CLB July 2012 by Yvette Chiu

Japa n:

Co u n t ry

t h e

crossroads

日本

：十字路口的国家

july2012 WWW.LEGALBUSINESSONLINE.COM

亚洲法律杂志 - 中国版 CHINA

The

silk road alliance 丝路之盟 NEXT GENERATION CITIES Guangzhou on the rise 未来之城：上升中的广州

PAGE 16

WAITING GAME

SOARING AHEAD

Renewed hope for an International Board launch in the near future? 等待的游戏：国际板希望重燃？

A Q&A with China National Aviation Fuel’s legal chief 勇往直前：中航油法律顾问专访

PAGE 34

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INSIDE n Deals SPOTLIGHT

n THE BIG STORY

n LAW FIRM LEAGUE TABLES

n SUNDRIES

LOOKING FOR A CHANGE?

Post your CV online and let your new life come to you

CONTENTS

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

NEWS

16 丝路之盟

The investment partnership between China and the Gulf is growing stronger with numerous multibillion dollar projects linked between Chinese and Middle Eastern energy players. This is just the beginning. Candice Mak explores what opportunities are in store next for investors eyeing the powerful liaison between the Middle East and China.

Briefs

League Tables

Appointments

SE asia law awards

Index

Sponsored Profile

泰和泰律师事务所

2012年金融法律服务的机遇与挑战

实韩颖梅律师, 泰和泰律师事务所合伙人

体经济与金融业相辅相成，兴衰与共。泰和泰正在转型为包含金融业务在内的综合大型律所，捕捉行业的发展机遇，离不开对宏观经济形势、金融业发展趋势的了解和正确把握。

一、2012年上半年经济形势概述在刚刚过去的半年，我国经济呈现明显减速的下行走势。而随着银监会、证监会、发改委等十余部委相继出台“新36条”实施细则，我国民间资本发展将迎来新的机遇。与此同时，基于服务实体经济的根本需要，以及金融市场不同利益群体间的博弈，金融业目前正孕育着一场空前的改革风暴。郭成刚律师, 泰和泰律师事务所合伙人

泰和泰律师事务所地址: 成都市鼓楼南街117号世贸中心 A座25楼、27楼邮编：610015 电话: 0086-028-8662 5656 手机: 0086-1590286 8559 0086-1398183 3133 邮件: lawyer.h@vip.163.com guochengg@sohu.com 网址: www.tahota-lawyer.com

二、金融市场的发展动向 2012年上半年可谓“乱花渐欲迷人眼”，金融业改革的亮点频出： 1、银行业的发展动向（1）银监会发文鼓励民间资本进入银行业，并推动商业银行建立全面审慎的资本监管和风险管理体系。（2）银行间市场交易商协会公布了债市扩容政策。 2、证券市场及证券业的改革（1）改革新股发行及退市制度证监会发文完善新股发行及退市制度。同时，积极鼓励西部地区企业上市。（2）鼓励证券公司金融创新证监会组织召开证券公司创新大会，并就证券公司金融改革创新提出了多达十一条的措施。（3）为证券投资基金松绑

证监会本着“放松管制”的思路，修订了基金公司管理、客户资产管理等规范性文件并公开征求意见；日前，全国人大常委会公布了《证券投资基金法》修订草案，首次将私募基金纳入监管范围。（4）新三板证监会拟建立非上市公众公司监管制度，以进一步支持和促进非上市公众公司尤其是中小微型企业的稳步成长。（5）推出中小企业私募债沪、深交易所及结算公司分别出台了试点办法、业务指引及规则，为中小企业私募债构建了较为完整的制度体系。 3、保险业的监管思路保监会自去年以来修订或拟定了十余项规定，并将在完善风险防控机制的基础上进一步放松管制、拓宽范围，给予保险机构更灵活的投资操作自主权。三、机遇与挑战 2012年上半年，金融行业的政策导向均趋于积极促进实体经济尤其民营经济的发展，适度放松管制。而从相关政策分析，金融脱媒、不同细分领域的金融机构同质化竞争程度将会进一步提高，混业经营的发展趋势将会愈发明显。在此宏观背景下，律师事务所既面临着一个历史性机遇，又面临着巨大挑战。除了继续巩固银行、证券、信托等传统优势金融业务外，泰和泰还将在保险、基金、融资租赁、典当等领域进行业务拓展，集全所之力，在人才培养、资源共享、标准化作业、渠道建设等方面做出积极努力，争取尽快在西部地区的金融法律服务中占据领先优势。

大成律师事务所海事海商部

Commercial and Maritime Law Services Our Offices One of the first and largest partnership law firms in China Has a long history of representing clients in international trade and maritime cases

Our Team Intensively Experienced law practitioners with well legal education and wealth of practice Providing services for exporters & importers, bankers, insurers, various carriers, forwarders, logistics providers from around the world and across the country

Our Network Headquartered in Beijing, and extends to all of coastal ports, air gateways in China and main ports abroad As sole member of WSG, we could cooperate with partners worldwide via WGS global network expediently

BRIEFS

ASIAN LEGAL BUSINESS juLY 2012

Sponsored Profile

北京市天同律师事务所

中国最高人民法院《反垄断法》首部司法解释出台

摘

王峰, 合伙人邮件 : wangfeng@ tiantonglaw.com 直线：+86-10-51669666-201

宋峰, 律师助理邮件 : songfeng@tiantonglaw. com 直线：+86-10-51669666-828

要：2012年5月3日，中国最高人民法院出台了《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》（下称《规定》），并将于6月1日起施行。《规定》是中国最高人民法院在反垄断审判领域出台的第一部司法解释，其对于改变公民起诉垄断企业罕有胜诉的现状、构建公平竞争秩序、维护社会公共利益和公民合法权益具有重要意义。起诉垄断行为不需行政认定《反垄断法》规定的垄断纠纷民事责任的认定，是否需要以行政机关的执法认定为前提一直存在较大争议。由于中国的反垄断执法部门与国有垄断企业一般存在天然的“纽带”关系，其往往不会轻易认定企业的行为构成垄断；而原告在提起反垄断民事诉讼时，法院又常常告知其只有在获得反垄断执法机关的垄断行为认定时才能受理，造成公民合法权益无法得到保护。《规定》明确了垄断民事纠纷案件不需以行政认定为前提，排除了行政认定前置的“干扰”，在启动程序上大大降低了垄断民事纠纷案件的门槛；同时，这也意味着企业的市场行为是否构成垄断，不仅反垄断行政执法机关有权认定，法院也可以基于司法审判行为作出认定。与以往行政认定“一权独秀” 的反垄断模式相比，无疑是一大进步。垄断民事纠纷集中管辖垄断民事案件涉及情况多样、利益复杂且专业性强，无论对于案件事实的认定，还是法律标准的把握，都较之于普通民商事案件有更高的要求。从司法实务情况看，现有垄断民事纠纷中涉嫌的垄断行为分布领域广泛，既包括石油、电信等传统经济领域，也包括网络增值服务等现代新技术领域。在案件类型上，既有因滥用市场支配地位行为引发的案件，也有因垄断协议行为引发的案件。鉴于此，《规定》明确了除经最高院批准的基层法院可以受理垄断民事纠纷外，“第一审垄断民事纠纷案件，由省、自治区、直辖市人民政府所在地的市、计划单列市中级人民法院以及最高人民法院指定的中级人民法院管辖。” 这对垄断民事纠纷裁判的准确性、案件办理的专业性、以及案件质量的提高都大有裨益。加重垄断企业举证责任

北京市天同律师事务所地址：北京市东城区南河沿大街南湾子10号邮编：100006 直线：+86-10-51669666-218 传真：+86-10-65279996

考虑到垄断民事纠纷中原告举证能力与被诉垄断企业相差悬殊的现状，《规定》对垄断民事纠纷案件举证责任的分配进行了细化，并在相当程度上减轻了原告的举证负担。同时，《规定》还引进了欧美国家行之有效的“专家证人”和“市场调查或者经济分析报告”证明制度。在备受各界关注的奇虎360诉腾讯公司滥用市场支配地位案中，原告奇虎360在起诉状中就援引了《中国即时通讯行业发展报告》等市场调查报告证明腾讯公司占据中国境内即时通讯软件及服务市场的支配地位，这与司法解释关于“市场调查或者经济分析报告”作为证据形式的规定相契合。北京市天同律师事务所合伙人王峰律师表示，虽然司法解释能否适用于本案、奇虎360所提交证据的证明力能否获得法院认定，目前尚不得而知，但司法解释的出台，无疑有助于法院审理本案。从长远来看，“市场调查或者经济分析报告”在诉讼中尤其是民事诉讼中的力量，必然会随着证据制度的完善和调查主体、方式等的规范化、专业化而有所提升。

大型企业被诉垄断风险增加《反垄断法》施行以来，反垄断民事案件数量有逐渐增多的趋势，这反映出公民和企业已经逐渐形成了对垄断企业提起诉讼的意识。另外，近几年中国的反垄断民事诉讼中被诉垄断行为涉及的商业领域正在逐步扩大，原告的诉讼请求也从象征性赔偿逐渐转向较大的数额，最高索赔额已达2亿。从我国市场经济发展现状看，在电信、石油、交通、邮政等公用经济领域，占据市场优势地位多为大型央企。其经常通过设置较高准入门槛、优先分配资源等方式获取和巩固其垄断地位。《规定》的施行无疑会进一步提高社会公众提起反垄断诉讼的意识，并通过减轻原告的举证责任等制度，提高公众的胜诉可能。这同时意味着大型央企被诉垄断的风险将可能大幅上行。一旦身陷大量垄断民事诉讼争议，不仅可能给企业造成巨大的直接经济利益损失，还往往影响企业的自身形象和社会评价，同时有可能成为竞争对手的诉讼性竞争策略，进而给企业造成潜在的重大威胁。北京市天同律师事务所宋峰表示，大型企业应当对此给予重视，不仅应当从传统的规范经营行为、积极应对相关诉讼等方面预防垄断民事诉讼风险，更应当针对《规定》的制度安排，建立起从实体运作到宣传策略、从风险预警与危机化解的一整套应对机制，将被诉垄断风险降至最低。

Sponsored Profile

ASIAN LEGAL BUSINESS JUly 2012

sunland law firm

Capturing the early investment market and growing with clients By Zhang Mingruo – China Practice Group, Wei Qun – Intellectual Property Group and Shi Jiangnan – Capital Markets Group Zhang Mingruo, China Practice Group E: zhangmingruo@ sunlandlaw.com

Shi Jiangnan, Capital Markets Group E: shijiangnan@sunlandlaw.com

Wei Qun, Intellectual Property Group E: weiqun@sunlandlaw.com

ith another $216 million in financing received from international investors and an estimated value of several billion U.S. dollars against the depressing private equity (PE) market, the success of Xiaomi Mobile has brought the attention to the community that sorted out all its legal issues – Sunland Law Firm. A young player in one of the most competitive legal markets in the world, Sunland is determined to build a name for itself in China by working and growing with young enterprises that have strong potential in the country.

Chinese Silicon Valley’s firm Sunland focuses on the early market in the investment space – one that few other law firms pay much attention to. Its key client base is start-up enterprises, angel investors and early venture capital organizations of the TMT industries. Over the past two years, Sunland has advised hundreds of startup IT companies like Xiaomi. Sunland’s strong expertise and its active involvement in fostering entrepreneurship has also attracted the support of many angel funds including Shunwei, ZhenFund, and TusPark Ventures. Leading investors Xu Xiaoping and Lei Jun have officially appointed the firm as their legal counsel. The Sunland team, together with the investor and investees, tried and discovered a standardised and flexible transaction model that is more suitable for angel investment and earlystage investment and financing. The “one-stop” model has proven to be cost-saving and effective and is regarded highly by the angel investment circles. It has been one of Sunland’s core targets to become “the most economic and considerate legal advisor of both the entrepreneurs and the investors”.

Sunland Law Firm A: Suite 902, YinGu Building No.9 Beisihuan West Road Haidian District, Beijing 100080 P.R. China T: +86-10-8252 5375 F: +86-10-8252 5373

aims to work as a commercial partner with them to provide advice that can best serve clients’ commercial needs, thus enabling the firm to form deep partnership with clients. Growing with clients With its professionalism, integrity and reasonable price, Sunland not only took the lead in the early investment market, but also locked on long-term partnership and expanding practices. “The client adhesion is very high in the legal business. Being a trustworthy service provider during the startup period means a great number of opportunities will follow,” says Zhang. For the demands of the clients, Sunland has extended its practices from company establishment, investment and financing to corporate governance and intellectual property. As the young companies Sunland has looked after begin to mature, the firm will be able to enjoy a constant and stable source of work flow from the close relationships developed from when the clients were start-ups. As clients then will likely need a wider range of services, this will also give a chance to the other practice areas in the firm to flourish. The team will have the opportunity to engage in a variety of work and enable each member to grow professionally. In particular, IP will truly become a significant part of the IT industry, as predicted by Zhang. Sunland handles about 100 trade mark and patent applications for clients a year and the firm expects that it will be another growth area in the long term future. As some of clients develop at a stunning speed, Sunland is also ready for their IPOs.

Home to numerous IT companies and funds, the Zhongguancun Science Park is known as the Chinese Silicon Valley, where Sunland is aiming to occupy. “Our goal is to be the first choice whenever people think of the legal service of the early investment market,” says Zhang Mingruo, the founding partner of Sunland.

One of the most prominent and successful examples of Sunland’s niche focus is its role as counsel to Xiaomi Technology on various legal matters since the company was founded in 2010. Born in the same office like a twin sister to the handset maker that is worth billions of dollars, the firm has closely kept Xiaomi company, assisted through each and every milestone step of the firm’s setting-up, financing and expansion.

International standards Such a goal is based on the deep faith in the firm’s professional team. One of the unique features of Sunland is its young and vibrant contingent of about 30 people. Most of the team members are in their 30s, hold degrees from top law schools overseas and have over 10 years of practice experience in big international firms. This has provided the firm a lot of room and flexibility for growth. “In the area of Investment and Financing, our team can absolutely meet the professional service standards of any big firms domestic or international,” says Zhang proudly.

Opportunities and challenges The early investment market has been slowing down to a sluggish and fiercely competitive state since the second half of 2011, as a number of PE and venture capital specialist international firms piled into the Chinese market. But Sunland remains clear and calm with its strategy. “In contrast to their focuses of the big investors and huge projects, Sunland will stick to angel investment and early venture capital. However small the amount of the investment or the size of the company is, we would provide our best quality service without reservation,” says Zhang.

What pleases Zhang more is the diligence and devotion his lawyers have for the clients. In addition to the role of legal counsel, Sunland spends time to understand its clients and

“We do not only want to grow with the clients. We will grow like one of the startup companies,” he says.

Sponsored Profile

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

尚伦律师事务所

慧眼识先机，与客户同成长张明若 – 中国业务组，魏群 – 知识产权组，施江南 – 资本市场组

在

2012年上半年私募股权融资趋冷的市场环境下，小米手机高调宣布成功获得2.16亿美元大额融资及估值近40亿美元的消息让投资市场为之振奋，而代理小米手机进行多次融资的尚伦律师事务所也同时引起了律师界的广泛关注。在竞争激烈的中国法律市场上，这家仅成立两年律师事务所凭着清晰的定位和国际化专业实力，以新锐和蓬勃的姿态逐渐建立起自己的品牌并不断发展壮大。中国硅谷的“风投律所” 尚伦从设立之初就将自己定位为专注于天使投资、种子投资和tmt领域创业企业的专业型律所。在尚伦的项目简历中，两年里尚伦为已经为顺为、启迪、真格基金等多家风投基金的投资项目提供法律服务，担任了二十多家公司的法律顾问，其中包括小米、多看、多玩等发展迅速的互联网公司。天使投资人雷军和徐小平也将尚伦聘请为他们的长期法律顾问。尚伦针对早期创业企业对法律服务需求量大、资金少和时间紧的特点，制定了“一站式”灵活而标准化的法律服务方案，极大提高了服务效率并降低了成本，为客户在节省了大量时间金钱的同时提供了可媲美国际大律所水准的专业化服务。“成为国内外创业者和风投机构性价比最高和最体贴的法律服务管家”是尚伦一直倡导的服务理念。由于众多互联网创业企业和基金聚集在北京中关村，中关村被誉为“中国硅谷”。成为中国硅谷的“最佳风投律所” 是尚伦近期发展的目标。 “我们希望大家一说到从事早期创投业务的律所，第一位就能想到我们。”尚伦创始合伙人张若明说。国际水准的专业实力尚伦的发展目标来源于对团队专业素质的自信。尚伦的律师团队目前有三十多人，不少律师都有英美留学背景和国内外大所工作经验。在迅速发展中，尚伦的律师在大量境内外融资项目和与国内外大所律师的合作中，专业实力得到迅速提升。“在投融资法律服务领域，我们完全拥有媲美国内和国际大所律师团队的专业水平。”张若明对这一点非常自豪。然而更另张若明感到骄傲的一点，是尚伦律师全心全意为客户考虑的敬业精神。凭借在投融资领域多年打拼的经验，尚伦律师不仅能为客户提供法律专业服务，更是他们可信赖的创业顾问，能在不同阶段为不同客户提供其适合其商业发展需求的建议。与客户共同成长创投融资业务的迅速发展不仅使尚伦迅速成为了创投领域的领先律所，更为这一专业律所带来了更多的长期合作伙伴和新的业务领域。 “律师行业的客户黏着度很高。从创业之初就赢得客户信

赖，意味着后续的更多机会。”张明若说。围绕客户的需求，尚伦的业务从公司设立、投融资，发展到了一般公司法务和知识产权等领域。随着创业企业的发展，一般公司法律业务的需求也不断增加，这些也顺理成章的由初始就为创业公司服务的尚伦继续提供服务。互联网行业中，知识产权的保护也是重点。目前尚伦每年已经替客户处理数千件商标和专利申请。随着部分客户规模的更进一步扩大，尚伦也开始为他们的境内外IPO做好了准备。小米手机就是尚伦发展策略中最引以为豪的案例。小米科技从2010年初创到现在成为估值几十亿元的大公司，尚伦一直陪伴左右。尚伦团队与小米团队从同一个办公楼里携手起步，一路为小米的成立、数轮融资以及后续发展提供着法律服务。激烈竞争中的机遇与挑战从2011年下半年起创投市场和资本市场逐渐跌入低谷，而面对众多英美大所和中国大所对投资项目的激烈竞争，甚至不少专注于创投业务的硅谷律所进驻中国，尚伦有清醒的认识和发展定位。“和他们专注于实力雄厚的大投资机构及大额项目相比，尚伦将坚持天使投资和早期风投，哪怕是很小的投资金额或者一个人的创业团队，我们都将不遗余力的提供最好的法律服务。”张明若说：“我们希望不仅与客户共同成长，尚伦本身也要像创业公司一样去成长。”

NEXT GENERATION CITIES

ASIAN LEGAL BUSINESS JULY 2012

ALB’S NEXT-GENERATION CITIES IDENTIFIES THE BEST FULL-SERVICE LAW FIRMS IN EMERGING COMMERCIAL CENTRES ACROSS ASIA. AS GUANGZHOU, OSAKA, BANGALORE AND PENANG BECOME INCREASINGLY IMPORTANT TO THE GLOBAL ECONOMY, THE MARKET DEMANDS A CORRESPONDING GROWTH IN SUPERIOR AND SOPHISTICATED LEGAL SERVICES. ALB HAS IDENTIFIED AND PROFILED THE TOP FULL-SERVICE LAW FIRMS IN THESE NEXT-GENERATION CITIES. BY SEHER HUSSAIN AND KANISHK VERGHESE

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As China grows rapidly, Guangzhou – the capital of Guangdong province in southern China – is emerging as a significant economic powerhouse in the country. An economic report forecast that the city’s GDP is poised to catch up with that of Hong Kong and Singapore by 2015, and Taiwan by 2024. In fact, Guangzhou’s economic growth of 11 percent is in stark contrast to the sub-four percent figure seen in the other three jurisdictions. Guangzhou’s economy is fast developing as an important industrial base in China. The industrial output value of the three main industries – automobile manufacturing, electronic communications, and petrochemicals – accounts for about a third of the city’s output value. Other sectors are heating up too, say lawyers, who observe intellectual property, joint ventures, and M&A as some areas of growth. Guangzhou’s rise as an epicentre of activity has led to numerous foreign enterprises seeking to do business in the southern city. This has sparked several foreign law firms to set up shop, and spurred domestic law firms to bolster their existing practices in the region. (Firms are arranged in alphabetical order)

DACHENG LAW OFFICES

GUANGZHOU

One of the largest law firms in China, Dacheng Law Offices commands an impressive presence, sporting 35 offices on the mainland. In addition, the firm has seven overseas offices spanning the U.S. (New York, Los Angeles, Chicago), Paris, Hong Kong, Singapore and Taiwan. The outfit’s specialties include corporate M&A, capital markets, foreign direct investment, energy and mining, real estate, intellectual property, criminal law, and litigation and arbitration. The Guangzhou team consists of seven lawyers, and profits from the experience of senior partner Bin Jiang who focuses primarily on financial securities, real estate, corporate law, and criminal matters. Dacheng Law Offices joined the World Services Group (WSG) in 2009 as its only China member. The WSG is a leading profes-

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sional service organisation encompassing members from law firms, accounting firms, and financial and investment companies.

GUANGDA LAW FIRM One of China’s prominent full-service law firms, Guangda Law Firm wields a team of more than 250 legal professionals who operate out of key cities including Beijing, Shanghai, Shenzhen, and Guangzhou. The firm has capabilities in capital markets, banking and finance, real estate and construction, and intellectual property, with a specialisation in corporate and securities, cross border investment, and dispute resolution. The firm’s Guangzhou office has benefited from an array of work over the last year, including advising on several cable, radio and television network reorganisations for Guangdong province, negotiating on behalf of Opple Lighting with Apple on a global trademark registration of the mark Opple, and acting as legal adviser to CITIC Bank International and the Guangdong branch of the Agricultural Bank of China. The team also advised Brightoil Petroleum on its HK$1.5 billion ($193 million) stock acquisition from another petroleum company. Guangda is also a founding member of the Sino-Global Legal Alliance (SGLA), which includes Hogan Lovells and eight other leading PRC law firms.

HJM ASIA LAW & CO A foreign law firm with a presence in Singapore and Guangzhou, HJM Asia Law & Co boasts over 15 years of experience in the region. The outfit offers a gamut of specialties including corporate M&A work, employment law, litigation and arbitration, and compliance. But its prowess lies in assisting CAROLINE BERUBE foreign companies with establishing operations in China, and intellectual property matters. Managing partner Caroline Berube has been steadily growing the firm’s practice in Guangzhou, which now comprises eight lawyers. The recent arrival of foreign attorney Brad Alexander has served as a further boost to the team. Berube recently advised a German company on the setup of a wholly-owned for-

eign enterprise in Shanghai to expand its manufacturing in China. The team drafted required incorporation documents, resolved issues relating to the manufacturing facility, and liaised with authorities regarding the company’s activities. On the IP side, Berube advised a U.S. manufacturer on refiling its patent application in China, after the initial application and appeal – filed by the client’s previous legal adviser – was rejected by the State Intellectual Property Office (SIPO). An amended application was drafted, and ultimately approved by SIPO.

MAYER BROWN JSM Commanding a strong legal presence globally, Mayer Brown JSM has also tapped into the Guangzhou market. The firm has had a busy year working with blue chip clients on real estate, construction, and engineering matters. The team is involved in real estate transactions that total over 11 million square feet in gross floor area in cities such as Beijing, Shanghai, and Guangzhou. Advice is also given to numerous foreign companies building manufacturing facilities in China, particularly on issues including procurement models, drafting of contracts, and consultancy agreements for the projects. On the contentious side, the firm is acting for several developers and institutions on cross-border matters involving legal and arbitration proceedings in Hong Kong and China. Mayer Brown’s team has also advised several MNC clients on environmental law in China, including carbon credits, carbon emissions trading, and implementation models.

WRAGGE & CO UK firm Wragge & Co’s Guangzhou office, which opened in 2008, comprises eight legal professionals, headed by the experienced Tom Carver. Founded initially with a focus on intellectual property, the firm’s office has grown substantially in the last few years to encompass corporate, employment, real estate, finance, and dispute resolution among others via its international network. The consistent quality of the firm’s offering in Guangzhou has led it to acquire and retain clients including Aston Martin, Dyson, Triumph Motorcycles, Zaha Hadid, and several top UK and U.S. universities. The Guangzhou of fice was fur ther

ASIAN LEGAL BUSINESS JULY 2012

WRAGGE & CO

strengthened by the arrival of Daniela Shaw in February 2012. A Chinese qualified lawyer and trademark attorney, Shaw has a wealth of experience on intellectual property strategy and IPR transactions. The firm is assisting Aston Martin on its Chinese employment contracts, and advising the car maker on PRC intellectual property issues. The team also acted for Dyson in its successful civil action against Chinese home electrical appliances manufacturer Ninghai Wansheng. The issue surrounded the alleged design patent infringement by Ninghai of Dyson’s bladeless fan, in which the latter was awarded 500,000 yuan ($78,000) in damages. Besides intellectual property work, the firm has had a busy year advising clients on international arbitrations, joint ventures, and general corporate M&A matters.

ZHONG LUN LAW FIRM Headquartered in Beijing, Zhong Lun Law Firm also has offices in Shanghai, Shenzhen, Guangzhou, Wuhan, Chengdu, Hong Kong, Tokyo and London. The Guangzhou office covers a range of practice areas including, but not limited to, real estate and construction, corporate M&A, capital markets, foreign direct investment, and dispute resolution. The Guangzhou office alone boasts 14 partners, including real estate specialist Jianqing Ding, underlining the scope of the firm’s operations in Guangdong province’s capital city. The size of the team, coupled with its reputation in the market, has led many blue chip companies to seek out Zhong Lun Law Firm for its expertise. ING Real Estate, Sun Hung Kai Properties, HSBC, General Electric, Sony China, and American Oil Company are just a few of its clients on an extensive list. Other notable firms in the city include GFE Law Office, Guangxin Lawyers, Jun He Law Offices, King & Wood Mallesons, Trust Law, and Yingke Law Firm.

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OSAKA

Despite the earthquake and tsunami that hit Japan’s economy in March last year, the world’s third-largest economy is bouncing back, buoyed by robust consumer spending and rebuilding in the disaster-struck areas. In fact, the Japanese economy grew a revised 1.2 percent in the first quarter of 2012, compared to the last three months of 2011. This was a welcome figure above the preliminary expectation of a 1 percent growth, signalling that domestic demand is fuelling economic recovery. The revised annual growth figure stands at 4.7 percent, compared to the preliminary forecast of 4.1 percent. Osaka, historically the commercial centre of Japan, stands to benefit from the country’s rebound in the market. Practitioners note an increase in outbound M&A transactions by expanding Japanese companies, spurred on by an appreciating yen. Interestingly, some economists have suggested that domestic companies may consider shifting operations to Osaka in light of last year’s earthquake. Several business executives have asserted that production hubs in Japan should be moved to the west of the country – away from Tokyo – to minimise disruptions to the nation’s supply chain in case of future unforeseen events. A rise in businesses setting up shop in Osaka is certainly going to present lucrative opportunities for lawyers in the city.

REUTERS/Eriko Sugita

(Firms are arranged in alphabetical order)

CHUO SOGO LAW OFFICE A market leader in Osaka, Chuo Sogo Law Office has worked with clients for more than four decades on M&A, intellectual property, and local and cross border litigation, among others. The firm has a distinct prowess in financial matters, assisting banks and financial institutions on cross MASAHIRO border M&A. The pracNAKATSUKASA tice’s 15 partners and 41 lawyers work closely with foreign enterprises, and leading Japanese companies including Panasonic, Sumitomo Mitsui Banking Corp, Mizuho Bank, and Tokio Marine & Nichido Fire Insurance Co.

NEXT GENERATION CITIES

ASIAN LEGAL BUSINESS JULY 2012

work, advising a range of corporations on banking and finance, trading, manufacturing, construction and IT. In 2010, Dojima Law office became a limited liability partnership, and opened an office in Tokyo. The recent expansion of operations has been a boon to the firm, whose clients are benefiting from the team’s ability to act quickly on cases that take place across Japan.

OH-EBASHI LPC & PARTNERS Established in 1981 in Osaka, Oh-Ebashi LPC & Partners is growing its reputation across Japan. The outfit offers a full range of services to its clients, from corporate law and finance, to environmental law and litigation. The Osaka office alone boasts a team of 25 partners and over 40 lawyers, underscoring the large volume of work being done in the city. Oh-Ebashi also has an office in Tokyo, and had opened a branch in Shanghai in 1995 which specialises in litigation and arbitration matters. “Oh-Ebashi is a very good law firm in Osaka,” comments a peer, who adds that “the quality of their lawyers is very impressive”. Another peer singles out partner Seigo Takehira for his expertise in corporate and M&A work.

OSAKA INTERNATIONAL LAW OFFICES

Passers-by walk under advertisements in the Dotonbori shopping and amusement district in Osaka. REUTERS/Issei Kato

Chuo Sogo expanded into Tokyo in 2003, and opened an office in Kyoto in 2009, strengthening its presence on the ground in Japan. Serving as a further boost, Shigeru Morimoto, a former professor at Kyoto University and an expert on corporation law in Japan, joined the firm in October 2011. Corporate partner Masahiro Nakatsukasa has been praised by both lawyers and clients. “His deep legal expertise, and his capability to understand our business needs makes him invaluable to us,” says one approving client. Nakatsukasa led the team that advised Sanyo Special Steel on establishing a joint venture company with Mahindra Ugine Steel to manufacture special steel in India. The group advised Sanyo on several cross border aspects of the transaction, assisted with its negotiation with Mahindra, and drafted agreements. “Chuo Sogo is one of the most renowned firms in Osaka,” comments a client. “The of-

fice has a fleet of highly qualified lawyers, including labour relations specialists, corporate law specialists, and international experts. All in all, we hold them in high regard,” he explains.

DOJIMA LAW OFFICE Dojima Law Office commands a strong presence in Osaka. Established in 1965 as Kimura & Matoba Joint Law Office, the firm was renamed to Dojima Law Office three years later in 1968. The firm operates with more than 20 capable lawyers, including the highly experienced Yuki Matoba and Toshio Kawamura. Key areas of focus for the firm include corporate restructuring and bankruptcy, environmental law, labour law, intellectual property, and criminal law. The team is also well known for its corporate law

Founded in 1994 by Koshi Yamaguchi, Osaka International Law Offices has grown steadily, and now includes, in addition to Yamaguchi, partner Nobuaki Matsuoka, five associates, and a resident foreign legal consultant. Yamaguchi, who a peer describes as “knowledgeable and very well known in the market”, helms the firm that offers a variety of services including M&A, real estate and construction, intellectual property, employment law, and international purchase agreements. Moreover, the firm has a wealth of experience in litigation. The team represents foreign enterprises in Japanese courts, and supports Japanese companies entangled in litigation proceedings abroad. Other notable firms in the city include H. Okada International Law Office, Kitahama Partners, Midosuji Legal Profession Corporation, and Yodoyabashi & Yamagami. As this issue went to press, Nishimura & Asahi, one of Japan’s Big Four law firms, announced plans to open offices in Osaka and Nagoya. The Osaka office will have two partners and up to four associates.

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BANGALORE

Bangalore stole the spotlight earlier this year when lawyers clashed with journalists on the steps of the cityâ&#x20AC;&#x2122;s civil court over allegations that they had been unjustly portrayed in the media. But leaving aside political confrontations, the outlook for the legal marketplace in Bangalore holds steadily positive. Sources report that despite a general slowdown, given the national economy, there is increasing activity in certain industries such as e-commerce and real estate. Venture capital and private equity funds are also continuing to take a closer look, and propelling deal activity in the region. Well known as an IT hub, lawyers have seen a continuous entry of software and internet companies into the city, with a heavy weighting towards international clients over domestic ones. There is also a distinct shift towards mid-level foreign companies who are now looking at Bangalore, as opposed to previous years in which only the larger Fortune 500 corporations staked a presence. More generally however, the market continues to evolve as national firms pour into Bangalore, setting up meaningful offices, as opposed to mere outposts. Smaller firms also persist in spinning off from larger national or Bangalore-headquartered firms, creating a deeper market for clients.

REUTERS/Jagadeesh N.V

(Firms are arranged in alphabetical order)

AMARCHAND & MANGALDAS & SURESH A. SHROFF & CO A force when it comes to corporate matters, this national firm has a renowned team in Bangalore that handles big-ticket restructurings, M&A, private equity, and capital markets transactions. The group also advises on real estate and litigation matters, focusing on corporate financing REEBA CHACKO and property acquisitions. Highlight work from the last year includes advising Doosan Heavy Industries &

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Constructions in their $27 million acquisition of AE&E Chennai Works, and representing DSP Merrill Lynch in relation to the $2.1 billion sale by Petronas of 14.9 percent of Cairn India on the Bombay Stock Exchange and the National Stock Exchange of India. Other notable representations include advising the Kotak Alternate Opportunities (India) Fund in relation to the structuring of its investment in Century Real Estate Holdings. Notable clients include GMR, Landmark/ Lifestyle, Sequoia Capital, OnMobile, Premji Investments, Mantri Developers, Indiabulls, and BAMIL. Peers hail the firm for being “very active in the market”, and key contacts in Bangalore include partners Reeba Chacko and Nivedita Rao.

INDUS LAW A Bangalore-headquartered firm, Indus Law has a strong track record of representing clients in complex corporate, real estate, and dispute resolution matters. The team is especially sought after for its strength in capital markets, private equity, fund formation, and M&A work.

KHAITAN & CO This distinguished five-partner practice earns accolades for its expertise in corporate and commercial, real estate, litigation, and banking and finance mat te r s . T h e tea m frequently undertakes M&A, private equity, venture capital, securitisation, intellectual property, debt recovery RAJIV KHAITAN and licensing matters. Key work includes advising Vilmorin & Cie on the acquisition of shares in Bisco Bio Sciences with the objective of forming a joint venture company with the promoters; representing Happiest GANESH PRASAD Minds Technologies in a $45 million Series A Investments led by Canaan Partners and Intel Capital; and handling InMobi Technologies’s acquisition of certain assets worth $ 8.5 million from Sprout Inc. One client revealed that the team is “responsive, focused and easy to deal with”, while another pointed out that they are “excellent value for money”. O.P. Agarwal and Rajiv Khaitan helm the team in Bangalore, while other key contacts in the city include Ganesh Prasad.

KRISHNAMURTHY AND CO / K LAW

INDUS LAW

Recent key work includes representing Oak India Investments in its investment into Ybrant, advising Walden Investments on its $6 million investment into Bankbazar.com, and handling ASM Technologies in its 100 percent acquisition of U.S.-based Abacus Corporation. Key clients include Orbimed, Helion Venture Partner, Just Dial, and Elevar. Clients affirm that “we only have good things to say about Indus Law”, while peers reveal that the firm has “strong solid lawyers, and is a significant player”. Kartik Ganapathy, Srinivas Katta and Suneeth Katarki are the main partners in Bangalore.

Established in Bangalore in 1999, this fourpartner team is adept at handling corporate/ commercial and intellectual property matters. The firm is active in various industries, and represents software, pharmaceutical and hospitality companies as well as banking and finance clients. NIKHIL In the last year, the KRISHNAMURTHY team advised Captronic Systems in a $2.6 million investment by Forum Synergies India Trust and IMI Investments One Limited, represented IndoUS Venture Partners II in a $2.8 million investment in Simplilearn Solutions, and handled the Muthoot Group in the $8 million purchase of property in Bangalore.

ASIAN LEGAL BUSINESS JULY 2012

Clients compliment the firm for ITS “knowledge, experience, ease of working as a team and good accessibility”. Sources further note that “they deliver excellent legal advice and support and understand our needs”. Primary contacts include managing partner Naina Krishnamurthy and head of the Bangalore practice, Nikhil Krishnamurthy.

NARASAPPA, DORASWAMY & RAJA This talented team is headquartered in Bangalore, and is known for handling complex matters with a focus on corporate M&A, private equity and banking work. The firm also has a wellrespected litigation and arbitration practice. The team consists of three partners and 14 POORNIMA HATTI lawyers. Notable work from the last year includes advising Actoserba, a B angalor e -bas e d online lingerie store regarding a Series A funding from a venture capital firm, representing Aureos South SIDDHARTH RAJA Asia Fund in its $7 million investment in Sai Security Printers, and handling Inventus Capital Partners’ $2 million investment into LemonLearn eservices. Sources praise the team as “thoroughly professional, very helpful, and accommodative of tough time lines when required”. Harish Narasappa is the primary contact in Bangalore, and clients affirm he is “articulate and in control of his work”. Partners Siddharth Raja and Poornima Hatti are also well-recognised in the market.

SINGHANIA & PARTNERS Having established its Bangalore office in 1999, this firm maintains a significant profile in the market, advising on a wide range of dispute resolution matters as well as handling corporate and commercial deals. The team has particular expertise in representing both domestic and international IT clients, particularly software and internet companies. Key work from the last year includes defending the National Highways Authority of India in

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REUTERS/Bazuki Muhammad

the High Court of Karnataka regarding a question of right of access to the national highway, as well as representing management and technology consulting firm BearingPoint in the acquisition of an Indian company. The team also advised the Union of India before the High Court of Karnataka chalSHILPA SHAH lenging the order passed by a judge regarding an acquisition by the government of India. Source praise the team for its “large variety and volume of work”. Key contacts include partner Shilpa Shah in Bangalore.

TRILEGAL Going from strength to strength, this fourpartner practice has an established reputation for a wide range of corporate transactions, particularly for technology clients, including M&As, venture capital and private equity matters. The team also frequently undertakes telecom and media transactions. Recent notable work includes representing SAIF Partners and MakeMyTrip in a $17.8 million acquisition of a majority stake in iXigo.com, advising Synopsys on its $11 mil-

TRILEGAL

lion acquisition of nSys Design Systems, and handling Varkey Group’s acquisition of 32.60 percent shareholding in Everonn Education. Key clients include Telenor, Norwest Venture Partners, and Unitech Wireless. Market sources praise the team for its “high level of activity” while partner Rahul Matthan is valued for his “unparalleled negotiation skills, both strategically and tactically, and profound knowledge of the telecom industry”. Other notable law firms in Bangalore include J. Sagar Associates, Wadia Ghandy & Co, Luthra & Luthra, and AZB & Partners.

PENANG

A clear next-generation region for legal services, Penang continues its dynamic growth hand in hand with Malaysia’s economic boom. A recent report by the chief minister of Penang noted that the state made the largest contribution to Malaysia’s foreign direct investments in 2011 with RM17.7 billion, or 28 percent of the country’s total FDI total - an undeniably strong advantage in continuing to attract more multi-nationals to its shores. To date, the economy has shown no sign of slowing down as manufacturing investment also continues to pour in, having topped out at RM9.1billion in 2011. Practitioners have clearly seen a knock-on effect, given the flurry of commercial activity. A notable trend is the robust growth in real estate work, as both commercial and residential projects keep lawyers busy. General corporate work has also been on the upswing, as joint ventures with foreign partners become increasingly common. Lastly, commercial banking transactions continue to hold steady, according to market sources. As the demand for these services grows, many predict a corresponding expansion of the legal market in the months and years to come.

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(Firms are arranged in alphabetical order)

GHAZI & LIM A renowned national firm, Ghazi & Lim has a well-established Penang office that undertakes a mix of corporate, commercial, banking, real estate and dispute resolution matters. The team frequently handles a wide range of civil and criminal litigation, and is also sought out for its experience in labour relations, employment law, and immigration matters. Clients include multinationals from the electrical, electronics and manufacturing industries, as well as several international trading enterprises. Market sources praise them as “worthy opponents and a reputable firm”. Notable lawyers include Dato' Ghazi Ishak who focuses on litigation and often handles criminal, banking, construction, and constitutional disputes. Other areas of expertise include corporate transactions, in particular joint ventures with foreign partners. Tai Lee

ASIAN LEGAL BUSINESS JULY 2012

Sim is another key contact who is sought out for her banking, corporate, and commercial expertise.

LEE HISHAMMUDDIN ALLEN & GLEDHILL This large national law firm has two resident partners at its Penang office, and is renowned for its broad experience in disputes, intellectual property, and corporate matters. In the last year, the firm has undertaken a significant amount of real estate work as well. Last year, the team counselled Malayan CHIA LOONG THYE Banking Berhad, the largest bank in Malaysia, regarding the recovery of sums worth RM20 million due and owing under banking facilities granted to Tong Giap (the borrower) against its guarantors.

Key partners include Saravana Kumar who focuses on tax planning, audits, double taxation, stamp duty and transfer pricing matters, and Chia Loong Thye who handles arbitration, corporate, and real estate issues. Thye has particular expertise in land transactions and housing development legal matters.

PRESGRAVE & MATTHEWS With over 100 years of history, Presgrave & Matthews is one of Penang’s oldest law firms. This ten-partner team is well reputed for its disputes and corporate and commercial expertise. Within disputes, the group has a particular focus on building and construction law, arbitration, insurance, and taxation. Its corporate and commercial experience covers banking, shipping and employment transactions as well as offshore, personal and Islamic banking. There is also a dedicated intellectual property practice that handles both trademark and copyright issues. Senior partner Karin Lim Ai Ching specialises in corporate and commercial litigation, frequently undertaking wills, probate, banking and land law disputes. Head of the corporate and commercial department, Peter Moey Boon On, is experienced in property conveyancing, as well as personal and corporate banking matters.

ZAID IBRAHIM & CO This two-partner team is highly regarded for its real estate, litigation, and corporate and commercial expertise. Recent highlights include representing Maybank Investment Bank Berhad and Danajamin Nasional Berhad, Malaysia’s first financial guarantee insurer in the Ranhill Power Sukuk Musharakah worth $264 million. Other notable representations include advising Khazanah Nasional Berhad in its disposal by way of a private tender of its 32.21 percent strategic stake in Pos Malaysia Berhad, Malaysia’s national postal services corporation. Key clients include CIMB Group Holdings Berhad and AmInvestment Bank Berhad. The main contact is Ang Siak Keng, who focuses on corporate commercial, capital markets, real estate, and banking matters. He is sought out for his expertise in advising foreign investors in setting up operations in the states of Penang and Kedah. REUTERS/Zainal Abd Halim

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Sponsored Profile

Cadwalader, Wickersham & Taft LLP

The Demise of the VIE Structure and the Emergence of the MJCC Structure

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

The variable interest entity (“VIE”) structure (the “VIE Structure”) has been the investment structure of choice for foreign investors in the People’s Republic of China (“PRC” or “China”) who wish to invest in industries where foreign investment is “restricted” or “prohibited” by the foreign investment catalogue issued by the Ministry of Commerce (“MOFCOM”). The VIE Structure permits foreign investors to own and control indirectly a business operating in China.

Sino Forest Corporation is a fraudulent company because of its corporate structure in the PRC. Sino Forest was subsequently delisted from the Toronto Stock Exchange. In August, Longtop Financial Technologies Limited was delisted from the New York Stock Exchange after Deloitte’s Shanghai affiliate quit as Longtop’s auditor claiming financial irregularities. Countless other Chinese issuers, many of which were RTO companies, ceased to exist in 2011 and 2012.

Many publicly-listed PRC companies have used VIE Structures because they were generally accepted by investors and regulators. However, a “perfect storm” of events has placed the viability of the VIE Structure into question.

There also have been escalating tensions between the Public Company Account Oversight Board (“PCAOB”) and Chinese regulators over the accounting profession in China. On September 8, 2011, the SEC filed a subpoena enforcement action against Deloitte’s Shanghai affiliate. China’s Ministry of Finance then issued a directive stating that no more than 40% of partners at the Big Four auditors can be foreignqualified certified public accountants. In November 2011, U.S. Senator Charles Schumer outlined his concerns about a lack of oversight by China-based auditing firms in a letter to the Chairman of the PCAOB.

The VIE Structure engenders inherent deficiencies. Improperly establishing a VIE Structure may further exacerbate its inherent risks and weaknesses, including conflicts of interest, poor corporate governance and inadequate intra-company liquidity. As early as 2001, the fragility of the VIE Structure was revealed when dismissed Sina CEO Mr. Wang Zhidong refused to resign and asserted his rights as the majority shareholder of interest in the domestic internet operating company which held the requisite license to operate Sina. com’s business in China. Since 2001, VIE contracts have been periodically strengthened to improve corporate governance, but these enhancements were not systematic. In July 2010, misaligned interests between foreign investors and domestic owners caused Gigamedia to lose control of its VIEs in China and forced Gigamedia to write-off and deconsolidate its VIE investments. In March 2011, Buddha Steel, Inc. rescinded its public offering registration statement after local government officials stated that the company’s VIE Structure contravenes Chinese management policies. Also, as recently as April 2012, former chief executive of ChinaCast Education Corporation, Mr. Ron Chan, physically entered into the company’s offices accompanied by others to claim his ownership of company assets.

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

Meanwhile, PRC regulators imposed limitations on the VIE Structure. In September of 2011, MOFCOM issued Order No. 53, which subjected certain companies with VIE Structures to national security reviews. Concurrently, the People’s Bank of China (“PBOC”) classified all online payment companies as restricted financial institutions, and banned Chinese online payment companies from using the VIE Structure. In early 2011, before the PBOC’s announcement, Mr. Jack Ma, the CEO of Alibaba, terminated the VIE contracts connecting Alipay to Alibaba, claiming that he could not obtain from the PBOC an online payment license with a VIE Structure in place. This event prompted questions about whether VIE contracts are enforceable in the PRC. The termination of Alibaba’s VIE contracts left Yahoo, Alibaba’s foreign investor, in a significantly weaker negotiating position. Chinese issuers faced voluminous financial scandals in 2011. In June, Muddy Waters issued a report stating that

Most recently, in July 2012, the U.S. Securities and Exchange Commission (the “SEC”) issued a “formal order of investigation” against New Oriental Education & Technology Group Inc. Commentators believe that the SEC is concerned about the lack of intra-company liquidity in VIE Structures, and particularly the inability of VIEs to transfer profits to foreign investors. New Oriental is the latest in a long list of U.S.-listed PRC companies facing investigation by the SEC. The same intra-company liquidity concern erased away Sino Forest less than one year ago. It is unclear whether U.S. regulators will continue to permit the VIE Structure to exist. These recent events have demonstrated the need for a new alternative to the VIE Structure. The VIE Structure, when created, assumed that the interests of the Chinese founders were aligned with those of foreign investors because they were all shareholders in the listed company. However, Chinese founders have an incentive to walk away from the VIE Structure when the company faces growing pressure from U.S. regulators or when its stock price drops significantly. A superior structure called the Multi-Jurisdictional Captive Company Structure (“MJCC Structure”) addresses many of the VIE Structure’s weaknesses. The MJCC Structure mitigates risks inherent in the VIE Structure by: (i) offering greater legal protection to foreign investors; (ii) aligning the interests of foreign investors and their local PRC business partners; (iii) improving intra-company liquidity and; (iv) affording a sophisticated method of calculating damages and enforcing judgments when MJCC contracts are breached. Chinese companies considering whether to list in the U.S. or in another offshore jurisdiction should consider the MJCC Structure, which mitigates the weak points of the VIE Structure and offers foreign investors greater legal protection. It is also now advisable for listed companies to commence the restructuring of its VIE Structure to improve corporate governance.

japan Country Report

ASIAN LEGAL BUSINESS july 2012

JAPAN 2012

Country at the crossroads

japan Country Report

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Despite the rebuilding taking place following the earthquake last year, these are difficult days for the Japanese economy. The once-invincible manufacturing sector has lost out to Chinese and South Korean challengers, the workforce is ageing, and the yen has made merciless gains in the past few years. Alison Harley talks to lawyers and other professionals about the trends they see, the bright spots in the market, and what they think is the road ahead

apan’s problems are well documented: Years of deflation, an ageing population, a strong yen, the March 2011 earthquake, tsunami and nuclear meltdown, a record trade deficit of $54 billion, and a net debt GDP ratio that “places it in a slightly better position than Greece, but worse than Italy,” says Professor Mitsuhiro Fukao, Professor of Economics, Faculty of Business and Commerce, Keio University. However, there is an increasing sense of cautious optimism about the world’s thirdlargest economy. “Around 2 percent of Japan’s GDP was disrupted by the earthquake, tsunami and nuclear disaster,” says Fukao. “The direct impact of the earthquake was much smaller than the global financial crisis in 2008 and 2009. The economy is rebounding.” “The March 2012 Bank of Japan Tankan survey on market sentiment shows a definite improvement over December 2011 and the GDP seems to be on the up, albeit slowly,” says Junzaburo Kiuchi, corporate partner at Freshfields Bruckhaus Deringer’s Tokyo office. “We see 2012 being a better year than 2011,” says Stephen Bohrer, counsel at Nishimura & Asahi. “Things began to look brighter by the end of 2011, and that momentum has continued. Overall the business climate, which translates into legal work, has improved.”

REUTERS/Yuriko Nakao

Growth trends “Outbound M&A is a very hot topic, and the current boom looks to continue for the rest of the year and beyond,” adds Kiuchi. “In 2011, Japanese companies made around 800 cross border acquisitions valued at over $89 billion. This was the largest number of cross border M&A deals on record since 2000. We would expect this trend to continue and surpass 2011.” ”Japanese companies are very active (in) looking at overseas acquisitions,” agrees Kenneth Siegel, managing partner of Morrison & Foerster’s Tokyo office. “In addition to the traditionally active companies, you also see trading companies that, for many years, were unsure how they would deploy funds and expand globally, figuring out how to be important global players. These companies are now very active in outbound transactions, particularly in minerals and commodity-related transactions, which have historically not been a focus for Japanese companies.” “The main factor driving outbound M&A is demographic issues in Japan combined with a stagnant market. If Japanese companies want to expand, the obvious choice is to go overseas,” says Kiuchi. “Japanese businesses also tend to have greater cash resources and good access to debt funding, as Japanese banks tend to have strong relationships with buyers.” Other factors, says Kiuchi, are the lack of private equity bidders which has led to less pressure in competitive bids - which many Japanese strategic investors tended to struggle with - and strong government support. “The Japan Bank for International Cooperation (JBIC) apparently has $130 billion of credit available to lend for strategic overseas M&As and in 2009, the government established the Innovation Network Corp of Japan, which has $25 billion available with a stated aim of strategic investment in areas of environment and energy, electronics and IT, biotech and infrastructure such as water supply, railway service, and nuclear power supply.” This outbound trend appears to extend across all sectors, “but particularly food and beverages, pharmaceuticals, and energy and resources appear to be active areas,” says Yuko Tamai, a corporate partner at

japan Country Report Nagashima Ohno & Tsunematsu. “Japanese financial institutions are very active in expanding overseas at the moment,” adds Yoshiaki Muto, managing partner of Baker & McKenzie’s Tokyo office, “taking advantage of the strong yen, the weakened European financial state, and growing Asia-Pacific markets.” Tamai lists India, Indonesia and other Southeast Asian countries as particular outbound “hot spots”. “The Latin American, eastern European and Asia-Pacific regions are keeping our corporate lawyers busy,” says Muto. Nishimura & Asahi, meanwhile, has opened offices in Beijing, Singapore and Vietnam over the past 18 months which primarily cater to this outbound demand. So what about inbound? “Inbound M&A opportunities are limited by the strong yen, weak domestic growth, and structural and legal barriers. For example, in the public M&A space, hostile takeovers are not allowed in practice; cross shareholdings by Japanese corporates act as ‘de facto’ takeover defence mechanisms,” says Kiuchi. “However, there are definitely ‘hot’ pockets in Japan, especially for the sophisticated investor. Japanese technology is likely to be an attractive area for Asian companies, in particular Chinese and Korean companies, looking to buy know-how. The recent interest in Elpida is a good example of this,” he says, referring to the Japanese chipmaker which is in acquisition talks with U.S. multinational Micron Technology, having also had interest from U.S. private equity firm TPG Capital LP, China’s Hony Capital and South Korea’s SK Hynix. “There isn’t strong growth for new investment,’” says Muto. “However, foreign investors and companies have already built up a significant presence in Japan and there is a lot of restructuring taking place at the moment.” “Integration of large companies as part of industry consolidation should be expected, given the current state of the Japanese economy,” says Tamai, while Bohrer adds, “I have seen a continued demand for joint venture, licensing and strategic alliance work, as they generally have a lower upfront capital requirement.“ “Distressed assets are also likely to be an area that attracts attention. There are also some niche inbound plays, particularly for ‘contrarian’ investors who are willing to bet against the pack, in, for instance, the real estate, TMT and pharmaceutical sectors,“ says Kiuchi. “Real estate is another growth area,” says Muto. “There is still concern regarding the impact of the earthquake, followed by the tsunami and nuclear disaster. But it is starting nonetheless. It seems that money is coming in from those looking for an alternative to the Chinese real estate market.” “We are seeing a number of the private equity

ASIAN LEGAL BUSINESS july 2012

REUTERS/Kim Kyung Hoon

funds coming back in to town,” says Siegel. “Also, some interesting project finance and development work, particularly in alternative energy.” Energy concerns On May 5 this year, Japan shut its last operational nuclear power station. With 30 percent of its power having previously come from nuclear energy, and strong opposition to the stations reopening, Japan has a serious energy shortfall, which has led to a record high fiscal trade deficit attributed to increased natural gas and oil imports. “Japan is set to adopt a feed-in tariff, which requires the utilities to take power that is generated from independent power producers, and pay a set tariff,” says Siegel. “If so, it will probably be the only major country to retain this system to encourage alternative energy development. So U.S. solar companies and other alternative energy providers are now getting very interested in Japan as a potential investment opportunity.” While alternative sources develop, imports must continue. Fukao, however, sees a positive in this, saying: “What I expect is (that) the bigger demand for foreign fuel will weaken the yen somewhat, which will stimulate Japanese exports.” But is Japan facing another summer of power shortages? A government-backed panel’s preliminary findings, based on all nuclear reactors staying offline, suggest Japan could have a power surplus of 0.1 percent in August. However, Osaka and the surrounding region are expected to see a significant shortage. “(However), unlike last year, the Japanese manufacturing sector has enough time to respond,” says Fukao. “Some are changing their production patterns, producing more in spring when there is enough power, and less in summer.” ”Demand for energy continues to be a focus for the trading houses,”

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japan Country Report

“We anticipate legislative action to change requirements for independent directors on boards and how disclosures are made, and potentially what kind of securities law liabilities companies will have. We suspect issues about corporate governance will follow through amendments to the Company Law.” Stephen Bohrer, Nishimura & Asahi

says Kiuchi, examples being Mitsubishi and Mitsui’s recent deals with Australian oil and gas producer Woodside, their partnership with Shell and OAO Gazprom on the Sakhalin-2 project in Russia’s Far East, and their commercial development agreements with Sempre Energy to develop a natural gas export facility in Louisiana. Another concern has been the stability of struggling power company TEPCO. However, these fears have been allayed thanks to the Japanese government approving a restructuring plan that will see it acquire a controlling share in the company in return for a capital injection of one trillion yen. Recovery and reconstruction The Noda administration has also agreed to a massive post disaster recovery and reconstruction budget. “The implementation of the budget is delayed. However, it will boost the public works sector of the Japanese economy in this fiscal year,” says Takahira Ogawa, Singapore-based sovereign analyst and director at Standard & Poor’s. Another key industry that is reviving post 2011 is Japanese car manufacturing which was hit badly by not only the earthquake and tsunami, but also by the floods in Thailand. “If there is no disaster this year, the production level of cars will recover,” says Ogawa, evidenced by recent results from Honda, reporting a 60.7 percent increase in consolidated net income for the quarter ended March 31 in addition to Toyota posting net profits of 121 billion yen for the first three months of 2012 and predicting net profits of 760 billion yen by March 31, 2013. “Tourism is coming back, particularly an increase in the number of Chinese tourists. However, the tourism industry is very small in Japan,” says Ogawa. It may be small, making up only around 7 percent of Japan’s GDP, but it is receiving a major government push with Prime Minister Noda calling it “a frontier” for Japan at the 12th World Travel

and Tourism Council Global Summit in Tokyo. The prime minister is also encouraging “aggressive tourism promotion measures” forming part of the Ministry of Land, Infrastructure, Transport and Tourism’s Recovery and Rehabilitation Plan as part of this push. Linked to this is a recent extension of the low-cost carrier market in Japan with Peach Aviation having taken to the skies in March, Jetstar Japan and AirAsia Japan due in July and August respectively thanks to increased landing slots, the new low-cost carrier (LCC) terminals, and the promise of lowered landing fees. Consumption tax The consumer market is also an emerging growth trend with companies targeting “customers who have money, but will not spend it,” says Muto, particularly in the fields of high-level healthcare, life sciences and technology. However, the consumer market stands to be impacted when the proposed increase to the consumption tax comes into force. Japan’s consumption tax currently stands at around 5 percent, much lower than most European countries which have a value added tax of around 20 percent. It is this percentage of consumption tax that the Noda administration wants to raise to 10 percent to cut the budget deficit. However, it seems this may not be enough. “It is far too small (an increase) to cut the budget deficit,” says Fukao. “In order to balance, you would have to raise it by 20 points, to at least 25 percent.” One can imagine the opposition to such a hike; however, while it is not easy politically, the budget deficit is also unsustainable. An increase is ”inevitable”, says Ogawa. “But it depends on the timing, and (the increase) alone will not solve the fundamental problem, which is the social security and pension system,” he says. “If consumption tax is increased, consumer spending will change,” explains Bohrer. However, he does not see this impacting the demand for legal work (though domestic clients will be subject to this higher consumption tax), save that perhaps there could be a rush on large purchases, for example real estate, ahead of it being phased in. At the same time, there is a corresponding suggestion that the corporate tax rate will go down, adds Bohrer. It is hard to know if or when this will happen. That said, it is also true that the government is very concerned about the competitiveness of Japanese companies, which would certainly be assisted by a drop in the corporate tax rate. Legislative developments So what about other legislative changes that would impact the Japanese corporate and legal world? “There have been recent amendments to tender offer rules that allow exchange offers to be made,” says Bohrer. “There are still some technical difficulties that have prevented this taking off, and there will

japan Country Report

have to be some further modifications. But I see this as a potential area for growth.” Another area that has been subject to recent change is the Japanese anti-monopoly law, which has been reformed regarding companies prefiling notifications to the Japanese Fair Trade Commission. The prenotification consultation system essentially has been abolished, and instead, these consultations should be made in connection with an actual filing, making the merger filing procedure more efficient and transparent, says Bohrer, adding that Japanese regulators are also taking a more proactive approach on regulation and anti-monopoly activities. As a result, compliance and dealing with the agency will be an area that companies will need to be focused on. A potential area of change is corporate governance, following in the wake of the recent Olympus and AIJ scandals, and a continuing demand that corporate governance become more robust, says Bohrer. “We anticipate legislative action to change requirements for independent directors on boards and how disclosures are made, and potentially what kind of securities law liabilities companies will have. We suspect issues about corporate governance will follow through amendments to the Company Law.” Japan’s Company Law, which had its last major overhaul in 2006, is currently subject to significant revision with various proposals being discussed, but nothing agreed upon yet. “Whilst nothing on the magnitude of the 2006 amendments, we are expecting there to be significant changes requiring further legal work on how to implement these changes and what it means for companies operating in Japan,” says Bohrer. How quickly these amendments will come into play remains to be seen. In fact, they may not impact this year at all, but will be ones to watch for in 2013. Something else to watch is the possible enacting of what is being called a Japanese version of a consumer class action system. “The impact of this possible new system is still unknown,’’ says Tamai, “but this may increase consumer-related litigation in the future. The proposal has not been submitted to parliament, but is expected to be in the current session.” A factor that could have a major impact on Japan’s legislation would be Japan join-

ASIAN LEGAL BUSINESS july 2012

ing the Trans-Pacific Strategic Economic Partnership (TPP), a move which “(would involve) a significant ‘opening up’ and review of Japan’s legislation and regulatory framework”, according to Muto. However, the government and parties are divided on TPP, and whilst President Obama has supported Japan joining the TPP, no decision has been made. “There is no strong momentum for TPP, at least for this year,” says Ogawa. Gaiben Law There is another potential legislative change aimed directly at lawyers – a proposed revision of the Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers or Gaiben Law which governs foreign lawyers operating in Japan. The amendment relates to the ability of gaiben (foreign lawyers) to operate through hojins, or legal entities. Being able to operate through a hojin would enable foreign firms to open more than one office in Japan, something that is currently forbidden. However, the present position is far from clear. “The new amendment to the law proposed by the Ministry of Justice was going to permit hojins comprising gaiben, and also hojins comprising both bengoshi (Japanese attorneys-at-law) and gaiben,” explains James Lawden, Japan managing partner at Freshfields

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japan Country Report

in a way, that failed to clarify the tax implications of expanding. To take advantage of the law probably requires a change of entity that might have adverse tax consequences. So until it is clear that firms can pursue this in a tax efficient way, it is probably not going to make a material difference,” says Siegel. An area not being addressed by the current amendments is the current requirement that before being admitted as a gaiben, lawyers must spend at least two years practising outside Japan. “This is the most significant issue for us,” says Siegel. “We would like to be able to hire young attorneys and potentially have them spend their entire careers in our Tokyo office. Having to transfer attorneys who are busy to another office to meet this requirement is artificial, costly and adversely affects both attorney development and client service. This we would love to see changed.” “We are not sure when the recent proposed amendment will be implemented or in what form,” says Lawden. “We are meeting with the Ministry shortly, so we hope to have an update after that.”

Bruckhaus Deringer and a co-chairman of the Gaiben Kyokai, the association of registered foreign lawyers in Japan. “However, a bill filed recently purports to amend the Ministry’s proposal so that only hojins comprised entirely of gaiben should be permitted,” he adds. “It is very strange because the current law already allows GJB (registered foreign lawyers) and bengoshi (local lawyers) to form a single partnership called a joint enterprise,” says Muto. “The proposed revision is making good progress on deregulating the Japanese legal service industry, but is not a satisfactory change for international law firms already practising in Japan,” he says. “I do not think the change in the law is going to significantly affect how international firms practise in Japan going forward. It has levelled the playing field between international and domestic firms for the purposes of opening additional offices in Japan. But

2012 and beyond “Japan can change the course of its own future,” says Ogawa, “but time is getting shorter to do so.” There are undoubtedly many issues to address: the Bank of Japan is struggling to meet its price stability goal of an annual growth rate of consumer price index at 1 percent, “revolving door” prime ministers have made meaningful change difficult and now, according to a recently unveiled population clock, the nation is facing extinction in 1000 years if the birth rate does not increase. However, lawyers working in Japan have no doubt the country can, and will, overcome its problems. “This is still a robust market where foreign and domestic law firms can thrive,” says Bohrer. “There is all that gloom and doom out there, but it is not nearly as bad as it is portrayed,” says Siegel. “From a lawyer’s point of view, there are a lot of areas where we see positive trends.” “Japan’s economy is not growing rapidly but it is growing steadily. It is gaining its confidence back and spending again. It is healthy,” says Muto. The Research Institute of Economy, Trade and Industry (RIETI) agrees and, barring another natural disaster or a European crash, is forecasting a 2 percent growth rate for Japan in 2012. So whilst Japan may not currently have the dynamism of China or the flare of India, it does have a quiet stoic strength that should not be underestimated. It perhaps pays to recall the tale of the tortoise and the hare - that sometimes it is not always about being the fastest. Instead, it is about facing life’s challenges, persevering and when you reach a crossroad, choosing to move forward steadily.

japan Country Report

ASIAN LEGAL BUSINESS july 2012

岐路に立つ日本

日

本の問題は明らかだ。長年にわたるデフレ、高齢化、円高、2011年3月11日の東日本大震災と原発のメルトダウン、540億ドルという記録的な貿易赤字、対GDP純債務比率は「ギリシャよりは若干良いが、イタリアより悪い」程度だと慶応大学商学部深尾光洋教授は指摘する。とはいえ、この世界第3位の経済大国に対しては、慎重ではあるが楽観的見方が高まっている。「地震と津波、原発事故によって GPDのおよそ２％が影響を受けた。震災による直接の影響は2008、2009年の世界的な金融危機に比べ遥かに少なく、経済は回復傾向にある」と同氏は言う。「2012年3月の日銀短観では2011年12月以降明らかな回復がみられ、GDPもゆっくりではあるが回復している」フレッシュフィールズブルックハウスデリンガー法律事務所のパートナー弁護士、木内潤三郎氏は言う。「2012年は2011年よりも好調」と語ったのは、西村あさひ法律事務所のカウンセル、スティーブン・ボーラー氏。「2011年末から状況は好転しており、その傾向は続いている。全般的に景気は上向きで、法務分野にも反映されている」という。成長トレンド木内氏は「海外M&Aは非常にホットな話題で、このブームは今年以降も続くと思われる。2011年、日本企業はおよそ800件のクロスボーダー買収を行い、その取引総額は 890億ドルを超えた。海外M&Aの件数としては2000年以降最大となったが、この傾向が2011年以降も継続する」と期待している。「日本企業は海外買収に対して非常に積極的」だと言うのは、モリソン・フォースター東京オフィス代表のケン・シーゲル氏だ。「以前から積極的にM&Aを行ってきた企業に加えて、資金投下と海外展開の方法が分からず長年頭を悩ませてきた商社が、遂にグローバル・プレーヤーとしての重要な地位を占めるようになってきた。これらの企業は、これまで日本企業からはあまり注目されてこなかった分野、特に鉱物資源とコモディティ関連に対して非常に積極的な投資を行っている」という。木内氏は、「積極的な海外投資の背景には、日本の人口問題と国内市場の停滞がある。日本企業が成長するためには、海外へ行くしか道はない」と考える。「日本企業は多くのキャッシュを保有していて、日本

の銀行は買い手と強い結びつきを持っているため、借り入れが容易」だからだ。その他にも、未公開株式を購入する企業が少ないため、日本の戦略投資家が苦手とする競争入札のプレッシャーが少なく、政府による強力なサポートもあるという。国際協力銀行（JBIC）は、戦略的海外M&Aに1300億ドルの融資を行う準備があったのに加え、政府は2009年に産業革新機構を設立し、投資先を定めた戦略的投資に対して250億ドルの融資を行うとした。環境、エネルギー、エレクトロニクスとIT、バイオテクノロジー及び水道、鉄道、及び原子力発電などのインフラ分野が対象になると木内氏は言う。この海外投資傾向は全てのセクターに共通しているが、長島大野・常松法律事務所、コーポレートパートナーの玉井裕子氏は「特に食品と飲料、製薬、エネルギー・資源で好調」とみる。ベーカー＆マッケンジー東京事務所のパートナー、武藤佳昭氏によれば、「日本の金融機関は現在海外進出に対して非常に積極的。円高、欧州の財政悪化、そして勢いに乗るアジア太平洋市場をうまく利用している」という。玉井氏は、インド、インドネシア及び他の東南アジア諸国を、海外投資の「ホットスポット」と呼ぶ。またベーカー＆マッケンジーの武藤氏も、「我々の企業担当弁護士は、南米や東欧、アジア太平洋地域の案件を多数手がけている」という。こうした海外投資需要に応えるため、西村あさひ法律事務所はこの18カ月で北京、シンガポール、ベトナムにオフィスを新設した。国内向けの投資に関しては、「円高、国内成長の鈍化、そして構造的・法的障害が原因で、国内向けM&Aの機会は非常に限られている。例えば、株式の公開買い付けの場合、敵対的買収は現実には認められておらず、日本企業間の株式持ち合いは〈事実上〉の買収防衛策となっている」とフレッシュフィールドの木内氏は指摘する。「とはいえ、日本にも洗練された投資家向け〈ホット〉ポケットは確実に存在している。日本のテクノロジーは、ノウハウを得たいと思っている中国や韓国などのアジア企業にとって魅力ある分野。最近のエルピーダに対する興味がそのよい例」と米国の多国籍企業マイクロン・テクノロジーによる日本のチップメーカー買収話を例にあげた。この会社の買収には、米国プライベートエクイティ会社TPGキャピタル、中国のホニー・キャピタル、韓国のSKハイニックスも興味を示した。「新規投資にはあまり高い成長はみられないが、海外の投資家や企業はすでに日本で重要な立場を築いており、いま様々な改革が起こっている」武藤氏は言う。また、玉井氏は「現在の日本の経済状況を考えれば、業界再編の一環として大企業の統合が起こるのは当然」とみる。ボーラー氏も「ジョイント・ベンチャー、ライセンス契約、戦略的提携に対して継続的な需要がみられるのは、一般的に初期資本が少なくてすむから」と分析する。木内氏によれば、「不良資産は注目を集めやすい分野。他の有力投資家とは反対の銘柄を購入する〈逆張り〉投資家にとって、不動産、TMT、製薬セクターなどがニッチな市場として人気だ」という。「もうひとつの成長分野は不動産。地震、津波、原発事故の影響による不安感は未だに存在しているものの、すでに成長は始まっている。中国の不動産市場に変わるオプションを求めるマネーが流入している」と武藤氏はみる。「多数のプライベート・エクイティ・ファンドが東京に戻っている。興味深いプロジェクト・ファイナンスや開発案件が、特に代

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替エネルギーの分野でみられる」とシーゲル氏も語った。消費税消費者市場に関しても、「資金はあるが、使わない」人たちをターゲットにした企業を中心に急成長しており、特に高度医療やライフサイエンス、テクノロジーの分野で顕著に見られると武藤氏は語った。とはいえ、消費税の増税案が成立した場合、消費者市場への影響は必至だ。日本の消費税は現在５％で、多くの欧州諸国の20％にものぼる付加価値税と比べるとはるかに低い。野田政権はこの消費税率を10 ％に引き上げて財政赤字削減に活かしたい意向だが、これでは財源としては十分ではなく、「財政赤字の削減には程遠い」と深尾氏は指摘する。財政赤字の解消には税率を20ポイント引き上げて、少なくとも25％にする必要があるが、そのような増税には反対の声が上がるのは想像に難くない。増税は政治的に難しい作業になるが、財政赤字をこのまま維持するのは不可能だという。スタンダード＆プアーズシンガポールのソブリンアナリスト＆ディレクター小川氏も、増税は「不可避」とみる。「問題はタイミング。増税だけでは社会保障や年金制度など根本的な問題の解決にはならない」という。「消費税が引き上げられれば、消費者の行動も変わる」ボーラー氏はいう。とはいえ、（国内顧客は高い消費税を支払うことにはなるものの）不動産などの高額商品購入が新消費税の施行直前に殺到する可能性を別にすれば、増税が法務需要に与える影響はないとみている。「同時に、これに対応して法人税の引き下げを提案する声もあるが、本当に実現するのか、またその時期については不明だ。しかし、政府は日本企業の競争力を非常に懸念しており、法人税の引き下げによる支援は確実に行われるだろう」同氏は語った。では、日本企業と法曹界に影響するような法改正は他にはあるのか。「先ごろ株式公開買い付けに際した株式交換の利用を可能とする方針が決定した。実際に施行までにはまだクリアしなくてはならない問題がいくつかあるが、その他の項目についての改正が見込まれていることも含めて。私はこれを成長分野と考える」ボーラー氏は言う。他の分野では、独占禁止法で公正取引委員会の審査手続等に関する改正が行われた。事前相談制度は廃止となり、代わりに届出前相談制度が新設されて実際の届出書に関する相談が可能となるため、より効率的で透明性の高い企業統合が可能になるとボーラー氏はみる。日本の規制機関は、独占禁止法順守のための活動を強化しており、その結果、企業は今後、コンプライアンス及び関連機関との対応に注意する必要が出てくる。「コーポレート・ガバナンスの分野では、オリンパスやAIJのスキャンダル以降、より厳格な企業統治が引き続き求められている。社外取締役の義務化とディスクロージャの方法、証券取引法義務に関する法改正が期待される。問題は、これらコーポレート・ガバナンスの課題を（日本の）会社法の改正として反映できるかどうかだ」ボーラー氏は言う。また、日本の会社法は、2006年に大幅に改正されたものの、現在も様々な法案が審議中で、改正の対象となる箇所が多数あるが、どれも可決されていない。2006年大改正には及ばないものの、大幅な改正が予測されており、改正法への対応と日本における会社経営への影響など法務の果たす役割は大きいとみる。こうした法改正がどの程度迅速に施行されるかは不明だ。実際のところ、今年はまったく影響がないかもしれないが、2013年は

japan Country Report

注意する必要がある。もうひとつ「注意」が必要なのは、日本版消費者クラスアクション導入の可能性である。「この新たなシステムの影響は未知数」と玉井氏。「しかし、今後は消費者関連の訴訟が増加する可能性がある。この法案はまだ国会には提出されていないが、今期中に提出される見込み」だという。日本の法制度に大きな影響を与える可能性があるのは、環太平洋戦略的経済連携協定（TPP）への参加だ。これによって、日本は大規模な「市場開放」と法制度の見直しが迫られる。しかし、TPP に対する政府及び政党間の意見は割れており、オバマ大統領は日本TPPへの参加を支持しているものの、未だに結論は出ていない。「少なくとも今年に関しては、TPP参加への強い弾みはついていない」小川氏はいう。 2012年以降「日本の将来は変える事ができる。しかしそのタイムリミットが刻一刻と迫っている」と小川氏は言う。問題が山積しているのは明らかだ。日銀は消費者物価指数の上昇率１％という目標達成に苦労している。首相が「次々と入れ替わる」ような状態では、意味のある改革を行うことは難しく、世界人口時計によると、出生率がこのまま上昇しなければ、1000年後に日本は民族絶滅の危機に直面することになるという。しかし、日本で働く弁護士らは、日本にはこうした問題を解決する力があると確信している。

日本はまだまだ堅牢な市場で、国内外の事務所の成長が見込まれる、と主張するのはボーラー氏だ。またシーゲル氏も「悲観的な見方も残っているが、見かけほど実態は悪くない。弁護士の視点からは、多くのポジティブな傾向がみられる」と語った。「日本経済に急速な成長はみられないが、確実に成長している。市場が信頼を取り戻し、再び消費行動が始まった。これは健全な動き」武藤氏は指摘する。独立行政法人経済産業研究所(RIETI)では、新たな自然災害、又は欧州経済の崩壊がなければ、2012年の成長率は2％と予測している。中国のような活力やインドのような勢いはないが、日本は静かで抑制された強さを持っている。これを過小評価してはならない。ウサギとカメの物語を思い出してみればよい。常に一番乗りになる必要はないのだ。人生の課題に粘り強く取り組み、分かれ道に来たら、確実に前進する道を選べばよいのだから。

Shanghai International Board

ASIAN LEGAL BUSINESS july 2012

The waiting

game 等待的游戏 The issuance of a central government directive allowing foreign companies to list on the Shanghai Stock Exchange has reignited hope for the launch of this long-awaited International Board. Still, the clearance of existing barriers is closely linked to other reforms, and lawyers believe that Chinese investors will likely have to wait a while longer before enjoying direct access to foreign firm shares. Liu Zhen investigates

中央政府发布的关于允许境外公司在上交所挂牌交易的指导意见再次点燃了对启动期待已久的国际板的渴望。但如何清除现有障碍与其他各方面的改革息息相关，律师们认为中国投资人可能需要再等待些时日才能直接购买境外公司股份。Liu Zhen报道

** 鑫马翻译提供中文译文 **

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Shanghai International Board

REUTERS/Aly Song

ast month, a State Council statement thrust the possible opening of an equity market to foreign listings under the spotlight once again. The central government has said that China will begin a trial programme that will enable foreign companies to list on the nation’s stock exchanges. The statement was issued jointly with eight agencies in June, and said that China will “seriously” prepare for foreign listings technically, and initiate such a pilot scheme “when the time is appropriate”. “China will study mapping out the guidelines

上

个月，国务院发布了可能向境外企业开放A股市场的意见，将国际板再次推向各方关注焦点。中央政府表示，中国将开展允许境外企业在中国证券交易所挂牌交易的试点项目。今年6月份八个部委联合发布了该《指导意见》，其中提到中国将“认真”做好相关技术准备，“适时”启动境外企业境内发行人民币股票试点。国务院表示：“中国将研究制定境外企业到境内发行人民币股票的制度规则”。

for foreign firms to issue yuan-denominated shares in the domestic markets,” said the cabinet. Discussions about the Shanghai International Board have been around for almost a decade. Although many multinationals had made their interest in listing in the world’s second-largest economy known throughout the years, Chinese authorities have delayed the plan repeatedly over problems ranging from worries about hot money inflows to the global financial crisis.

有关在上海启动国际板的讨论持续了将近十年。尽管多年来，许多跨国企业都表现出了在世界第二大经济体上市的兴趣，但从担心热钱涌入到全球金融危机等因素，中国政府一再推迟A股市场的开放计划。然而，国务院上月发布的《指导意见》显示出政府深入改革金融制度的决心，理由是几乎所有发达国家的股票市场都向外国企业开放。随着上海加快国际金融中心的建设步伐，很多人相信上海会向国内投资人放开境外公司股票的买卖。

Shanghai International Board

The latest statement, however, demonstrated the government’s determination to make deep reforms to the financial system, given the fact that almost all developed countries have local venues for foreign listings. Where Shanghai’s desire to step up as an international financial centre is concerned, many believe it ought to offer domestic investors access to foreign equity. Attractive market Once the Shanghai International Board be-

ASIAN LEGAL BUSINESS july 2012

comes a reality, Jing Gang, a Beijing-based partner at King & Wood Mallesons, suggests that the market would probably see encouraging responses from both listers and investors, at least during the start period. For the multinationals, particularly those that have a considerable amount of business in China, listing there could enhance their brand and reputation, not to mention the deliverance of a large source of yuan financing, Jing says. Jingtian & Gongcheng’s Beijing partner Liu Jun also says that two factors largely count for the attractiveness of the Shanghai International Board to potential listers: Brand promotion and favourable valuation, of which the latter weighs more. “Listing locally is good for branding, but since they are probably very reputable already, the

Prada Chief Executive Patrizio Bertelli speaks at the Hong Kong Stock Exchange. REUTERS/Bobby Yip

诱人的市场金杜合伙人景岗律师认为，一旦上海国际板成为现实，至少在初始阶段，市场可能会收到上市公司和投资人的双重利好反馈。对跨国企业来说，尤其是那些在华业务量巨大的跨国企业，在中国上市可以增强其品牌效应和声誉，而获得大量的人民币资金更是自不待言。竞天公诚合伙人刘君律师也认为，对潜在上市公司来说，上海国际板的吸引力主要来自于两个方面：品牌提升和有利的估值，而后者更关

键。“在本地股票市场上市交易对品牌推广很有利，但一些企业可能已经很有名气，所以大家看重的基本都是企业估值”，他同时还列举了一些国际奢侈品牌在香港成功完成第二地上市的例子，比如说普拉达(Prada) 。“中国投资人对有些行业更情有独钟，给予这些行业的估值也远远超过他们在本国的估值。” 景律师认为：“根据市场预计，国际板市开始时市盈率将明显高于其他资本市场，”他也“相信将有众多高质量的跨国企业将在国际板上市。另外，一些主要的‘红筹’企业也会成为潜在的上市公司。”他预言短期内市场对国际板会出现非常积极的反映，原因是第一批上市的公司很可能是业绩亮丽的著名跨国企业。

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Shanghai International Board

“There is no substantive legal blocking or unmet precondition for foreign companies to list in China…But neither the investor nor the entire capital market of China is mentally prepared enough at the moment.” Jing Gang, King & Wood Mallesons

consideration is all about valuation,” he says, citing the examples of international luxury brands’- such as Prada, which made a successful secondary listing in Hong Kong. “Chinese investors prefer some industries and value them much higher than their native countries.” “The market estimates that the P/E ratio of the International Board will be significantly higher than that of the other capital market in the beginning,” says Jing. “I believe there are going to be a number of high-quality multinationals that will list on the International Board. Plus, some major ‘red-chip’ Chinese companies are also potential listers.” He predicts a very positive market reaction to the International Board listings in the short term, as the initial issuers are likely to be well-known and high-performing multinationals. Most recently, the second-largest oil producer in Russia, Lukoil, said it was considering listing in Shanghai when conditions matured. Germany’s Allianz, the largest insurer in Europe, has also expressed its intention to list new shares in China. Among other German blue-

chip companies mentioned by the media to be mapping out China listings are sporting goods maker Adidas, as well as carmakers Volkswagen and Daimler. “Despite their clients’ high interest and inquiries, actual market prospects would depend on the condition and attractiveness of the economy after the launch,” says Li Xiaocheng, a partner at Jun He’s Beijing office. “The long-term trend of the International Board will be closely connected to the entire Chinese economic environment, the A-share development, and the internationalisation of the yuan,” affirms Jing. Meanwhile, there is no substantive legal blocking or unmet precondition for foreign

“从法律层面，境外企业到中国境内发行股票并上市并不存在实质性的障碍或者说前提条件……但目前投资者以及整个市场还没有从心理上接受国际板。” — 景岗律师，金杜律师事务所

最近，俄罗斯第二大石油生产商Lukoil表示，正考虑在条件成熟时在上交所挂牌交易。欧洲最大的保险公司德国安联保险集团也表达了在中国上市的意愿。媒体一度提到的计划在华上市的德国蓝筹公司还包括体育用品制造商阿迪达斯和汽车生产商大众和戴姆勒奔驰。君合合伙人李晓承律师认为，尽管他们的客户表现出了强烈的兴趣，也多次询问有关事宜，但实际市场前景还取决于国际板启动后的经济环境和吸引力。景岗律师则说：“长期来看，国际板的发展趋势将与整个中国经济环境、A股市场发展和人民币国际化进程紧密相关”。同时他还提及，境外企业在华上市不存在任何实质性的法律障碍，也没有任何未满足的先决条件。因为国家在基本框架下已制定了很多规则，例如首次公开发行股票和上市的管理办法，以及涉及招股书信息披露、发行人公司治理及股东权益保护等方面的规则。“就发行人监管而言，相关部门已制定了规范国内A股上市公司的规则。境外发行人肯定有注册在中国的实体，并通过该实体在中国境内的联系点来确保信息披露，所以这不是最实质性的问题。”他还说：“据我们所知，监管机构对国际板的配套性法规

研究已基本完成，市场条件一旦成熟，监管制度便可在很短的时间内制定形成。” 但大家普遍预期，上海国际板不会在短期内启动。相反，上个月的《指导意见》是一个中长期的战略指导文件。尤其值得注意的是，证监会作为中国证券市场的主要监管者和政策制定者却没有参与发布《指导意见》。“这意味着证监会没有参与意见的制定，可能并不赞同其中关于启动国际板的意见。现阶段，启动国际板的主要顾虑甚至障碍首先是对于资本流向海外的忧虑，其次是担心A股市场不能再给出高的估值” 美国凯寿律师事务所合伙人符迎曦律师认为。人民币的可兑换性当前的资本项目牢牢地掌握在国家手中，大

Shanghai International Board

companies to list in China, he adds. This is so because many rules have already been in place with basic frameworks such as the administrative measures for public offerings, the rules governing the listing of stocks, the rules on prospectus disclosure, issuer corporate governance, and shareholder protection.“Regarding the issuer supervision, there have been rules to regulate the domestic A-share listing companies. There must be China-registered entities of the foreign issuers who have to have domestic contacts to ensure the information disclosure. So it is not the most substantive problem,” Li says. “As far as we know, the regulators’ study on the supportive regulations of the International Board is almost done,” says Jing. “As soon as the market condition is ripe, the regulation system can be completed within a very short period of time.” However, it is widely anticipated that the Shanghai International Board will not be kicking off any time soon. Rather, last month’s directive is a middle- or long-term strategic guideline. In particular, it is noted that a key

ASIAN LEGAL BUSINESS july 2012

exclusion from the issuers of the directive was the China Securities Regulatory Commission (CSRC), the major regulator, and rule maker of the Chinese stock market. “This means that the CSRC is not a part of this opinion, and may not endorse the statements made in the opinions on the launching of the International Board,” says Yingxi Fu-Tomlinson, a Shanghai-based partner at Kaye Scholer. “At the moment, what seem to be major concerns or even showstoppers for the launch are first, the fear of capital being moved out of the country and second, the fear of loss of high valuations on the A-share market.” Yuan convertibility Currently, the capital account is tightly controlled by the state and large cross border capital flows cannot move freely, which would prevent foreign companies transferring capital for use in other countries once they list in China. The restriction applied to yuan conversion is an urgent legal problem that needs to be solved before the launch of the International Board, says Zhu Linhai, a Shanghai-based senior partner at AllBright Law Firm. “An alternative to the domestic financial market products, the main purpose of the International Board is also to help foreign companies effectively raise money in China,” he says. “But how will they transfer the money out of China?” This barrier is not easy to remove. Chinese authorities believe that capital controls protected the Chinese economy from the volatile international capital flows that devastated its Asian neighbours during the 1997 and 1998 Asian financial crisis, and again during the 2008

“There could be some entry criteria for investors. In the starting phase, only strong investors with high-risk tolerance should be allowed, and then there could be a gradual expansion.” Zhu Linhai, Allbright Law Firm

“（国际板）……制定一定的投资者准入标准，首先引入部分实力雄厚、风险承受度高的投资者，然后逐步放开。” — 朱林海律师，锦天城律师事务所

型跨境资本流动无法自由展开，这一点使得境外公司在华上市后难以将资本转移到其他国家使用。锦天城合伙人朱林海律师认为，人民币兑换方面存在的限制是国际板启动之前亟待解决的法律问题。他说：“作为境外企业所在国国内金融市场产品的一种替代补充，国际板的主要目的也是帮助境外企业在中国有效地募集资金，但他们又如何将资金转移出去呢？” 要消除这一障碍却并不容易。中国政府认为资本控制保护了中国经济免遭1997-98年在东南亚金融危机和2008-09年全球金融危机中重创其亚洲邻国的国际游资的破坏。

刘律师认为，在最终开放资本项目或人民币自由兑换之前外国企业仍有出路可寻，但开放资本项目或人民币自由兑换预计至少在近年内难以实现。目前政府不可能放松对资本项目和外汇的限制，国际投资者的参与正使情况变得复杂化。他认为：“由于过多的限制，上海国际板将永远不可能成为纽约或香港市场所提供的那种交易平台。” 但上海可以学习东京。从务实的角度来说，只要将上海国际板定位为和东京证券交易所相同的“有一部分境外公司上市的区域性平台”，并在这一阶段暂时不考虑国际投资者，便可在一定程度上绕开这些问题。脚踏实地来讲，上海国际板最初应把参与者限定在国内投资人而不是国际投资人身上，由此货币兑换的需求便可得到有效限制。“在这一情形下，证监会和外管局为发行人开放一条特殊通道来兑换募集到的人民币即可，这样便降低了监管难度。”刘律师表示：“有了清晰的定位，人民

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Shanghai International Board

and 2009 global financial crisis. However, there is a way out before the eventual opening of the capital account or free yuan conversion, which is estimated to not happen for at least eight years, suggests Liu. Since the government is currently not likely to loosen the restrictions on the capital account and foreign exchange, the involvement of international investors is complicating the situation. “With too much restriction, the International Board might never become New York or Hong Kong,” he adds. But it could become Tokyo. As long as the Shanghai International Board is pragmatically positioned as “a regional platform with some international listings” like that of the Tokyo Stock Exchange and temporarily puts aside international investors at this stage, such problems could be bypassed to a certain degree, suggests Liu. Practically, the Shanghai International Board should initially limit its investor base to domestic investors instead of the international ones. Thus the demand for currency exchange could be effectively limited. “In that case, the CSRC and the State Administration of Foreign Exchange (SAFE) could just open a special channel for the issuers to convert their yuan raised in the offerings which is easy to regulate,” says Liu. “With a clear positioning, the convertibility should not be a problem.” Prematurity The sluggish A-share market is another key concern. “Although the technical conditions are in place, the capacity of the domestic capi-

tal market and the international economic environment must be considered,” says Yan Guozhe, a partner at Jia Yuan Law Firm. “The Chinese stock market has been constantly deteriorating. An immediate launch of the International Board could damage the finances of the current market.” Previous A-share market response to each tidbit of news about the International Board has proven that neither the investor nor the entire capital market of China is adequately mentally prepared to afford the volume of major listings at the moment, says Jing. Liu also says that the A-share and renminbi markets are presently too vulnerable to accept such a huge diversion. Yan adds that given the unstable international economic environment, China would not rashly allow foreign companies to shift their operational risk to the Chinese investors. “There are three necessary conditions: First, the affordability of the domestic capital market; second, a stable and continuously upward-bound domestic and international economy; and third, a complete set of legal,

“We shouldn’t be too ambitious. Better to aim at being a regional centre. Be Tokyo, not New York.” Liu Jun, Jingtian & Gongcheng

“我们不要好高骛远，想成为纽交所。最好就像东京着眼于成为区域中心。” — 刘君律师，竞天公诚律师事务所

币的可兑换性便不再是一个问题了。” 为时尚早 A股市场的疲软是另一个主要原因。嘉源律师事务所合伙人晏国哲律师认为：“尽管技术条件已经成熟，我们还必须考虑国内资本市场的容量和国际经济形势。”他进一步表示：“中国股票市场正经历持久性的衰退，立刻推出国际板将损害目前市场的经济状况。” 之前A股市场对每次国际板相关新闻的反应都证明了，不论是投资人还是整个中国资本市场现在都没有做好足够的心理准备来承受外国大公司上市所带来的体量，景律师有此体会。刘律师也认为，A股和人民币市场现在都还过于脆弱，无法接受这一巨大市场变化。晏律师补充道，由于目前国际经济环境不稳定，中国不会匆忙地允许

外国企业将其经营风险转嫁给中国投资人。“ 国际板的推出要考虑三个必要条件：首先是国内资本市场的承受能力；第二是持续稳定增长的国内和国际经济；第三是要具备一套完整的法律、会计和外汇法规制度。现在还不是国际板启动的最佳时机。”晏律师认为。景律师指出，在启动国际板之前还有更多监管方面的细节尚待澄清，中国与其他国家相比，在公司治理、信息披露、文件申报和流程以及会计准则方面的要求都存在很大差异。例如，中国对目前发行A股的法律意见书长度和内容范围都远远超过包括美国在内的主要资本市场的规

Shanghai International Board

accounting, and foreign exchange regulations and rules,” says Yan. “It is not the best timing for the International Board to start.” More regulatory details need to be clarified before the launch of the International Board, as there is a great amount of difference between China and other countries in their requirements of corporate governance, information disclosure, declaration documents and procedures, and accounting standards. For instance, the required length and content coverage of the legal opinion on the current A-share offering is far more than those of the major capital markets like those in the U.S. It is unclear whether such requirements will remain the same for the International Board, or will be adjusted. (And) the divergent accounting standards might cause foreign issuers extra costs and difficulties in making the financial documents as well as all the follow-up disclosures, according to Jing. One of the priorities of the regulators is investor interest protection, as nearly 90 percent of those participating in the Chinese stock market are retail or individual investors, says Zhu. But the overseas location of the issuers’ business makes the timely supervision difficult, and in the case of a foreignregistered company default, the CSRC has no parajudicial power to enforce the penalty. “The cross border regulatory supervision over the issuers might be the biggest challenge for the CSRC,” says Liu. “The objects are not on Chinese soil, and they have no experience with that.” Hence, Zhu emphasises on the necessity

ASIAN LEGAL BUSINESS july 2012

of systematic investor education about the international corporations. “There could be some entry criteria for investors. Only strong investors with high-risk tolerance should be allowed, and then there could be a gradual expansion,” he suggests. Fu-Tomlinson adds that on the Chinese stock market, some risk hedging mechanisms, such as short-selling, are not permitted. “The country and the market may be ready for the International Board after China further relaxes its control of foreign exchange capital account transactions, and after the Chinese capital market shifts towards more institutional investors and allows some risk hedging mechanisms (subject to appropriate regulations, of course),” she says. Lawyers benefit Although the International Board would remain premature for a while, it is still “an area of strategic importance” that constantly attracts great attention, and will definitely be a “rare opportunity and new growth driver” for many law firms once it is finally inaugurated. “The lawyers need to be not only knowledgeable and skilled, but also innovative and predictive,” says Zhu. Lawyers’ roles with the International Board would be basically the same as handling A-share listings, but feature introductory efforts for the foreign issuers who are strangers to Chinese law, according to Li. “The lawyers will have to help the clients understand the difference between the Chinese law and their own. There will be lot of explanations about Chinese rules and regulations, which have to be in the language understood by the clients and the concepts made simple and clear,” says Li. Language and professional skills are necessary. Working for inter-

定。现在还不清楚这些规定是否将适用于国际板，还是会进行一定的调整。不同的会计准则可能会令外国企业在制备财务报表以及进行后续披露等方面承担额外费用，也面临更多困难。朱律师认为，由于中国股市将近90%的投资人都是散户，监管者的要务之一就是保护投资人的利益。但发行人业务远在海外，及时监管变得有困难。如果外国公司违规，证监会也不享有执行处罚的准司法权。刘律师坦言：“对发行人的跨境监管可能是证监会面临的最大挑战，因为监管对象不在中国，证监会缺乏这方面的经验。” 因此，朱律师强调，要对投资者进行系统的国际企业知识教育。他建议：“对投资者应该要有一些准入标准，刚开始，只有能够承受高风

险的投资者才能进入这一市场，随后参与者范围可以逐步扩大”。符律师补充道：“有一些风险防范机制，例如卖空，在中国股市还不被允许。”她接着表示：“在我国进一步放宽外汇资本项目管制，资本市场投资人更加机构化，以及允许一部分风险防范机制后（当然这些机制需符合适当的法律规定），中国和中国市场可能已经就国际板做好了准备”。对律师是利好尽管国际板的推出目前尚不成熟，它仍是“一个具有重要战略意义的领域”，将持续吸引广泛的注意力，而一旦推出也必定会成为很多律师事务所“难得的机遇和新的业务增长点”。朱律师认为：“律师们不仅需要具备专业知识和技能，更要有创新意识和前瞻眼光。” 律师在国际板中扮演的角色基本和处理A股上市交易无异，但有个特点，就是需要向境外发行人介绍对他们而言比较陌生的中国法律，李律师作此分析。“律师将帮助客户理解中国法和其本国法之间的差异。用客

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Shanghai International Board

national clients largely relies on foreign language proficiency, suggests Li. Most of the International Board-related work will be in English, in spite of the possible requirement of the documents being translated into Chinese. Liu adds that all the Chinese-language related jobs and dealing with regulators like the CSRC will be great opportunities for Chinese lawyers to be thrust into a more international domain.“ To explain the procedures and requirements of China to clients requires the understanding of the principles and causes, which comes from the lawyers’ professional expertise. Plus, lawyers should have consider-

户能够理解的语言，简明扼要地解释中国相关法规规则便颇费周章。” 李律师说。李律师同时还指出，语言和专业技能都是必不可少的。为国际客户提供服务很大程度上倚赖于对外语的熟练运用。尽管文件可能要翻译成中文，但大部分国际板相关工作将用英语开展。刘律师也补充，所有与中文相关的工作以及与监管机关（如证监会）的沟通将给中国律师带来更多参与国际法律服务的良机。向客户解释国内的程序和要求，就必须对相关法律规则和原理有深入了解，这些都来源于律师的专业知识。由于客户可能会基于其本国法律而提出各种疑问，律师们还应对国际惯例和法规有充分的知识储备。景律师表示，即便是在现阶段，已有部分律师事务所如金杜积极参与到国际板上市法律问题的研究，以及前期准备阶段潜在发行人和监管机关之间就相关法律的沟通中。据我们所知，由于潜在发行人来自不同的

able knowledge about international norms and regulations as clients are likely to raise questions based on their own regulations,” she says. “Even at the current stage, some law firms like King & Wood Mallesons have proactively been involved in the multinationals’ research about relevant legal issues related to listing on the International Board, and the communications between potential issuers and regulators about relevant legal resolutions during the preparatory period,” says Jing.“To our knowledge, because the potential issuers are from different jurisdictions such as the U.S., UK, EU, and other parts of Asia, and some of them have already listed in multiple countries, almost each and every one of them has more or less some unique questions in meeting the requirements of the International Board,” says Jing. “The regulators are unable to know them all beforehand and include everything in the making of the rules, which means that communication between the potential issuers and the regulator is vital.” The issuer needs to understand the contrast between Chinese requirements and that of their native country (or major listing country), and identify the major differences and the substantial legal barriers. After full communication, the regulators could give them special exemptions or add relevant items into future rule revisions. “We gather that the practices relating to the International Board will be a joint exploration together with our clients,” says Li.

司法管辖区，如美国、英国、欧盟和亚洲其他各地，其中一部分已在多个国家上市，几乎每个发行人在满足国际板上市要求这一方面都或多或少地存在一些特殊的问题。监管机关无法预知也无法在制定规则时涵盖到所有问题，这意味着潜在发行人与监管机关之间的沟通是非常关键的。发行人需要了解中国相关规定和其本国（或其主要上市地）规定的差异，找出主要的区别和实质性的法律障碍。经过充分沟通，监管机关可以向他们提供特殊豁免或在未来修改规则时加入相关内容。李律师表示：“与国际板相关的实务需要律师与客户的共同努力。

Shanghai in-house legal summit

ASIAN LEGAL BUSINESS july 2012

shanghai 2012 In-house legal summit On June 20, lawyers and corporate representatives met at the Swissotel Grand in Shanghai for this yearâ&#x20AC;&#x2122;s ALB Shanghai In-House Legal Summit. This momentous event brought together some of the brightest minds in law. Counsels from around the region came to hear experts discuss relevant issues and events, allowing them to garner a better understanding of the current legal climate and practices, both in China and worldwide. The all-day event kicked off with a workshop on dispute management in M&A, led by four of Global Law Officeâ&#x20AC;&#x2122;s partners from Bei-

jing, Shanghai, and Shenzhen. The workshop discussed issues involving foreign parties in M&A, as well as the lawyers offering personal insights into solving disputes through arbitration and litigation. Next up was Dr. Isabelle Wan of TransAsia Lawyers, who discussed employment in China. She delved further into the ever-lingering issue of trade unions and collective action in the economic powerhouse. After a brief legal job market update from Frazer Xia of China Legal Career and luncheon, the summit continued in the event hall,

where the delegates all gathered to listen to Julie Cheng of Jun He Law Offices. In the session, she highlighted the recent major tax policy changes in China affecting foreign investment and what that meant for businesses operating in the PRC. Following the discussion on tax policy, Dmitri Hubbard and Ben Wootliff of Control Risks explained the challenges of the culture of corruption, and also walked them through some of the most highly regarded and emerging trends in investigations, specifically regarding hand-held devices and e-

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mail accounts. Wrapping up the event, the In-House Counsel Panel accentuated the importance of an in-house legal counsel in creating and communicating value for their company. The panel was made up of four industry elites; Edwin Li, General Counsel of BASF (China) Company, Angell Xi, Asia-Pacific Counsel

shanghai in-house legal summit

at GE Intelligent Platforms, Michael Rickman, Associate General Counsel Asia-Pacific at Goodyear Tire Management Company (Shanghai), and Cherry Fan, Asia Legal Counsel at Stanley Black & Decker. The counsel left the delegates with a lasting thought: that the integral values of an in-house counsel is that of compliance and integrity. Those, su-

plemented by domain expertise, leadership, talent development, risk control, and several other values, are the secret, they say, to an optimised in-house counsel. The next ALB China In-House Legal Summit will be held in Beijing on Nov. 28. www.asianlegalbusinessevents.com

Workshop Sponsors Control Risks Control Risks is an independent, global risk consultancy specializing in political, integrity and security risk. We help some of the most influential organizations in the world to understand and manage the risks and opportunities of operating in complex or hostile environment. Our unique combination of services, our geographical reach and the trust our clients place in us, ensures we can help them effectively solve their problems and realize new opportunities across the world. Our Service include: Political and Security Risk Analysis Business Intelligence Fraud, Corruption and Corporate investigations Crisis Management and response Business continuity Planning Security risk audits, protection and training Security Design Solutions Travel Security eDiscovery

As the first law firm in China, Global Law Office was established in 1984 under the auspices of China Council for the Promotion of International Trade (CCPIT) and was subsequently converted to a private partnership in early 2001. Since its establishment, Global Law Office has provided services for numerous high-profile cross-border and domestic transactions and dispute resolution matters which set precedents in China. Today, with nearly 200 lawyers practicing in Beijing, Shanghai and Shenzhen offices in China, Global Law Office has become a leading Chinese law firm providing comprehensive quality legal services to clients worldwide. As a recognized leading law firm in China, Global Law Office has been regularly awarded by leading international legal and business publications, such as Asia Pacific Legal 500, Chambers Global, Asian Legal Business, Asia Law & Practice and China Law & Practice.

For any enquiries, please contact: shanghai@control-risks.com or visit our website: www.controlrisks.com Jun He Law Offices JUN HE LAW OFFICES is widely recognized as a leading full-service law firm in China, uniquely positioned to provide superior legal services in commercial transactions and disputes. As one of the first private PRC law firms, we are renowned as a pioneer in the re-establishment and development of the legal profession in contemporary China. Since our inception in 1989, we have become one of the largest and most established PRC-based law firms with over 400 attorneys and nine offices in Beijing, Shanghai, Shenzhen, Guangzhou, Dalian, Haikou, Hong Kong, New York and Silicon Valley. Our firm possesses strong foreign language capabilities, and our working languages include Chinese, English, Japanese. Operating under an integrated system and aided by stateof-the-art communications technology, we are fully equipped to provide our clients with professional services of the highest caliber. Our reputation for excellence is evident through our extensive client base and is widely acknowledged by the Chinese judiciary and foreign professional organizations. In addition, we are the exclusive Chinese member of such international law firm associations as LEX MUNDI and MULTILAW. Contact details Jun He Law Offices Shanghai Kerry Centre, 32nd Floor 1515 West Nanjing Road, Shanghai 200040, P. R. China Tel: +86 21 5298-5488 Fax: +86 21 5298-5492 E-mail: junhesh@junhe.com

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Global Law Office Global Law Office is a leading full service law firm in China, providing premium legal services to multinational and Chinese clients in a wide range of cross-border and domestic transactions and dispute resolution matters.

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In-house perspective

ASIAN LEGAL BUSINESS july 2012

Soaring In just one year, the legal department at China National Aviation Fuel (CNAF) has grown from seven to 38. The state-owned enterpriseâ&#x20AC;&#x2122;s chief legal director, Hong Yuwen, talks to Zhen Liu and shares his perspective on how he manages a team that quintupled so quickly, the challenges ahead for his department, and maintaining an encouraging optimism during global economic turbulence.

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ALB: Please describe your team’s characteristics and its main function(s). HY: Our job is no different from any other well-established in-house legal department’s, which includes various meetings, negotiations and talks, drafting documents, communications, and appearing before the court. The main affairs our legal department takes care of are major operational decisionmaking, contracts, internal regulations, and litigation. We fully participate in all these areas. There used to be only seven workers, including me, last year in the entire legal department of CNAF. But the full-time headcount has now reached 38, plus some more contract dealers. We have three major features: First is we emphasise on centralised management. In the past, there wasn’t a legal

In-house perspective

department in our subsidiary companies. All legal affairs went to the legal department of the headquarters; the only legal department we had back then. In the beginning, there weren’t many issues, but the amount of legal issues grew with time. Now, we delegate many administrative works while stressing on the centralisation of matters like information flow, work flow, life cycle of contracts, and so on. The central legal department has to know about all of them. In addition, we appointed legal officers in all of our six major subsidiaries over the past year, who report to their companies as well as to us. These companies also have their own legal departments now. Through this, we are pushing the legal frontier to a more basic level while strengthening our central management. Second is our corporate culture. We have a slogan: “CNAF the Iron Army”, which demonstrates our fighting spirit and executing capability. It is the corporate culture that transfers to our departmental culture. Third is that we are a mixture of all kinds of backgrounds and experiences. Imagine that we became a 38-strong team without any new hires. They all came from other departments of the company, and joined us for a common goal. They do not necessarily have law backgrounds, which positively diversifies the culture, but also means an integrating process.

ahead

REUTERS/Petar Kujundzic

ALB: 请介绍中航油法律团队构成，特色和主要工作内容？ HY: 我们的工作内容跟其他的成熟的法律部门没有什么两样。主要是各种各样的会议，谈判，协商，文件的起草，修改，各种沟通，出庭等等。法律部门最主要的几个事务是这样的：重大经营决策；合同；公司的规章制度；诉讼。在这些工作领域中，法律部门都要有一个全面的参与。整个中航油的法律部门，去年我们只有连同我在内只有7位法律工作者，现在已经增长到了38位。他们的主要精力都在法律工作岗位上。如果算上兼职的合同管理员，可能还会更多一些。我们法律管理的特点有三个。第一个是集中管理。在此之前中航油的子公司是不设法律部门，只在集团公司设有法律部门。如果有法律事务，全

部送到总部来处理。现在在集中管理的前提下，把一些日常性的工作下放，同时更加强调了另外一些全局性事务的集中管理。与此相应，我们的组织系统有一个发展变化的过程，现在主要子公司都设立了总法律顾问和专职法律机构。从法律业务上说，他们向本公司汇报，同时也要和我们进行沟通。第二个是铁军文化。我们公司的文化叫做“航油铁军”。强调我们队伍的战斗力，执行力。与此相应，法律系统要努力建设航油法律铁军。第三个，充分交流。我们在没有新进人的情况下，从公司内部调配出了36个法律事务工作者，都是从内部其他部门过来，是各种专业背景和经历结合。我们这个法律共同体是结合了不同专业不同背景的人员，他们不全不是法律出身，为了法律的共同目标走到了一起来。在文化上面这是一个好事情，但是也会需要一个交融整合的过程。 ALB: 这说明公司对法务工作的重视增强？ HY: 公司对此一直比较重视，这些年法律工作不断在前进。总公司的法律部门是07年的时候成立的。那个时候Legal Counsel是4个，部门Head是2个，加上我去年年初加入，一共7

In-house perspective

ALB: Does the boom in size your team has experienced mean that the company is paying more attention to legal affairs? HY: The company has been giving us a lot of attention, with an evolving progress though. The legal department was launched in 2007, when we had four legal counsels and two department heads. My joining in the beginning of last year made it seven. The creation of my position, “Chief Legal Officer”, showed the attention the company was giving us. Since then, we have continued to set up more “Legal Officer” roles at our subsidiaries. You see the increasing focus on us from senior management based on previous efforts. In addition, we proposed our development and expansion plans - including the headcount increase - which has come true thanks to the support of the company. ALB: What is your department’s development strategy/plan?

target of “building a world class aviation fuel company” to strengthen our basis. With the three-year effort between 2012 and 2014, we will complete the legal risk prevention mechanism, legal officer system and legal affair management system, and improve the quality of the legal counsel team and their capability of corporate governance. The rate at which we review and supervise over company regulations, contracts, and major business decisions will soon reach 100. The major subsidiaries and other relative companies will appoint their own legal officers and launch their own legal departments, where full-time legal officers and licenced counsels will account for 80 percent of the staff. We will complete the full chain of legal risk prevention, eliminate major disputes caused by our own lack of compliance and safeguard CNAF’s goal strongly from a legal perspective. One of the key indicators, and a relatively difficult task, is to raise the rate of full-time legal officers. Currently, most legal officers are members of management or vice-presidents of their own companies. We require that they become full-time eventually in the next three years. Another indicator is the rate of licenced legal officers and counsels. This year, 100 percent of my 36 staff are taking the “National In-house Counsel Qualification Exam”, and they’ll have to pass it. Otherwise, they’ll be replaced by more appropriated people. This was also a command to the subsidiaries. Their performance evaluation would be affected if their counsels failed to pass the exam.

HY: Generally, we make our plan in accordance with SASAC’s Three-Year Plans. In the third Three-Year Plan of the CNAF legal department, we will follow the CNAF’s strategic

ALB: What are the challenges you face while carrying out your plan?

个。后来我们继续建立健全各级公司的法律管理工作体系，在下属公司普遍设立了总法律顾问、专职法律事务机构、法律事务岗位。在此基础上，法律部门对今后怎样发展我们也提出了自己的规划和设想。这些都得到了公司的支持，并且得以实现。

上岗率达到80%以上，法律风险防范机制的完整链条全面形成，企业因自身违法违规引发的重大法律纠纷案件基本杜绝，为中国航油战略目标的实现提供坚强的法律保障。其中比较核心或者说比较困难的指标是总法律顾问专职率和法律顾问持证上岗率达到80%以上的问题。我们要求未来三年内这些总法律顾问都专职化。今年公司所有法律顾问都要要 100%的参加“国家企业法律顾问资格考试”，如果今年不能通过，就要调整岗位，换其他合适的人来。这是作为任务下达给成员企业，如果不能完成，他们的排名就要受到影响。

ALB: 您对法律部门发展的规划和设想？ HY: 总的来说我们属于按照国资委三年内第三个法制目标来进行的。中国航油法制工作第三个三年目标的总体要求是：紧紧围绕中国航油“建设综合性世界一流航油公司”的战略目标，大力加强“三基”工作，力争再通过2012 －2014年的三年努力，着力完善中国航油法律风险防范机制、总法律顾问制度和法律管理工作体系，加快提高法律顾问队伍素质和依法治企能力和水平，集团公司和相关成员企业规章制度、经济合同和重要经营决策法律审核率全面实现100%，重要子企业和其他相关成员企业设置总法律顾问和法律事务专职机构，总法律顾问专职率和法律顾问持证

HY: Under this Three-Year Plan, we have a few tasks to complete. First is to have legal adjust to the centralised management system, which

ALB: 实现这些目标面临的挑战？ H Y: 我觉得在这个三年目标下面，我们有几个任务需要去解决。第一个是如何加强集中管理，为公司提供法律保障。集中管理在不同历史时期有不同的表现。在新的形势下，我们要进行制度，流程，程序和管理模式的再造。在新的历史时期如何加强集中管理，如何建立健全法律管理体系，这需要我们对整个的管理制度进行再造。第二个是加强我们法律部门的管理能力，服务能力和监督能力。第三是打造优秀的企业的法律人才队伍。 ALB: 对现有人才队伍的看法？ H Y: 我们相信我们的人员在各个岗位都是很优秀的。现在他们加入到法律队伍来，寄希望与公司和个人的

ASIAN LEGAL BUSINESS july 2012

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In-house perspective

REUTERS/Darley Shen

has different features at different times. In this new era, we have to recreate the system, procedures, and managing modes. Second is to reinforce the management, service and supervision abilities of the legal department. (And) third is to build an outstanding team of legal talent. ALB: How do you build an outstanding team of legal talent?

努力，打造出优秀的法律人才队伍。对人才的发展和培养，一个是外部引进，一个是内部培养。这两个在未来都会有所体现。我们已经组织了大规模的企业法律顾问资格考试辅导班，有90多人参加了培训。 ALB: 公司近期面临的法律挑战？

HY: I believe all my team members are excellent talent from different positions. We hope with our hard work, we can make them cooperate together as an excellent team. Our fast expansion from a very thin team on the ground means that nurturing the talent requires a considerable process. Talent can

HY:战略挑战是公司法制工作三年目标，例如完善中航油的法律风险防范机制，完善总法律顾问制度，完善法律管理工作体系，等等。与此相应，我们还需要进行流程再造，提升能力，打造队伍等工作。战术上是具体的法律事务的挑战，例

In-house perspective

be imported from outside or cultivated from inside, of which we will see both in the future. ALB: What are the legal challenges the company faces? HY: The largest issue in our strategy is mentioned in the Three-Year Plan. Our biggest goal is to complete the CNAF’s legal risk prevention system, the Legal Officers system, and the legal affairs management system. Based on these, we may be working on a few other issues, like operational flow redesigning, competence improving, and team building. Another part is the specific affairs. For instance, CNAF is considering an initial public offering. We have other businesses like corporate governance, real estate and infrastructure construction, shipping and labour issues. We have also been working on mergers and acquisitions constantly. ALB: What trends are you seeing in your industry, and how will it affect your work?

如公司上市、公司治理、并购、房地产基建、海运、劳动法等，都是我们重点关注的领域。 ALB: 行业的整体趋势对法律工作带来的影响？ HY: 金融危机以来，经济反反复复，到现在为止还没有明朗化，甚至可能有一定的恶化。我们无可避免会受到一些影响。对法律工作来说，可能有三点。第一是在经济的波动时期，很容易带来法律纠纷的增加。在经济上升时期很多问题被掩盖掉，但是在经济大起大落时就会浮现。第二个是各个公司各个部门的法律风险意识在提高。他们会意识到这是非常时期，会意识到法律风险。第三个是我们希望在恶劣环境中我们希望我们是最终的胜出者。如果是管理良好，人员杰出的队伍，反而可能在风浪中生存下来。大风大浪之后，优秀的会更优秀，强大的会更强大。我们是希

ASIAN LEGAL BUSINESS july 2012

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In-house perspective

REUTERS/China Daily China Daily Information Corp - CDIC

HY: Since the financial crisis, the economy has gone up and down. The trends are yet to be clear, and perhaps some aspects may even worsen to some extent. The indicators for Chinese companies have dropped from the same time last year. Inevitably, we have been affected in the following ways: First, legal disputes increase in an unstable economy. Problems once covered by growth emerge in the downturn. Second, companies and departments become more aware of legal risk in such harsh times. Third, we hope we can triumph through the tough environment as well-managed and excellently-manned teams survive. After the storm, the good will get better, and the strong would be stronger. We hope we could turn the bad things into good, and become better and stronger. ALB: What do you value when choosing external lawyers? HY: We consider first the professional skills, second the enthusiasm in service, and third a long-term partnership that we could develop together. We don’t want a law firm to bring their service to an end at the closure of the case. We hope that from the company’s point of view, we pick a law firm that will help us down a path that will bring forth the company’s best and offer us the most additional value. It would be mutually beneficial if they help correct our shortcomings and improve our abilities. ALB: What are the necessary qualities an in-house counsel must possess? HY: An ideal counsel must possess four things: First, professional

望把坏事变好事，变得更加优秀，更加强大。 ALB: 中航油外聘律所选择标准? HY: 第一个是专业精通，第二个热情服务，第三个和我们长期合作，共同成长。我们希望律所不是给我们处理完一件事就算一件事，我们希望他们从公司的角度考虑，对公司最有利的路径，希望他们为我们提供更多的附加价值。比如通过服务，改进我们的不足，提高我们的能力，双方相得益彰。

REUTERS/Petar Kujundzic

ALB: 您认为法务人才应有的素质？ HY: 一个ideal counsel有四个方面，一个是专业精通，第二个是品德端正，第三个是世事洞明，法律人员要有businessman 的思维，不能光从法律上考虑，第四是对法律事业的热爱和对公司的忠诚。 ALB: 中航油能够吸引和留住人才的办法？ HY: 第一个是给大家一个用武之地。

skills; second, integrity; third, worldly wisdom, or a business mindset besides a legal perspective; and fourth, a love for the law and loyalty towards the company. ALB: How do you win the loyalty of your inhouse counsels? HY: First, we provide them with a stage to perform. Second, we offer them opportunities of self-development, including capability improvement through work, training, a challenging environment and career development. The set up of legal departments and legal officers in subsidiary companies are partially carved out from this consideration. Third, we accommodate their work. For example, we’ve already issued two policies: The company will cover all the costs of the legal team member throughout their licence exam, for internal or external tutorial sessions, and for the exam itself. The other policy is that they must register at local corporate in-house associations and attend a continuing education course - the cost of which is borne by the company. Fourth, we work on caring for our employees. We are doing our best to create a harmonious and pleasant atmosphere.

第二个是尽可能为他们提供进一步提高的机会。包括个人能力的提高，可以通过工作提高，也可以通过培训，还可以通过工作环境的带动；也包括个人职业生涯的提高。，我们在各个分公司都设立了总法律顾问和法律部门，对一些员工来说也是机会。第三个是尽可能为他们创造工作便利条件。比如今年我们已经下达两个通知，一个是规定了法律顾问要参加考试，公司还要求他们参加两次培训。把他们全部集中起来培训，给他们请老师，动员，模拟考试，帮助他们通过。除了公司的培训，如果他们要参加其他培训的费用，还有他们的考试费用，也是由公司来报销。另一个是我们要求拿了证的法律顾问要去当地的相关机关注册，参加当地企业法律顾问的继续教育。这些费用从今年也是由公司承担。第四个是员工关爱，为他们营造一个尽量和谐愉悦的气氛。

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ASIAN LEGAL BUSINESS july 2012

The

silk road alliance

The investment partnership between China and the Gulf is growing stronger with numerous multibillion dollar projects linked between Chinese and Middle Eastern energy players. This is just the beginning. China has aggressively been locking down upstream energy resources, while the Middle Eastern countries are keen to secure a downstream market for their oil and gas supplies. Candice Mak explores what opportunities are in store next for investors eyeing the powerful liaison between the Middle East and China. REUTERS/Stringer .

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he “Silk Road” between China and the Middle East has never been more active, particularly on the energy front. China’s continued investments in Saudi Arabia, Abu Dhabi, Iran, Syria, Iraq, Qatar, and other countries in the Middle Eastern region remain strong, with prospects looking very bright indeed for increasing cooperation. Raad Alkadiri, a partner and head of markets and country strategies practice at U.S.-based consulting firm PFC Energy was quoted by the New York Times in May as saying: “Asia is quite clearly where the Gulf is making a strategic gamble. The Gulf states are hoping to tie their economies more closely with Asia’s. With the U.S. strategic focus shifting, they may eventually look to the giants of Asia to fill some of the security vacuum in the Gulf.” Saudi Arabia is already China’s top international source of crude oil. In the first 11 months of 2011, it supplied China with 45.5 million tonnes of crude, a rise of 12.9 percent over the same period in 2010. Angola and Iran were the second- and third-biggest suppliers. Qatar is a major supplier of liquefied natural gas (LNG) to China, and in the first 11 months of 2011 it shipped 1.8 million tonnes of LNG to China, a rise of 75.9 percent over the same period in 2010. Dominic Harvey, a Dubai and Hong Kong-based partner at Vinson & Elkins, says that the view in the Middle East on the ground is that “there is huge expectation. China is at no more than five percent at the moment of where I think we all expect it to be in the next five to 10 years. We haven’t even scratched the surface yet”. Herbert Smith Hong Kong-based energy partner, Hilary Lau, agrees: “The reality is that there will be a lot more Chinese investment moving into the Middle East in the future. I think this is just the beginning.” Paul Deemer, a partner at the Hong Kong office of Vinson & Elkins, says that he has seen an increasing level of interest and activity by the Chinese energy companies. “From an energy, natural resources, chemicals and petrochemicals angle, we see this growing and growing,” he says. Chinese oil companies have been investing in Middle East projects for over two decades, and now the Middle Eastern countries are beginning to look East and invest based on China’s growth potential. “It demonstrates how foreign partners, particularly those in the Middle East, are recognising the opportunities that exist in the domestic Chinese market,” says Handel Lee, a Beijing-based partner of King & Wood Mallesons. He adds that since China has surpassed the U.S. as the largest exporter to the Middle East, there are now more opportunities for growth in other types of investment: “The issue remains in finding these new growth sectors and opportunities, and China’s increased investment in the region has created diversification of investments, outside oil and gas, into sectors like construction and banking.” Trade and investment between China and the Middle East is largely energy, infrastructure, and commodities-driven. Harvey comments that China is the Middle East’s biggest downstream market and for China, it requires as much upstream energy sources as possible. “It’s not just about Chinese money flooding into the Middle East, but we’ll also see a lot Middle East money flooding into China, whether that’s with downstream acquisitions, capital market plays or with joint ventures on Chinese soil or elsewhere rather than on Middle Eastern soil,” he says. Saudi Aramco-Sinopec Yanbu refinery One of the latest headline-grabbing alliances was the $10 billion joint venture agreement between state-owned Saudi Arabian Oil Co (Saudi Aramco) and Petrochemical Corp (Sinopec) that was announced earlier this year. The project will build and operate a 400,000-barrel-a-day oil refinery in Yanbu on the coast of Saudi Arabia’s Red Sea. The deal, which was advised on by international law firms White & Case and Vinson & Elkins, is particularly significant because it highlights a move

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by Saudi Aramco to diversify beyond its traditional partners in the West. Saudi Aramco will hold a 62.5 percent stake in the joint venture formed to develop Yanbu Aramco Sinopec Refining Co (YASREF), while Sinopec will own the rest. State-owned Saudi Aramco has already partnered with Sinopec in a joint venture for a Fujian-based plant in southeast China. The Saudi firm’s president and chief executive, Khalid al-Falih, said in a speech in mid-January that Saudi Aramco is also in ongoing talks with Sinopec on investing in its Qingdao refinery in China, Reuters reported. Saudi Aramco also plans to invest $90 billion over the next five years to boost refining capacity to six billion barrels a day, and upgrade that level to eight billion barrels a day within a decade. The company is eyeing Asia and China in particular as key markets to grow capacity, given that China is Asia’s biggest energy consumer. For Sinopec, the tie-up with Saudi Aramco marks a milestone for the two countries.

“It’s not just about Chinese money flooding into the Middle East, but we’ll also see a lot of Middle East money flooding into China, whether that’s with downstream acquisitions or with joint ventures on Chinese soil rather than on Middle Eastern soil.” Dominic Harvey, Vinson & Elkins

“This transaction represents the singlelargest Chinese investment in the Kingdom to date,” said Nicholas Song, partner in Vinson & Elkins’ China practice. “It is also Sinopec’s first investment in a petroleum refinery outside of China, and (it) is a strong example of Sinopec’s drive to expand its reach and presence throughout the global hydrocarbon chain.” The Yanbu project, however, is just one in a string of alliances between Chinese and Middle Eastern energy players. The China National Petroleum Co (CNPC), Qatar Petroleum, and Royal Dutch Shell are working on a $12.6 billion refinery and petrochemical complex in the eastern Chinese coastal city of Taizhou. The project will include a 400,000-barrel-per-day refinery and a 1.2

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ASIAN LEGAL BUSINESS july 2012

REUTERS/Ali Jarekji

million-tonne-per-year ethylene complex. Sinopec has partnered with Kuwait’s national oil company to set up a similar venture in Zhanjiang. The Saudi Basic Industries Corp (SABIC) and Sinopec began negotiations in February with Trinidad and Tobago to build a $5.3 billion methanol complex there. The Caribbean country gave its approval to the SABIC-Sinopec bid after an auction against other international companies. SABIC and Sinopec also have an agreement to build a $1 billion plus polycarbonate plant in Tianjin, where the two firms started operating a petrochemical joint venture in 2010. At the moment, Saudi Aramco and Petrochina have partnered for the development of a refinery in Yunnan that is underway, and the list goes on. The director of legal affairs at Sinopec, Zhang Jixing, explains why cooperation between Middle Eastern energy players and the Chinese will continue to thrive: “The Middle East countries have advantages including abundant oil and gas reserves, relatively stable politics, standardised corporate management, and a mature and stable legal environment. Above all though, is their abundance of oil and gas reserves.” China reaches out In mid-January, China’s premier, Wen Jiabao, visited three key Middle Eastern oil and gas suppliers - Saudi Arabia, the United Arab

Emirates (UAE), and Qatar - to help China expand its options in the face of U.S. sanctions aimed at Iran [See box out on page 53]. The Chinese Foreign Ministry said that Wen met the host leaders, including Saudi Arabia’s King Abdullah, to “thoroughly exchange views on developing bilateral relations and on international and regional issues of common concern. During Wen’s Saudi Arabia visit, he was quoted by the Xinhua news agency as saying that his government wants “strong and reputable” Chinese companies to invest in Saudi Arabia’s ports, railways, and infrastructure. “China and Saudi Arabia should keep deepening cooperation in the face of changeable and complicated regional and international trends,” he told Xinhua. “Definitely, these three countries (Saudi Arabia, UAE, and Qatar) are major suppliers of oil and gas to China, and how to increase this kind of cooperation would be a major topic whenever they meet,” said Li Guofu, the director of the Center for Middle East Studies at the China Institute of International Studies in Beijing, to Reuters. Wen signed a partnership with the UAE during his visit, and in addition, the Chinese government signed a series of cooperation agreements with the three countries covering economy, trade, education, infrastructure, finance, and culture. Two-way street In March 2011, president and CEO of Saudi Aramco, Khalid al-Falih, said during a speech in Beijing that “Saudi Aramco’s relationship with China is very much a two-way street, and as we work with our partners to establish more joint ventures here, I look forward to even more traffic and trade – including additional Chinese investments in Saudi Arabia – along the ‘energy superhighway’ connecting our company with this great nation”. For decades, the United States has been Saudi Arabia’s best customer. However now, with the rise in the prominence of shale gas for the U.S., it is less dependent on the Kingdom. This offers a prime

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U.S. Senate approves tougher Iran sanctions By Roberta Rampton and Susan Cornwell, Reuters

n May 21, the U.S. Senate unanimously approved a package of new economic sanctions on Iran’s oil sector just days ahead of a meeting in Baghdad between major world powers and Tehran. The sanctions add to a raft of punitive measures by the United States and the European Union, aimed at shrinking Iran’s oil revenues, to force it to halt a nuclear programme the West suspects is being used to build an atomic bomb. Iran has said its nuclear programme is for civilian purposes. The new package would extend sanctions to cover dealings with the National Iranian Oil Co (NIOC) and the National Iranian Tanker Co (NITC) if they are deemed to be an agent or affiliate of the Revolutionary Guards. It aims to close a potential loophole that could have allowed Tehran to continue selling some of its oil using its own fleet. The House of Representatives passed its version of the bill in December last year, and now the Senate and House must work out their differences in the legislation before it is signed into a law by President Barack Obama. “This bill is another tool that will demonstrate to Iran that the United States is not backing down,” Robert Menendez, the Democratic senator who helped craft the

legislation, said on the Senate floor. “Today, the U.S. Senate put Iranian leaders on notice that they must halt all uranium enrichment activities or face another round of economic sanctions from the United States,” said Republican senator Mark Kirk, a co-author of the bill, in a statement. The Senate bill was brought up on Thursday, but was blocked by Republicans who wanted some parts toughened up. Build on banking sanctions Iran, OPEC’s second-largest producer, exports most of its 2.2 million barrels of oil per day to Asia, home to its four main customers - China, Japan, India, and South Korea. All four nations have cut back on their purchases, dissuaded by the previous package of U.S. financial sanctions that are due to take effect by the end of June, as well as an EU oil embargo and a ban on shipping insurance which has already come into effect from July 1. The U.S. sanctions threaten to shut out importers of Iranian oil from the U.S. financial system unless they make substantial, sustained cuts to their purchases. Washington has already granted 10 EU nations and Japan a waiver from these measures, and is pressuring Iran’s main buyers, China and India, to comply.

strategic opportunity for China, which does not have neighbours with rich oil reserves. Its dependence on Saudi Arabia and other Middle East countries is only going to grow. On the flip side, the growing trade relationship between the Kingdom and China also allows Saudi Arabia to reduce its reliance on the U.S. An Australian global markets commentator pointed out the commonality of the political elite in China and Saudi Arabia, is that they are indifferent to popular opinion and global pressure. “They’re both pretty practical,” said Dan Denning, the editor of The Daily Reckoning Australia. The pragmatic nature of the two countries and mutual dependence has created quite a healthy trade and investment relationship. China needs to secure energy resources, while Saudi Arabia needs to secure a downstream market – and not just any downstream market, but the biggest energy consumer in the world. “It’s a mutually beneficial arrangement, a very obvious connect,” says Harvey. “This will surely encourage a number of projects down the line because there is that resource and commodity need both ways.” Private investments Although the most high-value projects have been conducted by the Middle Eastern and Chinese state enterprises, the “big boys” as Lau calls them, another area lawyers are expecting a lot of activity down the road will come from Saudi family groups, says Harvey. “It won’t

In addition to totally banning Iranian oil imports, the EU measures prohibit European insurers from covering Iranian oil exports anywhere in the world. This would leave importers exposed to personal injury and pollution claims. Typically, a supertanker insures against these liabilities to the tune of $1 billion per shipment. Almost 90 percent of the world’s tanker insurances are based in Europe. South Korea will effectively become the first of Iran’s major Asian customers to halt purchases from July due to the ban. The cumulative impact of the U.S. sanctions will be severe, said Suzanne Maloney, a senior fellow at the Brookings Institution’s Saban Center for Middle East Policy. “Right now, both sides are playing a game of chicken - the Iranians want to see how much they can get and how little they can give, whereas Washington and its allies are counting on the looming threat of impending sanctions to elicit more concessions on the part of Tehran,” Maloney said. The escalating Western sanctions and the threats by Israel and the United States of last-ditch military action have helped to push up world oil prices, compounding the economic misery wrought by debt crises in many industrialised countries.

just be big state companies looking at M&A, but on a smaller scale, we expect family group companies will be looking at opportunities for joint ventures and M&A opportunities both ways, with downstream operations in China a particular target for Saudi and Middle East companies to secure offtake flow for them.” According to the V&E lawyer, these private companies have gas allocations from the government, are producing petrochemicals and refining metals, and working on numerous smaller-scale projects in the resources sector. “For the Middle East market it’s about guaranteed offtake - the Far East is the biggest and most obvious market for them. If you’ve got the feedstock available at the Middle East end, you want to be securing your downstream market,” says Harvey. He comments that one of his larger private Saudi clients is actively in discussions with several entities in China for such partnership investments. Deemer too brings up that his team is involved in a joint venture compris-

cover story ing a large Saudi group, a large Chinese group, and an entity in a third country. “We also have a couple of things going on in the UAE involving inward Chinese investment in partnership with local UAE groups,” he says. Lau of Herbert Smith acknowledges that he is aware of some Chinese private companies looking into some Middle Eastern assets. However, he believes it will take a few more years before the private sector can take off with bigger-scale investments. Construction In April, Sinopec was awarded an engineering procurement construction (EPC) contract for a terminal building project in the Sharjahlocated Hamriyah free zone by the Abu Dhabi National Oil Co (ADNOC). The Chinese SOE has already started construction of the terminal, and the project is expected to be completed and handed over to ADNOC by the end of 2014. Deemer points out that the construction arms of the major Chinese oil and gas companies are also making significant headway into the Middle East market. “Activity by the construction subsidiaries is growing, with

“Activity by the construction subsidiaries is much broader than the oil and gas business, and there is quite a lot happening with the subsidiary companies getting involved in projects as general contractors. It’s an interesting area to watch.” Paul Deemer, Vinson & Elkins

the subsidiary companies getting involved in projects as general contractors,” he says. “It’s an interesting area to watch.” Capitalising on downstream project construction is crucial for Chinese companies in order to bring oil to the market, and build refineries and pipelines. “The advantage of Chinese contractors is that they are quite cost-effective and they can usually receive funding from the Chinese banks, if required,” says Lau, referring to the importance of the banks’ role if there is a significant construction element in an investment. “The Chinese believe that in addition

ASIAN LEGAL BUSINESS july 2012

to good construction capabilities, the support they receive from the banks is advantageous in helping them to win projects.” Harvey highlights that the Saudi Arabian power sector is a space the Chinese are keen to move into, as it is a very lucrative area that has traditionally been dominated by the Koreans and the Japanese. “Certainly, the Japanese and Koreans are very aware of the competition and what they describe as the Chinese wave that’s coming in a number of those key sectors,” he says. Chinese contractors have been winning mandates, although Harvey does indicate that some Chinese contractors have been facing a “slight PR problem” related to quality. In late June, a local Saudi newspaper reported that several Chinese contracting companies had pulled out of the Saudi construction market and quit projects after facing difficulties executing them in accordance with the Kingdom’s rules. Back in January, Reuters reported that the Abu Dhabi Crude Oil Pipeline (ADCOP) for United Arab Emirates’ oil exports to bypass the Strait of Hormuz had faced delays due to differences with the Chinese construction company. An industry source close to the project told Reuters that “there is a debate over the quality of the pipeline between Abu Dhabi’s National Oil Company and the Chinese construction group”. Another industry source explained: “The Chinese (construction) company is ready to commission the pipeline, but ADCO (ADNOC’s onshore unit) has to make sure first it suits its standards. So now they’re working to do that. The project was initially done without the involvement of ADCO. That’s why now they have a problem. The Chinese company has different standards.” “I think it’s fair to say that to date there may have been some teething problems, but I am sure it will be addressed as some of the contractor arms are extremely well-regarded and geared up for this sort of work,” says Harvey. Lau is similarly optimistic about the Chinese improving their quality: “The reality is these contractors will have expert people to help them out and hence they are able to build reliable mega projects.” Legal advice The increasing amount of investment between China and the Middle East is undoubtedly leading to more work for the legal set, particularly those with energy specialties. “I believe that it will definitely increase lawyers’ work due to more project or investment overseas by Chinese enterprise(s), and we look forward receiving benefits from such increase,” says Weidong Wang, managing partner of Beijing-based Grandall Law Firm. Lee of King & Wood Mallesons also comments that the increasing trade and investment between China and other nations has raised the demand for competent legal advice regarding the intricacies of China’s regulatory system and how it interacts with global trade and investment. “It has also created a new emerging market for Chinesespeaking legal counsel in the Gulf, whereas in the past, Chinese firms have focused on expanding to Western Europe or the United States, leaving the Middle East as an afterthought,” he says. “Additionally, with the massive oil trade, energy players are finding new partners and developing new oil and gas assets, this in turn creates more work for lawyers who assist on various international tie-ups, acquisitions, and development projects.” With liquidity tightening for projects around the globe and an aggressive projects development programme in the Middle East, regional clients are looking for deeper pockets in the Far East – which is where lawyers can step in and help advise. “The key word in the Middle East is, frankly, finance. That’s the main request we’re getting at the moment,” says Harvey. “The questions I get asked, probably more than any other from a legal point of view, is ‘what do we need

cover story

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to be doing with our project? How should we be structuring our project so that they would be attractive to Chinese financial institutions and Chinese export credit agencies?” The V&E lawyer explains that while the export-import banks of Japan and Korea are healthy and generous, their funds will not even cover half of what is being planned in the Middle East. “So attention naturally turns to China and investment from China, and how projects should be put together to attract that investment,” he says. Deemer, from his perch in China, finds that it is a different story with his domestic clients. “The projects the Chinese get involved in tend to be internally financed,” he says, and so financing is not a core driver of his practice. Instead, he is witnessing growth in Chinese state company outbound M&As and project development s around the globe, particularly in the petroleum space. Herbert Smith’s Lau, meanwhile, has found that Chinese clients are quite concerned about host government issues and regulatory requirements they do not have much control over. Unlike Western investors, the Chinese are not fussed with exits. Instead, they are focused on long-term planning. “We are advising them on their significant energy investments in the Middle East, acting as international counsel in these investments. What is important for them is our ability to come up with innovative solutions to difficult issues without compromising legal protection,” he says. An interesting observation Lau makes is the maturation of his Chinese clients: “I have noticed that the Chinese oil companies are definitely becoming more sophisticated, not just from the legal angle, but also when it comes to valuations, financials and generally M&As.” Lau praises the technology of Chinese upstream companies, and notes they are targeting more mature assets around the Middle East region. According to him, these oil and gas SOE players will seek out specialist external counsel rather than general corporate law firms. “The Chinese companies know the matters quite well themselves as they are quite sophisticated, and they need lawyers who are experts in complex energy matters,” he says. North Asia ties expanding It is not just the China-Middle East story that is burgeoning. South Korea and Japan too are continuing to bolster their Middle East ties, and ramp up investments and alliances. In April, a consortium of South Korean firms inked a $20 billion deal with the UAE to build more nuclear plants in the gulf country. South Korea president Lee Myung-bak himself lob-

“The Chinese companies know the matters quite well themselves as they are quite sophisticated, and they need lawyers who are experts in complex energy matters.” Hilary Lau, Herbert Smith

bied at meetings with Abu Dhabi officials to ensure success. According to industry sources that spoke to Reuters at the end of June, Saudi Aramco and Japan’s Sumitomo Chemical were close to signing multibillion dollar contracts to expand their petrochemical complex in Saudi Arabia. The Rabigh II petrochemical expansion project is expected to cost around $7 billion. Saudi Aramco and Sumitomo Chemical recently awarded the $1.78 billion construction contract to South Korean builder GS Engineering & Construction after a competitive auction against Britain’s Petrofac, Italy’s Saipem, and Japan’s JGC. In another recent triumph for South Korea, a Korea National Oil Corporation-led consortium secured the country’s first oil production assets in the UAE. Of the project, president Lee Myung-bak said in a statement: “We now have our own oil reserves in the Middle East. Through this, stable crude supply to us is more guaranteed, and our energy security taken a big step forward.” — “In the long term, there is going to be more mutual investment,” says Zhang of Sinopec. “More specifically, the development of mutual investment depends on a series of factors including the statuses of the relationships between China and Middle East countries, the strategic partnerships between Sinopec and the Middle Eastern partners, the market situation and opportunities of the oil, gas and chemical sectors, and of the market entry permission by China and the Middle Eastern countries.” Even though there may be economic instability globally, continued investment between the Gulf nations and Asia is not slowing down. Some investors may be taking a wait and see approach to see how conditions – particularly in Europe – pan out. But the Chinese have thrived in markets where other international energy players have been cautious. “I think there’s a grudging respect for the Chinese appetite and their ability to invest into countries like Iraq and some in Africa that others may be viewing as still a bit difficult at this time. Albeit, that’s changing, and very quickly, but certainly China would seem to have a first mover advantage in some countries,” says Harvey. With analysts and lawyers alike commenting that the investments between the Middle Eastern countries and China are just the beginning, expect to witness a landslide of East-East partnerships in the coming years.

Reuters OP-ED

ASIAN LEGAL BUSINESS july 2012

China’s growing strategic stake in the Middle East By John Kemp, Reuters London, March 2

hina’s growing demand for imported oil, coupled with the development of new oil and gas supplies in North America, is set to transform the international security situation in the Middle East over the next 20 years. That is the inescapable conclusion from an arresting slide in a presentation given by Maria van der Hoeven, executive director of the International Energy Agency (IEA), at a seminar on the future of energy in Mexico City on Feb. 29. The slide in question shows how “changing oil import needs shift concerns about oil security” based on IEA projections of net oil imports in 2035. U.S. oil imports are set to almost halve between 2000 and 2035 owing to rising domestic output from both conventional and shale fields, increased ethanol blending, and improvements in vehicle efficiency. By 2035, the United States is expected to import just six million barrels of oil per day (bpd); down from almost 11 million bpd in 2000. In contrast, China’s oil imports are set to surge from around one million bpd to more than 12 million by the end of the period. India’s import needs will soar from less than two million bpd to around seven million. Members of the ASEAN, meanwhile, will be importing almost four million bpd. China, on the other hand, is expected to overtake the United States as the world’s largest oil importer by around 2020, according to the IEA, with other Asian customers adding to regional import needs.

Middle East have been dominated by the United States through a web of alliances with European powers, the Gulf monarchies, and North African autocrats. Competition has come from Iraq (now removed), Libya (overthrown), Syria (engulfed in civil war), Iran, and Islamist politicians and militant groups. Primary U.S. interests in the region are threefold: Oil security; a strong political, cultural and strategic alliance with Israel; and counter-terrorism. Declining U.S. imports will not make the United States less interested in the Middle

While it need not be boots on the ground, China is already seeking to enhance its capabilities for projecting power through the development of a deep water navy and has sent warships into the Indian Ocean. Like the United States and Britain before it, China will need to develop its naval capabilities to protect the most important supply lines through the Persian Gulf, the Indian Ocean, the Strait of Malacca and the South China Sea, as well as other supply routes across the Pacific. On the diplomatic front, China’s growing assertiveness in the region has been evident

Navies, diplomats and firms China relies on the Middle East and North Africa for almost half its oil imports in contrast to the United States, which sources most crude and condensate from other countries in the western hemisphere, with extra supplies from West Africa. The increasingly important commercial ties between China and major suppliers in the Middle East and Africa have been widely analysed. But China’s growing import dependence also has a security dimension, as it seeks to increase its influence in the region, which will undoubtedly lead to increased competition with the United States. Following the end of the Cold War, the politics and international security of the

East oil trades in a global market. Regional developments still have the potential to affect the United States through their impact on prices. (And) the importance of its policies on Israel and counter-terrorism is unlikely to diminish. But it will face heightened strategic competition from China and possibly other Asian powers as they seek to protect their interest in Middle Eastern oil supplies. As China’s import dependence rises, the country cannot afford to rely on a regional “pax Americana” to guarantee its most important source of fuel. What form that strategic competition will take remains unclear, and will be determined in the years ahead.

in its decision to veto a western-backed United Nations Security Council resolution on Syria, its blocking of further Security Council sanctions on Iran, and evident interest in the course of the confrontation between Western powers and Iran. Secure access to Middle Eastern oil supplies is a matter of vital strategic concern, and its importance for China will only grow in the next two decades, according to IEA’s charts. China, therefore, will have to develop the commercial, diplomatic, and military capabilities to protect its vital interests suggesting the recent rise in Chinese activity in the region is not an aberration, but is, in fact, the start of a trend.

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NEWS

REUTERS

Analysis: Banks play cat-and-mouse with Beijing to comply with rules By Kelvin Soh and Gabriel Wildau, Reuters

HONG KONG/SHANGHAIChina’s banks are playing a game of cat-and-mouse with the Beijing authorities, window-dressing deposit numbers at the end of each quarter to meet regulatory requirements on how much funds they must hold. This practice, which started last year, exaggerates the size and stability of banks’ liquidity and masks any stresses on the country’s financial system at a time when the world’s second-biggest economy is expanding at the weakest pace since 2009. “If there was a list of things that could destabilize China’s financial system, bank liquidity would be it,” said Diana Choyleva, a Hong Kong-based director at Lombard Street Research. The government limits the amount of money that banks can dole out as loans at 75 percent of deposits. With deposit growth slowing, banks must seek new funds to meet the requirement or reduce lending, which would go against current government policies on loosening credit to stimulate the economy. To meet the loans-to-deposit rule, banks are selling short-term wealth management products (WMPs) that mature in the final days of each quarter, when the investment is then automatically converted to cash and deposited into investors’ regular accounts. Banks are also resorting to “deposit brokers” - individuals or businesses with large cash deposits that are able to transfer their money between banks at whim and often to the highest bidder. The scrambling for deposits plays out in China’s money markets, where rates on short-term interbank loans often surge in the final week of the month. The spikes are even more pronounced at the end of each quarter. On June 27, the benchmark weightedaverage seven-day bond repurchase rate jumped to 4.40 percent, the highest since February 24, from 2.55 percent on June 12. The pattern repeats itself every month, soaring then collapsing. Reflecting this volatility, retail deposits surge at the end of every quarter. A day or two later, the numbers plummet as this money is quickly withdrawn by customers and channeled back into higher-yielding WMPs. Officials at the country’s so-called “Big

Four” lenders declined to comment on such practices, but said they abided by all rules set by the China Banking Regulatory Commission. SLOWING DEPOSIT GROWTH China’s banks have traditionally enjoyed a seemingly endless flow of cheap deposits, allowing them to extend loans freely and insulating them from poor lending decisions. That is changing. With deposit rates capped by the government at 1.1 times benchmark rates, deposit growth is slowing as savers move their money into mutual funds, real estate and the WMPs being sold by banks. Banks have suffered month-on-month declines in yuan deposits five times since last year. Between 2002 and 2010, there was only one such monthly outflow. This is worrying for China’s banks, which rely heavily on local savers. Deposits account for 82 percent of liabilities at Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest bank. At JP Morgan, it’s only 53 percent. Banks began selling WMPs - short-term, higher-risk investment vehicles that offer returns of as high as 10 percent compared with about 3.5 percent for deposits - to retain and attract new customers. WMPs have ballooned from a few hundred in 2009 to nearly 20,000 today, now equivalent to more than $3 trillion in deposits. About 22 trillion yuan ($3.4 trillion) of such products are set to be issued this year, according to Barclays. Now, banks are using WMPs as a means of boosting deposit numbers to satisfy regulatory requirements. The problem is WMPs tend to be less “sticky” than regular deposits. That means savers are more likely to move their money between banks in search of higher yields. “What has happened is that there is money shifting on and off balance sheets,” said Alex Lee, an analyst at DBS Vickers in Hong Kong. “When an investor buys a WMP, it comes off the bank deposit records, which then affects the bank’s ability to lend.” Money market dealers say the “big four”, the largest net lenders in the interbank market, have turned cautious about lending at

the end of each month. With their huge nationwide branch networks, ICBC, Bank of China Ltd, Agricultural Bank of China Ltd and China Construction Bank Corp boast the strongest deposit bases. But knowing their smaller rivals will use overnight fees and other tactics to draw in short-term deposits near the end of the month, the big banks cut down on interbank lending to protect themselves from a liquidity crunch. “Demand (for interbank loans) is pretty fixed, but if the big banks are pulling back their supplies, then you will see a spike in the seven-day repo rate,” said Ethan Mou, rates strategist at Bank of America-Merrill Lynch in Hong Kong. “At month-end or quarter-end, the small banks are trying like crazy to attract deposits. Even the big banks are afraid they may lose deposits to their competitors. So that’s why at the end of the month, they are cautious about lending too much.” DUBIOUS NUMBERS The balance sheet massages are undermining the loan-to-deposit limit put in place to ensure that banks finance their lending through deposits, rather than short-term funding, which can quickly evaporate in times of market stress. The concern about the lack of stickiness in WMPs - set to equal 10 percent of China’s official deposits - is compounded by worries that the funds raised through the products are used to finance long-term loans and other illiquid assets, all of which would be difficult to sell at short notice, analysts say. This raises the risk of a sudden liquidity crunch at a bank, which could be triggered by a run on WMPs if losses start to appear. “Any single default would freeze liquidity and eventually jeopardize (the trust) business,” Nomura analyst Lucy Feng wrote in a research report on the Chinese trust industry. “The industry cannot afford to have any non-performing loans that could create a systemic crisis.”

The rest of this report can be found on reuters.com

AWARDS

ASIAN LEGAL BUSINESS JULY 2012

WINNERS Asian Legal Business (ALB) is delighted to announce the official list of winners of the Marina Bay Financial Centre ALB SE Asia Law Awards 2012, held on May 11 at the Shangri-la Hotel Singapore. The eighth annual event was attended by the guest of honour, Deirdre Stanley, EVP and general counsel Thomson Reuters Corporation visiting from the U.S. She joined more than 300 investment bankers, solicitors, in-house counsel, and CEOs from across SE Asia who assembled to celebrate with the winners as they accepted their awards on stage Awards in a total of 33 categories were presented to firms, companies, and individuals. Allen & Gledhill claimed 10 awards including the construction, real estate, and tax and trusts law firm of the year awards, as well as the coveted Singapore Deal Firm of the Year award. In addition to recognising the collective talents of law firms and in-house legal teams, the Marina Bay Financial Centre ALB SE Asia Law Awards also singled out SE Asiaâ&#x20AC;&#x2122;s leading individual talents. Lee Eng Beng SC of Rajah & Tann took home the Managing Partner of the Year award, while Sok-Theng Cheng of Morgan Stanley was named the Singapore In-House Lawyer of the Year. International law firm Latham & Watkins and regional heavyweight WongPartnership each took home four awards on the evening. Baker & McKenzie was one of the big winners for its work on the PT Natrindo Telepon Seluler Murabaha Facilities deal (the winning deal of the Islamic Finance Deal of the Year), as well as the recognition of its foreign offices. Wong & Partners was awarded with the Malaysia Deal Firm of the Year, and Hadiputranto, Hadinoto & Partners was named the Indonesia Deal Firm of the Year.

DEAL AWARDS CATEGORIES

FIRM AWARDS CATEGORIES

Award

Winner

Award

Winner

Asset & Corporate Finance Deal of the Year

Boeing Aircraft Order from Lion Air

Commercial Litigation Law Firm of the Year

Drew & Napier

Islamic Finance Deal of the Year

PT Natrindo Telepon Seluler Murabaha Facilities

Construction Law Firm of the Year

Allen & Gledhill

Project Finance Deal of the Year

Jurong Aromatics Petrochemical Plant Project

Energy & Resources Law Firm of the Year

Linklaters

IP Law Firm of the Year

ATMD Bird & Bird

Debt Market Deal of the Year

Wilmar International Limited Guaranteed Medium Term Note Programme

International Arbitration Law Firm of the Year

Herbert Smith

Hutchison Port Holdings Trust Listing on the SGX-ST

Offshore Law Firm of the Year

Maples and Calder

Equity Market Deal of the Year

Temasek Holdings (Private) - Khazanah Nasional Berhad Joint Development

Marina Bay Financial Centre Award Real Estate Law Firm of the Year

Allen & Gledhill

SE Asia M&A Deal of the Year

NestlĂŠ S.A. Acquisition of 60% stake in Hsu Fu Chi International

SE Asia Shipping Law Firm of the Year

Ince & Co

IPP Financial Advisers Pte Ltd Award Singapore M&A Deal of the Year

Singapore Shipping Law Firm of the Year

Rajah & Tann

SE Asia Deal of the Year

Boeing Aircraft Order from Lion Air

Tax & Trusts Law Firm of the Year

Allen & Gledhill

Singapore Deal of the Year

Jurong Aromatics Petrochemical Plant Project

India Deal Firm of the Year

Amarchand & Mangaldas & Suresh A. Shroff & Co.

Indonesia Deal Firm of the Year

Hadiputranto, Hadinoto & Partners

Malaysia Deal Firm of the Year

Wong & Partners

Philippines Deal Firm of the Year

Romulo Mabanta Buenaventura Sayoc & De los Angeles; SyCip Salazar Hernandez & Gatmaitan

Thailand Deal Firm of the Year

Linklaters

Vietnam Deal Firm of the Year

VILAF

International Deal Firm of the Year

Latham & Watkins

Singapore Deal Firm of the Year

Allen & Gledhill

Marina Bay Financial Centre Award Managing Partner of the Year

Rajah & Tann - Lee Eng Beng SC

IN-HOUSE AWARDS CATEGORIES Award

Winner

Investment Bank In-House Team of the Year

Morgan Stanley

Real Estate & Construction In-House Team of the Year

CapitaLand

Shipping In-House Team of the Year

Sembcorp Marine

Singapore In-House Lawyer of the Year

Morgan Stanley Sok-Theng Cheng

The Singapore Corporate Counsel Association Award Singapore In-House Team of the Year

CapitaLand

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