风格？发展速度与策略、目标？ TJ: 复星集团法务部架构呈现为三级层次：集团总部法务部-产业集团法务部产业集团投资企业法务。集团总部及产业集团法务人员共约80人，其中集团总部法务人员共有17人，根据国内业务和国外业务全面对接各投资部门。在这17 人当中，35岁以下的占70%，硕士学历

以上的占1/2。可以说，复星集团法务团队是一支高学历的年轻团队。复星的文化一直秉承“汇聚成长力量”。2010年，复星集团正式提出全球化战略，其核心为“中国专家，全球能力”。围绕这一理念，复星集团法务部也积极引进海外人才，努力实现人才全球化。从2010年至今，复星集团法务部引进海外法务人员5名，这些年轻的“

海归”为法务部带来了活力，为集团的涉外业务提供了专业支持。法务部紧紧围绕集团愿景——为“ 专注中国成长动力的世界一流投资集团”提供专业的法律服务。法务部的目标致力于公司内部控制，通过专业的法律服务，助力公司实现战略目标和年度工作经营计划。围绕这一目标，法务部建立了独特的风险控制理念以及风险

BRIEFS

ASIAN LEGAL BUSINESS august 2012

ALB: What is so unique about

Fosun’s legal department? TJ: In contrast to our counterparts in other companies, we, the legal team of Fosun, have our unique characteristics and advantages. The first one is that the group executives attach high importance to risk control, and the one who oversees legal affairs is able to take part in the highest decision making of the group. The second is Fosun’s high awareness of risk and a culture of compliance. In addition, the inhouse counsel plays the main role along with the support of external agencies. Prevention has the priority in risk control, and the legal team has full involvement throughout the procedure. Last but not least, we keep a firm grip on stamp management and authorisation management. In short, four words can summarise our characteristics: complete surveillance, embedded, institutional, and personalised. 1) Complete surveillance The service to the investment department takes centre stage for our legal work. By doing diligent investigations and contract examinations, we closely control the risks during the entire investment procedure.

控制方法，形成了有复星特色的法务支持体系。 ALB: 相比一般其他企业的法务工作，复星法务部门的独到特色？ TJ: 法务部的定位在于既要为企业的运营与发展提供专业的服务，又要成为企业的战略伙伴；法务部门的职责在于既是企业的风险控制工具，又是企业的战略伙伴。无论是定位还是职责，最终都要落实在协助企业实现战略目标上。与其他企业相比，复星法务部门独具特色。首先，领导对风险控制非常重视，分管法务的领导能够直接参与集团最高层决策；其次，复星非常重视树立风险意识、培育合规文化；再次，复星的法务工作以内部法务为主，外部中介为辅，在风控理念上以预防为主，注重全流程参与、控制风险；最后，复星的法务工作以印章管理和授权管理作为核心抓手。概括而言，复星法务部的特点可以总结为12个字——全流程、嵌入式、制度化、落实人。 1）全流程复星法务工作全面围绕整个投资活

2) Embedded More precisely speaking, we insert the legal role into daily business, and embed the legal counsels into the business departments. All Fosun businesses are implanted with legal support. 3) Institutional The legal department has drafted a series of regulations to give risk control solid guidance throughout all the operation and management of the company, such as regulation on stamp management, regulation on contract management and regulation on stock rights management. 4) Personalised Precisely speaking, we assign legal personnel to look after investment projects and department business. They provide tailored support to their specific departments. ALB: What was the most important

legal issue that your team has recently dealt with? TJ: In terms of internal control, the legal department stressed on the improvement of two core issues: stamp management and authorisation. We have organised and categorised all existing stamps of the group, and identified the problematic ones

动来进行。通过尽职调查、合同审核等环节，全流程控制投资风险。 2）嵌入式具体而言就是将法务工作嵌入到业务工作中，将法务人员嵌入到业务部门中。复星集团的所有业务中都嵌入了法务支持。 3）制度化为了使风险控制贯穿到企业的业务及管理活动中，法务部制定了一系列制度，使风险控制有据可依。例如《印章管理规定》，《合同管理规定》、《股权管理规定》等。 4）落实人具体而言，就是指在投资活动和业务部门中配备法务人员。这些法务人员专门为特定的业务部门提供法律支持。 ALB: 近一两年来，公司遇到的最主要/ 重大的法律相关事务是什么？法务部是怎样解决的？ TJ: 一、在内部控制方面 1、法务部着重抓住印章与授权两个核心抓手，完善内部控制。对于印章的

according to internal auditing, and also provided propositions to improve the management after research and deliberation with other departments. We also sorted through all the authorisation documents. Combining the results from interviews with operational and functional departments, and the actual facts of the business of the group, we finally worked out, suggested, and integrated authorisation standards. The legal department also carried out a series of internal audits and examinations. In 2009, we drafted the Manual of Company Legal Risk Control (“the Manual”), based on the Standards of Company Internal Control, and issued the amendments to all industrial companies. The Manual listed various aspects of company risk control including internal environmental control, risk evaluation management, and company controlling, etc. According to the Manual, the legal department implements four to five audits every year to help the industrial companies discover their risk points, and improve their corporate governance structure. We also pay attention to the prevention and prohibition of tunneling between the investment teams and their targets. We occasionally interview the companies

保存、管理和使用方面，法务部对目前复星集团已有的印章进行梳理与整合，并依据集团审计部门对于印章的内部审计结果，重点追查存在问题的印章，经过调研后会同公司档案部门共同提出整改意见。对于授权方面，法务部梳理了各产业的授权表，并与业务部门以及职能部门有关人员进行访谈，最终结合复星实际业务情况，统一了复星集团建议适用的授权标准。 2、法务部进行了一系列稽核与内审的活动。2009年，根据《企业内部控制基本规范》，复星集团法务部制定了《企业法律风险控制手册》（以下简称“ 风控手册”），并经2011年修订后下发复星集团各产业。风控手册罗列了企业风险的多个方面，包括企业内部环境控制、风险评估管理、企业控制活动等。根据风控手册，集团法务部每年组织4 到5次对下属产业的法务稽核，帮助各产业查找公司治理的风险点，完善法人治理结构。除了法务稽核以外，法务部还注重预防和禁止投资团队与投资单位进行利益输送，制作《访查函》并不定期对已投资企业进行访谈。

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above. By structure, this means delegating the executive director system, communications with the investment department, connections to the invested companies, and legal audits to discover the risky points and raise the level of management. We will try our best to make the corporate governance structure standardised, transparent, and clearly authorised.

following works in the next year or two:

and tax. Since 2009, we have been organising eight to ten training sessions every year, and hosting forums. Through the learning opportunities, the counsels are able to improve their skills and exchange experiences. In the meantime, the legal department should also provide valueadded services to our investment projects, and their post investment management. We also should supervise the companies Fosun has invested in on their major spending projects, legal affairs, and even their IPOs with help from securities traders and lawyers. Besides professional skills, improving service standards also means we should increase the communication among the executives, relevant business departments, and industries. We should be more sensible and proactive in solving the problems. Better communication is an indispensible part of better legal services.

1) To constantly improve the standards of the professional services The in-house legal service is a highly professional job that requires not only knowledge of the law, but also relevant knowledge like accounting

2) Further improvement of the corporate governance structure Over the next while, the legal department will do its best to improve the corporate governance structure apart from the completion of the authorisation system mentioned

3) Strengthening the construction of the legal system The building up of the legal team is an important function of the group headquarters’ construction. The legal teams at all levels together form an organic system. In order to improve the legal system across the group, the legal department led a restructuring of the organisation of industrial groups, and helped them recruit qualified legal people. The management over the team has been strengthened by delegation, incentive offering, and assessment. A “successor” programme was developed to ensure team continuity, and we also invented a chart to evaluate the capability and potential. In the first half of this year, the legal department of the group has been benchmarked with the legal teams of GE Shanghai and the Jardine

二，在投资方面 1、法务部着力完善人员架构，根据境内外业务，按照不同产业全面对接公司业务部门，为所有业务部门配备专业、适格的法务人员，使所有业务部门的所有投资活动，都能找到对口的法务人员进行跟进。 2、为了简化审阅流程，减化投资部门与法务人员的沟通程序，法务部制定了一系列指引性文件及文本模板。目前，法务部已经制作了包括《境外并购指南》、《印尼矿法指南》、《人民币基金设立指引》等指引性文件，以及PE投资协议文本模板、保密协议文本模板等。

8-10次业务培训，并开展不定期的业务讨论。通过业务学习，法务人员提高了自己的专业水平，交换了彼此的业务经验。在提供专业服务的同时，法务部还为投资项目提供增值服务，有效进行投后管理工作，指导已投资企业的重大投资项目和其他法律事务，与券商及律所一起协助被投资企业实现上市等。除了提供专业服务外，提高法律服务水平还体现在增强和领导、相关部门、各产业间的沟通协调能力，增强职业敏感性，提高解决问题的能力。加强沟通对于更好地提供法律服务起到至关重要的作用。 2）进一步完善公司治理结构除了之前提到的对授权体系的完善以外，未来一段时间，法务部将致力于完善公司治理结构。包括加强董监事委派制度的执行，加强与投资部门的交流和沟通，加强与被投资企业的条线衔接，通过法务稽核帮助各产业查找公司治理的风险点，提升公司管理水平等。力图实现公司治理的规范、透明和授权明确。

3）加强法务体系的建设法务体系的建设是复星集团总部职能体系建设中重要的一部分，集团各层级的法务团队构成法务体系一个有机的整体。为完善复星集团法务体系，集团法务部牵头各产业法务部门梳理本产业法务部的人员架构，并协助各产业招聘适格的法务人员；依靠委派、激励和考核，加强对产业法务人员的管理；在梯队建设方面，实行继任者计划，并与人力资源部共同协商制定法务人员能力与潜力的九宫格。今年上半年，复星集团法务部已经与GE上海总部及香港怡和集团的法务部进行了对标，向他们学习法务体系架构以及法务人员与业务人员配比等体系建设有关问题。下半年，我们还将选择其他全球领先的企业进行对标。从长远角度来看，对标活动将会是我们一直贯彻下去的学习方式。除此之外，加强法务体系建设还需要建设高绩效的法务团队。具体而言，就是要培养团队共享愿景的能力，将个人目标与团队目标结合起来，通过“照

we’d already invested in with the investigation letter we drafted. In terms of investment, the legal department works on the structure of personnel. We connect with business sections industry-by-industry allocating professional legal advisers suitable for each industrial division. This effort ensures that all investment cases are followed up by suitable legal experts. In order to simplify the approvals procedure and the communication between the investment department and the legal department, we have also issued a series of manuals including the Guidelines on Overseas M&A; the Guidelines on Indonesian Mineral Law, Instructions of Setup of RMB Fund, and document templates of PE investment and confidentiality agreements. ALB: What are your team’s plans in

the next few years?

TJ: We will be focusing on the

ALB: 预计未来一两年的法律部门工作重点是什么？ TJ: 未来一两年内，法务部门的工作重点主要有以下几点： 1）不断提高法律服务专业水平法务工作是一项专业性很强的工作，不但要掌握法律专业知识，还需要熟悉与业务相关的财务、税务知识。从 2009年起，复星集团法务部每年组织

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ASIAN LEGAL BUSINESS august 2012

Group in Hong Kong to learn from their system constructions, such as organisational structure and legal-tobusiness personnel ratio. In the second half of this year, we will continue this with the other leading companies of the world In the long run, such benchmarking learning is what we will carry through all the way. In addition, a highly efficient team is what a good legal team system needs. More specifically speaking, the shared vision and common goals among individuals and the team are necessary. By “self review”, “gap analysis” and “reality reflection”, we will maintain our creativity and increase the communication and problem-solving abilities. 4) Deepen compliance and risk control construction The Fosun Group has always valued compliance and risk control very much. The goal of Fosun is “to manage trillions of assets”. In the first half of this year, the group launched the AntiCorruption Supervision Division, which demonstrated our high vigilance over these issues. For the legal department, we will continue organising and reinforcing our system, completing the procedures, eliminating flaws, and reducing the potential risk based on our Legal Risk Control Manual. A standardised, transparent, and clearlyauthorised corporate governance is what we are striving for.

镜子”、“找差距”、“反思现状”，持续保持创造力；提高高效交流的能力以及处理复杂问题的能力等。 4）深化合规、风控建设复星集团一向重视合规与风控。复星集团未来的目标是“管控万亿资产” 。今年上半年，复星集团成立了廉政督察部，体现了对合规与风控的重视。对于法务部而言，要继续梳理和加强制度建设，完善流程，消除缺陷，继续以法律风险控制手册为核心抓手，进一步强化风险控制。在公司治理方面，继续向规范、透明、授权明确的方向去努力。 ALB: 法律部门和其他业务部门怎样协调配合？挑选外部律所开展合作的标准？ TJ: 在和其他业务部门的关系上，法务部强调沟通交流和加强行业研究。企业法务人员不同于外部律师，要站在公司的角度思考问题，要尽量在商业判断与风险把控之间找到一个平衡点。此外法

ALB: How is the cooperation

between your team and the external lawyers? TJ: The legal department emphasises communication and industrial studies when working with other internal departments within the company. Unlike private lawyers, the in-house counsel have to think from the company's perspective, and look for the delicate balance point between business judgment and risk control. Also, the legal department gets our counsels to learn basic accounting and the business trends so that they can help other departments more specifically. The legal advice for our domestic business is basically provided by our in-house team. But we also have cooperations with external law firms when dealing with foreign-related cases. We prefer those who have frequent cooperation with companies when choosing our partners. We value their experiences in relevant areas, and the service quality of their lawyers. At the moment, we are completing our database of external law firms from which we can pick up appropriate ones to work for us. ALB: What are the highest valued

qualities of an in-house counsel?

TJ: The most important qualities that

professional legal services and advice to the daily business and operations of the company, in-house counsels ought to have sufficient knowledge of the law, particularly those about the business they work with. Without the knowledge, one could not make correct judgments about, or take control of, the risks in the operations in order to fulfill the company’s strategic targets. Apart from the knowledge and judgment, the professional skills required also include efficient communicating abilities. Horizontally, in-house counsel need to communicate with business partners and their lawyers, as well as colleagues within the company. Vertically, in-house counsel need to communicate with superiors, subordinates, and the executives; even directly with the president. Second is sticking to professional ethics. The legal department is the goalkeeper that controls the risk for the company, which requires high moral standards. As an in-house lawyer, one ought to be honest, diligent, dutiful, have integrity and the spirit of teamwork. He must protect the company's secrets, be dedicated and conscientious, and work hard to improve the professional work.

in-house counsel must possess are: First is having strong professional skills. As the personnel providing

务部还强调法务人员学习财务知识，了解商业中行业的发展趋势，更好地、更有针对性地为业务部门服务。复星集团的境内业务基本上全部的法务工作都由法务部完成，涉外业务有很多是与外部律所共同合作的。在挑选律所时，我们倾向于挑选那些经常与公司有业务合作的所，我们看重的是律所在相关领域的实践经验及律师的服务质量等。目前，法务部正在进一步完善律所库的建设，未来的合作律所将在律所库中进行挑选。 ALB: 您认为企业法务人员最重要的素质是什么？ TJ: 企业法务人员最重要的素质体现在以下两个方面：其一是过硬的专业素质。法务人员是为公司日常业务及运营提供专业法律服务的人员，法务人员应当熟悉法律，特别是和自己服务部门业务有关的法律，为业务部门提供专业的法律意见。

只有熟悉法律，才能准确判断业务活动中的风险，对风险进行有效的控制，并最终帮助企业实现战略目标。专业素质不仅包含丰富的法律知识，良好的判断能力，更包含高效的沟通能力。横向上，在业务活动中，法务人员要与业务活动的对方进行沟通，与对方聘请的律师进行沟通，更要与本公司内部业务人员进行沟通；纵向上，法务人员要与自己的上下级沟通，与公司领导沟通，也需要具备直接与董事长对话的能力。因此，高效的沟通能力对于一名合格的法务人员来说是必须具备的条件。其二是良好的职业道德素质。法务部门是企业的风险控制部门，帮助企业把好风险控制的大门，这要求法务人员具备更高的职业道德素养。作为一名公司律师，应当诚实守信，勤勉尽责，具有团队精神，注重保护公司的商业秘密，敬业勤业，努力钻研业务。

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LEAGUE TABLES

ASIAN LEGAL BUSINESS august 2012

CHINA Announced M&A Legal Rankings

CHINA Announced M&A financial rankings

Stikeman Elliott

22,210.6 DEALS: 3

RANK

Goldman Sachs & Co

31,562.5

VALUE ($mln)

DEALS: 10

MARKET SHARE: 17.7

LEGAL ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 25.2

financial ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

Davis Polk & Wardwell

20,765.5

16.6

Citi

22,555.7

18.0

Paul, Weiss

19,612.6

15.7

RBC Capital Markets

17,859.8

14.3

Blake Cassels & Graydon

18,606.5

14.9

BMO Capital Markets

17,672.3

14.1

Burnet Duckworth & Palmer

17,672.3

14.1

Credit Suisse

17,394.5

13.9

Richard A Shaw Professional Corp

17,672.3

14.1

HSBC Holdings

11,845.9

9.5

Osler Hoskin & Harcourt

17,672.3

14.1

Deutsche Bank

11,055.6

8.8

Skadden

12,518.2

10.0

UBS

9,223.3

7.4

Weil Gotshal & Manges

11,638.4

9.3

Allen & Co Inc

8,091.3

6.5

Fangda Partners

9,747.5

7.8

JP Morgan

7,654.7

6.1

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

CHINA Announced M&A Legal Rankings

HONG KONG Announced M&A Legal Rankings

Davis Polk & Wardwell

760.1 DEALS: 9

RANK

Freshfields Bruckhaus Deringer

4,849.8

VALUE ($mln)

MARKET SHARE: 1.6

LEGAL ADVISeR

VALUE ($ MLN)

DEALS: 4

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 12.8

financial ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

Mayer Brown JSM

522.5

1.1

Clifford Chance

3,957.3

10.5

King and Wood

494.8

1.0

Allen & Overy

3,781.7

10.0

Mallesons Stephen Jaques

453.2

1.0

Sullivan & Cromwell

3,779.1

10.0

Fangda Partners

426.3

0.9

Baker & McKenzie

3,336.3

8.8

Shearman & Sterling

388.2

0.8

Jones Day

2,400.7

6.3

Allen & Overy

387.6

0.8

Zhong Lun Law Firm

2,104.1

5.6

Paul, Weiss

368.6

0.8

Linklaters

1,259.6

3.3

Freshfields Bruckhaus Deringer

345.1

0.7

Kirkland & Ellis

1,067.0

2.8

Oâ&#x20AC;&#x2122;Melveny & Myers

341.9

0.7

Gide Loyrette Nouel

941.7

2.5

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

ANY CHINESE INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND 80

Rank Value US$ billion

No. of Deals

83.6

46.4

50 40 30 20 10

8.3 9.4

16.6

10.6

15.7

12.4

17.0

1,200 72.1

39.9

42.5

36.5

47.7

45.7 47.1 42.5 42.6

1,000 54.9 45.1

41.9

600

27.5

23.4 21.5 22.6 22.4

800

400

16.7

200

No. of Transactions

Rank Value US$ Billion

0 1Q 05

3Q 05

1Q 06

3Q 06

1Q 07

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

3Q 10

1Q 11

3Q 11

NOTES: League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. Deals with undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. Data accurate as of August 15, 2012

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自

Rocky T. Lee, Asia Managing Partner, Head of Greater China Corporate Practice

2 0 0 5年进入中国，美国凯威莱德律师事务所（Cadwalader, Wickersham & Taft LLP）一直致力于将两百多年的华尔街经验与中国本土智慧相糅合，努力为国际金融机构和跨国公司带来专业高效而又独具慧心的法律服务，为其开拓中国市场助力加码。近年来，外商境内投资风波不断，长期为外商所采用的VIE（Variable Interest Entity，可变利益实体）结构丑闻频爆，原先处于监管灰色地带的VIE如今前途难卜。面对市场的波诡云谲，凯威莱德凭借强大的专业实力坚定地走在了跨境投资结构创新的前列。综合多年中国受限行业的法律经验，凯威莱德亚太区管理合伙人李大诚律师带领手下团队独创跨多界控制模式（Multi-Jurisdictional Captive Company Structure），对原有的VIE结构做出符合中国监管的优化设计。该架构能够帮助境外投资者建立中国运营分部，并在受限领域获得营业执照。通过MJCC，公司不仅将以独资形式进入中国市场，完全掌控运营平台及公司品牌，更可在今后对中国业务进行分拆，实现香港上市。 2010年加入凯威莱德的李大诚律师是中国受限制行业的顶级法律专家，其个人在互联网、电信、新媒体领域拥有丰富的经验与深刻的见解，曾参与起草多项由中国商务部牵头的外商投资法律文件，在风险投资、私募股权圈内拥有极佳口碑。因其出色的专业素质及管理能力，李大诚律师被 ALB评为2011年度大中华区最受关注的25位律师之一，并荣获“呼风唤雨奖”(the “Expert & Rainmaker” Award)。在他的带领下，凯威莱德积极把握对华投资的新趋势，大力拓展在华新业务。据李大诚律师透露，事务所正在帮助多家上市的跨国零售巨头如泰德贝克（Ted Baker）等，打开中国市场并建立对华的网上零售平台。凯威莱德的专业团队恰能为这种网上、网下联动的全新对华投资结构提供全方位的法律服务。

Cadwalader, Wickersham & Taft LLP A: Beijing 2301 China Central Place Tower 2, No. 79 Jianguo Road, Beijing 100025 China T: +86 10 6599 7200 F: +86 10 6599 7300

A: Hong Kong 27th Floor, 100QRC 100 Queen’s Road Central Hong Kong T: +852 2946 1100 F: +852 2946 1200 E: rocky.lee@cwt.com W: www.cadwalader.com

如今，凯威莱德已在纽约、伦敦、布鲁塞尔等全球八个重要的经济金融中心设立代表处。2005年，北京代表处正式成立，2010年，凯威莱德又在香港设立第二家亚太区的代表处。两家办事处现共拥有六位合

伙人，十八位律师和八位法律员工。这支专业的团队熟知西方资本市场的运作规律，更深谙中国当地的法律体系及商业环境，既帮助跨国企业在中国繁复的监管体系中挖掘机会，也为中国的大型金融机构及企业走向世界铺平法律道路。目前，其在华业务主要关注资本市场的股权债券发行以及外商直接投资、兼并收购、公司治理、反垄断、财务重组等多种公司业务；同时，倚靠多年的华尔街经验，凯威莱德还为国内大型银行、券商、金融管理公司、资产管理公司获取美国从业牌照提供至优服务。律所荣誉： 1. 凯威莱德律师事务所在中国的业务被《法律 500强》评为“2012年度私募股权及风险投资领域顶级律师事务所”。 2. 凯威莱德律师事务所在中国的业务荣获英国《Corporate INTL》杂志颁发的“2012年度中国区最佳企业律师事务所”大奖。 3. 《Asian Legal Business》杂志授予凯威莱德律师事务所“2011年度中国最值得关注律师事务所” 荣誉。凯威莱德律师事务所被认为是亚太地区内最有可能在法律头条制造最大影响的十大最值得关注的律所其中之一。合伙人荣誉： 1. 自2005至2011年，李大诚律师连续七年被《亚洲法律》评选为“私募股权及风险投资领域杰出律师”，他被业界同行（包括企业高管、专职顾问及该领域律师）认为是私募股权及风险投资领域亚洲最顶级律师。 2. 凯威莱德律师事务所亚洲区管理合伙人李大诚律师于2007至2011年连续五年被《钱伯斯亚洲》评为“私募股权及风险投资领域国际律师事务所顶级律师”。 3. 陈彗律师自 2 0 0 8 至 2 0 1 0 年连续三年被《Chambers & Partners Global》及《钱伯斯亚洲》评选为“资本市场及证券领域杰出律师”。陈律师以其在业界的出色表现获得广泛认可，并被钱伯斯赞誉为“专业，技能卓越并易于合作”律师。

凯威莱德所提供的法律服务是卓越的，且在中国资本市场中名列前茅。凯威莱德之服务不仅及时、准确、极具价值，而且其合伙人李大诚（Rocky T. Lee）律师及其团队在任何时候都始终敬业、专业、值得信赖。我们期待继续与凯威莱德合作，并进一步加强我们之伙伴关系。 -- 中国工商银行

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PITFALLS AND OPPORTUNITIES:

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NAVIGATING THE

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MIDDLE EAST BY SHAHEEN PASHA AND LAYLA MAGHRIBI ADDITIONAL REPORTING BY REUTERS

As the West suffers an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east. The Middle East and North Africa, in particular, are expected to outpace the rest of the world, according to a July report by the International Monetary Fund (IMF). In the report, the IMF stated that it expects regional economies to expand this year by 5.5 percent, up from its previous estimate of 4.2 percent. However, by comparison, it expects the crisis-hit euro zone to contract by 0.3 percent and trimmed its estimates for the United States. "In contrast with the broad trends, growth in the Middle East and North Africa will be stronger in 2012 and 2013 relative to last year," the fund said in its quarterly revision of economic forecasts. "Key oil exporters continue to boost oil production and domestic demand, while activity in Libya is rebounding rapidly after the unrest in 2011." But the Middle East and North Africa are not without their own geopolitical challenges, which could serve as a hindrance to business. To help navigate the sometimes treacherous terrain in the region, the following is an overview of some of the opportunities and challenges the business and legal communities face when attempting to do business in the Middle East. REUTERS/Peter Andrews

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The United Arab Emirates, once the Golden Child of the region with the glitz and glamour of Dubai, suffered a thrashing in the wake of the global financial crisis. Humbled by Dubai World’s $25 billion restructuring and tarnished by the ghost towns that emerged as construction and development dried up, the UAE is once again seeking its place on the global stage with significant legislative reforms that it hopes will spur investment. The revised Commercial Companies Law is among the most anticipated pieces of legislation due by the government. The draft of the law, which was approved by the UAE cabinet in December 2011, will allow business ventures, especially small enterprises, to forgo the 150,000 dirham minimum capital requirement under the old Companies Law passed in 1984. It will also address issues of corporate governance by increasing transparency through the disclosure of financial statements, and is expected to provide a set of unified accounting standards based on international best practices.

“The new law will predominantly impact public joint stock companies, and will introduce some good general changes that will assist in attracting more funds into these companies. Changes to the general framework of PJSCs will protect and clarify the rights of stakeholders, improve levels of transparency through the disclosure of financial statements, and improve the integrity of boards,” wrote Mohammed El Ghul, senior associate and Intisar Sadek, senior counsel, at local law firm Habib Al Mulla & Co in an April report. Still, there are areas that lawyers fear fall short of what is needed to truly reform the legislative system. The most anticipated change revolves around the issue of foreign ownership. Under the current legislation, foreign owners are restricted from owning more than 49 percent of a limited liability company. A local partner must hold the rest. The new Companies Law is expected to give the UAE cabinet the authority to raise that ceiling of ownership for foreign owners in certain sectors and industries. Essam al-Tamimi, senior partner at Al Tamimi & Co, told The Brief earlier this year that the decision to only provide exemptions

A development is seen on one of the islands on the World Islands project in Dubai. REUTERS/Jumana El-Heloueh

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“2008 AND 2009 WAS THE WORST TIME EVER FOR DUBAI, AND EVERYONE THOUGHT IT WOULD COLLAPSE. BUT, ACTUALLY, DUBAI IS A REGIONAL HUB WHERE MOST BUSINESSES IN THE REGION ARE RUN OUT OF. PEOPLE WILL CONTINUE TO INVEST HERE.” HUSAM HOURANI, Al Tamimi & Co

to the 51 to 49 percent foreign ownership rules in select cases rather than change the law altogether to accommodate 100 percent ownership by foreigners, may turn off some investors who are eagerly awaiting a firmer stance on the issue. The UAE received foreign direct investment worth $3.9 billion in 2010 and $4.0 billion in 2009 respectively, according to the United Nations Conference on Trade and Development. These figures were sharply low compared to $13.7 billion in 2008 because of the global financial crisis and Dubai's own corporate debt problems. The country is expected to benefit from a flight-to-safety in the wake of the Arab Spring. While legislative changes are certainly on the minds of investors interested in the UAE, the shadow of debt restructurings remains. State-owned Dubai World rocked global markets in 2009 when it announced that its property development unit Nakheel was unable to make payments on its Islamic bond. The trickle down effect of this disclosure was the exposure of a culture of implicit guarantees in debt dealings within the country, which forced Abu Dhabi to come in and help bail out its troubled neighbour. Now almost three years later, Dubai and many of its entities are on the road to recovery following a spate of debt restructurings. Still, there are bumps along the road. The Dubai Group, for instance, remains embroiled in contentious debt negotiations. The Royal Bank of Scotland and two other banks have abandoned talks on restructuring the Dubai Group's $10 billion debt, and threatened to bring unprecedented legal action against the investment vehicle of Dubai's ruler, sources close to the matter told Reuters in July. Sources said the banks were demanding immediate repayment, and would take the issue

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The Burj Khalifa stands in Dubai. REUTERS/Mohammed Salem

to court if necessary. Trying to go through the courts could prove hard given the uncertainties over insolvency law in Dubai. While the UAE has bankruptcy legislation, the statute has never been tested by the kind of multibillion dollar, multijurisdictional case which a Dubai government-related entity would represent. Lawyers and bankers complain the legislation is out-of-date - especially in terms of criminalising anyone who defaults on debt and is open to a judge's interpretation, which means two identical cases could yield vastly different rulings. Also, bankruptcy legislation is spread across several different laws. A new insolvency law is in the works, but will not be passed in time to address the current wave of restructurings facing Dubai, lawyers say. Still, the Gulf Arab state has made some progress on restructuring its debt, and that has improved confidence. Healthy demand in April for the state's first sovereign bond issue in nearly a year suggested that investor confidence in Dubai was on an upward trend. Analysts and legal experts say there is room

now for the UAE, and Dubai in particular, to restart some of the country’s stalled projects. After the debt crisis hit, spending on infrastructure projects fell sharply. Last year, it dropped 20 percent to 7.1 billion UAE dirhams ($1.9 billion), half the level seen in 2008. But conditions are improving. Abu Dhabi has revived plans to build branches of the Guggenheim and Louvre museums as part of a $27 billion cultural project aimed at making Abu Dhabi a cultural capital for the region. Drydocks World, a shipbuilding unit of Dubai World that is in the process of restructuring $2.2 billion in debt, plans to build the world’s first underwater hotel. “2008 and 2009 was the worst time ever for Dubai, and everyone thought it would collapse. But actually, Dubai is a regional hub where most businesses in the region are run out of,” says Husam Hourani, managing partner at Al Tamimi & Co. “People will continue to invest here. There is increasing opportunity from tourism and hospitality, and companies with bases here are going to want to invest in their future business.”

Bordering the UAE to the west is the kingdom of Saudi Arabia, which is fast becoming the market to watch in the Gulf. The kingdom boasted gross domestic product of 6.6 percent last year, fuelled by soaring oil prices and heavy government spending. Robust government spending is slated to continue with the Ministry of Finance projecting in December last year that the kingdom will spend 690 billion riyals ($184 billion) in 2012. Much of that expenditure is expected to take place in the construction and infrastructure sectors, creating vast opportunities for businesses and legal advisers alike to cash in on the bounty. Infrastructure is key when exploring the Saudi market. For instance, Saudi Arabia's construction sector is fuelled predominantly by public spending on economic and social infrastructure. Business intelligence firm Business Monitor International (BMI) said in a recent report that construction industry growth rates will accelerate over 2012 and 2013, thanks to the government's vast

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infrastructure investment scheme aimed at staving off public discontent. The Arab Spring uprisings last year sparked concerns of similar protests in the kingdom, where unemployment is a growing concern among Saudi Arabia’s large youth population. To counter the threat of unrest, especially as violent protest erupted in neighbouring Bahrain, King Abdullah of Saudi Arabia established a $130 billion plan to create jobs and build subsidised housing. Saudi Arabia is estimated to have projects worth $623 billion currently underway, according to the economic weekly MEED, making it by far the largest projects market in the region, worth almost as much as the other five GCC states combined. A report by MEED Insights also estimates that the kingdom has more than $300 billion worth of projects planned and yet to be awarded. Project finance is considered to be a major area of growth within the Saudi market. For instance, Saudi Arabia's General Authority for Civil Aviation (GACA) is funding the building of the 27 billion riyal ($7.2 billion) King Abdulaziz International Airport in Jeddah through a series of Islamic bonds that are fully guaranteed by the Saudi Ministry of Finance. Saudi Arabia’s Al-Jadaan & Partners has joined global law firm Clifford Chance in advising GACA on the deal. Dominic Harvey, Abu Dhabi-based partner at Vinson & Elkins, says the expected flood of business has prompted the firm to expand with a Saudi Arabian office to further target project finance work. Social infrastructure such as power, water and wastewater projects will be key, while transportation infrastructure, alternative energy and more metals and petrochemical facilities will also keep law firms busy in days to come. Baker & McKenzie, for instance, recently advised the Dow Chemical Co and its subsidiaries on Islamic project financing worth $1.4 billion to support the construction and operation of three integrated petrochemical plants in the Jubail Industry City. The emphasis on social infrastructure and thus ensuring that its population does not take to the streets is of particular importance to the kingdom, as unrest could threaten the oil industry and its exports. Saudi Arabia, which has the largest oil reserves in the world, produces over nine million barrels a day. While oil prices have been high amidst the global economic crisis, the kingdom has been actively attempting to diversify the economy away from its heavy reliance on oil. Over the

last 15 years, Saudi Arabia has made strides to open itself up more to both foreign investment and different industries. Real estate has seen a particular boom; a trend that is at odds with troubled real estate markets in the rest of the Gulf, lawyers say. Strength in that market is expected to get an additional boost by the passage of the highly-anticipated, and much-delayed, mortgage law. After over a decade of study, the government approved the country's first law permitting mortgages in July. Saudi Arabia's housing market will need 1.65 million new homes by 2015 to meet demand, according to a report released by Banque Saudi Fransi last year. Private and public developers will need to build about 275,000 units a year for a population that has doubled in size since 1988, and is growing by more than 2 percent annually, it said. The mortgage law, which includes regulations covering mortgage finance institutions, home leasing, and legal mechanisms to settle disputes, could make it much easier to satisfy this demand for housing. According to a Fitch Ratings report, the introduction of a mortgage law in Saudi Arabia will improve the housing supply and social stability, and also provide for diversification of the banking sector. Interest is already emerging from the financial sector. Saudi Arabian investment bank Sidra Capital plans to set up a housing mortgage firm with one billion riyals ($267 million) of capital to tap growth expected after the kingdom passed a law covering mortgages, chief executive Hani Baothman told Reuters. Baothman has said that the law is expected to encourage the formation of several companies to compete with banks in mortgage financing, but this could not happen without an active sukuk market to provide such companies with the liquidity necessary for lending. Sukuk have been a strong area for growth in recent months. A spate of issuances out of the kingdom, in both domestic and dollar denominations, has been met with strong demand. For law firms, Saudi Arabia’s burgeoning sukuk market is proving to be profitable. Recent deals include petrochemical company National Industrialization Co’s (Tasnee) two billion riyals offering in May, while dairy firm Almarai completed a one billion riyal deal in March. Momentum for sukuk issuances in the Gulf is expected to continue through the end of the year at least, with Saudi Arabia serving as the main driver, lawyers say.

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The Kingdom Tower stands in the night in Riyadh. REUTERS/Ali Jarekji

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Vehicles drive past skyscrapers on a road in Doha. REUTERS/Mohammed Dabbous

“THE POLICY OF THE GOVERNMENT IS THAT QATAR WANTS TO MOVE FROM A FRONTIER MARKET TO AN EMERGING MARKET. IT NEEDS A CRITICAL MASS OF COMPANIES LISTED.” AHMAD ANANI, Latham & Watkins

ASIAN LEGAL BUSINESS AUGUST 2012

Qatar, which made its mark among global economies as the largest producer of liquefied natural gas, has gained even more fame in recent months after the small Arab kingdom won the bid to host the 2022 FIFA World Cup. With this achievement, Qatar has been thrust into the international spotlight with an aggressive push by the government to improve the country’s infrastructure and facilities, creating a wealth of opportunities for businesses and lawyers alike. The country has allocated 40 percent of its budget between now and 2016 to infrastructure projects. State-owned property developers Barwa Real Estate and Qatari Diar, for instance, are set to spend 100 billion riyals ($27.5 billion) over the next five years to 2016 on commercial and residential projects, according to a national development strategy unveiled last March. The government is backing this budget allocation with promised public investment worth $95 billion during the period, over $65 billion of which is expected to be on infrastructure. There are plans to spend $11 billion on a new international airport, $5.5 billion on a deep-water seaport, and $1 billion on a transport corridor in Doha. An additional $20 billion will be spent on roads. Among its more ambitious projects, Qatar plans to implement a $41 billion rail project. In October last year, Qatar Railways had stated that it had received bids from around 60 consortiums with at least two contractors each for the same. The project will include four rail lines, and will link stadiums that will be used to host the various matches of the soccer World Cup. The rail project is also expected to have an underground component at the centre of the capital city of Doha. Education and healthcare will also be major industries of growth, experts say. Government spending will be a key driver for growth in 2012 and into next year, according to a recent report by Emirates NBD research. According to the government’s recently released budget, development and infrastructure spending is projected to rise by 7.1 percent to 62.1 billion riyals this year. To help fund some of its proposed projects, Qatar recently made history by issuing the largest dollar-denominated Islamic bond to date valued at $4 billion. The two-tranche sukuk, which was the government’s first Islamic debt issue in nine years, attracted a massive order book of over $24 billion. International law firms Latham & Watkins and White & Case advised on the deal.

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“The government is going to be injecting money and liquidity into the market, so there will be certain areas where we will see legal work and growth,” says Ahmad Anani, corporate partner at Latham & Watkins, who is based in Doha and Abu Dhabi. “This is a planning phase. We will then see a lot of construction work for lawyers. Real estate will be required, which will create another important area for business. I see this market on a steady growth over the next seven years.” Anani added that capital markets work will be a hot area for the legal community in Doha. Islamic lender, Barwa Bank, a unit of Barwa Real Estate, plans to issue a sukuk by 2013 and is eyeing a share listing over the longer term, its chief executive told Reuters in June. The bank sees an issuance as helping smooth out maturities in the Gulf state, which plans to invest about $130 billion in its nonhydrocarbon sector between now and 2018. A yen-denominated deal by Qatar's quasi-sovereign oil and gas company, Qatar Petroleum, is also said to be in the works, according to IFR Markets, a unit of Thomson Reuters. In another potential deal in the works, Qatar Telecom has asked banks for proposals about a $1 billion commercial paper programme, three sources told Reuters

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in May. It would be a rare example of a Middle Eastern entity using such an instrument. Commercial paper, which is a short-term unsecured debt instrument used to manage near-term obligations and to finance everyday expenses more easily, has so far only been issued by a couple of regional banks and Abu Dhabi state-owned investment fund Mubadala. Initial public offerings are also expected to be a hot market for lawyers in the coming months. Latham & Watkins is currently working on six IPOs that are expected to launch in the second half, and into the first quarter of 2013, Anani says. The firm is also in discussions regarding three more IPOs out of Qatar. “The policy of the government is that Qatar wants to move from a frontier market to an emerging market,” he says. “It needs a critical mass of companies listed.” Despite its diversification into other industries, there are still plenty of opportunities within Qatar’s energy sector. A moratorium has been placed on the export of LNG until 2015, but the country is seeking alternatives. Qatar plans to spend $25 billion on expanding its domestic petrochemical industry over the next decade, thereby more than doubling its annual petrochemical production capac-

ity from the current 9.2 million tonnes to 23 million tonnes by 2020. Qatar will be the consummate growth story for the next decade, lawyers say, with law firms looking to increase their presence in coming years.

The island kingdom of Bahrain was long hailed as the hub for business and finance in the Gulf. Without the glitz and glamour of Dubai, Bahrain sought a more serious financial standing with one of the highest numbers of both Islamic banks and international financial institutions in the region. International players, including big law firms, sought to make a presence in the country, which has had a historically strong relationship with Saudi Arabia. Saudi Arabia shares one of its oilfields with Bahrain, providing around 70 percent of the budget revenue in a country of over 1.2 million people, including 660,000 foreigners. Last year, Riyadh and other Gulf countries promised Bahrain and Oman $10 billion each over 10 years for socio-economic spending to bolster their governments in the face of unrest.

A view of the skyline of Manama at night. REUTERS/Hamad I Mohammed

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ASIAN LEGAL BUSINESS AUGUST 2012

City view of Bahrain’s capital Manama is seen from Abraj Al Lulu. REUTERS/Hamad I Mohammed

But the onset of the financial crisis and the instability that ensued in the wake of the Arab Spring has cast Bahrain into a negative light. As media reports highlighted mounting violent protests and unrest in Bahrain’s financial centre, banks and corporations began to reconsider the viability of Bahrain’s business environment. In August 2011, Credit Agricole shifted the majority of its Bahrain-based staff to Dubai, while BNP Paribas moved back office operations from the island kingdom. In February this year, Societe Generale's private banking arm also confirmed plans to exit Bahrain to cut costs. Sources told Reuters in May that the Bank of Tokyo-Mitsubishi too plans to scale back its operations in Bahrain. Law firms too have not been immune to these mounting concerns. Offshore law firm Appleby pulled out of Bahrain last year, citing the instability of the region as the reason. The firm continues “to monitor the region for the future,” says Peter Bubenzer, group chairman of the firm. It has been a costly year for the country. Bahrain’s 2011 gross domestic product growth fell to 2.2 percent from 4.5 percent in 2010. A study conducted by Bahrain’s Shura

Council, its parliament, and the Bahrain Chamber of Commerce and Industry earlier this year also indicated that businesses in Bahrain lost up to $800 million over the last year due to the unrest. According to a Reuters poll conducted in July, Bahrain is forecast to be the only Gulf country in the red in 2012, with a budget deficit of 2.0 percent of GDP. However, lawyers still say the opportunity for conducting business in Bahrain remains strong, although the nature of their practices have changed over the last three years. Before the financial crisis, Bahrain – like much of the region – was focused on building up its infrastructure. Real estate was king, and construction projects dominated much of the legal work in the country. But with the bursting of the global real estate bubble and the subsequent financial downturn, construction sites turned to ghost towns as funding dried up. For lawyers, vibrant real estate and construction practices suddenly gave way to an increased need for dispute resolution. Trowers & Hamlins’ Bahrain partner Paula Boast told The Brief that dispute work used to make up only 10 percent of her practice in 2009, with 90 percent still focused on

project development. By 2011, dispute work made up 60 percent of her practice, with 40 percent dedicated to actual construction deals. Lawyers say the current legal environment has shifted notably towards litigation. To that end, local law firms have a distinct advantage in handling court matters. Under Bahraini law, while international law firms can operate in Bahrain without a local partner, they can only represent claimants when accompanied by a Bahraini lawyer licensed before the Cassation Court. The financial crisis has also created work for lawyers in the realm of restructuring and refinancing. Islamic investment bank Gulf Financial House was repeatedly forced into restructuring obligations in 2010, as the firm struggled with its debt burden in the aftermath of the global downturn. The company recently restructured $45 million in debt, the second time it has restructured that same facility. In May this year, a unit of Bahrain investment house Arcapita filed for bankruptcy protection in the United States, becoming the first Gulf entity to file for Chapter 11 after it was threatened with legal action following its

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failure to repay a hedge fund in full. Arcapita’s legal advisers are Gibson Dunn & Crutcher and Linklaters. Clifford Chance is working with the creditor committee. “There has been a significant amount of work out of the ashes of the financial crisis,” says one Bahrain-based lawyer. “Financial institutions have struggled, and have needed advisory work and structuring expertise to help them meet obligations. Things are not as dire as they were on that front, but there are still payments that need to be made. This is an area that will keep corporate departments (of law firms) busy for a while.” Despite Bahrain’s challenges, legal experts say it is not without its strengths. Infrastructure, for instance, has become the buzzword going forward as the government seeks to appease the masses with more social housing. Bahrain’s government has signed a $550 million public-private partnership (PPP) to build housing in the kingdom. The country has also committed $4.8 billion towards expansion of its international airport, $4.7 billion towards improving its roads and bridges, and $8 billion towards expanding its public transport networks, according to a report by Deloitte. Such initiatives will require financing through loans and debt instruments. Bahrain issued a $1.5 billion, ten-year dollar bond in June. International law firms Allen & Overy and Baker & McKenzie, as well as local Bahraini firms Hassan Radhi and Associates and Qays H. Zu’bi Attorneys & Legal Consultants have advised on the deal. Legal experts expect more corporate financing deals to come to market over the next few months.

REUTERS/Stephanie McGehee

The Gulf state of Kuwait has come under the spotlight in recent months as it struggles through its own political upheaval, which threatens its economic development in the region. Kuwait has seen eight governments come and go in just six years due to bickering between the parliament and the cabinet. The last government resigned in June after Kuwait's constitutional court dissolved a parliament elected in February this year. In a continuation of its political tug-of-war, Kuwait's ruler approved a new cabinet in July, which ushered back many of the old faces following the mass resignation in June. Analysts expect Kuwait's ruler to dissolve the parliament in order to allow a new election, widely expected to be held after the Muslim holy

month of Ramadan. The new cabinet should be sworn in before the reinstated parliament. But such a move could prove difficult as the majority of the 50 elected-member assembly have said they are boycotting the reinstated parliament, which was tarnished by corruption allegations. Such political manoeuverings are resulting in a lack of faith in the Kuwaiti market, which could hinder its economic growth, experts say. "Domestically, a negative outlook is inevitable where government spending remains dormant, tendering of new projects significantly lags, and asset values continue contracting as the local stock market considerably underperforms," National Bank of Kuwait (NBK) chief executive, Ibrahim

Dabdoub, said in July, according to a report in Reuters. Kuwaiti lawyer Mohammed Al Noor at AlTwaijri & Partners (TLF) adds that the lack of political stability has already had an impact on the country’s development. “Decisionmaking needs political will, otherwise Kuwait cannot move forward,” he adds. “There isn’t much foreign investment because the law needs to be changed. The Foreign Direct Investment Law is in draft form, but it needs to be reviewed and passed by the parliament, and this is a long process.” Major oil producer Kuwait is one of the most financially stable economies in the world, thanks to a high demand for its natural resources. But its weak regulatory

MIDDLE EAST PROFILE

ASIAN LEGAL BUSINESS AUGUST 2012

“THERE HAVE ALWAYS BEEN A SMALL NUMBER OF INTERNATIONAL FIRMS BECAUSE OF THE WAY THE KUWAITI MARKET IS. THE LEGAL MARKET HERE DEPENDS A LOT ON WASTAS (PATRONAGE) AND WHO YOU KNOW AND THE OPPORTUNITIES YOU CAN GET.” ABDUL AZIZ AL-YAQOUT, DLA Piper

environment and outdated insolvency laws make it difficult for distressed companies to restructure, weakening the country’s business capabilities, according to the World Bank. Speaking at a forum in May, World Bank senior counsel Riz Mokal said Kuwait needs legislation that gives distressed but economically viable companies an opportunity to restructure. The Financial Stability Law brought in as a response to the financial crisis did not provide for this, according to a report by Reuters. Kuwaiti firm Investment Dar, which partly owns British luxury car maker Aston Martin, secured a one billion dinar ($3.6 billion) debt deal with creditors in February 2011 as part of a contentious restructuring under Kuwait's Financial Stability Law. The Global Investment House is undergoing its second voluntary debt restructuring in three years. Other laws are also in need of a revamp in order to make the Kuwaiti market more conducive for business, lawyers say. Kuwait is in the process of drafting a new commercial companies law in addition to laws for small and medium enterprises. Kuwait is also drafting an investment promotion authority law to reduce financial and logistical barriers for inbound and internal investment in the country. But legal experts say such legislation is taking a backseat to the country’s current political situation. Tenders for large-scale projects, such as the Al Zour waste water project, have already been submitted, but are currently on hold as politics play out. Financing for many projects has also stalled with banks currently reluctant to lend, given a lacklustre legal environment and past credit defaults. In such an uncertain market, it is a struggle for international law firms to conduct business. “There have always been a small number of international firms because of the way the Kuwaiti market is,” says Abdul Aziz Al-Yaqout, regional managing partner at DLA Piper. “The legal market here depends a lot on wastas (patronage) and who you know and the opportunities you can get.” DLA Piper, SNR Denton and Curtis, MalletPrevost Colt & Mosle are the three main in-

ternational players with a presence in Kuwait. Al Noor of TLF says that many international law firms have sought to downsize in Kuwait because it is a slow growth process. “They want results fast and move quickly if they don’t come. This is not the way this region works,” he says. There is room for local lawyers to make a mark in Kuwait, but concerns remain in some cases that the standards in practice differ too greatly between local Kuwaiti firms and international players. Still, lawyers on the ground say there are prospects for growth within the capital market in the wake of the Capital Markets Law passed in 2010. Mergers and acquisitions and investment restructurings should provide more legal work in the months to come, says Al-Yaqout.

The Gulf Arab sultanate of Oman was cast into the spotlight last year as the Arab Spring turmoil ushered in a series of uprisings within the country, with citizens protesting a lack of employment opportunities to meet the needs of its fast-growing population. The IMF said in December that a 2010 census had put the unemployment rate among Omanis at 24.4 percent, although the high number may include many who are not truly looking for work. Omanis accounted for only 14 percent of nearly 1.3 million private sector employees in 2011. The social unrest last year prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 42 years, to pledge an extra $2.6 billion of spending in April 2011. Oman obtained pledges in March 2011 for $10 billion in aid over 10 years from its wealthier Gulf neighbours. The government forecasts a budget deficit of 1.2 billion rials for 2012, or 4.3 percent of 2011’s gross domestic product (GDP), which grew a real 5.5 percent last year. Against this backdrop, the sultanate is attempting to draw more foreign investment within its borders to bolster its economy. Its initiatives are expected to create abundant opportunities for businesses and lawyers.

Oman joined the World Trade Organisation in 2000, and has since relaxed laws for foreign capital investment into the country from 51 percent to 30 percent. In addition, Oman is considered to be one of the more businessfriendly environments in the Gulf, including a free trade agreement with the U.S. and a modern business law framework. Driving some of the activity is the sultanate’s focus on its industrial development. Oman has one of the fastest growing power and water sectors in the Middle East region, with electricity and desalinated water demand expected to increase until 2017 at an average growth rate of about 9 percent per year, according to the Oman Power and Water Procurement Company. Solar power and renewable energy are areas of particular

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MIDDLE EAST PROFILE

View of the Al Alam Royal Palace in Muscat. REUTERS/Benoit Tessier

focus for Oman. “The greatest growth area in Oman is in infrastructure projects, in particular water and power,” says Bruce Palmer, partner at Curtis, Mallet-Prevost Colt & Mosle. “We are talking about large scale projects of over $1 billion.” Such projects will require a significant amount of financing, creating opportunities for banks and the legal community. In addition to infrastructure projects, Islamic banking is also seen as a key growth area for the country, legal experts say. The Islamic finance market has grown to nearly $1 trillion globally, analysts estimate. But unlike neighbouring states such as the UAE and Iran, which have embraced the industry, Oman until last year remained stubbornly secular in its approach to finance. Its central

bank head said in 2007 that "banks should be universal”. Oman reversed its stance after seeing a steady trickle of investment money flow to nearby countries with well established Islamic banking sectors. The decision was also seen as one way of appeasing its population following the protests. Following the edict allowing Islamic finance, the sultanate launched its first Islamic bank, Bank Nizwa, which attracted $681 million rials ($1.77 billion) in bids during its initial public offering. Bank Nizwa’s was the first IPO this year in Oman, with Trowers & Hamlins having advised on the deal. The country's market regulator has said it expects three to four new listings in 2012. Sharia-compliant lender Al Izz International Bank, Oman's second lender to be licensed for Islamic

operations, was expected to issue an IPO of 40 percent of its 100 million rials capital by June this year. However, the anticipated IPO has still not come to the market. Legislation covering Islamic insurance, or takaful, along with sukuk is expected to be finalised by the end of the third quarter of the year, Capital Market Authority officials told Reuters in June. But the introduction of the regulatory framework may not produce a rapid surge of activity. Many institutions are still grappling with the need to obtain product expertise, arrange oversight by boards of Islamic scholars, train staff, and build computer systems. “The introduction of Islamic banking is great, but it will undoubtedly be slow to begin with to see how it goes,” Palmer says.

Managing Partner Q&A

ASIAN LEGAL BUSINESS august 2012

Domest

Managing Partner Q&A

Defiant against pressure from competitors’ speedy expansions and bold overseas ventures, Jun He Law Offices continues to adhere to its strategy of being an independent China-focused practitioner - a principle that has led to its consistent success over the past two decades. Managing partner Xiao Wei discusses his firm’s challenges with Liu Zhen, analyses market trends, and explains how Jun He is able to maintain an advantageous edge for tougher market share battles to come.

无惧来自竞争对手急剧规模化和国际化的压力，君合始终坚持以中国法为核心竞争力的独立发展道路。过去二十多年，这一原则引领君合不断走向成功。而今，管理合伙人肖微律师与本刊记者刘蓁讨论当前挑战，评点市场趋势，并详解君合在即将来临的更激烈的竞争中得以保持领先优势的秘诀。

优势在中国

ic focus REUTERS/Carlos Barria

Managing Partner Q&A

ALB: What is your firm’s development strategy? XW: There have been two big trends among China’s law firms. The first is that people are obsessed with size. Firms are trying to outsize one another. The second is that Chinese firms are going overseas. Many have formed alliances with foreign firms, while some have even merged with one. But for Jun He, simply speaking, we are first of all concentrating on the China market and PRC law services. Our size is completely based on the needs of the clients and our practices. We will enlarge our network geographically, but it does not mean that we are opening offices across the country. We could just cooperate with local firms to build up a nationwide network. It is very important for Jun He, a full-service law firm, to focus on developing the China market based on PRC law practices for a certain period of time. It is because: 1) We have accumulated a large base of international clients in the past who have huge inbound businesses; 2) As the domestic transactions of Chinese clients grow, we are having an increasing base after we strategically switched our client orientation to focus on domestics; and 3) The outbound business of Chinese clients is also growing. However, for outbound business, we mostly carry this out by coordinating and cooperating with international firms to build a legal service platform overseas. There is not a single firm that can completely cover all the areas being invested in by Chinese capital, especially Africa and South Asia. As a result, we have to create an effective cooperative model to join forces with firms of the target countries.

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ALB: How is Jun He reacting to “size obsession” in the market? XW: The current volume inflation of firms is like an arms race. It appears in different styles, some in M&As, some in franchising, and some in contracting. The reason for this phenomenon, I think, is that Chinese firms lack experiences and cultural deposits, as the marketisation of China started some 30 years ago, and no firm has a history any longer than that. Everything happened all at once when the Chinese economy quickly boomed, and the market suddenly exploded. For the particular time being, there are enormous opportunities. It is natural for the firms to have an impulse to grow large. It is indeed a significant change in the market. Speaking of the firm’s size, I agree that a firm has to have a certain scale of size. But for Jun He, the reason we have our current size is because we have increasing areas of practice, which requires different types of professionals. Over the past years, we have made Jun He a full-service firm with a considerable range of practices, and a good coverage of key regions. However, we keep our size growth under strict control. Our main concerns are the needs of practices and regional demands. Besides, we must also verify the competence and quality of each and every lawyer and partner while expanding. We also carefully calculate the profit per office, the revenue per partner, the profit per partner, and so on. We take everything into account before we make a decision on whether to scale up more. We are one of the more temperate and steady expanders among the law firms.

ALB: 请您概括一下君合的发展战略和思路？ XW: 我觉得国内律所现在有两个比较大的变化，第一个大家都搞规模化，你规模大，我规模更大。第二个现在中国律师事务所开始走国际化，有的在很多国家都搞了联盟事务所，甚至有的直接和国外所合并。但是君合的战略简单说来，第一步还是做好中国市场和中国法的相关服务。我们的规模是完全根据客户需求和业务需求来做。可能我们接下来在地域上还需要发展更大的网络系统，但这并不意味着君合要到全国各地和世界各地设很多的分所。我们可以和很多地方律师事务所进行合作来建立网络。我们现在做为一个全方位的法律服务事务所，总体上来讲，在一个阶段内以中国法为基础，做好中国的市场是非常重要的。因为第一，国际客户的对华投资有不少业务，我们过去有很多这种客户基础。第二，中国客户本身在国内的交易也越来越多。我们把调整战略面向中国国内客户，其规模也在不断发展。第三，中国客户对外业务的法律服务需求也在增长。我们在对外业务方面的做法是组织协调与各国事务所合作，建立境外法律服务的平台。因为中国的投资涉及很多国家，没有一家事务所可以真正的把这些地方全部覆盖。尤其在非洲、东南亚很多地方。所以主要还是建立一些合作模式和选择联络及

组织各国律所的网络。 ALB: 在规模化发展的市场潮流中，君合的选择是？ XW: 现在大家搞规模化，有点规模竞赛的意思。而且方式也不太一样，有的用合并、并购的方式，有的用连锁、合同的方式。这是因为中国的市场经济主要是这二三十年才全面发展，律师事务所的运作也是这二三十年的事。所以没有过去的历史经验，也没有这种文化，，赶上这样的经济高速发展期，机遇很多，自然带来不少规模冲动，我觉得这是市场的一个大变化。对于规模化，我觉得律所有必要具有一定规模。因为现在业务的内容是越来越丰富，对于各方面的专业人员都有要求。我们这些年把君合做成了一个全方位商业法律服务的事务所，这需要有相当的团队和覆盖面，所以我们的规模是在增长的。另外我们也在一些重点的地域适当的做了一些覆盖，开设分所，形成规模和网络。

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Managing Partner Q&A

We do not accept any sort of “franchises” or any big team mergers, despite many firms that have proposed these to us. We have been carefully selecting high quality small teams to join us over the entire history of our firm. We never take over a whole firm. Through this, we are able to maintain the high quality of our services and personnel while growing. ALB: What are your international development plans? XW: Chinese firms are going global, like King & Wood Mallesons, and many of those are operating overseas with affiliating firms. However, we have our own opinion. We have no objection against other people’s approaches, but we believe that the genuine advantage of Chinese firms lies in PRC law services. Jun He has an office in Hong Kong. We opened another one in New York as early as 1993. We also have a patent office in Silicon Valley. While running these offices, we have tasted the reality of a Chinese firm operating on different soil. The Chinese firms have no advantage when it comes to services relating to U.S., UK, Hong Kong or other countries’ laws. It is because we are not native language speakers, we are strangers to the culture, and PRC law is not commonly used worldwide. Moreover, Chinese clients are not yet quite world class. Although we have participated in many overseas projects of Chinese clients, the amount of their demands are not big enough to support a Chinese firm to turn fully international. Where Chinese firms can perform is the area of PRC law. Jun He has grown into the leading counsel of plenty of cross border transactions, but it is not enough to become an international firm. One can open in many countries with many teams, but one cannot maintain them without a strong client base. Realistically, Chinese firms are not developed

但是我们的规模是非常有控制的，在扩大规模时候必须要保证每个律师、每个合伙人专业的能力和素质。另外我们要还考虑律师费的收益，合伙人的平均创收，合伙人综合利润率等等。所有这些中国要做平衡，然后决定是不是再应该扩大规模。虽然我们的规模在发展，但是在律师界里，我们属于一个相对比较严格控制的，比较稳扎稳打的事务所。虽然找我们谈加盟的各地事务所很多，但是我们一律不接受任何加盟。我们也不做大团队的吸收。君合发展二三十年的历史，都是采用的精挑细选的、高质量小团队的加盟，没有采用并购或其他方式吸收整个事务所。这是我们在进行规模扩大的同时，对业务质量、人员素质方面进行的一个控制。 ALB: 君合对国际化发展的思路？ X W: 现在中国律师事务所开始走国际化，比如金杜，还有些以联盟的方式在国外发展。但是我们的看法不太一样。我们不反对别人怎么走，但是我们觉得

作为中国的律师事务所，第一位优势还是在于中国法为主的法律服务。我们在香港有分所，我们在纽约于1993年就有分所了。后来在硅谷也开设了分所主要从事专利法律事务。但是也正是从这些事务所的设置中，我们真正体验到中国律师事务所在其它国家的实际意义。如果涉及到美国法、英国法、香港法或者不同其它国家的法律服务，显然中国律所不占优势。第一个原因是语言，我们的人员很多英语是不错的，但是比起人家母语并不占优势。第二个我们在当地文化上也不占优势。第三个中国法也不是一个普遍适用的法律。另外中国客户目前也达不到全球客户的程度。虽然我们现在也参与不少中国客户境外投资项目，但是这种需求还不可能支撑起一家中国律所转换成为一家国际所。中国律所起到的最大作用的地方还是中国法及为中国公司组建协调境外交易的法律服务平台和服务团队。随着君合不断发展，我们现在在很多跨境交易中已经起着主导顾问的作用，但是只靠这些还不足以成为一个国际性的律师事务所。你可以到各个国家设很多分所，然后建立很多团队。但是要建非常强的海外团队，一定要非常好的客户基础。以中国事务所现在的综合能力去吸引其它国家的客户是不太现实的，人家也不太可能找中国事务所做主顾问。而如果光靠中国客户境外投资业务的收费还养活不了强大的国际化律师团队。

Managing Partner Q&A

enough to build a major foreign client pool, while the foreign clients are not likely to hire a Chinese firm as leading counsel. And the revenue from the Chinese clients could not afford to sustain a strong team. Frankly speaking, those overseas offices are mainly windows for us, they cannot provide substantive legal services. Of course, one can also choose to become a part of an international firm, which is another approach. But we will basically continue to adhere to our strategy of being an independent Chinese firm. Meanwhile, we are also working on internationalisation, but not by opening up everywhere or merging with someone else. We will build our own team, have a better and closer cooperation with foreign firms, and construct an international service platform with detailed rules and operational manners to provide high standard legal services to Chinese clients. Thanks to increasing business, we have, in fact, come up with plenty of experiences about it.

ASIAN LEGAL BUSINESS august 2012

Chinese economy, we know the PRC law, and there are needs for PRC law practices, including those of foreign clients. However, when you become a part of an international firm, you will lose most of your previous business partners. What you receive is less than what you lose - this is the problem of a merger. Our firm has established close relationships with numerous firms in many countries. There are a number of cases that come through

ALB: So for now, Jun He is not going to merge with any international firm, correct? XW: There have been a great number of firms from other countries and Hong Kong that have contacted us, showing their interest of a possible merger. But at the moment, we would prefer to improve our own business. This is due to many reasons. The first is that we do not intend to become an international firm. The second is that even if we are to become an international firm, it is not likely we can have control of the process. We might have the client base, but we do not have the advantage in those businesses. Our real advantage is that we are in China, we have the

这些海外分所目前实际上起到是一个窗口和辅助性的提供当地法律服务的作用。当然，中国所也逐渐地为一些中国公司中小规模的交易提供香港法和外国法律服务，但这还不具备提供全面、复杂、大规模境外法律服务的能力。当然，你也可以选择跟其它国际所合并，甚至你变成国际所的一部分。这个是另外的思路和道路选择。而我们选择保持作为中国独立所的定位和战略。国际化我们也是要做的，但我们国际化不是建立在到处设分所或者跟国际事务所合并的基础上，而是我们建立起自己的团队，然后跟包括国际所和各国独立律师事务所建立起更好更紧密的工作关系。我们要建立一个国际法律服务平台，包括具体的规则和操作方法，这样来给中国客户提供境外法律服务。而最近这种法律服务需求越来越多，我们现在摸索出了不少经验和体会。 ALB: 所以君合暂时不会也跟外国事务所进行合并？ XW: 和我们接触，表示合并意愿的外国所和香港所很多。但目前来讲我们还需要先做好自己的事情。原因有很多方面的。第一我们没想做国际所。第二个即使是做国际所，国际化的过程当中不可能以你为主来做的。因为就算你有些客户的基础，但是真正做这些事情的优势并不是你的，你的优势是因为你在中国，有中国法，有中国经济,有一些中国客户。有中国的法律需求，包括其他国家对中国的法律需

求。但是你变成哪个国际所一部分的时候，你就会丢掉很多你的合作伙伴。你可能从一个事务所得到的东西，包括客户，比你失去的东西少，这就是问题。我们事务所多年已经与很多国家不同的事务所建立了很多协作的关系。每年都会有不少业务来自于很多国家的事务所

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referrals from those firms every year. We cannot become stuck on one at the cost of losing all the others. In particular, when a partner is a top U.S. or Magic Circle firm, it is more trouble. It is like once you marry someone, you can no longer keep long-time relationships with others. They are rivals to each other. As a result, we have decided to choose a way of independent development.

Managing Partner Q&A

is competition going to be like in the future? What are Jun He’s advantages? XW: Outbound investment work used to be dominated by foreign firms, but now Chinese firms are taking over a growing share. In the future, I think it would be like the split of the inbound market. The largest issues in the outbound business are the high cost of communications between the Chinese clients and their foreign counterparts, and the need for a China hand who knows the Chinese way of doing things and Chinese culture to help out.

ALB: As outbound business increases, what For instance, when a Chinese client has such a case, he might turn to an international firm in the past, since he believed it had wider coverage and stronger professional skills. However, Chinese clients are now realising that international firms also have plenty of uncovered areas and that their frontline teams consisting of Chinese lawyers with foreign qualifications, is so small that much more work needs to be covered by back office forces. And there are always problems in the process of coordination between the frontline and the back office with high cost and low efficiency. In fact, Chinese firms can do most of these things, and we can do them better. We have easier communication with the clients, we understand their needs. We can provide a larger and full-service practice team and help our clients to choose foreign firms to work with. Once our experience grows, Chinese clients would find that we can totally handle it, and then they would like to choose us eventually. A Chinese firm would take the lead in the cooperation with foreign firms. Such a tendency has become obvious.

下，将来国内外律所之间市场竞争的格局会发展成什么样的局面，君合又将怎样发挥自身的优势？ XW: 原来这个领域里主要是外国所在做，但是现在越来越多的份额进入到了中国所手中。将来趋势上中国所的份额会加大。因为中国律师容易沟通，费用也低。比如中国客户有相关的业务，他可能原来找国际所，因为他认为国际所会有很大的覆盖范围，有更强的业务能力，但是随着时间、业务的发展，很多中国公司反映:第一，其实国际所在很多地方也是没有覆盖的。第二，这些国际所在中国的前台出面的许多都是有外国律师资格的中国人。但是前台团队是不够强大，很多的事情要靠他们后台即在其它国家的办公室来做。但是他们前台、后台的协调成本高,效率并不很好。 REUTERS/Miro Kuzmanovic

的推荐。不能只和一家做，把其他都丢掉，特别是如果对方是英美大所，就很麻烦了。你跟一个人成了婚姻关系了，其他人没法跟你保持这种长期的协作关系，他们之间可能都是竞争者。所以我们决定选择独立发展的道路。 ALB:

在现在海外业务越来越多的状况

而很多的事情实际上中国所都可以做，而且可以做得更好。因为中国所和客户的沟通很方便，中国所更了解中国客户需求什么。然后中国所可以与客户一起选择外国的事务所而组成团队工作，并负责组织协调。一旦业绩上来，经验上来，中国客户，就会逐渐更多选择中国事务所。现在这个趋势已经显现出来了。但是具备这样的能力的中国所目前是比较有限的，因为这个需要长时间积累。我们过去在中国所中国际业务的能力是最强的之一，今后我们还要继续保持这一个能力。而像金杜采用了和国际所合并的这种方式。也是另外一种模式，他们在这方面也

Managing Partner Q&A

However, Chinese firms capable of this are limited since it takes a long time to gain international experience. Jun He is one of the strongest Chinese firms in terms of international practices. We will keep this advantage in the future. We’ve seen King & Wood choose to merge with Mallesons, which is another approach, and they have their advantages too. But I think we can also build our abilities in our own way. Jun He has previously done a lot of inbound work. Now we also have many outbound practitioners. Our front line abilities are more comprehensive than most of the international firms. We can do many substantive practices better, including communicating with Chinese clients, organising the foreign participating firms, carrying out negotiations, and drafting bilingual contracts, etc. Plus our price is more reasonable. Since foreign firms charge at least a third or half higher than us, Chinese firms have a significant advantage over the competition. Chinese clients have been positively trying out our services over the past year, and gradually we have become the lead counsel in many cases. We have quite an advantage. ALB: What do you require from your lawyers? What incentives do you offer? XW: Our demands from the talent are: Chinese lawyers developed by ourselves who know China and PRC law very well, and speak foreign languages too; Chinese lawyers who used to work for international firms, and foreign or Hong Kong lawyers. With such a mixture of talent, we can build an organic team. Historically, we made a few adjustments to our standards. In the beginning, we targeted school graduates and local talent with strong professional skills. Then we imported returning lawyers from overseas. Now on one hand, we develop our own youngsters, while on the other

ASIAN LEGAL BUSINESS august 2012

hand, we attract both domestic and foreign talent with international expertise from top Chinese and international firms to join us. We arrange our talent programme according to actual practices. The standards and needs of talent vary from practice to practice. For example, a domestic capital market lawyer need not be an international expert, but we surely must have people specialised in U.S. or Hong Kong IPOs. Hence, we have specialised requirements according to particular sectors and practice areas, and we do not just rely on one or two people. We group together complementary people for teamwork. We have been constantly working on the improvement of our distribution and incentive system, but generally we are doing well by making use of our human resources. ALB: What challenges do you face as a managing partner? XW: I actually face all sorts of psychological pressures and challenges. For example, all the firms are trying to expand in size now. For Chinese clients, size is a significant factor in selecting a law firm. They think the bigger a law firm is, the better it will be. So this mentality brings tremendous pressure on us,

会有他们的优势。我们选择了走另外的道路，来把自己的能力培养和建立起来。过去君合做了很多境外对华业务，这方面的人才也很多。所以我们的整体团队的工作能力，比国际所在中国的团队更全面。而且我们很多实质内容都可以做，包括与中国客户的沟通，对外国合作事务所的组织，另外很多谈判，合同文件，中英文双语化的问题中国所能做得更好。费用也更有竞争力些。因为境外的律师收费比中国所费用价格至少多三分之一到一半。所以在这方面中国所还是有很大的空间和竞争优势的，现在中国的客户也在积极尝试请中国所来做这种业务，我们这一年多很多业务先是由我们来参与，后来变成了由我们主导来做。 ALB:君合的人才的需求和激励措施是什么样的？ XW:现在我们对人才的需求大概有这么几类：第一个是自己培养起来的国内律师。他们对中国很了解，法律也很熟悉。而且外语能力也很强。第二是过去在国际所、外国所工作过的中国律师或者顾问。第三还有英美或者香港的律师。这样的团队人才组合，成为一个有机的一体。我们在历史上引进人才的时候经过几次定位调整。早期的时候是定位在专业能力比较强的本地的人才。第二次定位我们开始从国外引进海归人才。现在我们的定位，除了自己培养，还有吸收国际国内的很多领先律所的具有国际化业务能力各种人才。

我们人才的需求是根据我们的业务板块来安排的。不同的方面需要不同的人才，不同板块标准是不一样的，比如说做国内的资本市场的人不一定要有很强的国际能力。但是我们资本市场的人里面有些人是专门涉及到美国或者香港上市的人才.我们每个不同的业务板块、业务领域，靠一两个人是不行的，它需要一个互补组成一个团队来工作。我们内部的分配机制和激励机制，也是我们这些年都不断在调整和改进的问题。但总体上我们目前的人才消化得还是比较好的。 ALB: 作为管理合伙人您面临的主要挑战是哪些？ XW:我们实际上面临着心理各种压力和挑战。例如现在各个事务所都在做大规模。而对于中国的客户，律所规模是起相当大的心理影响作用。以为大就是好。这会对我们产生相当大的来自圈外圈内的压力。关键在于我们是不是真正能够不为所动，坚持按照我们自己的理念来做事。我们觉得这个压力对我们内

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both from within and outside the industry. The key is whether or not we can keep our peace of mind, and uphold our principles of doing things. I feel this pressure has a bearing on our internal governance too. Oftentimes, some partners would suspect that we have fallen behind other firms in expanding, so we often have to “unify and stablise our thoughts” in this regard within the firm. Secondly, the recent merger between King & Wood and Mallesons has been a hot topic in the international market. We have not made such a move, and thus have not been a “hot topic”. This will have a certain impact on us for some time.

部也有影响。时常有些合伙人觉得我们是不是在这方面落后了。所以我们内部经常要把这个思想统一好，稳定好。第二个在国际上，最近金杜和万盛合并，成为了关注的热点话题。而我们没有这样的举措，会显得不是热点。这样也会在一个时间内产生一些冲击力。但是作为具体业务上来讲，这是一个长期的任务，我们需要真正把自己的队伍

Managing Partner Q&A

However, when it comes to concrete cases and practices, the longterm task for us is to build better legal teams and a strong leadership. Another big problem is payment. The legal industry in China is still at a messy stage. In general, Chinese clients are not used to paying high prices for legal advisers. If we do not charge legal fees sufficiently high, it will affect our assembly of a strong legal teams and recruiting talent. But on the other hand, it will be more difficult for us to get business if we charge high fees. This is a major challenge for us. ALB: Are there any other challenges in operation and management? XW: We are one firm and one profit pool, which is different from those franchise firms. We adhere to the principle that all our offices are one firm with the same system and base. It has always been our advantage. At the moment, our problem is that we need a better combination and distribution of the firm’s resources as a whole, particularly including

建设好，把业务市场和专业服务水平建设好。还有一个大问题就是收费，中国的法律市场很乱，收费总体比较难。费用太低的话事务所的团队和人员建设是受影响的，但是要收比较高的费用拿项目又比较困难，这方面也是比较大的挑战。 ALB: 君合在经营管理方面需要解决的其他挑战？ XW:我们首先是一个企业，统一核算，所以我们跟连锁加盟制经营的律所不一样。我们一直坚持这一点，我们所有的分所都

Managing Partner Q&A

the development of new joiners to strengthen our workforce. The number one challenge we are facing is how to build this platform well to benefit the group function. For one thing, our partners in fact have different levels of capabilities, which should be represented correctly. Otherwise, those better ones would lose their motivations. Another thing is that we should have a constant incentive. If the capable ones and the young people have enough room to develop and deliver to gain recognition, the firm would also lose its driving force.

ASIAN LEGAL BUSINESS august 2012

need to work hard, but also live a healthy and harmonious life. Therefore, when it comes to the expansion of the firm, we are active but not aggressive and reckless.

There is another thing we need to consider - that there are many people who have made a great contribution to us, and have now come to the age of retirement. It is a natural process of time and we have to settle them in a fitting manner. We have reasonable packages for different retirement ages to provide them a guarantee while not causing a heavy burden to the firm. We have to create a virtuous cycle of human resources in which the elderly have proper retirement settlement when new blood is constantly filled in.

Many people want quick and easy success today. They hope to make leaps forward in some aspects of life within a short period of time. We, at Jun He, have stuck to our own principles when it comes to growing the company. We applaud other firms’ rapid growth, but we will not follow them blindly. We have always been in a prudent, active, and relatively harmonious state. We do not employ gimmicks or resort to media hype. We keep a low profile, but we do not do so for the sake of doing so. Our daily job is to do things well, and take every step in a firm manner.

Chinese firms, as I said, have little history, so we have to adjust ourselves throughout development. In a compressed period of time, we will be facing all the problems that the Western firms have experienced over the past century.

After more than 20 years of growth, we have cultivated a tradition, a kind of cultural atmosphere, and a set of habitual ways in the company.

ALB: How has Jun He built its corporate culture in this process? XW: We have always attached great importance to corporate culture. We have always emphasised unity and integrity of the firm. We expect our employees to be aware of the firm’s long history and of the larger issues facing society, and thus our corporate responsibility. We expect them to be clear that Jun He is not a firm owned by a certain individual or by a small group of individuals. It is a long-term cause. We also want our employees to balance their life and work, making it a long-term cause for them personally too. The firm means a job and a career for them. It is also a foundation for their life and work. They

Our partners have a consensus on the firm’s general direction. When a new lawyer joins Jun He, he or she may have a unique personality or style. But over time, the new recruits incorporate our tradition and culture into their ways of doing things. We are a firm that consciously cultivates a corporate culture, and has its eyes on wider society too. We want our tradition to get passed on for more than a hundred years and even longer. That

是一个统一的平台，所有的体系都是一个整体。这个基础是比较好的。

新鲜血液进来，资深的人也要有一个出口和一个休息的安排。

但是我们现在问题在哪呢？我们需要更好的组合和配置全所的整体资源，包括特别要发展新来的这些人员，把我们的力量全方位的加强。所以我们面临的第一个问题，就是我们要打造好这个平台，是它更有利于整体工作。这对我们来讲是一个挑战。

因为中国事务所没有历史积淀，它在发展过程中要不断调整。我们在一个发展过程中，从无到有，从小到大，从弱到强，就会在短时间内遇到西方国家一两百年历史上遇到各种各样的问题，要不断调整。

挑战的原因，第一个因为我们的合伙人实际上能力的大小是有差异性的。这个差异性需要能够合理的反映出来。如果什么都是一样的话，真正对于工作好的人，激励作用就会降低。第二个要考虑是我们要有一个持续激励，如果不能让能力强的人，包括年轻人空间得到相对的合理的认可和发挥，事务所就会缺少一个持续的动力。还有另外一个方面我们也要调整。事务所毕竟有很多人做了很多历史贡献，在一个时代里面总是有后浪推前浪，但是我们对前浪也是要有所安排。我们建立了我们的退休体系，不同的时候退休，我们也有保证和照顾，也不给事务所造成大的负担。因为你必须让人才形成一个循环，形成一个良性循环，不但有

ALB: 君合在这种过程当中对企业文化建设做了哪些努力？ X W: 我们所对企业文化一直比较重视的。我们一直是强调整体性，强调事务所的人文的发展，强调事务所长期发展战略。不是某一个个人或某一部分人的事务所，它是一个长远的事业。也强调了工作与生活的一个平衡来发展。事务所是一个工作和事业，但也是事务所人员的工作和生活的一个基础平台。要积极努力工作，也要自然和谐的生活。

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is why we do not think from the perspective of one generation or even for a time range of only three or five years. We think long term. ALB: Of the achievements Jun He has made in its 23 years of history, can you list some that you are especially proud of? XW: First of all, Jun He is among the first law

Managing Partner Q&A

firms that was set up during post-reform China. We have 23 years of history now. We were already an industry leader when we were very small. Now we are still a top firm leading in many areas, and this is reflected by consensus in the industry. Second, we have always taken a prudent approach to expanding the firm. The partners and the legal teams as a whole have been quite stable over the years. We have adapted to the market changes well,

REUTERS/Reuters Staff

在事务所发展上，总体我们是积极进取的，但又不去冒进。在现在中国法律服务市场比较浮躁，许多所希望在短期内大跃进。我们则坚持按照我们自己的理念来发展，别人发展很快我们为别人喝彩，但是我们不能应

该完全盲目的去跟风。我们一直追求一个稳健、积极，而且相对比较和谐的状态。我们不去制造一些噱头，也不太采用造势的方式。但我们”低调”也不是刻意的。我们每天做的工作就是踏踏实实把事情做好，一步一步去做就是了。我们20多年的发展，延续下来的理念，已经形成一个文化氛围和习惯。我们的合伙人在大的方向上也有共识。我们每个新人

Managing Partner Q&A

ASIAN LEGAL BUSINESS august 2012

REUTERS/David Gray

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and have avoided big fluctuations. Third, we are better than most Chinese firms in terms of the overall quality of our legal teams, and the variety of the cases they take. Fourth, we have made many strategic reforms over the course of our history, and all of them have been successful. We used to focus on foreign direct investment cases in China. In recent years, we have made sweeping adjustments in our choice of key clients and types of cases. In addition to international clients, we now attach great importance to domestic clients too. In this area we were a latecomer compared to those firms that have been working on domestic clients from the very beginning. Thanks to our good reputation that more and more companies are seeing Jun He as an important choice when they are concluding major deals. Particularly noteworthy are overseas investment matters by Chinese companies. Our advantages in these transactions are quick to demonstrate themselves. There might be many firms scrambling for ordinary deals, but when it comes to highend ones, Jun He is especially well received and well recognised by companies, whether we get the legal business in the end or not. ALB: Which areas will Jun He focus on as it plans growth for the future? XW: We have lost many of our advantages in some areas, so we have a new strategic preference now. We continue to take some routine

进来，虽然每个人风格个性不一样，但是发展过程中基本上的思想理念的东西或者说这种文化的基础东西还是共通的。我们比较强调人文的事务所，希望能够传承百年甚至更长时间，所以不是从三五年来考虑，我们是从长远来考虑。 ALB: 君合二十多年来的发展中特别自豪的成果是？ XW:首先我们在中国事务所里面成立的是最早的一批。已经有 23年。从一开始还很小的时候就是比较好的，到现在还是律师界领先的律所之一，在律师界比较认可。第二，我们所一直比较稳健的方式来发展，包括合伙人、整个团队、跟着市场上的节奏，一直保持平稳，没有大起大落。第三，我们团队整体的配置和业务的质量在国内的事务所当中是比较整齐的。第四，这些年来我们也做了很多大的战略调整，都比较成功。我们过去做跨国公司对华投资比较多。但是这些年我们把客户群和业务领域做了全方位调整。除了国际客户以外，也重视国内客户。虽然不像过去专门做国内客户的所开始那么早，但因为我们的业务质量口碑好，越来越多的客户在遇到比较重大的业务时，把君合视为重要的选择之一。尤其现在做对外投资，我们的竞争优势就出来了。可能一般的业务很多人去竞争，但

Managing Partner Q&A

business in the domestic market, such as A-share IPO transactions, but we do not actively seek this business because the market is very competitive. We must have a balanced structure in the businesses we involve ourselves in. There are other sectors that we want to get a better hand at. We have made satisfying progress in the financial sectors in the last couple of years. We have also made efforts to get more international business. We have paid more attention to appeals in anti-monopoly cases, and have made some progress in that regard too. As you know, it is always challenging to take up litigation in China. We have tried to become more professional in litigation. Arbitration, especially overseas arbitration, is another area that we have worked on improving, with some positive results. Intellectual property is gaining weight in our overall operations as the global protection of IPRs has become crucial for many companies. Therefore, we have made recruiting talent specializing in IPRs protection a priority. ALB: Will Jun He open more offices nationwide? XW: We have branches in several coastal cities now. China is one jurisdiction, and our teams belong to an integral entity, not individually contained in a certain city. Moreover, you can only be efficient when you mobilise the resources of the entire firm. We are having more and more coordination and collaboration among our branches. The fact that office work is increasingly becoming electronic has helped us achieve the timely assignment of tasks across the country. Having said that, we aim to have more cooperation among offices in certain regions. We need more Chinese companies as clients. We cannot be content with having the big central SOEs that we have now. We should win clients from among local SOEs and private enterprises too. The more, the better. ALB: How much do international businesses occupy Jun He’s overall operation?

是高端业务，对我们的评价和认可都是相当高的。 ALB: 哪些业务领域将是君合将来的发展重点？ XW:在有些领域里我们很早就不太占优势了，我们也有一个战略取向。国内一些日常业务，比如A股的IPO，因为它市场比较难做，我们每年都做一些，但并不在这方面刻意去追求它。因为我们要平衡我们所有业务的结构。对于有些板块，我们要再加强。我们这两年金融板块加强不错的。另外对外业务这也是我们不断加强的。反垄断业务我们前两年就开始加强，现在已经取得不少的效果。因为做中国诉讼比较难，我们在这方面业务就强调专业化的优势，还有仲裁，包括境外仲裁下了不少工夫，现在也是取得一些进展。还有知识产权保护也是我们一个重点。因为现在很多企业，尤其是全球性企业的知识

Managing Partner Q&A

ASIAN LEGAL BUSINESS august 2012

XW: Inbound business used to account for a huge part of our operation. At its highest, 70 to 80 percent of our businesses was dedicated to inbound. This was especially the case in the period between China’s accession into the WTO in 2001 and 2005. Now the percentage has gone down with one of the reasons being a lower number of transactions after the global financial crisis. Meanwhile, we have also been serving more Chinese companies. Today we have a roughly equal number of international and domestic clients, but more than half of our revenue continues to come from international clients. As to our hopes for the future, I think we have to build on what we have achieved so far - to deepen and consolidate our current practices in international businesses. We should also strengthen our legal teams, and deliver better services to clients. We need to maintain our competitiveness, and achieve stable and sustainable growth in the face of ever-changing industry trends. In addition, we are making overseas business a strategic priority. First of all, the robust growth in market demand for our legal services has indeed been beyond our imagination. International legal counsel has become a routine business of ours. Chinese companies are set to become more and more global with many of them going overseas. We are determined to build up a leading edge in this area. ALB: Who are Jun He’s major competitors and what are your advantages over them? XW: The most obvious rival remains King & Wood, because of its sheer size, and the push it gets from its recent merger with Mallesons. In fact, we have different competitors in different fields. For example, our main competitors in the A-share business include Commerce & Finance and Haiwen & Partners. We compete with Fangda in the area of private equity. Dacheng and JT&N pose challenges to us for some domestic business. However, overall the big rival is King & Wood Mallesons. Our competitiveness lies in our good relations with a large pool of long-term clients. We have served many multinationals in their China-related deals over the past 20 years, and we have success-

产权业务是一个重要业务。所以我们把知识产权业务，特别知识产权保护方面作为一个重点。 ALB: 那么地域方面接下来的布局会有调整吗？ XW:我们沿海几个城市都有了分所。但业务团队都是一个整体，不是局限哪个城市里的。而且你必须要把全所的业务资源能力用上才能够真正发挥效率。我们将来还将于很多区域进行某种方式合作，我们要有更多中国客户。现在这些大国企还不够，我们要有地方国企和民企，越来越多才行。 ALB: 君合目前的对外业务能够占到多大比重？ XW: 外资在中国的投资与经营方面的业务在君合业务中的比重过去一直挺大

fully cultivated and maintained great relations with them. We are among the few Chinese law firms that are very experienced in serving international clients. We have not done what King & Wood has done – merging with a foreign firm, but we have enhanced our capability to handle international cases, and improve our international legal teams through other means. Our achievement in this regard does not pale

的，我们过去曾经最高的时候占百分之七八十，尤其是WTO 以后到2005年前后那几年。，现在降下来了，是全球的金融危机造成交易少多了，二是自己我们也调整了中国企业的比例和客户。现在国内客户和国际客户数量可能各占到一半，但是国际客户的收入还是占我们的一半多。将来的海外业务，我们是要在现有基础上深化和扎实，把团队做好，业绩做得更好，业务做也得更好些。保持相对的竞争优势。另外我们近期的重点战略就是要特别加强海外业务。这方面的需求增长速度确实超乎我们的想象，成为了常态业务。将来中国企业面临着一个全球化的问题，可能很多企业都往外去，我们要先把这个优势做起来。 ALB:君合主要的竞争对手是哪些呢？自己的优势在什么方面？ XW: 竞争对手最明显的还是金杜。因为金杜的规模化，还有和万盛合并的影响。实际上在不同领域里我们也有有不同的竞争对手。比如A股有A股的竞争对手，比如通商、海问。PE领域

Managing Partner Q&A

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number of truly all-round law firms like us is small. Perhaps, some people only know about Jun He’s non-litigation businesses. Actually, we win prominent litigation cases for our clients too. For example, we have represented Danone and Michael Jordan in their China-related lawsuits.

REUTERS/Jianan Yu

In addition, we have a good record with anti-monopoly cases. We have also actively taken part in China’s legislation process, and offered advice to the government in the creation of public and industry policies. We have good working relations with the government at several levels. Thirdly, our legal teams are extremely professional with a strong capability to operate in the international market, and have accumulated rich experience in all kinds of cases over the years. This has been demonstrated repeatedly by the major deals concluded by Chinese companies in which we played crucial and well-recognised facilitating roles. We are capable of taking up big cases and deals both within and outside China.

in front of what King & Wood has achieved. Our competitiveness also comes from the fact that we are a real full-service firm. Those firms which rely too much on a specific kind of business will be greatly impacted by market fluctuations. We are much more balanced, and can stand market changes. In China, the

跟方达。有些国内的业务就会碰到大成、金诚同达，但最集中的可能还是金杜。我觉得我们在竞争中的优势，首先是原来对华业务中的客户基础。很多跨国公司在中国的业务，过去20年这个客户基础一直持续得比较好。我们本来在中国事务所里，是和境外打交道比较强的事务所，我们没有像金杜那样跟国际所搞合并，但是我们可以通过不同的方式让我们这些国际化的能力和素质整体上的团队水平殊途同归，也是毫不逊色的。第二个是我们是真正的全业务事务所。如果过分依赖个别业务，一旦市场出现变化也会受比较大的影响。我们是全业务，整个的平衡方面就比较好。能做到这种全业务的事务所目前也是比较有限的。可能大家只知道君合的非诉业务，但实际上我们的诉讼业务每年也都比较有影响，比如说达能，以及我们代表乔丹。另外，我们反垄断的业务，包括参与立法，包括他们政策的制订，和其它相关政策审批我们都有比较好的政府关系的基础。

Last but not least, in the past 20 years, Jun He has had a great advantage in handling foreign direct investment cases and international M&As in China. Now we are also becoming better and better at helping Chinese companies in their overseas M&As or construction contracts. We are also gaining substantial experiences in areas ranging from antimonopoly law, the listing of foreign companies on the international board of the Chinese stock market, and banking and finance markets to intellectual property, labour law, and taxation law. ALB: What is Jun He’s strategic goal in the next couple of years? XW: We have two strategic goals. The first one is internal adjustment. We plan to optimise the utilisation of resources and platforms within the company so that they can further help our overall growth. Second, we will introduce more creative ways to attract talent and build even better legal teams with an internaitonal service platform. This is about laying a more solid foundation, after the completion of which many things will come naturally, and the firm can achieve healthy growth. Without a solid foundation, you will be restrained by this or that problem in every subsequent move you make.

第三个对于中国客户的重大案子我们的竞争力还是不错的。什么原因呢？我们的专业性，包括跟国际打交道能力和过去的基础都很强，所以无论是境内境外的交易，我们的参与能力都比较强。另外，过去二十年君合在外资及并购有明显优势，现在又在境外并购及工程，反垄断，外国公司在中国国际板上市，银行金融业务，知识产权保护，风险及股权投资，劳动法，税法等方面有综合优势。 ALB: 君合接下来一两年内的战略目标是什么？ XW: 我们现在战略目标两个方面。一是内部调整，我们要把内部的资源和平台调整到更利于我们整体上的发展。第二刚才讲到我们境外法律服务平台的定位和结构搭建，要做的更有创意。这些都是基础方面，基础方面做上去了以后，很多东西就可以水到渠成，良性运转。如果这些基础东西搭建不好，你后面的东西每次做起来都是捉襟见肘。

INDIA COUNTRY REPORT

INDIA’S

ASIAN LEGAL BUSINESS august 2012

HOUR

“THERE IS NO POINT BLAMING THE GREEKS OR THE SPANIARDS FOR INDIA’S ECONOMIC WOES. NOR ARE THE USUAL SUSPECTS, THE RAIN GODS, AT FAULT THIS TIME. GROWTH SLOWDOWN IS ESSENTIALLY HOME-MADE.” THE ECONOMIC TIMES

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OF DOUBT IT IS HARD TO IMAGINE THAT INDIA WAS, UNTIL A MERE COUPLE OF YEARS AGO, ONE OF THE MOST ATTRACTIVE OF THE WORLD’S NEW ECONOMIES. THE LUSTRE HAS NOTICEABLY FADED IN THE LAST FEW MONTHS, WITH GROWTH SLOWING, THE DEFICIT GAP WIDENING, AND THE RUPEE FALLING THROUGH THE FLOOR AS A RESULT OF STALLED REFORM, GOVERNMENT PARALYSIS, AND A VARIETY OF OTHER FACTORS THAT HAVE MADE INVESTORS CIRCUMSPECT. THERE IS NO QUESTION THAT THE FUNDAMENTALS OF INDIA ARE JUST AS STRONG AS THEY WERE HALF A DECADE AGO, AND THE COUNTRY IS EXPECTED TO TURN THINGS AROUND IN THE NEAR FUTURE. BUT THE NEXT FEW MONTHS COULD BE CRUCIAL, FINDS RANAJIT DAM

REUTERS/Arko Datta

he recent statement from Leif Lybecker Eskesen, HSBC’s chief economist for India, describing the country as "a gasping elephant" would have been unthinkable a few years ago, as would have been the comment from Jim O'Neill, former chief economist at Goldman Sachs and the man who coined the famous "BRIC" moniker - that India was the "biggest disappointment" of the BRIC nations. An interplanetary traveler visiting Earth in the 2009, shortly after India had weathered the global financial crisis with a sense of relative calm, and then returning sometime in the first half of 2012 would be encountering a completely different country, particularly if the newspaper headlines were to be believed. Much of the negativity, however, has been justified. India's GDP grew a mere 5.3 percent in the quarter compared to a year earlier, its slowest quarterly pace since early 2003 and below economists' forecasts of 6.1 percent. For those used to the 8 percent the country had registered in recent years, it certainly felt like the growth party was over. This was the hangover setting in. As of the time of writing, the rupee had breached the mark of 56 to the dollar, and did not look like it was headed the right way anytime soon. India’s trade deficit in April amounted to $13.48 billion, with oil imports which account for the single largest chunk of India’s import bill, standing at $13.9 billion. When you combine all these with stifling red tape, a lumbering bureaucracy, and some distinctly investor-unfriendly moves by the Congress-led coalition government of Manmohan Singh, the picture begins to look grim indeed. The government has attributed much of the slowdown to the falling growth seen elsewhere around the globe. But India’s current situation owes much to problems at home, and has been on the horizon for a while now. "There is no point blaming the Greeks or the Spaniards for

INDIA COUNTRY REPORT

India's economic woes. Nor are the usual suspects, the rain gods, at fault this time," noted The Economic Times, possibly the most influential business newspaper in India. "Growth slowdown is essentially home-made." New Delhi has been spending massively on welfare programmes, which, while politically popular, have widened the budget deficit and exacerbated inflation. Oil imports (as stated above) have widened the trade deficit, weakening the rupee and pushing up the cost of imported goods. To rein in inflation, the Reserve Bank of India doubled benchmark interest rates over a period of two years – from 4.25 percent in January 2010 to 8.5 percent in January 2012 – and this has led to a drop in the pace of investments in the infrastructure and manufacturing sectors. In April, Standard & Poor's downgraded India’s rating from stable to negative, citing “lower GDP growth prospects and the risk that its external liquidity and fiscal flexibility may erode”. Clearly, the alarm bells have begun ringing. Much of the blame is laid at the feet of the current government. “Certainly six months back, if not earlier, there was realisation of the eurozone crisis and (the) weakening of the Indian economy (deficit and inflation included) would have an impact on India,” says Jyoti Sagar, founder partner at J. Sagar Associates. “However, since November

ASIAN LEGAL BUSINESS august 2012

2011, the acts of commission and omission in governance, or the lack of it, have clearly and disproportionately impacted India.” The Indian authorities have been accused of paying scant respect to Indian firms, while displaying a condescending attitude towards investors. Additionally, it has made no moves toward reforms of any variety as corruption and red tape have run unchecked. Examples like the scandal surrounding the sale of 2G licences and the Vodafone case, which has led to a Finance Bill containing extraordinary retrospective provisions that go back 50 years, have not helped either. “From purely a lawyer’s perspective, the casualty has been the belief that we are a country governed by the rule of law,” says Sagar. LEGAL WORK IMPACTED According to Sagar, the gloom pervading the

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“Certainly six months back, if not earlier, there was realisation of the eurozone crisis and (the) weakening of the Indian economy (deficit and inflation included) would have an impact on India. However, since November 2011, the acts of commission and omission in governance, or the lack of it, have clearly and disproportionately impacted India.”

REUTERS/Rupak De Chowdhuri

JYOTI SAGAR, J. Sagar Associates

Indian economy has led to market sentiment being definitely bearish, especially when compared to the bullish waves of the recent past. Another outcome has been a fall in foreign investments, both financial as well as strategic. “This is characterised by lower (and perhaps more realistic) valuations in the M&A and private equity space, as contrasted by the more bloated valuations one would witness up until four or five years ago,” he says. “While mid market M&A activity is still prevalent, it is the transactions having a larger ticket size which are only few and far between and less forthcoming.” Sagar adds that there has not been any significant capital markets activity. Rabindra Jhunjhunwala, partner at Khaitan & Co, agrees with regard to the capital markets work. “With the economy being what it is, there has definitely been a dent,” he says. “Investor confidence is low, which has resulted in IPOs being stalled, and hence the volume has dropped significantly, even though clients are still interested in listings.” According to Ashwin Ramanathan, partner at AZB & Partners, part of the reason for the slowdown in capital markets work is that IPO promoters have very little incentive to go through with them. “Companies are currently waiting for markets to turn,” he says. Jhunjhunwala adds that a lot of the firm’s capital markets lawyers are now helping out on the M&A side, which seems to be awash with work. “There is so much buying happening, and it is pretty much across all

sectors,” he says. “We honestly do not know how to handle all this work.” Arun Balasubramanian, a Singapore-based partner with Linklaters’ India practice, notes that his firm has seen a fall in plain vanilla transactions, and an increase in more complex structured deals like IL&FS Transportation Networks Ltd (ITNL), which through its Singapore-based subsidiary, is looking to raise money by issuing yuan-denominated bonds. He adds that an interesting trend has been the appetite of Indian companies to acquire assets overseas, despite the prevailing global economic conditions, and cites the example of auto parts maker Motherson Sumi’s acquisitions in Europe. “Also, there is a great deal of potential for M&A activity in the healthcare and pharma sectors,” he adds. Ramanathan also says that in a way, the larger law firms are hedged against market turbulence since they can provide a wider range of services. “As the capital markets work reduces, our litigation side is positively booming,” he says. “What is different now from other financial crises is that clients have much less patience when it comes to initiating litigation. They are willing to pull the trigger much earlier.” Sagar says that his firm is seeing continuing activity in the dispute resolution sphere, apart from the regulatory and infrastructure space, “given the uncertainty in the regulatory climate and contractual defaults”. RETAIL TO THE RESCUE? Lawyers agree that one of the brightest spots in India’s road to recovery is the introduction of foreign direct investment into the country’s massive retail sector (See box on p.60) - something the government has been unable to carry out in full in the face of fierce opposition from across the political spectrum and from traders' unions. The annual sales of the sector amount to an estimated $450 billion, with nearly 90 percent of the market being controlled by tiny family-run shops. The country recently allowed 100 percent FDI in single-brand retail subject to certain sourcing restrictions, but no ownership in multibrand retail. “The opening up of the insurance and retail sector to foreign

INDIA COUNTRY REPORT

ASIAN LEGAL BUSINESS august 2012

KEY FACTS: INDIA’S RETAIL

LOCAL COMPANIES

Supermarket chains are looking for funding in a tough business environment, with foreign partners closed off for now after last year's indefinite suspension of a move to open the $450 billion retail market to giants such as Wal-Mart.

• Pantaloon Retail, India's largest listed retailer

The government had hoped the major reform would boost investment in Asia's third-biggest economy, but it quickly backtracked when it came up against fierce opposition from across the political spectrum and from traders' unions. Following are some facts on India's retail sector:

• The retail sector in the nation of 1.2 billion

people is estimated to have annual sales of $450 billion, with nearly 90 percent of the market controlled by tiny family-run shops.

• Organised retail, or large chains, makes up

about 10 percent of the market, but is expanding at 20 percent a year. This is driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at nearly 2 percent a year.

•

India also allows 100 percent FDI in cashand-carry, or wholesale, ventures. Restrictions on foreign investment in front-end retail exist because of opposition from millions of small shopkeepers, who are valuable vote banks during elections.

• India has recently allowed 100 percent FDI in

single-brand retail subject to certain sourcing restrictions, but no ownership in multibrand retail.

and part of the Future Group, runs apparel and electronics stores under its lifestyle brands Central, E-Zone, and Hometown. Future also operates the Big Bazaar hypermarket chain and supermarket brand Food Bazaar. The group has over 1,300 stores across formats, and occupies a total retail space of 16.5 million square feet in India. Future has, for long, been linked to France's Carrefour for a partnership in hypermarkets. It recently sold controlling stake in its flagship clothing brand Pantaloon to bring down its high debt.

•

Second ranked Reliance Retail is part of Reliance Industries, India's largest listed group headed by Mukesh Ambani, India's richest man. Reliance Retail operates 1,300 stores across neighbourhood stores, supermarkets, hypermarkets, and lifestyle stores. It has said it does not plan to partner with any global retailer.

• Shoppers Stop, part of the K Raheja Group which operates in real estate, has about 265 stores across brands and formats including 12 Hypercity hypermarkets. It operates 4.58 million square feet of retail space, and its loss-making Hypercity is open to partnerships with foreign groups. • Trent, part of the sprawling Tata Group, operates 106 stores across formats and runs the Westside range of apparel stores, in addition to hypermarkets under Star Bazaar. It signed a

investors will certainly augur well for the industry and investor sentiment alike,” says Sagar. Jhunjhunwala agrees. “Liberalisation is key, and I expect it to happen in a number of sectors, including retail and insurance,” he says. “These are hard decisions that the government has to take.” He adds that just a “few small things” in the near future would be enough to turn around India’s fortunes. “We need clarity on the telecom issue, and we need clarity on the issue of tax,” he says.“ And all these will happen; I am positive.” Another positive for him is the fact that many countries around the world are experiencing slowdowns as well. “The West is presently having a hard time too,” he says. “This is clearly a time of opportunity.” According to Balasubramanian at Linklaters, one trend he is seeing is more foreign investors entering into JVs with Indian counterparts instead of going for outright acquisitions. “This tends to benefit both parties,” he says. “The Indian partner gets the knowledge and the knowhow, while the foreign partner reduces its risk.” He expects to see liberalisation in sectors like retail, and “sensible regulations” in areas like transportation and aviation. “However, you need to keep in mind that this is a sentiment-driven market,” says Balasubramaniaun. “That needs to change.”

franchisee agreement with Tesco under which Star Bazaar shops use the British firm's supply chains and infrastructure.

• Aditya Birla Retail is the unlisted retail arm of

India's telecoms-to-cement conglomerate Aditya Birla Group, headed by Kumar Mangalam Birla, ranked the seventh-richest Indian by Forbes in March 2012. T h e co m p a n y o p e r a t e s a r o u n d 5 0 0 supermarket and hypermarket stores under the More brand. It has said it will evaluate partnerships with global firms. MAJOR FOREIGN COMPANIES

• Wal-Mart has a cash-and-carry operation with Indian partner Bharti Enterprises, the parent company of leading mobile provider Bharti Airtel, and will add 12 to 15 new cash-and-carry stores this year to its 17 existing stores.

• Tesco, Britain's largest retailer, has a tie-up with

Trent's Star Bazaar hypermarket chain. Tesco is also looking to enter the wholesale market through the tie-up.

• Germany's Metro AG operates 11 wholesale stores in India. The company plans to open five cash-and-carry stores every year.

• Carrefour has two cash-and-carry stores in India. The world's number two retailer has been seeking a local partner to enter the hyper or supermarket sectors.

For Ramanathan at AZB, one of the biggest pluses about the current situations is that assets have become cheaper. “Currently, as capital is hard to come by and debt is very expensive, valuations have become more realistic,” he says. “These present great opportunities for investors.” From a law firm’s perspective, he says that one of the strongest areas of growth has turned out to be the competition law practice, apart from the spike in litigation. However, he cautions that much will need to happen for India to come out of the woods. “All the problems that are being discussed need to be resolved,” he says. “A lot needs to be done. Investors are not convinced that this is the best time.” THE BRAND REMAINS STRONG It is worth noting that despite all the headlines, not all the news coming out of India has been depressing. In March, India attracted

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REUTERS/Sivaram V

“THERE’S SO MUCH BUYING HAPPENING, AND IT’S PRETTY MUCH ACROSS ALL SECTORS. WE HONESTLY DON’T KNOW HOW TO HANDLE ALL THIS WORK.” RABINDRA JHUNJHUNWALA, Khaitan & Co FDI of $ 8.1 billion, the highest monthly inflow ever recorded, even though much of it was due to the $ 7.2 billion Reliance IndustriesBritish Petroleum (BP) deal announced in February 2011, which saw BP picking up a 30 percent stake in Reliance Industries' 21 oilfields. According to Sagar, despite its recent troubles, the fundamentals of India “as of now are still sound, be it the demography and be it also democracy. Both (of) these are long term positives. Foreign investors should see that side of the coin too. Bold and positive moves by the government would provide the credibility and the spark that we need urgently to put to work our inherent strengths as a country.” Jhunjhunwala at Khaitan concurs, but says that while the last few months might not have heralded the end of the road for “India Shining”, it has clearly had an impact on the way the India brand in perceived among investors, particularly in the aftermath of the Vodafone tax case. “The announcement of the retroactive General Anti Avoidance Rule (GAAR), slated to come into force in 2013, had

a lot of people asking: ‘What exactly did the Finance Minister have in mind?’,” he says. “Is this the way things happen in a democracy, in a rule of law?” Nevertheless, he sees some positive trends in the next year or so. One is the growing number of outbound transactions, as cashrich Indian companies take advantage of cheap assets overseas, particularly in natural resources. Another trend is that of PE funds selling to other PE funds. “Since exits are currently difficult as IPOs have stalled and funds that have raised money looking for assets to purchase, I see a lot of acquisitions of PE assets by other PE funds,” he says. Jhunjhunwala also sees competition law as a growing practice area for firms as awareness increases, and M&As continuing to be their biggest revenue generator. Another promising area, he notes, is infrastructure, where India has penciled in an investment of about $1 trillion. The country plans to award 9,500 kms of road projects, and commission three new airports in the fiscal year to March end in 2013. Balasubramanian sees a lot of opportunities for India emerging from the so-called “South-South trade”. “I expect to see a lot of trading of resources located in Africa and in Southeast Asian countries,” he says. “There is a great deal of value to be had there.” Additionally, a lot of the larger companies will be looking to grab bigger assets overseas, he says, citing the attempt by Tatas to acquire Cable & Wireless as an example. Sagar, however, has words of caution. “We have to avoid the temptation (and the arrogance) that we will be an attractive investment destination irrespective of what we do or do not do,” he says. “Unfortunately, the world increasingly sees us in negative light. The perception is that we have red tape and not a red carpet for foreign investment. Add to that, we are not considered a business-friendly country… (and also) it was demoralising to see that India ranked 182 out of 183 countries in terms of enforceability of contracts. Now the recent threat that India’s rating could be pegged below investment grade does not really help.”

Rising 62

Antitrust

ASIAN LEGAL BUSINESS august 2012

As companies increasingly go to battle on the antimonopoly front in China, lawyers play a key role in the cavalry. With several high-profile cases grabbing headlines in recent months, including Qihoo 360 v Tencent, antitrust litigations are notably on the rise. Competition specialists are joining forces with litigators to fight for their clients, and it appears that dedicated antitrust litigation practices may make an appearance on the domestic legal scene sooner rather than later, finds Candice Mak

在中国，由于越来越多公司正在走上反垄断战场，因此律师的角色显得愈发重要。随着近几个月数宗影响巨大的反垄断案件登上新闻头条（包括奇虎360诉腾讯案），反垄断诉讼的发生率明显上升。Candice Mak发现，反垄断及反不正当竞争业务方面的专家已纷纷加入诉讼律师的行列，共同为其客户争取权益，而专注于反垄断诉讼方面的法律业务也可能很快会出现在国内法律舞台上。

**The Chinese translation of this story was prepared by Synmax Translation**

** 鑫马翻译提供中文译文 **

tide

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Antitrust

风起潮涌

Antitrust

ASIAN LEGAL BUSINESS august 2012

y the end of 2011, there were 61 antitrust civil litigation cases accepted by the Chinese courts since the onset of the Anti-Monopoly Law (AML) in 2008. The vast majority of these related to abuse of dominance and of the 61, 53 have closed – most ending in settlements. These figures, as released by the Supreme People’s Court (SPC), reflect that antitrust litigation has been on a steady rise in China over the past few years. Susan Ning, a senior partner and the head of King & Wood Mallesons’ Beijingbased international trade, antitrust and competition group, says she has noticed and experienced an increasing number of companies considering employing the AML to protect their interests: “This has become the new battlefield, in particular for companies who feel that their rights and interests have been unduly infringed by more powerful industry leaders.” Philip Monaghan, a Hong Kong-based competition specialist at Mayer Brown JSM also observes the same trend. “Even when the AML first came into force, parties immediately started to take the initiative of going to court to enforce the conduct prohibitions in the law. This was a very striking development at the time and I think quite surprising to many,” he says. One hypothesis that is being bandied about by legal practitioners

as to why competition courtroom battles are increasing is that of the inactivity of two of the three AML enforcement authorities. Since the AML came into effect, enforcement has been largely confined to the Ministry of Commerce’s (MOFCOM) screening of large M&As. Officials at the National Development and Reform Commission (NDRC) and the State Administration for Industry & Commerce (SAIC) have largely stayed on the sidelines. The NDRC concentrates mainly on monopoly pricing issues, while the SAIC enforces other antitrust rules, including those on monopoly agreements. “The comparative lack of institutional enforcement of the relevant behavioural rules has clearly provided an incentive for private action,” says Monaghan. Whatever the impetus, all the lawyers ALB spoke with confirm that antitrust litigations are on the up-and-up, and are expected to further swell. “AML litigation is an area of law that is rapidly developing,” asserts Fangda Partners’ Beijing lawyer, Fang Qi. New regulatory updates On May 3, the SPC issued the Provisions on Several Issues Concerning the Application of the Law in Trials of Civil Dispute Cases Arising from Monopolistic Acts (Judicial Interpretation). The rules came into effect

“In the long run, as the practice matures, dedicated antitrust litigators could be real assets for companies seeking such services.” Susan Ning, King & Wood Mallesons

“从长远角度看，随着反垄断司法实践的逐步成熟，专业反垄断诉讼律师对寻求该领域服务的公司而言或将成为真正的资产。” — 宁宣凤律师，金杜律师事务所

自

2008年实施《反垄断法》（“《反垄断法》”）以来，截至 2011年年底，中国法院已受理了61 宗反垄断民事诉讼案件，其中大部分案件与滥用市场支配地位相关，在这 61宗诉讼案中，已有53宗结案，其中大部分都以和解结案。最高人民法院（“最高院”）公布的这些数据反映出近几年来中国反垄断诉讼案件数量正在稳步攀升。金杜律师事务所的反垄断及反不正当竞争业务团队的主管宁宣凤律师说，她注意到也已切实感受到，越来越多的公司正在考虑利用《反垄断法》保护自身权益：“这块业务已成为一个新的战场，对于那些认为自身权益遭到更强势的行业领军者不当侵犯的公司而言更是如此。”美亚博国际法律事务所香港反垄断及反不正当竞争业务专家Philip Monaghan同样注意到了这一趋势。他指出：“即使在《反垄断法》刚出台时，各方便已开始主动向法院申请强制执行反垄断法项下的禁止性规定。这在当时是一个重大发展，我认为许多人对此都颇感惊讶。” 业内有一种普遍假设，反垄断及反不正当竞争方面的诉讼不断增加与三个反垄断执法机构中两个机构的消极不作为有关。自《反垄断法》生效以来，反垄断执法工作主要由负责审查大宗并购交易的商务部（“商务部” ）负责。国家发展和改革委员会（“发改委”）与国家工商行政管理总局（“ **The Chinese translation of this story was prepared by Synmax Translation**

工商总局”）却在很大程度上置身事外。发改委主要关注垄断定价问题，而工商总局则负责执行其他反垄断规则，包括针对垄断协议的反垄断规则。Monaghan认为：“行政机关对相关行为规则执法方面的相对欠缺已明显刺激了私人诉讼的产生。” 无论是什么因素促使反垄断诉讼在不断增加，接受ALB采访的所有律师均认为，反垄断诉讼的热潮正在形成，并将进一步扩大。方达律师事务所北京办公室的Fang Qi律师称：“反垄断诉讼是正在迅速发展的一个司法领域。” 新法速递 5月3日，最高院公布了《关于审理因垄断行为引发的民事纠纷案件应用法律若干问题的规定》（“《司法解释》”）。该《司法解释》于6月1日起生效，旨在为解决垄断民事纠纷案件构建一个司法框架。目前，公司或个人均可直接向人民法院提起反垄断诉讼，无须获得行政部门的确认或授权。宁律师称：“《司法解释》清楚地阐明了反垄断私人诉讼中的某些关键性问题，比如：原告地位、司法管辖权、举证责任、证据规则、专家证人、司法程序、民事责任的形式以及诉讼时效。”宁律师认为，该新规则可能

** 鑫马翻译提供中文译文 **

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on June 1, and they seek to construct a judicial framework for civil anti-monopoly disputes. Now, companies or individuals may institute antitrust actions directly with the People’s Court without recognition or authorisation by administrative departments. “The Judicial Interpretation provides welcome clarifications on some key issues in AML private actions, such as the standing of plaintiffs, jurisdiction, burden of proof, evidentiary rules, expert witness, the judicial process, the form of civil liabilities, and the statute of limitations,” says Ning. She outlines that the new law may impact antitrust disputes by: i) Encouraging more consumers or smaller enterprises to file private actions under the AML, as it clarifies that primary courts may also have jurisdiction over civil monopoly cases of the first instance; and ii) By lessening the plaintiffs’ burden of proof, which should encourage more private actions. In relation to the latter, the Judicial Interpretation stipulates that: i) A plaintiff does not bear the burden of proving a horizontal monopoly agreement has anti-competitive effects; ii) A plaintiff can use information publicly released by a defendant as evidence of its dominance in an abuse of dominance action; and iii) The court may have a preliminary finding of market dominance on the basis of market structure and the

competition conditions, if the defendants are public utility enterprises or other undertakings that are legally authorised to be in a monopoly position. The Judicial Interpretation, according to Monaghan, is a “clear signal that the authorities are in favour of encouraging private action, not least because the Supreme People’s Court’s guidelines seek to make things easier for the plaintiff in a number of respects,” he says. Andy Huang, an associate at Hogan Lovells in Beijing, concurs that “given the clearer legal guidance, we expect to see more private enforcement of antitrust law in the coming years”. He also points out that since the beginning of this year, the State Council and its departments have released policies to encourage private investment in industries that have long been dominated or monopolised by SOEs, such as energy, transportation,

“(The Judicial Interpretation is a) clear signal that the authorities are in favour of encouraging private action, not least because the Supreme People’s Court’s guidelines seek to make things easier for the plaintiff in a number of respects.” Philip Monaghan, Mayer Brown JSM

“[司法解释]清楚地表明，政府开始鼓励私人诉讼，主要原因就是最高院的指引旨在从许多方面为原告提供便利。” — Philip Monaghan律师，美亚博国际法律事务所通过以下方式影响垄断民事纠纷案件的解决：1)鼓励更多消费者或小型企业根据《反垄断法》提起私人诉讼，因为根据《司法解释》，基层人民法院也可以管辖第一审垄断民事纠纷案件；以及2)减轻原告的举证责任 —— 这将鼓励更多私人诉讼的产生。就后者而言，《司法解释》规定：1) 原告不对横向垄断协议具有排除、限制竞争的效果承担举证责任；2)原告可以以被告对外发布的信息作为证明其具有市场支配地位的证据；且 3)被诉垄断行为属于公用企业或者其他依法具有独占地位的经营者滥用市场支配地位的，人民法院可以根据市场结构和竞争状况的具体情况，初步认定被告在相关市场内具有支配地位。 Monaghan认为，《司法解释》“清楚地表明，政府开始鼓励私人诉讼，主要原因就是最高院的指引旨在从许多方面为原告提供便利”。霍金路伟律师事务所北京代表处的黄律师也持同样观点，他说：“由于具备了更清晰的法律指引，我们将会在未来几年中看到更多有关《反垄断法》的私人诉讼案件。”他同时指出，自今年年初起，国务院及其各部委已公布了数项政策，鼓励私人投资那些长期受国有企业支配或垄断的行业，其中包括能源、交通、通信、教育、保险和银行业。他说：“根据《反垄断法》发起的私人诉讼将可能成为打破目前国家控制上述行业局面的日渐有效的方式。”

案件精选近期，发生了多宗影响巨大的反垄断诉讼案和反垄断调查，表明公司和监管机构正在努力推进反垄断法的实施。比如，去年11月，发改委披露其正在对国有电信运营商中国联通和中国电信涉嫌垄断行为进行调查。这两家电信运营商共占约三分之二市场份额，他们因被指向竞争对手收取高价但没有同时优化网络速度而接受调查。据路透社11月16日报道，发改委公布其正对一档著名的中国午间电视新闻节目进行调查。这一调查行为在中国这样一个通常由共产党高级官员领导大型国有企业的国家是一项大胆的举措。长久以来，监管机构行事谨慎，一直跟随在已跻身全球最大公司行列同时又与中国最高权力层密切相关的国企身后亦步亦趋，但上述动作向亿万观众显示了监管机构如今坚决

Antitrust

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As Henry Chen, a Shanghai-based partner at MWE China Law Offices points out, “one of the most important weapons for an antitrust lawyer is economic and rule of reason analysis.”ALB China offers a unique insight into the role of economists for competition practitioners, through a commentary by Professor Bryane Michael, who is currently a visiting fellow at the University of Hong Kong’s Centre for Comparative and Public Law. He has previously advised on Anti-competition Law in Russia for the EU, and in the developing world for the Organisation for Economic Co-operation and Development (OECD), and the World Bank since 1995. He has done his doctoral work in Economics from Oxford and Harvard.

Economists: A lawyer’s best friend? Bryane Michael, University of Hong Kong

ew law yer s receive training in econometrics and advanced statistics. And why should they? Negotiating contracts, bringing suits against parties who violate the law, and interpreting the way new laws affect Hong Kong’s companies do not usually require heavy statistical analysis. Yet, in-house counsel with experience in the U.S. and/or EU knows that statistics provides a key method of helping to detect and file civil actions against the anti-competitive behaviour of commercial rivals. As Professor Rubinfeld of the New York University Law School notes: “To obtain a financial recovery in a private action, the plaintiff must prove three distinct elements: (1) An antitrust violation; (2) Antitrust injury; and (3) Damages – a measure of the extent of the injury.” Hong Kong’s law firms and in-house counsel will find that economists can help them with each of these points. Consider the case of a hotel owner in Kowloon wishing to show that other hotels in the area are keeping their prices too low in order to drive him out of business. Without an economist, that owner would need to obtain written proof that these hotel managers had met and come to an agreement. He would need copies of emails or preferably one of the hotel own-

ers to “squeal” on the others in their collusive agreement. With statistics though, the hotel owner’s legal counsel could more easily obtain information useful to start litigation. Such information might include correlations between room prices, discounts below estimated marginal costs, and expected losses taken by rival hotels in the area. Such information would certainly convince a judge to order further material investigation. Three key statistical tests prove to be useful in this kind of litigation. Lead counsel should know about these tests when working with economists on particular competition law-related cases. The hypothesis test (or test of similarity) can show – with a certain level of certainty – that one hotel owner’s prices, occupancy rates and other factors – are not like the other hotel owners’. For example, an economist can tell you with a 99.999 percent level of probability that hotels in a district advertise prices below their expected marginal costs. Economic methods can actually remove the distorting effects of factors like seasonal demand, how well the stock market is doing, the prices of inputs like labour, and so forth. The regression analysis can tell legal counsel how much the prices, quantity offered, amount of innovation, product quality, and so forth has changed in response to changes in factors like the number of other hotels in the area, the size of these hotels

(the amount of assets they hold), and so forth. Such regression analysis can show (with a certain level of confidence) that the profits of our hypothetical hotel owner have changed because of the actions of the other hotel owners. Economists can also do costbenefit analysis – showing the profits our hypothetical hotel owner has lost because of collusion by neighbouring rival hotels. Such analysis can “take out” the effects of a weakening economy, changes in hotel regulations, and other factors. Economists can provide law firms and in-house counsel with information useful in three venues. They detect anti-competitive behaviour – showing with a level of probability – when rivals are engaged in anticompetitive behaviour. They show such behaviour – which can be useful when asking regulators and judges for more in-depth investigatory work. They prove (in some jurisdictions) which anti-competitive behaviour occurs. We cannot directly observe secret meetings in which trading partners agree to manipulate prices, quantities, and so forth. But we can observe their effects. In some instances, a 99.999999 percent statistical probability of engaging in anticompetitive behaviour is enough for regulators or judges to provide injunctive relief, assess fines, and provide other remedies. In this way, an economist can be a lawyer’s best friend while enforcing Hong Kong’s new Competition Law.

Key cases

Recently, there have been a handful of high-profile antitrust cases and investigations showcasing companies and regulatory agencies pushing AML boundaries. For example, in November last year, the NDRC revealed that it was investigating alleged monopolistic activities by state-controlled telecom operators China Unicom and China Telecom. The two, which have roughly two-thirds market share, were being probed for supposedly charging rivals higher fees for broadband

打击垄断行为的决心。美国普衡律师事务所北京办事处合伙人David Livdahl在接受路透社采访时说：“中国政府希望通过公布这一案件证明他们打击垄断行为的决心。此案涉及的罚款占到企业年营业收入10%之多。”

该项调查与《反垄断法》第17.6条相关。该条规定，禁止具有市场支配地位的经营者在没有正当理由的情况下，对条件相同的交易相对人在交易价格等交易条件上实行差别待遇。2011年12月2日，中国电信向发改委提交了一份整改方案，并申请中止调查。但是，由于监管机构未表示其是否接受申请，因此发改委的调查可能仍在进行中。

telecommunications, education, insurance, and banking. “Private enforcement of the AML may be an increasingly effective means to break up the existing state control in those sectors,” he says.

**The Chinese translation of this story was prepared by Synmax Translation**

** 鑫马翻译提供中文译文 **

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正如上海元达律师事务所上海办事处合伙人陈立彤律师所指出的那样，“反垄断律师最重要的武器之一便是经济分析和合理规则分析。”下面，将就经济学家对反垄断及反不正当竞争业务从业人员的影响问题，ALB中国与读者分享一下香港大学比较法及公共研究中心的Bryane M ichael在这方面的独到见解。Bryane自1995年起为欧盟提供俄罗斯反不正当竞争法方面的咨询，并为经合组织和世界银行提供发展中国家反不正当竞争法方面的咨询。他在牛津和哈佛的完成了经济学博士课程。

经济学家，律师最好的朋友？接

受过经济学和高级统计学方面专业训练的律师可谓凤毛麟角。那么律师为什么需要这方面的专业知识呢？在合同谈判，针对违法的当事方提起诉讼以及解释新法对香港公司的影响时，并不需要大量统计分析。但是，拥有美国和/或欧盟执业经验的公司法务都知道，统计学是帮助律师发现并提起针对商业竞争对手的不正当竞争行为民事诉讼的关键方法。纽约大学法学院的Rubinfeld教授指出：“为使当事人从私人诉讼中获得经济赔偿，原告必须证明以下三个要件：(1)被告违反了反垄断法；(2)违法行为造成了损害；以及(3)损害赔偿金，即量化损害程度。”香港的律师和公司法务会发现，经济学家会帮助他们证明上述三个要件。设想有一名九龙的酒店业主希望证明该地区其他酒店试图以过低的价格将他排挤出当地酒店业。如果没有经济学家的帮助，该业主便需要取得书面证据，证明其他酒店已达成具有上述目的的协议。九龙的这名酒店业主必须取得相关电子邮件，或最好有一名其他酒店业

主“告发”该共谋协议中的其他当事方。但通过统计学分析，该酒店业主的律师便可更容易地取得有助于诉讼的信息。这些信息可能包括房价、低于预计边际成本的折扣和该区域酒店竞争对手预期承担的损失之间的关系。这些信息足以说服法官下令对此进一步实质性调查。有三项关键性的统计测试证明对此类诉讼有所帮助。牵头律师在与竞争法相关的特定案件与经济学家合作时，必须对这些测试有所了解。假定测试（或相似性测试）可以比较确定地证明一家酒店的房价、入住率及其他要素与其他酒店的房价、入住率及其他要素有所不同。比如：经济学家能以99.999% 的准确率告诉您，某地区酒店通过广告宣传的价格低于其预计边际成本。经济学方法可切实消除诸如以下因素的偏差影响：季节性需求、股市表现和劳动力等成本。回归分析可以告诉律师（该地区的）房价、房间数量、创新度、产品质量等因素是如何随着该区域其他酒店的数量及规模（该酒店所持有的资产数量）等因素的变化而变化的。这些回归分析可以比较有把握地证明我们所设想

的那个酒店业主的利润已由于其他酒店业主的行为发生变化。经济学家还能够进行成本效益分析，以显示我们所设想的那个酒店业主已由于周边酒店竞争对手的共谋行为而遭受损失。这些分析“ 剔除了”经济衰退、酒店行业法律法规的变更及其他因素的影响。经济学家可在上述三个方面向律师和公司法务提供有用的信息。经济学家在竞争对手参与不正当竞争行为时能发现该不正当竞争行为，并证明其发生的概率。经济学家指出存在不正当竞争行为，可有助于要求监管机构和法官进行更多深入调查。经济学家（在某些司法管辖区）证明发生了哪些不正当竞争行为。我们无法直接目击交易共谋各方达成价格和数量操纵协议的秘密会议。但是，我们可以觉察出由此产生的结果。在某些情况下，如果某当事方有 99.999999%的统计概率参与不正当竞争行为，便足以使监管机构或法官签发针对该方的禁令救济，对其施以罚款并向原告提供其他救济。由此可见，在执行香港新的《竞争法》过程中，经济学家可以是律师的挚友。

access without optimising network speed. Reuters reported on Nov. 16 that the NDRC disclosed its investigation on a popular Chinese noon television news show. It was a bold step in a country where senior Communist Party officials run the biggest SOEs. The move, broadcast to an audience of tens of millions, signaled a new assertiveness by regulators that had largely remained in the shadows, treading gingerly around state enterprises that are

among the biggest companies in the world, and connected to China’s highest echelons of power. “By announcing this case so publicly, the PRC regulators are showing that they are serious. We are talking about a fine worth 10 percent of annual business revenues,” said David Livdahl, a Beijing-based partner at

该项调查的重要意义在于，它表明《反垄断法》同样适用于国有企业。该案发生之前，法律从业人员和学者之间一直存在着有关国有企业是否免于遵守反垄断和反不公平竞争法律的争论，因为国有企业与政府关系太过密切。但是，发改委对中国联通和中国电信果断实施调查的行为明确表明，国有企业也适用《反垄断法》。Monaghan说：“《司法解释》，

就其使得公用企业或者其他依法具有独占地位的经营者具有支配地位这一假设成为可能而言，也使还在进行的有关反垄断法是否适用于国有企业的任何争论暂告一个段落。” 另一宗展现中国反不正当竞争现状的重大复

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REUTERS/Bobby Yip

Paul Hastings to Reuters. The investigation concerned with Article 17.6 of the AML says that enterprises with a dominant market position may not apply without justification, differential prices or other discriminatory transaction terms with their trading parties. On Dec.2, 2011, China Telecom submitted a correction plan to the NDRC, and applied for a suspension of the investigation. However, the NDRC investigation may still be ongoing since the regulator has not indicated whether it has accepted the application. The significance of this investigation is that it revealed the AML applies to SOEs. Until this case, there was debate among legal practitioners and scholars whether SOEs were exempted from the competition rules – because they were so close to the government. However, since the NDRC bared its teeth, and went after China Unicom and China Telecom, it was evident that the SOEs were under the jurisdiction of the AML. “The Judicial Interpretation also puts to rest any remaining

controversy surrounding the application of the AML to SOEs in so far as it provides for the possibility of a presumption of dominance in the case of public utilities and companies with a statutory monopoly,” says Monaghan. Another prominent and complex case promising to sculpt China’s competition landscape is that of Qihoo 360 v Tencent. On April 18, in the Guangdong High People’s Court, Qihoo claimed that Tencent Holdings - China’s largest internet company - abused the dominance of its messenger product QQ in the instant communications market by forcing consumers to choose between QQ and Qihoo products in November 2010, and bundling QQ safety software with QQ IM software without valid reasons. The plaintiff filed the current case against the defendant under Article 17.6 of the AML, and is seeking 150 million yuan ($23.8 million) as compensation. “In previous abuse of dominance actions, the courts almost always ruled against the plaintiffs on the ground that they failed to establish that the defendants were

杂案件便是奇虎360诉腾讯案。4月18日，奇虎向广东省高级人民法院起诉，控告中国最大的互联网公司腾讯控股有限公司滥用其QQ即时通讯软件(QQ)在即时通讯工具市场中的支配地位，于2010年11月强迫消费者在 QQ和奇虎产品中作出选择，并在QQ即时通讯软件中捆绑搭售QQ安全软件，且未提供合理理由。原告根据《反垄断法》第17条起诉被告，请求法院判令被告赔偿原告人民币1.5亿元（约合2380万美元）。“在以往有关滥用市场支配地位的诉讼中，法院往往以原告未能证明被告具有市场支配地位为由，作出不利于原告的判决，”在此宗标志性案件中担任奇虎代理律师的宁律师说。“本案中，我的团队帮助奇虎确定各类数据来源，而奇虎

也聘请了经济学家进行经济分析，以确定相关市场以及腾讯具有市场支配地位的事实。”法院尚未对此案件作出判决，许多业内观察人士希望法院尽快作出判决。北京正见永申律师事务所合伙人何菁律师对许多律师的观点作出了如下总结：“我们希望此案的结果可以为未来中国的反垄断法司法实践提供重要先例和程序参考。在判决中将问题明朗化将有助于完善司法体制并为未来修订《反垄断法》提供有益帮助。” 瑞邦诉强生案是首宗对外界公布的与纵向协议相关的反垄断案件。在该案中，作为强生手术产品的北京经销商，瑞邦永和贸易有限公司指控强生设定对第三方的最低转售价格。法院以原告未能证明强生拥有市场支

**The Chinese translation of this story was prepared by Synmax Translation**

** 鑫马翻译提供中文译文 **

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