CLB May 2012

State Grid Q&A: Going offshore ‘calmly and cautiously’ 国家电网国际公司：‘冷静审慎’走向世界

may2012 WWW.LEGALBUSINESSONLINE.COM

亚洲法律杂志 - 中国版 CHINA

AFFORDABLE HOUSING

Building social equality? 保障性住房： 重塑社会公平？ NEW CIETAC RULES China’s international arbitration ambitions 贸仲新规彰显国际野心

PAGE 14

SHANGHAI ELECTRIC SPEAKS

CONFIDENCE UNDIMMED

INSIDE

CLO shares on strategy, challenges and external counsel 上海电气法务专访

China’s slowing growth worries few 经济增速放缓 中国信心不减

n Deals SPOTLIGHT

PAGE 20

PAGE 38

04

n THE BIG STORY

05

n LAW FIRM LEAGUE TABLES

08

n SUNDRIES

52

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CONTENTS

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26

1

NEWS DEALS

04

BRIEFS

05

LEAGUE TABLES

08

APPOINTMENTS

12

China law awards

26

INDEX

51

SPONSORED UPDATES

COVER STORY Social housing boom

保障房开发蕴商机

While the speculative property market has been effectively cooled down by stringent regulations, other segments of the real estate sector are being promoted. It is in this space of affordable housing, senior housing, mixed use facilities, R&D parks and other project types that investment opportunities are emerging, finds Candice Mak

42

— International Tax AzureTax

48

— Fujian Sphere Logic Partners

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—

49

Shanghai Victory Legal Group

— Singapore Loo & Partners

49

SPONSORED PROFILES —

Zhonglun W&D Law Firm

— CIETAC

在银根紧缩的调控政策之下，投机性住宅市场逐渐降温，地产行业向其他领域转型。 经济适用房，廉租房，养老房，综合设施，科技园区等其他类型项目带来投资新机 会。Candice Mak报道

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SUNDRIES

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Countering the slowdown 反周期增长

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FEATURES Arbitration alignment 贸仲新规：七年磨一剑 Effective since May 1, CIETAC’s latest version of its rules is widely regarded by practitioners as a welcome development towards regulations that follow international standards.

They demonstrate CIETAC’s international ambitions, although uncertainties remain over the constraints imposed under PRC law.

Liu Zhen reports 从5月1日起，中国国际经济贸易仲裁委员会 （CIETAC）将启用其2012版最新仲裁规则。 虽然仍受限于当前中国法律规定，新规仍然采 纳许多国际通行标准，将贸仲的海外野心展现 无遗。刘蓁报道

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Shanghai Electric speaks 上海电气法务专访 Tong Liping, the chief legal officer of Shanghai Electric, chats with Liu Zhen about her team’s successes in outbound investments, nurturing talent from the entry level, and how integrity matters more than skills. 上海电气集团股份有限公司总法律顾问童丽 萍对本刊记者畅谈法务团队建设心得，如何献 策公司海外战略，以及怎样培养德才兼备的人 才。刘蓁报道

20

Recent economic growth data show that China’s economy is growing at its slowest since the global financial crisis. But the prospect of a hard economic landing has not diminished lawyers’ confidence in China as a market, thanks to the profession’s countercyclical characteristics, writes Liu Zhen 自08年全球危机以来最差的一季度增长数据并 未打击中国律师的总体信心。经济放缓的大背 景下，法律行业自有反周期应对策略，刘蓁报道

ASIAN LEGAL BUSINESS may 2012

2 ON THE COVER

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

HEAD OF SALES May Wong may.wong@thomsonreuters.com

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

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DIRECTOR, EVENTS Lucinda Maguire lucinda.maguire@thomsonreuters.com ACCOUNT MANAGERS Yvonne Cheung (Senior Account Manager, China) yvonne.cheung@thomsonreuters.com Rebecca Ng (Account Manager, North Asia) rebecca.ng@thomsonreuters.com Brenda Lau (Account Manager, North Asia) brenda.lau@thomsonreuters.com Brian Chu (Account Manager, North Asia) brian.chu@thomsonreuters.com Mark Schroeder (Director, Business Development) mark.schroeder@thomsonreuters.com Wendy Tan (Account Manager, Southeast Asia) wendy.tan@thomsonreuters.com Alison Towle (Account Manager, Middle East) alison.towle@thomsonreuters.com DESIGNERS John Agra Yvette Chiu TRAFFIC MANAGERs Ivy Tsang (Hong Kong) Rozidah Jambari (Singapore)

ASIAN LEGAL BUSINESS is available by subscription. Please call +852 3762 3269 (Hong Kong), +65 6775 5088 (Singapore) for details or visit www.legalbusinessonline.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor.

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EDITORIAL

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

A new perspective

新栏目新视角

This month we kick off a new series focusing on the insights of leading industry practitioners. Tong Liping, the chief legal officer of Shanghai Electric, talks to ALB about the challenges her team faces at a growing state-owned enterprise, how in-house counsel function within the organisation and recent successes while transacting overseas investments. In the coming months, ALB will target dynamic Chinese in-house counsel from several key sectors to bring you fresh and detailed perspectives of their roles. Stay tuned for our next installment in the July issue.

本月我们推出新的系列栏目，为您呈现各行业领导企业中的法务 团队的工作状态和发展思路。本期首先登场的是上海电气总法 律顾问童丽萍女士。她在 ALB 的专访里，畅谈手下团队在一个 快速成长的国企中面临的挑战，法务在公司体系内如何发挥作 用，以及怎样为近年来海外项目的成功做出贡献。接下来的几期 中，ALB 将继续关注活跃于中国各大行业中的企业法务团队，为 各位读者带来更多更详尽的法务视点。请继续关注我们的六月法 务专访。

As arbitration flourishes across Asia, CIETAC has updated its rules to bring them more in line with international standards and trends.

They came into force on May 1. ALB offers a thoughtful exploration of what the most notable amendments are, their effects and the direction the arbitration body is heading in. In another timely feature, ALB examines the state’s push to exponentially increase the amount of affordable housing for citizens and where opportunities for real estate investors lie. China has a dual housing policy – one that restricts speculative investments and another that promotes the development of projects that align with broader social goals. It’s in the latter area that legal practitioners are finding their work shifting to, requiring a broadening of skills sets and deeper specialisation. In addition to these features, there are many more interesting pieces in the magazine that I hope you will enjoy and find useful.

ALB_186x119.5mm_bleed5mm.pdf 1 2011-8-13 17:12:41

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随着仲裁业务在亚洲地区的日渐繁荣，中国国际经济贸易仲裁委 员会（CIETAC）发布了更加符合国际潮流和标准的全新规则， 自5月1日起生效。ALB 专题报道及时与您深入探讨这次2012版新 规中的重要修改，评估其效果影响，揭示CIETAC对自身的方向 定位。另外一篇专题文章中，ALB 为您深入解析在国家力推居民 保障性住房的政策下，房地产业商机何在。中国当前对房市实施 双重政策，一方面限制投机性购买，另一方面鼓励保障性开发， 其中蕴含更深层的社会动因。而法律行业意欲将重点转向配合后 一部分政策，则需要更广泛的工作技巧和更深入的专业能力。除 了上述两篇专题，本期还有更多有趣的文章与报道，希望您喜欢 并从中所有得益。 CANDICE MAK North Asia Regional Editor, Asian Legal Business Thomson Reuters

DEALS

4

ASIAN LEGAL BUSINESS may 2012 n your month at a glance

$1.9 billion M&A Bright Food’s acquisition of 60 percent share in Weetabix from Lion Capital • The largest overseas acquisition by a Chinese company in the food and beverages sector.

• Bright Food, one of China’s largest food producers, will own a 60 percent interest in the UK’s global brand Weetabix. It paid £1.2bn ($1.9 billion), including company shares and debt. Lion Capital will continue to hold the remaining 40 percent of shares.

• The transaction is subject to regulatory and government approvals in China, as well as antitrust approvals. Completion of the transaction is expected in the second half of 2012.

Value ($ mln)

Firm

Jurisdiction

Deal name

Paul Hastings

Singapore/ Hong Kong

Alpha Investment’s disposition of Shama Serviced Apartments

China/UK

Bright Food’s acquisition of 60 percent share in Weetabix from Lion Capital

U.S./China

CODA’s partnership with Great Wall Motors

N/A

N/A

Hong Kong

CVC’s investment in Venturepharma Group

105

M&A

China/Hong Kong

China Minsheng Bank’s share placement

Hong Kong

CDH Investment’s purchase of TSL Jewellery’s convertible bond

Hong Kong

CNOOC Finance’s 2012 bond offering

2,000

Debt

Hong Kong

Haitong Securities Company’s IPO

1,680

Equity

Hong Kong

New World China’s dim sum bond issuance

Hong Kong/ China

Sinopec Kantons’ rights issue and acquisition of JV from Sinopec

Linklaters

China/ Portugal

State Grid’s acquisition of Portugal’s Redes Energéticas Nacionais (REN)

506.5 (EUR 387.15) M&A

Clifford Chance

Hong Kong

Temasek’s acquisition of Goldman Sachs’ ICBC H-shares

2,300

M&A

Skadden, Arps, Slate, Meagher & Flom

Hong Kong

Zoomlion bond issuance

400

Debt

Weil, Gotshal & Manges Linklaters Tian Yuan Law Firm Weil, Gotshal & Manges King & Wood Mallesons Clifford Chance

Deal type

154 Real Estate (HK$1.2 billion)

1,943 (£1.2billion)

M&A

Clifford Chance Freshfields Bruckhaus Deringer Paul Hastings

1,440 (£906 million)

Equity

32.2 (HK$ 250 Debt million)

Davis Polk & Wardwell Linklaters Commerce & Finance Law Offices Walkers Clifford Chance

$506.5 million M&A State Grid’s acquisition of Portugal’s Redes Energéticas Nacionais (REN) • State Grid International Development of China (SGID) took over a quarter of shares in Portugal’s Redes Energéticas Nacionais, SGPS, S.A. (REN).

• Transaction was part of Portugal’s government-approved financial aid plan, in which the state-owned SGID became the first Chinese company to acquire a European national power grid.

Eversheds Clifford Chance

443 (RMB 2.8billion)

Debt

Edwards Wildman Palmer (in Hong Kong in association with Lister Lo Lui Choy) Latham & Watkins Commerce & Finance Law Offices

450 (HK$3.49 Equity/M&A billion)

Conyers, Dill & Pearman

BRIEFS

05.2012

05

the big story

Liberalisation of the RMB Another layer peeled off

F

FORUM

By Liu Zhen

ollowing the unveiling of its central bank’s new cross border yuan payment system in April, China took its latest steps towards turning its currency into a global one by doubling the size of its trading band against the U.S. dollar to 1 percent.

The widening of the trading band is a milestone in China’s gradual reform of its strictly controlled foreign exchange system that was established in 1988. Restrictions are being slowly peeled off – too slowly some say – in the face of mounting international pressure on Beijing to allow the yuan to rise freely so that it is able to balance the trade surplus.

Meanwhile, the Chinese government hopes to boost the role of the yuan globally as an international settlement and reserve currency. It has already pledged to allow the renminbi (RMB) to trade relatively freely, or become convertible by 2015.

The China International Payment System (CIPS), which will be open to banks around the world in the next year or two, is expected to better facilitate future international yuan transactions.

With a more efficient run time and easier access, officials hope it would partly replace the existing cross border settlement system that goes mainly through Hong Kong.

Although lawyers reckon that the full convertibility of the yuan is still years away, the enlarging of the trading band from 0.5 percent to one is welcomed as an encouraging signal and a sizable leap forward towards the internationalisation of the yuan.

“It is a very positive move. With the increase of the trading range, the exchange rate could better demonstrate the true demand of the market, and the invisible hands of the market could function better,” says David Fu, a partner at Global Law Office. “But in the short term, the doubling of the trading band could mean the doubling of the risk of losses in exchanges. I would suggest our clients pay more attention to it.”

In the short term, the offshore RMB-denominated capital markets will demonstrate the impact of the loosening policy. In Hong Kong, the

most important offshore yuan capital market, there is a significant amount of hot money betting on the rise of the strong currency, suggested Michael Qi, a partner at Fangda Partners.

“The anticipation of the rising yuan will be significantly weakened by this policy,” says King & Wood Mallesons partner Roy Zhang. “As a result, investments based on such anticipation will see a drop. Companies doing cross border business will need to pay more attention to the rate shifting, which also means opportunities of arbitrage as well as the necessity of foreign exchange hedging.”

Full convertibility Speaking to the China Daily, Hong Kong-based Freshfields Bruckhaus Deringer partner Andrew Heathcote said that there are a number REUTERS/Stringer China of important issues standing in the way of a freely convertible yuan. These include the liberalisation of interest rates.

“In the near term, I think we will continue to see further gradual loosening of the restrictions on the capital account and the continued promotion of the use of the yuan for international trade settlement. Full convertibility and the use of the yuan as a reserve currency is, however, much more of a long-term project,” said Heathcote.

The benefit of the yuan acting as an international trading currency is obvious for China, the world’s largest exporter. According to Fu, being able to settle transactions in yuan would benefit trade counterparties because it would save them handling charges and also reduce the risk caused by rate shifts during time-consuming transactions.

Qi believes one of the ultimate goals of China’s reforms to open up the yuan market is to make it a currency to mark the price in all sorts of cross border transactions – a realm that is still dominated by the U.S. dollar. Except in a few Southeast Asian countries, the yuan has yet to function as the pricing currency. “After successful internationalisation, being a pricing currency would be an important role for the yuan. It shows the status of the currency and the economy in the global market,” says Qi. “I hope the reform proceeds ahead quickly.”

What can be expected in the future?

“In the short term, the doubling of the trading band could mean the doubling of the risk of losses in exchanges. I would suggest our clients pay more attention to it.”

David Fu

Global Law Office

“The widening of the trading band is a necessary stage through which the yuan is moving towards becoming a convertible international currency. It also reverses the pressure on the opening of the capital account and the relaxing of foreign exchange controls by the state.”

Roy Zhang

King & Wood Mallesons

“After successful internationalisation, being a pricing currency would be an important role for the yuan. It shows the status of the currency, and the economy in the global market. I hope the reform proceeds ahead quickly.”

Michael Qi

Fangda Partners

06

BRIEFS

05.2012

本月要闻

人民币大步迈向国际化 刘蓁

四

月中旬中国人民银行接连出 台两大新政，在宣布即将开 发独立的人民币跨境支付系统 （CIPS）之后，紧接着又将人 民币兑美元的浮动区间扩大一倍，从千分之五 提高到百分之一，在人民币国际化的进程中又 迈进一大步。 此次汇率区间调整是中国多年来渐进式汇 率改革中具有里程碑意义的一步。自1988年开 始，中国开始尝试小幅逐步放开对外汇的严格 管控政策。尽管近年来面临巨额贸易顺差和外 汇储备激增带来的巨大人民币升值压力，央行 对汇改问题始终谨慎 以对。 但另一方面，中国 政府也同样期待着人 民币走向国际化，承 担起国际支付手段和 储备货币任的重要角 色。北京此前已经宣 布，最快到2015年， 人民币将实现可自由 兑换。 央行的人民币跨境 支付系统（CIPS）正 是为此目的而开发。 该系统预计将在未来 一两年内交付世界各 地的银行用户，成为 人民币跨境交易的系 统平台。官方期待这 个运行更高效，操作 更简易的系统，能够部分 取代目前主要经由香港进行的人民币跨境支付 的既有系统。 虽然距人民币完全可自由兑换仍有数年之 遥，此次汇率区间调整仍然得到了相关律师的 普遍欢迎，被视为人民币国际化过程中令人鼓 舞的一大实质进步。 “此举有非常积极的意义。提升汇率浮动的 幅度，令汇率更加反应市场的真实需求，强化 市场的调节功能。”环球律师事务所合伙人傅志 耕告诉ALB.“ 但是短期内，汇率浮动的幅度加 倍可能就意味着汇率损失的风险加倍。交易双 方应对此加以考虑，” 短期内，最能体现这一政策直接影响的将是 境外的人民币资本市场。方达律师事务合伙人 齐轩霆指出，在最大和最重要的海外人民币交 易地——香港市场上，存在着大量的人民币热 钱，以及大量在人民币升值预期之下的套汇交 易。

“汇率浮动范围扩大将会减弱人民币升值预 期，从而导致基于升值预期之上的投资活动的 减少。企业在跨境交易中汇率因素会更明显； 而人民币波动增大也意味着更多套利机会，企 业也会考虑套期保值的必要性。”金杜律师事务 所合伙人张宁说。 自由兑换 《中国日报》引述富而德律师事务所驻香港合 伙人Andrew Heathcote评论，认为当前人民币 自由兑换仍然存在众多障碍，而利率管制就是 其中之一。

业界讨论 最新汇改政策将产生何种影响？ “短期内，汇率浮动的幅度加倍 可能就意味着汇率损失的风险加 倍。交易双方应对此加以考虑。”

傅志耕 环球律师事务所

“汇率浮动范围增大是人民币走向 可自由兑换的国际货币的必经过 程。将会倒逼资本项目的开放和 国家对外汇管制的放松。”

张宁 金杜律师事务所

REUTERS/Stringer China

“短期内，我认为对资本项目的的管制将会 更进一步放松，而人民币在国际贸易中作为结 算货币的地位将得到进一步推动。但是，人民 币要达到完全可自由兑换以及成为国际储备货 币将是一个更长期的工程。”他说。 作为世界第一大出口国，中国很显然将从 人民币承担国际贸易结算功能中获益。傅志耕 说，进出口贸易之外的其他类型跨境经济活动 如能以人民币结算，也有节约手续费，并且降 低交易期间汇率波动的风险的好处。 齐轩霆相信中国汇改的目标之一正是将人 民币提升到各种跨境交易的国际定价货币的地 位，以打破美元的垄断。除了在东南亚地区的 少数周边国家，人民币还远未成为定价货币。 他说：“未来人民币走向成功国际化的结果，是 人民币将承担起定价货币的角色。这也将是人 民币和中国市场地位的体现。希望看到看到一 过程走得更远。”

“未来人民币走向成功国际化的结 果，是人民币将承担起定价货币 的角色。这也将是人民币和中国 市场地位的体现。希望看到看到 一过程走得更远。”

齐轩霆 方达律师事务所

BRIEFS

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

GC INTERVIEW

Li Ling Chief Legal Officer, State Grid Corporation of China

7

‘We should be problem solvers, and not just issue spotters’

ALB: What is the structure of State Grid’s (SGID’s) in-house team like?

What is its function and role within the corporation?

LL: SGID is a wholly owned subsidiary of the State Grid Corporation of China (SGCC), and a platform through which SGCC runs its overseas investment and other international business. We, the in-house legal team, have been an independent department since the establishment of SGID. We now have 10 employees.

ALB: In alignment with the outward investment encouragement from state policies, what role does your team play in SGID’s “going out” objectives?

LL: We are not going out for the purpose of going out. We examine each M&A and investment opportunity calmly and cautiously. With open minds, we also do thorough research and investigation. To evaluate and make choices on opportunities and timings is so important that the professional advice of legal practitioners is indispensible.

lawyers specialising in cross border transactions. We need lawyers who have mastered the relevant laws and knowledge, are experienced in overseas deals, are proficient in the needed foreign language, are skillful in international negotiations and communications, and most importantly, are familiar with the style and needs of SOEs. At the moment, we rarely see external lawyers meeting this high bar. We need to work together with external lawyers to develop their expertise and grow this market.

I am the Chief Legal Officer and a member of the Executive Committee of the company. Apart from day to day legal affairs management, my team mainly works on supporting the business development of the company. We provide support to outbound investments and mergers and acquisitions, and we also advise on strategic decisions that are in the process of being made. In addition, we also collect and compile relevant knowledge and experiences concerning cross border business to educate our employees on the legal aspects.

The first role we play here is carrying out the due diligence investigation. We also provide comprehensive information and analysis to the decision makers after thorough research on the investment environment, and the laws and policies of the target’s country. Secondly, in order to proactively promote the projects, we utilise our expertise and experiences in law to prepare the documents and organise the negotiations. With our increasing experiences in overseas M&As, we can improve the international reputation and image of Chinese companies by successfully supporting the operation and execution of our investment projects.

Thirdly, looking at the overall functioning of in-house teams in Chinese companies, it is a good start that many have the attention of executives. In fact, this attention is growing. But we in-house counsel must work on how to influence the decision-making, how to present ourselves and add value to the company operations, and how to enhance the interaction between the legal team and other departments. More down-to-earth practices and a better founded culture of the “rule of law” are needed.

ALB: What is the development strategy of SGID’s in-house team?

LL: Overall, SGCC is number seven on the 2011 Fortune 500 ranking and is quickly growing. The company attaches high importance to legal affairs, which offers us a wonderful basis to build a good team on. As a window facing the external market, we set our goal at building a first class in-house team in China, and have been constantly working to that standard.

More specifically, in order to build a first class team, the first thing we emphasise is “professionalism”. We try to improve our legal workers’ professional capabilities as well as ethics. The second thing is being “proactive”. We need to proactively assist and support the operating departments, help them to discover the problems, and then help to solve them. Third, we are “prudent”. We have to fully and carefully evaluate and judge all potential risks. The fourth point is being “practical”. We should work out a solution that practically meets the needs of the company that will drive forward the business while reducing risk. This is a key requirement for in-house counsel.

We do not only see the problems; we also find out the solutions. We have to know the company’s strengths and weaknesses, and its risk endurance very well in order to make correct judgments.

ALB: What is your biggest challenge as Chief Legal Officer?

LL: The first challenge is nurturing talent and recruitment. Presently, many SOEs value legal team building, and so we are hunting for talent nationwide.

Although we have a good start, there is still much to improve. The issue of talent development involves not only the company, but also society in general.

Practising law is all about experience. Inhouse counsel need an education, legal training and more importantly, field work experiences. We need to manage internal legal affairs as well as external firms and lawyers. We have to be able to evaluate the external lawyers’ work and judge their advice, which demands rich practice experience. In many other countries, there is a mature system where high quality legal talent moves smoothly from law firms to in-house at corporations as the working environment and salaries are more attractive there. But in China, such moves have been insufficient due to the gap in payment and culture. As a result, we have to start recruiting from non-experienced graduates, which takes a much longer time.

The second challenge lies in the external market. We wish there were stronger

ALB: What are the qualities a general counsel in China must possess?

LL: Apart from relevant knowledge, skills and experiences, in-house counsel in China must have a clear vision of the company’s business and strategies. We must, on one hand, know the details of each of the operational departments, and on the other hand, know the bigger picture and plan of the entire company.

Otherwise, we cannot make the right judgments.

Meanwhile, we must possess a constructive mindset. We should be problem solvers, and not just issue spotters. We should come up with feasible solutions in addition to detecting the flaws.

Last but not the least, an in-house counsel must have the courage to challenge and question any problem.

He or she must also possess the skills of mediation and have a peaceful mentality. When facing problems, as in-house counsel, we must maintain a positive attitude and figure out how to utilise every possible internal resource to coordinate with other departments for a solution.

LEAGUE TABLES

8

ASIAN LEGAL BUSINESS May 2012

CHINA ANNOUNCED M&A LEGAL RANKINGS

CHINA Announced M&A financial rankings

Allen & Overy

2,570.9 DEALS: 5

RANK

credit suisse

6,022.7

VALUE ($mln)

DEALS: 3

MARKET SHARE: 4.9

LEGAL ADVISOR

VALUE ($ MLN)

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 11.5

LEGAL ADVISOR

VALUE ($ MLN)

DEALS

MARKET SHARE 8.5

2

Slaughter and May

2,531.4

1

4.8

2

Rothschild

4,473.0

3

3*

Fulbright & Jaworski

2,500.0

1

4.8

3

CITIC

3,304.8

7

6.3

3*

Vinson & Elkins

2,500.0

1

4.8

4

Deutsche Bank

3,304.4

6

6.3

5

Linklaters

2,490.0

5

4.7

5

HSBC Holdings

3,134.4

4

6.0

6

King & Wood Mallesons

2,261.4

5

4.3

6

Somerley

2,577.5

4

4.9

7

Tian Yuan Law Firm

1,993.3

2

3.8

7

Caitong Securities Co

2,334.6

6

4.4

8

Paul, Weiss

1,940.3

2

3.7

8

Goldman Sachs & Co

2,089.2

6

4.0

9

Clifford Chance

1,846.0

4

3.5

9

Citi

1,857.6

5

3.5

10

Jingtian & Gongcheng

1,797.3

5

3.4

10

UBS

1,765.3

3

3.4

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

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

HONG KONG Announced M&A Legal Rankings

HONG KONG Announced M&A Financial Rankings

Allen & Overy

4,089.4 DEALS: 5

RANK

Moelis & Co

4,278.7

VALUE ($mln)

MARKET SHARE: 19.6

LEGAL ADVISOR

VALUE ($ MLN)

DEALS: 2

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 20.5

LEGAL ADVISOR

VALUE ($ MLN)

DEALS

MARKET SHARE

2

Slaughter and May

2,531.4

1

12.1

2

Morgan Stanley

4,122.4

3

19.7

3

Sullivan & Cromwell

2,441.4

2

11.7

3

HSBC Holdings

3,064.9

4

14.7

4

Freshfields Bruckhaus Deringer

1,275.1

1

6.1

4

Goldman Sachs & Co

2,836.2

9

13.6

5

Clifford Chance

843.3

5

4.0

5

Deutsche Bank

2,795.4

10

13.4

6

Linklaters

533.5

2

2.6

6

Rothschild

2,752.2

2

13.2 12.4

7

Rajah & Tann

496.0

2

2.4

7

Somerley

2,581.2

5

8

Machado Meyer Sendacz & Opice

494.0

1

2.4

8

Credit Suisse

2,531.4

1

12.1

9

Davis Polk & Wardwell

348.2

2

1.7

9

JP Morgan

2,233.9

4

10.7

10

Paul, Weiss

300.0

1

1.4

10

Citi

514.8

2

2.5

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

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

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

Rank Value US$ billion

70

No. of Deals

60

83.5

46.7

50 40 30 20 10

8.3 9.5

16.6

10.7

15.7

12.4

17.0

1,200

76.4

39.6

42.4

36.4

46.0

42.1 40.2 43.6 45.1

1,000 44.9 43.5 47.0

27.4

23.4 21.0 22.3 22.4

800 600 400

16.9

200

0

No. of Transactions

Rank Value US$ Billion

90

0 1Q 05

3Q 05

1Q 06

3Q 06

1Q 07

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

3Q 10

1Q 11

3Q 11

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

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9

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Real Estate Team of Zhonglun W&D Law Firm

15.05.12 11:06

Maintaining the Lead Role of Real Estate Law Practice in China

F

Gavin(合伙人)

Lei Tian(资深律师)

Zhonglun W&D Law Firm A: 19/F Golden

Tower,No.1,Xibahe

South Road,Chaoyang District,Beijing,100028,P.R.C F: +86-10-6440 2915 T: +86-10-6440 2232 - 7719 E: ligang@zhonglunwende.com

ounded in 1992, Zhonglun W&D Law Firm is one of the earliest-established Chinese law firms approved by the Ministry of Justice. Headquartered in Beijing, the Firm has China-based offices in Shanghai, Tianjin, Chengdu, Shijiazhuang, Taiyuan, Wuhan, Chongqing, Hangzhou, Jinan and Shenzhen, co-functioning with dual-jurisdictional offices in London (UK) and Riyadh (Saudi Arabia) and representative/ associated offices in Hong Kong, Lyon, Paris and major cities in the US. Approximately 400 lawyers and employees enable the Firm to provide streamlined first-class legal service to diversified Chinese and overseas clients from strategically placed branch offices across the world with working languages include Chinese, English, French, Korean, Japanese and Arabic. The Firm is not only a leading Chinese law firm in traditional areas of law, but also a frontrunner in advising clients on their most important and challenging assignments in emerging areas such as private equity, structured finance and securitization, cross-border corporate transactions, real estate development and investment trusts.

Real estate and construction has grown to be one of the centerpieces of Zhonglun W&D’s practices. The

Firm has a varied and sophisticated team practicing real estate & construction matters. The team has cultivated solid working relationship with a significant number of large-scale and reputable real estate agencies, intermediaries across the world and relevant government authorities, facilitating the Firm to provide clients with legal services of the highest quality.

The team acts as the legal counsel for Beijing Municipal Bureau of Land and Resources, Beijing Land Coordination and Reservation Center, Tiara Group, Beijing Vantone Real Estate Co., Ltd., Chia Tai Land Co., Ltd., Taihe Group, Capital Airport Real Estate Development Co., Ltd. and so on. The team advised China Investment Co., Ltd., China National Petroleum Corporation, PICC Property and Casualty Co., Ltd., China Life Insurance Co. Ltd., Maple Tree Real Estate, China Mobile Communications Corporation, and China Everbright Bank in their acquisitions of real estate projects respectively. The team also accumulated extensive experience in advising on all aspects of real estate finance, property securitization, real estate trust investment, insurance capital investment in real estate and other areas.

10

BRIEFS

ASIAN LEGAL BUSINESS may 2012

IN CASE YOU MISSED IT

THIS MONTH’S TOP HEADLINES FROM WWW.LEGALBUSINESSONLINE.COM

REUTERS/Tim Chong

Temasek seeks $2.4 billion with China bank stake sales Singapore sovereign wealth fund Temasek Holdings, which is the single biggest shareholder in Standard Chartered Bank, is offering about $1.2 billion in Hong Konglisted shares of the China Construction Bank and another $1.2 billion of the Bank of China. The selldowns come just days after China’s Big Four banks wrapped up their first quarter earnings, which showed that the sector faced growing pressure from a slowing economy and rising funding costs.

REUTERS/Stringer China

Weil, Gotshal and K&W Mallesons advise on automaker partnership

U.S. law firm Weil, Gotshal & Manges and King & Wood Mallesons have represented U.S. company CODA Holdings and China’s Great Wall Motor Company on their agreement to co-develop, build and sell (EVs) for the North American, Chinese and European auto markets. Reuters reported that the partnership allows both automakers to develop and sell EVs in a more efficient and cost-effective manner.

REUTERS/Stringer China

Fangda sets up in HK with Freshfields recruit

Fangda Partners is set to launch its new Hong Kong office in June 2012 with the hiring of litigation specialist Peter Yuen from Freshfields Bruckhaus Deringer. The Chinese firm will enter into an association with a Hong Kong firm that will be set up

by Yuen. Regulatory approvals for the Hong Kong office are still pending, but Freshfields confirms it plans to cross-refer clients and dispute resolution work with the new Fangda office.

V&T Law Firm launches in Chongqing

Beijing-headquartered V&T Law Firm has opened a new office in the southwestern city of Chongqing. Officially opened on March 17, this is the second of V&T’s offices in the southwest, after the set up of its Chengdu branch at the end of 2011. Unlike the conventional expansion approach of merging with a local firm that other national firms have adopted, V&T’s Chongqing office is manned and operated by lawyers sent from the firm’s headquarters.

REUTERS/Amit Dave

Winners advocates CSR at LAW conference

At a lawyers conference held recently in Tianjin, Winners Law Firm urged law firms to participate in corporate social responsibility (CSR) activities. During the CSR-themed session, Winners said that law firms, in adherence to professional ethics, should take on more responsibilities including charity and environmental activities. Winners also said that law firms must focus on employee wellbeing, and promote justice through upgraded service.

Cleary Gottlieb nabs Shearman & Sterling China partner

U.S. firm Cleary Gottlieb Steen & Hamilton has recruited M&A specialist Ling Huang from rival firm Shearman & Sterling as a partner at its Beijing office. New Yorkqualified attorney Huang, who has practised at Shearman & Sterling’s Beijing office for 14 years, works with Chinese and international clients on M&A and inbound and outbound private equity transactions.

Sponsored profile

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11

中国国际经济贸易仲裁委员会 cietac

贸仲委新版《仲裁规则》出台，更加突出国际化特色

2

012年5月1日，中国国际经济贸易仲裁委员会(简称“贸仲委”) 新版《仲裁规则》正式实施。新版《仲裁规则》在保持规则 连续性稳定性的同时，对2005年版《仲裁规则》进行了较大幅 度的修改。新规则契合贸仲委国际及涉外仲裁机构的定位，突 出国际特色，吸引国内外当事人尤其是外国当事人选择贸仲委 的仲裁服务，并为贸仲委的域外发展预留了空间。 在原《仲裁规则》允许当事人约定选择符合法定资格的名册 之外的人士作为仲裁员，允许当事人约定仲裁员的国籍，约定全 球任何地点为仲裁地或仲裁案件的开庭审理地点，约定仲裁的 程序语言，约定仲裁案件的审理方式等的基础上，新版《仲裁 规则》规定，当事人对仲裁地未作约定或约定不明的，以管理 案件的仲裁委员会或仲裁委员会分会/中心所在地为仲裁地；在 当事人对仲裁地没有约定或约定不明的情况下，仲裁委员会也 可视案件的具体情形确定其他地点为仲裁地。 关于仲裁语言，新版《仲裁规则》规定，当事人对仲裁语言有 约定的，从其约定；当事人没有约定的，仲裁程序以中文为仲裁 语言；在当事人没有约定语言的情况下,仲裁委员会也可视案件的

梁华 电邮 : lianghua@cietac.org Mrs. Liang Hua, Arbitrator/ Deputy Director, Business Development Division, CIETAC E: lianghua@cietac.org

地址：北京市西城区桦皮厂胡 同2号 国际商会大厦6层 电话：+86 10 8221 7743 传真：+86 10 8221 7766 网址 : www.cietac.org A: 6/F, CCOIC Building, 2 Huapichang Hutong, Xicheng District, Beijing 100035, P.R. China.

T: +86 10 8221 7743 F: +86 10 8221 7766 W: www.cietac.org

具体情形确定其他语言为仲裁语言。根据该条规定，对于以英文 或其他非中文语言为工作语言的双方当事人，如果没有约定仲裁 语言，则不必然以中文为仲裁语言，贸仲委可根据案件和当事人 的具体情况，以方便当事人及程序进行为原则，确定仲裁语言。 新版《仲裁规则》还明确规定当事人可以选择仲裁协议效力 的准据法、可以约定适用于实体争议的法律、可以约定仲裁文件 的交换方式等，这些规定体现了贸仲委对当事人意愿的充分尊 重，体现了贸仲委仲裁服务的国际和涉外特色，符合中外当事 人选择以仲裁方式解决争议的目的和需求。 此外，新版《仲裁规则》还对简易程序的争议金额进行了调 整，增加了合并仲裁、程序中止等条文规定，考虑到民诉法的修 订涉及到仲裁的财产保全和证据保全以及行为保全问题，结合 国际上普遍适用的临时措施的做法，新版《仲裁规则》对相关 条款也做出了适当调整。

详细信息请登录网站查询：www.cietac.org

ASIA’S GROWTH AND INFLATION FORECASTS - ADB xxx

10

Growth - percent

Developing Asia

8 6 4 2 0 20

Forecasts

2008

2009

2010

2011

2012

2013

Developing Asia

Inflation - percent

15 10

KEY Central Asia South East Asia South Asia East Asia

5 0 -5

Forecasts

2008

2009

2010

2011

2012

2013

Source: Asian Development Bank

Stable Growth

Growth rates of the four regions in Asia are predicted to increase, according to the Asian Development Bank’s 2012 outlook report released in April this year. While the growth rate in East Asia is predicted to decelerate to 7.4 percent this year from 8 percent in 2011, Southeast Asia will see its GDP grow to 5.2 percent in 2012 from just 4.6 percent in 2011. South Asia will maintain a growth of 6.6 percent in 2012 before accelerating to 7.1 percent in 2013 on the back of a strong projected Indian economy. Inflation is stabilising, but the unpredictability of food and oil prices remains a constant threat.

12

APPOINTMENTS

ASIAN LEGAL BUSINESS MAY 2012

Lateral hires NAME

Leaving

Christopher Betts

Paul Hastings

GOING TO Skadden, Arps, Slate, Meagher & Flom

PRACTICE

LOCATION

Capital market, M&A

Hong Kong

Robert Caldwell

King & Wood Mallesons

DLA Piper

Finance and Projects

Hong Kong

Brenda Horrigan

Salans

Herbert Smith

Dispute resolution

Shanghai

Ling Huang

Shearman & Sterling

Cleary Gottlieb Steen & Hamilton

M&A

Beijing

Niping Wu

Debevoise & Plimpton

Kaye Scholer

Corporate

Shanghai

Peter Yuen

Freshfields Bruckhaus Deringer

Fangda & Partners

Litigation, Arbitration

Hong Kong

Zhang Fan (Frank)

Dewey & LeBoeuf

DeHeng Law Offices

Corporate finance

Beijing

PROMOTIONS NAME

FIRM

PROMOTION

PRACTICE

LOCATION

Bob Charlton

DLA Piper

Managing Director, Asia-Pacific

Infrastructure, Banking

Hong Kong

Xu Kaichen

DLA Piper

Partner

Corporate

Shanghai

Partner

Corporate

Beijing

Jean Yu

Clifford Chance

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14

cietac arbitration

ASIAN LEGAL BUSINESS MAY 2012

Arbitration alignment

cietac arbitration

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Effective since May 1, the latest version of the China International Economic and Trade Arbitration Commission’s (CIETAC’s) rules is widely regarded by practitioners as a welcome development towards regulations that follow international standards.

They demonstrate CIETAC’s international ambitions, although uncertainties remain over the constraints imposed by PRC law. Liu Zhen reports

REUTERS/Jason Lee

15

I

n the eyes of several lawyers, the 2012 Amendment of the CIETAC Rules (Rules) does not appear to be a radical remake of the 2005 edition. Nor is it likely to expand business for them dramatically.

There are still things which have been left unclear or restricted by current Chinese laws. However, some meaningful changes have shown the determination of CIETAC to develop from a China-centric organisation towards an internationally-competitive arbitral institution.

Good timing It is a long-awaited amendment. Lawyers have uniformly anticipated it because the timing was ripe for a revision of CIETAC’s arbitration rules.

“Seven years is a long time in terms of policy making,” says Charles Qin, a partner at Llinks Law Firm. “CIETAC has to catch up.” In a similar vein, Friven Yeoh, a partner at O’Melveny & Myers told ALB that: “Generally, arbitration institutions try and review and revise their rules from time to time to keep up with international trends.”

The trends, says Yeoh, such as the increasing demand for the consolidation of proceedings, have already been addressed in the recent updates of other major international arbitration institutions like the International Chamber of Commerce (ICC). Jessica Fei of Herbert Smith believes that the key driver of CIETAC’s changes was the increase in competition from both domestic and international arbitration institutions.

She says CIETAC is aiming at attracting more China-related cases in the Asian region. CIETAC has historically been the dominant arbitration institution in mainland China, notes Yeoh, but so far it has mostly housed matters that are domestic-focused. “Obviously, it has international ambitions because of the growing demand for arbitration and it has begun to position itself to try to attract some of these cases internationally,” says Yeoh.

CIETAC’s intention of internationalising its processes and seeking the creation of a more international arbitration body aligns with the general trend that Chinese legal business is gradually opening up and integrating into the outside world, suggests Shanghai-based King & Wood Mallesons partner Meg Utterback. “It only makes sense that as Chinese law firms like King & Wood merge with foreign firms to go outbound and Chinese companies increasingly invest internationally, that CIETAC too is internationalising its processes and seeking to create a more international arbitration body,” she says.

According to Mayer Brown JSM’s Hong Kong partner Thomas So, the amendment also improves some of the controversial issues in the previous rules, such as the involvement of the tribunal in the mediation process. Additionally, these changes come in the context of CIETAC’s recent announcement that it will be opening an office in Hong Kong in the course of 2012, says James Rogers, a Hong Kong and Beijing-based lawyer of Fulbright & Jaworski.

The opening of the Hong Kong sub-commission, the first office outside mainland China, not only requires CIETAC to internationalise its rules generally, but also that it make some specific practical amendments. For example, CIETAC’s power to decide the seat of arbitration will be in Hong Kong, and the tribunal’s power to grant interim measures will also be under Hong Kong law, adds Fei. Internationalisation It is hard to ignore the changes to the provisions in the Rules concerning the seat of arbitration, the language of arbitration and the nationality of the arbitrator, with stresses on the “non-PRC” elements. For the seat of the arbitration, any city in or outside China can now be named as such by CIETAC; even where the parties have not agreed on the seat of arbitration. Previously, the seat had to be where CIETAC or its sub-commissions were located, namely, Beijing, Shanghai, Tianjin,

16

cietac arbitration Chongqing and Shenzhen.

This is a further step from the 2005 version, which permitted CIETAC to administer an arbitration outside mainland China under the condition of party agreement. But under the current PRC law, only “foreign-related” arbitrations were allowed to take place outside mainland China.

Moving the seat of arbitration from mainland China to overseas will change a number of important elements of the arbitration, suggests Fei, including the applicable arbitration and procedural laws, supervisory courts, and pools of counsel and arbitrators. The change in these elements, therefore, could possibly change the outcome of the case.

Similarly, the new Rules allow CIETAC to designate a language of proceedings other than the Chinese absent party agreement. In the past, Chinese was the default language, which had severely restricted the parties’ choice of arbitrators to a mainly domestic pool of individuals and a limited number of foreign arbitrators who were fluent in Chinese, according to Yeoh.

“The choice of language will significantly impact on the pool of counsel and arbitrators available to the parties. If foreign counsels and arbitrators were appointed, the approach of the tribunal to apply relevant rules may become more flexible, which may eventually lead to a different arbitral award,” says Fei. While appointing arbitrators in the absence of party agreement, the nationality is explicitly listed in the new Rules as a factor to be taken into account. However, the presiding or sole arbitrator does not necessarily have to be of a different nationality from the parties.

This consideration of a nationality issue suggests the possibility that CIETAC may consider expanding its panel to include more arbitrators with international backgrounds and experiences. Being expected to deal with arbitrations involving more international elements, CIETAC needs to either recruit more foreign arbitrators or improve its domestic arbitrators’ relevant capabilities.

“CIETAC arbitrators may need to improve their foreign language proficiency and knowledge on foreign laws,” says Fei. “They will be expected to be more familiar with the practice of international arbitrations, and have the ability to apply procedural law as chosen by the parties while conducting the arbitration.”

It goes in line with the geographical and lingual expansion indicated by other articles of the Rules. If the English-language and foreign seats become more and more frequent in its future practice, CIETAC would see itself

ASIAN LEGAL BUSINESS MAY 2012

become truly internationalised. Given the current legal and practical restrictions in China, Fei predicts that few CIETAC arbitrations would be determined at a seat outside China, and that very few foreign arbitrators would be appointed in the absence of the parties’ agreement.

Interim measures One of the major topics in the new Rules is the provision of interim measures. Outside mainland China, interim measures ordered by an arbitral tribunal can take one of many forms, says Terence Wong, a Shanghai-based consultant at Hogan Lovells. For example, he men-

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tions the disposal of perishable goods, the prohibition against the distribution of profits before the determination of disputes among joint venture parties, and the prohibition against a party from infringing intellectual property rights.

However, PRC law currently does not empower the arbitral tribunal to grant interim measures. Such orders can be given by Chinese courts alone, and in the case of arbitration proceedings, such measures could be conservatory only, either through the preservation of property or by protection of evidence. CIETAC has to convey the parties’ requests for such measures to the competent Chinese court, according to Rogers of Fulbright & Jaworski.

While the new Rules remain unchanged in relation to the request for such measures in China, it allows the tribunal to order any necessary interim measures in accordance with the applicable law. Since arbitration can be administered outside mainland China, the tribunal would have wider power.

“This change allows CIETAC tribunals sitting outside of mainland China to make interim orders - including orders for specific performance and orders in relation to the provision of security - where permitted under local law,” says Rogers. “Questions remain over the enforceability of any such orders in China. It will also be interesting to see whether tribunals in China-seated CIETAC arbitrations attempt to make non-conservatory interim orders.”

Notably, the PRC Civil Procedural Law is currently under revision and the revised version is expected to broaden the courts’ power to issue mandatory and prohibitory injunctions, Fei adds.

All cases that require swift action will benefit from interim measures, including the international sale of goods, joint ventures, and intellectual property disputes among others, says Wong.

REUTERS/Toby Melville

Efficiency The new Rules seek to increase efficiency in the conduct of CIETAC arbitration, says Yeoh.

For instance, they provide a consolidation mechanism for separate arbitrations to be consolidated into a single one with the consent of all the parties. Similar procedures have already been introduced by ICC and a few other arbitration institutions.

“It is because the contracts are getting increasingly complex,” says Yeoh. “It is not just party A contracting with party B for the supply of goods. A 100 years ago, it might have been that case, but not now. These days we have a lot of M&A transactions involving multiple parties which require them to enter into a number of related agreements at the same time.”

The dilemma lies in the fact that the right of arbitration is based on a contract. Under the overcomplicated modern contracting structure,

cietac arbitration

17

“Although the new Rules provide more flexibility to the parties, it remains to be tested how these new provisions will be implemented by CIETAC in practice.”

Jessica Fei, Herbert Smith

“the whole idea of consolidation is to try to bring the proceedings involving different parts of the dispute together, so that they are resolved in a more coordinated, effective, efficient and less costly way,” says Yeoh.

Meanwhile, the increase of the threshold for the summary procedure from RMB 500,000 to RMB 2 million, will help improve the efficiency of CIETAC arbitration cases and lower the cost to parties, says Fei. The summary procedure requires the arbitration to be conducted under a more compact timetable. As a result of the amendment, not only will the arbitral award involving a much larger amount of money be handed down more quickly, but the cases whose claims or counterclaims which are being changed to exceed the threshold amount will also now have the default position to continue the summary procedure. In other words, more CIETAC arbitrations will be conducted in an expedited manner under the amendment.

Additionally, the exchange of documents between the arbitral tribunal and parties will now not need to be routed through the CIETAC secretariat any longer. The 2012 rules now allow parties to directly exchange correspondence and documents by e-mail, copying CIETAC and the tribunal in the process and then following up with hard copies by courier.

“This is one of the most useful revisions as it is so much more efficient,” says Qin. Flexibility The new Rules also introduce greater flexibility for the parties to exercise party autonomy in deciding how an arbitration can be conducted, suggests So. They make explicit the power of CIETAC to administer arbitrations conducted in accordance with the arbitration rules of other arbitration institutions. This effectively means parties may choose a set of arbitration rules, other than the CIETAC arbitration rules,

18

cietac arbitration to govern the arbitration while appointing CIETAC as the administrator of the arbitration.

“This is also intended to broaden the scope of CIETAC’s role,” says Rogers. However, he cautions that the assumption by one arbitration institution of the power to administer an arbitration under the rules of another institution is controversial. This was reflected by the ICC’s amendment to its rules to clarify that it alone is authorised to administer arbitrations conducted under its rules. “Parties considering agreeing to CIETAC administered arbitration conducted under the rules of another institution should consider carefully whether there is any procedural advantage to be gained from doing so,” he says.

Moreover, with the parties’ agreement, CIETAC can now conduct mediation(s) during the arbitration process if the parties do not wish to get involved the tribunal. “This

“It is a welcome change in the sense that the revised rules improve on some of the shortcomings of the previous version.

But I think given the option most foreign investors will still prefer using an international arbitration institution outside of mainland china.”

Friven Yeoh, O’Melveny & Myers gives the parties maximum flexibility to adopt a mediation process with which they are comfortable, with a view to achieving a mutually agreeable settlement wherever possible,” says Fei. Qin believes that the increase of party autonomy and discretion, as well as the empowerment of the tribunal, are the most meaningful changes to the Rules.

“Generally, we can see a trend towards more robust processes and strengthening of the role of the institution and the arbitral panel…CIETAC over the years has been adopting more and more rules in line with other international arbitration organisations,” says Utterback.

Impartiality It is quite common for arbitrators to suggest that parties try to reach a conciliation through a mediation process. But there has been an

ASIAN LEGAL BUSINESS MAY 2012

issue with the previous CIETAC rules with respect to their allowing arbitral tribunal members to conduct mediation during the arbitration. According to So, this naturally raised the question of impartiality, especially during the enforcement of the award.

“If the arbitrator also acts as a mediator, there is concern that confidential or even unrelated information provided during private caucus between one party and the arbitrator acting as mediator, may cloud the judgement of the arbitrator who has to rule on the dispute if the mediation fails,” Yeoh explains. Theoretically, the roles of the mediator and the arbitrator would actually clash. This is because the mediator does not impose his or her decision on the parties, whereas the arbitrator’s role is to probe into the case and make a binding award on the parties’ dispute to see who is right and who is wrong.

To address that concern, CIETAC has now allowed the parties to express their wishes if they do not want the same arbitrator to act as the mediator. CIETAC will now also try to find other people who can mediate in the dispute. This way, the parties will be able to explore possible settlement without the involvement of any arbitrator in the tribunal.

Although the new Rules still allow the arbitral tribunal to conduct mediations, it would happen only with the agreement of the parties.

Under the new Rules, it is CIETAC rather than the tribunal that has express power to assist the parties to conciliate, in which case any consent award given by the tribunal would be based on the conciliation through CIETAC rather than the tribunal. Thus, the consent award cannot be challenged on the basis of the impartiality of the tribunal being affected in the conciliation process, suggests Wong. Speaking in a similar vein, So concludes by saying: “Mediation conducted by the arbitral tribunal is very likely to decline.”

Internal disputes On the whole, the new Rules have been welcomed by legal practitioners and are being viewed as a positive step to modernise CIETAC procedures.

It is interesting to note that they bring several provisions in line with international best practices. “The changes of the CIETAC arbitration rules are not just procedural changes. It reflects the mindset of CIETAC aiming to become more user-friendly to international users, and to expand its user base beyond mainland China and Asia,” says So. However, lawyers do not predict any dramatic change in terms of the number of cases going to CIETAC in the near future since it is already where the largest number of China-related cases are submitted.

Despite positive intentions, there will be a gradual implementation process for the new Rules. Only when this has happened can the full extent of the impact be determined. “We have to wait and see how the Rules are actually being applied in practice,” says Qin. However, the new Rules will still have limitations. One key omission is the appointment of an emergency arbitrator provision found in the SIAC and ICC rules. Such a provision enables parties to appoint an emergency arbitrator solely for the purposes of obtaining urgent interim measures before the arbitral tribunal is constituted, according to Yeoh.

“Parties considering CIETAC arbitration should, nevertheless, be aware of some of the idiosyncratic features of Chinese arbitration procedure, which is traditionally short form, offering little opportunity for witness examination or cross examination and inquisitorial in nature, led by the tribunal rather than the parties,” says Rogers.

The most urgent issue for CIETAC, though, is the internal dispute with its sub-commissions who are unhappy about the new Rules. The conflict became public on April 30, when CIETAC’s Shanghai office revealed its discontent with the new Rules and announced its intention of separating from its parent body.

(Additional reporting by Artemisia Ng)

BRIEFS

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19

REUTERS

China’s yuan is at equilibrium level: People’s Daily

By Koh Gui Qing and Richard Borsuk

REUTERS/Petar Kujundzic

BEIJING: China’s yuan is at an equilibrium against the dollar and even high in some respects, the country’s main official newspaper said on May 4 in remarks that could sow further tension in talks between Beijing and Washington.

The People’s Daily, the mouthpiece newspaper of the ruling Communist Party, said differences in labour productivity and operating costs in the world’s two biggest economies show the yuan, or the renminbi, is reasonably valued versus the dollar.

The article came just a day after U.S. Treasury Secretary Timothy Geithner, in China with Secretary of State Hillary Clinton for annual talks with Beijing, repeated calls for China to have a stronger yuan to create room for more flexible policy.

“At the present stage, on the basis of value, and balanced supply and demand, the renminbi exchange rate is basically at a reasonable equilibrium,” said the article, written for the paper by the Chinese Academy of Social Sciences, the country’s top think tank.

It argued there was no need for the renminbi to rise further, especially since comparisons of labour, raw material and what the article called “environmental costs” - which were not

explained - show they are much lower in China than the United States.

“If the renminbi exchange rate is measured against the ‘three lows’ in Chinese costs, it will be high at present,” the newspaper said.

Labour productivity comparisons also showed the yuan was fairly valued, the People’s Daily said, adding that rises in the value of the Chinese currency between 2008 and 2010 outstripped the country’s productivity gains in that period.

It said U.S. productivity was 5.4 times that of China in 2010, slightly under 6.1 times in 2008, and 12.6 times as high in 2000.

The yuan rose 10.5 percent against the dollar between 2008 and 2010, and has climbed around 31 percent in nominal terms since a landmark revaluation in 2005.

LIGHTNING ROD The yuan’s value has been a lightning rod in Sino-U.S. ties, with some in Washington accusing Beijing of deliberately holding down the currency to gain export advantage.

China denies the allegation and says it too wants a currency whose value is decided by the market, but insists any changes to its foreign exchange policy must be gradual.

It took a milestone step of widening the yuan’s daily trading band last month to let the currency rise or fall 1 percent from a mid-point set by the central bank, compared to a band of plus or minus 0.5 percent before.

But even with incremental reforms, China still keeps the yuan on a tight leash, in part to protect its vast export industry, a huge employer in the country.

Although the latest comments in the People’s Daily may not have been authorized by Chinese leaders, they likely reflect the thinking in Beijing and demonstrate the tensions between the world’s two biggest economies on a key issue.

The annual Strategic and Economic Dialogue talks between the U.S. and China have already been upstaged this year by a row over a Chinese dissident who sought refuge at the U.S. embassy after escaping 19 months of house arrest.

The incident, which exposed uncomfortable differences on human rights between the two powers, escalated on May 3 when the blind dissident, Chen Guangcheng, made a dramatic plea for help to a U.S. congressional hearing from his hospital bed in Beijing.

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IN-HOUSE PERSPECTIVE

ASIAN LEGAL BUSINESS MAY 2012

FULLY

CHARGED SHANGHAI ELECTRIC’S CHIEF LEGAL OFFICER, TONG LIPING, CHATS WITH LIU ZHEN ABOUT HER TEAM’S SUCCESSES IN OUTBOUND INVESTMENTS, NURTURING TALENT FROM THE ENTRY LEVEL, AND HOW INTEGRITY MATTERS MORE THAN SKILLS.

W

ith rich experience in corporate legal work, Tong Liping now serves as the chief legal officer (CLO) and director of the legal department of Shanghai Electric, where she started her professional career in 1993.

Prior to being appointed the leader of the Legal Department in 2008, she worked as the director of the Legal and Audit Office of SEPPG from 2004 to 2009, was also the acting deputy director of the legal department of Shanghai Electric from 2008 to 2009, and was the director of the Centre of Legal Affairs of Shanghai Electric from 2006 to 2008.

Specialising in economic law and international law, Tong is also a qualified corporate lawyer and an arbitrator at the China International Economic and Trade Arbitration Commission (CIETAC) and the Shanghai Arbitration Commission (SAC). She graduated from Fudan University with an LLM degree.

ALB: Please describe your role and function.

TL: I am the chief legal officer and general manager of the legal department at the Shanghai Electric Group. Our department is in charge of the integrated management of all types of legal affairs. We participate in decision making, advise on legal questions, examine compliance conduct, deal with litigation and non-litigation cases, evaluate contracts, build the organisational structure, nurture talents and promote law knowledge. Generally, my task is to establish and maintain the legal risk prevention and control system within the whole group, and lead a professional internal team of lawyers to perform our duties.

ALB: How would you describe the strategy of your team?

TL: At the moment, my team has over 80 full time legal professionals, which is relatively quite a large team for a “non-central SOE”. The strategy of my team is to develop a functional line into an organic structure and mechanism, which is fully integrated into the overall operational and management system of the company as an indispensable part, a lookout for risks, and a gatekeeper of conduct. We have been working hard to create and build up such a system.

ALB: What is your functional line like at the moment?

TL: Our group is a three-level structure. First is the headquarters, second are the subsidiary industrial groups and listing companies, and third

are the manufacturing plants.

Accordingly, the structure of the legal team is at first the vertical supervision over the legal affairs of subsidiary groups by the legal department at the headquarters. But different subsidiaries have different situations.

For some of the subsidiary groups, they are big enough to set up their own legal team and functioning system. There is internal management within these teams too. They deploy their own representatives to look after the legal issues of the third-level plants below them.

These teams work closely with the business and operational management of their own units, and report to the executives of their group. However, as part of the legal team of the group, they have to report to me and follow my instructions as well. So it is basically a system of dual leadership.

For other smaller subsidiary groups, we directly send representatives from the legal department and have stronger control.

Basically, our system differs from group to group in order to keep in line with a specific situation.

ALB: How do you ensure effective management over your team branches in subsidiaries?

TL: Within the in-house team, we have strict rules and a code of practices to strengthen the management of the sub-teams and guarantee the quality of performance at all levels. For example, we have detailed regulations and a process on case management and on issuing legal opinions. According to such binding rules, the legal department is constantly informed about any major legal events and has

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IN-HOUSE PERSPECTIVE

21

REUTERS/Stringer

“WE WILL STRATEGICALLY SEEK NEW GROWTH POINTS, SUCH AS OVERSEAS INVESTMENT AND PROJECTS. BUT THE TRADITIONAL BUSINESS WILL REMAIN OUR ADVANTAGE IN THE MARKET AND OUR CORE COMPETITIVENESS.” tong liping, Shanghai Electric

the power to directly step in whenever necessary, or lead a coordinated action to solve problems.

ALB: What kind of relationship and function do the legal team and the other departments share?

TL: Horizontally, we divide the responsibility like this: for a non-litigation issue, it is usually headed by another department that is most relevant.

But we do participate actively. We provide in-depth assistance relating to the leading department’s business and management. When it comes to a litigation case, it is of course the time for my team to take the lead, and other departments cooperate.

In fact, a lot of work is done together by my team and other departments. We join forces for jobs such as contract review, training, promotion campaigns, team building, and company regulation drafting. We take part in other departments’ affairs to quite a degree, which also meets the requirements for SOE in-house legal teams as raised by the SASAC – “precaution beforehand; control concurrently; and remediate afterwards”. We watch out for the company’s issues throughout the entire process.

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IN-HOUSE PERSPECTIVE

ASIAN LEGAL BUSINESS MAY 2012

“I always stress that persistence and patience are the keys to being an inhouse counsel, since we are not yet a first tier department in the company.

Persistence means one needs to keep faith in the value of the job, and keep going towards the goal.”

ALB: What challenges does your in-house team face?

TL: The first challenge is to make the responsibilities and the position of the in-house legal counsel clear - not just to ourselves - but more importantly to make our colleagues who are on the same project from other departments know and understand what we are doing, and what function we perform.

Hence, the second challenge is to communicate with other people in the company. We are unable to function unless we communicate properly. We have to win support from the directors, the executives, and other departments through our communication. Our main job is to provide advice and have it accepted. Our other jobs, such as judging contracts and handling legal cases, also demand skillful communication which must be based on our professional expertise, competence and persuasiveness.

The third challenge is to master legal practices while obtaining an in-depth understanding of the company. This might also be the biggest difference between the in-house counsels and private practice lawyers.

They know things more generally and universally, but we keep our feet on a single and specific company. We know every aspect of the company’s business; from the overall picture to trivial details. Otherwise, we would never be able to fulfill our role, which is to find out potential risks to prevent actual damage.

Another challenge is how we collect comprehensive and precise information about the issues we are looking into. Information collection and processing is very important, yet complicated and difficult.

ALB: How do you guarantee the quality of your in-house legal services?

TL: Fundamentally, the quality is guaranteed by the system institution.

The company has basic principles and regulations regarding questions such as the stages of legal intervention, the processing of documents, the forming of legal opinions etc. We also take initiatives to supplement the possible gaps in the regulations.

Also, within our in-house team, we produce our own work guidelines and archives like checkpoints for certain types of projects, document lists in different phases, contract samples and cases archives. With the accumulation of information, we can make sure our job meets the standard.

In addition, we have set up some project groups to study the legal issues about those key businesses of our company. These groups study relevant law and policies, hold discussions and open seminars, and make risk analyses. We have groups for corporate, restructuring, IP, infrastructure construction and so on.

ALB: What are some of the key energy trends you are witnessing in China? How do you think they will they affect your company?

TL: Currently, the state policies of tightening investment have slowed down many projects. It has more or less some impact on us. But as one of the fundamental industries, our energy equipment manufacturing would perform relatively better than many other industries, since there isn’t as much of a bubble here as in some sectors. When the bubbles

burst they are the ones that get hurt, not us.

Furthermore, the energy industry will always be needed to a certain extend as it is a basic demand of all sectors. I think for a significant period of time, this would remain the case.

Anyway, we will strategically seek new growth points, such as overseas investment and projects. But the traditional business will remain our advantage in the market and our core competitiveness.

ALB: How has the in-house team at Shanghai Electric responded to issues or challenges that have come up in recent years?

TL: The biggest challenges were the ones we encountered while “going abroad”. As a large SOE, we have been increasingly targeting overseas development. Our in-house team has also advised on, and directly taken part in our overseas moves like cross border M&As, infrastructure projects, overseas asset management, and even the opening and running of branches in a foreign country.

For example, our company is cautious about investment overseas. We launched a subsidiary in India this year as well as in Vietnam, both of which are major markets for us. During the preparatory process, besides the project

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IN-HOUSE PERSPECTIVE

23

will be Shanghai Electric’s main challenges, and how will the inhouse team play a role in addressing these issues?

TL: The in-house team has little say in deciding strategic moves, such as which industry to enter or what country to invest in. However, we do play a role of assistance to “protect and escort” an already-made strategic move from the perspective of practical execution, constantly discovering and resolving possible problems while pushing the plan forward.

In the near future, I think Shanghai Electric will continue to focus on international cooperation. Either we will purchase assets overseas or establish cross border partnerships with international corporations. The methods vary, but the tendency is getting stronger and stronger. This will occupy most of our attention.

We also have to help the company deal with the problems left by our past restructuring. We have a role to play in the systematic integration and structural improvement to reinforce our core competitiveness. We can also help with the corporate governance and operation refining, as well as cost reduction, client management and supply chain building.

ALB: Can you provide an example of your team’s important contribution to the company’s success?

TL: One example of the in-house team’s remarkable input is the creation of a new contracting model we developed in India. Shanghai Electric invented the BTG (Boiler, Turbine and Generator) model in which we divide the outsourcing part of the project with the owner, which largely reduced our risk as a foreign contractor. We have successfully completed over 20 projects in India, which proves that the BTG model is an effective way of reducing the contract liability risk. During the designing of the model, our in-house counsel provided analysis on where the potential contract liability risks lay and made direct suggestions.

REUTERS/Aly Song

feasibility analysis, our team asked the local lawyers to issue legal opinions to state the legal requirements of an on-the-ground branch and all its potential risks. We carefully considered the nature of the company and how a subsidiary would be structured according to the laws of the target country, followed by the authorisation approval.

The challenges here firstly were that we had to get used to the international rules and laws as quickly as possible. This venture meant some risk, which required our judgment and control. The tricky part was that we had to perfectly understand all the risks, but our development could not be stopped by them.

Balancing this was quite a test for us.

Meanwhile, although we could seek help from external or foreign lawyers, another key challenge was that we had to be able to choose the best external assistance providers and know how to communicate with them. I needed to know which questions to ask and then judge whether the answer addressed our concerns.

We had to analyse the suggestions and form an internal opinion to present to our executives, which is never an easy job.

ALB: In the coming year, what do you think

ALB: What do you look for while hiring external counsel?

TL: For many important cases and deals, especially the cross border ones, we need help from external lawyers. External lawyers and inhouse counsel should supplement one another.

When choosing external counsel, cooperativeness and adaptability are important. We consider how much we understand mutually and match culturally. Price is an issue, but I never take it as one of the key criteria. Actually, I do not agree that we should pick a cheap one. What I value are which person the firm sends to us, whether he or she fits our project, how good he or she is professionally, how dedicated he or she is, and whether he or she values our business.

I took a reforming step after becoming the head of the legal team in that I put together our long-time Chinese external counsel in an “external lawyer pool”. Normally, we only hire counsel from within the pool for regular and major projects. It hugely increases the efficiency of choosing, and also guarantees the basic quality of lawyers in each case. But when the project is too unique to find a proper lawyer from the pool, we are also flexible enough to seek one from outside with special approvals.

We evaluate and make adjustments to the members within the pool each year to make sure they still meet our increasingly high standards.

The outcome of their cases and the level of satisfaction of their services are examined.

At the moment, the pool members are all law firms. In each of them, we have a designated contact. What we require is that they offer us the best resources they have. Otherwise they are out next year. Those big firms have different practice teams so that we can always pick the proper lawyer for different types of deals.

For the different sizes and difficulty of deals, we need different levels of lawyers. We should not waste a senior partner’s time on a minor case, nor risk our important business in the hand of a first-year associate.

Therefore, we need our contacts to be clear enough about our busi-

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IN-HOUSE PERSPECTIVE

ness. Also there is a certain amount of competition among them.

Representing Shanghai Electric is not only a fee-earning business, but also an honour. Being a long-term counsel of ours could greatly raise their profile within the legal community.

At the moment, we have 12 firms in the pool from across the country.

We do not have international firms in the pool now because the situation is much more complicated. But some first class international firms have good relationships with us and we cooperate in some projects together. For cross border deals, usually these cases are so big that we make decisions on a case-by-case basis.

ALB: What is the best advice you have ever received from an external lawyer?

TL: All our long-term external counsel are competent, dedicated and trustworthy. The lawyers who acted for us in all our major M&A deals helped us eliminate possible risks, and provided valuable suggestions on the deal structure design.

ALB: What challenges do you or your teammates personally face in the role of in-house?

TL: Legal is all about dealing with troubles and conflicts. We see flaws, reveal risks and settle disputes. Dare we say the truth? It is a challenge.

It is very difficult not just to speak truly, but to also say it appropriately.

To combine adherence principles and skills of persuasiveness requires great effort.

I always stress that persistence and patience are the key to being an in-house counsel, since we are not yet a first tier department in the company. Persistence means one needs to keep faith in the value of the job, and keep going towards the goal. Moreover, an in-house counsel needs to resist strong temptations, given the fact that a first class legal professional is in high demand by international law firms and also multinational corporations. To do the in-house job well, one has to be patient, keep a calm mind and wait for the time to come. At the SOEs, once the time comes, the opportunity of growth is no less than anywhere else.

ALB: Given such a reality, how do you attract and keep talent in your team?

TL: Firstly, it is thanks to our unique corporate culture and the cohesion of the team. Although we are market-driven, we have kept the humanitarian heritage of the socialist SOE tradition. We make our employees feel that they share ownership of the company. A counsel in my team once told me that he had enjoyed the feeling of “serving the people”, and that working for state interest makes people proud. Working for the multinationals might only challenge one’s identity rather than satisfying it, despite some higher pay. There, it is also likely that counsel will hit the “glass ceiling” being a non-native. But in our SOEs, as long as you are competent and patient, there isn’t any actual ceiling.

Another fact is that we are doing a worthy job and having a career in it is promising. We are first class in our sector, and are developing very well. We have a stage big enough for the most ambitious performers.

The most able ones will have their chances. I always try to let my team know that they will ascend higher as long as they do their job well.

Plus, we nurture talent. In multinationals, the practices are narrowly divided and people are highly specialised. But we prefer to cultivate the all-round ability of people, and make them fully developed. My team has been investing hugely in the training of young people over the past recent couple of years. We are now sending good young counsel to our overseas branches to enrich their experience, something that used to be an exclusive privilege held by multinationals and international law firms. We also cooperate with top law schools to train our counsel to-

ASIAN LEGAL BUSINESS MAY 2012

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gether with company executives on advanced law knowledge. We book spots for our counsel at senior management and negotiation training sessions too. Together, we make our youngsters feel that they are being cared for, are being well trained, and are developing.

In terms of payment, we are also working on that. Frankly speaking, there is still a gap. But at least we can guarantee a basic level.

I believe the environment and management skills are also important. We pay attention to these elements too.

ALB: When recruiting for the in-house team, what qualities are most valuable in a candidate?

TL: The quality of comprehensiveness. As in-house counsel have to work independently on many cases, besides legal knowledge, the candidates should have the ability to deal with disputes and problems. Management and coordination skills are important for an in-house lawyer.

It is hard to find people who are already that good in the human resources market. We have to train the young graduates ourselves, and from that we may be able to expect a higher

IN-HOUSE PERSPECTIVE

25

by making rules. Certainly, I participate in some major projects of the company and contribute legal advice. But the daily legal affairs are looked after by my team, which has been rapidly growing big and strong over the past decade.

There is the saying that “one flower does not make it spring”. I cannot do everything myself. The joint force of teamwork is necessary. What I should consider is how to allocate the right people to the right job, and whether I have sufficient resources to complete the given task.

ALB: What was your career path which led to your current role like?

TL: I joined Shanghai Electric in 1993 right after I graduated from the Law School of Fudan University. Generally speaking, for the past years, I have been working in law. I started from the very basic level doing business and contract management. Later, I took charge of the legal and auditing job in one of the big subsidiaries – the Power Plant Group. Over these years, our company went through several major restructurings.

My current department, the legal department in the headquarters of the Shanghai Electric Group, was officially set up in 2008.

ALB: How has your role evolved over the past years?

TL: Starting from the lower level gradually to the current position, I knew the company and the business from the very basics and got to understand the thoughts of people at all levels. Such advantages have helped me the whole time. However, I have got my shortcomings too.

As the company grows quickly, the demand for my role’s performance is also increasing. I have to open up myself in accordance to this growth, and keep learning in every aspect; from my professional capabilities to

“MY GREATEST IMPROVEMENT SO FAR IS THAT I know what the requirements of the company are and what i can do. i know when i should insist and when i should give up... I HAVE BEEN GIVEN GREAT OPPORTUNITIES AND COMPREHENSIVE TRAINING. I HAVE BEEN WORKING WITH GLOBAL FIRST CLASS COMPANIES SINCE THE BEGINNING, AND HAVE LEARNED SO MUCH FROM OUR PARTNERS AS WELL AS FROM OUR COMPETITORS.”

REUTERS/Amit Dave

loyalty level from them. Hence, the learning ability is also quite important. We also prefer candidates with such capabilities as proven by their academic performance as law majors.

Last but not least, I am also looking for candidates who have personalities demonstrating honesty and integrity. Skills can be attained, but morals and ethics are more essential.

In general, I want the candidates to be strong in professional skills as well as personal integrity.

ALB: What does a typical day for you look like?

TL: As the CLO, I do not get too deeply involved in detailed issues any more. Instead, my concern is in the design of the overall structure and the efficient operation of the team. I care about the issues relating to the entire system.

I design it, adjust it, revise it, and regulate it

my managing skills to my strategic vision, etc.

My greatest improvement so far is that I know what the requirements of the company are and what I can do. I know when I should insist and when I should give up. I think if you are able to do every single thing carefully with devotion, you will succeed. It would not have happened without the company’s training and trust. I have been given great opportunities and comprehensive training. I have been working with global first class companies since the beginning, and have learned so much from our partners as well as from our competitors.

I also sometimes work as an arbitrator for the CIETAC and the SAC. My view also broadens when I study cases when deciding on arbitration awards.

ALB: If you were not a lawyer, what profession would you be in?

TL: I have no idea what I would be if I was not a lawyer at Shanghai Electric. I have been doing it for so many years, and after all these years I could not give up my current career easily. Generally speaking, however, a person who is able to work in law is able to work in any area. If I was not an in-house counsel, perhaps I would possibly be a private practice lawyer or an academic.

26

china law awards

ASIAN LEGAL BUSINESS may 2012

Best of the Best

DEAL AWARDS CATEGORIES

FIRM AWARDS CATEGORIES

Award

Winner

Award

Winner

Synmax Translation Award Debt Market Deal of the Year

CNOOC bond offering

Banking Law Firm of the Year

Jun He

Corporate Citizen Law Firm of the Year

Global

Energy and Resources Law Firm of the Year

Vinson & Elkins

Synmax Translation Award Equity Market Deal of the Year

Hutchison Port Holdings Trust Singapore IPO and listing on SGX

Insolvency and Restructuring Law Firm of the Year

King & Wood Mallesons

Industrial and Commercial Bank of China Acquisition of 80 percent of Standard Bank Argentina S.A.

International Arbitration Law Firm of the Year

Baker & McKenzie

Westlaw China Award M&A Deal of the Year

IP Law Firm of the Year

CCPIT

Litigation Law Firm of the Year

Jun He

Offshore Law Firm of the Year

Maples and Calder

Private Equity Law Firm of the Year

Fangda Partners

Real Estate Law Firm of the Year

Zhong Lun

Rising Law Firm of the Year

Tiantong & Partners

Shipping Law Firm of the Year

Global

Tax Law Firm of the Year

Jun He

West China Law Firm of the Year

Tahota

North East China Law Firm of the Year

Deheng Law Firm

YRD Region Law Firm of the Year

Zhejiang T&C

Tianjin Law Firm of the Year

Winners

Guangdong Law Firm of the Year

Guangda

Shanghai Law Firm of the Year

Fangda Partners

Beijing Law Firm of the Year

King & Wood Mallesons

TMT Deal of the Year

China Dealmaker of the Year

Disney joint venture for development of Shanghai Disneyland

Davis Polk & Wardwell Eugene Gregor

IN-HOUSE AWARDS CATEGORIES Award Banking and Financial Services In-House Team of the Year

Investment Bank In-House Team of the Year

Foreign Company In-House Team of the Year

Winner Bank of China

Morgan Stanley

Microsoft China

Chinese Public Company InHouse Team of the Year

Ping An Insurance

Jun He Law Offices Award SOE In-House Team of the Year

China Telecom

Hong Kong Law Firm of the Year

Deacons

Japanese Law Firm of the Year

Anderson Mori and Tomotsune

Korean Law Firm of the Year

Bae, Kim & Lee

Singapore Law Firm of the Year

WongPartnership

Managing Partner of the Year

King & Wood Mallesons Wang Ling

China Legal Career Award International Law Firm of the Year

Clifford Chance

China Law Firm of the Year

Jun He

ALB is delighted to announce the official list of winners for ALB China Law Awards 2012, held in late March at the Park Hyatt, Beijing.

As evidenced by the breadth of the deals shortlists, the Awards celebrated an extremely robust year for lawyers in China.

The 9th annual event was presided over by Guest of Honour Dr. Zhenmin Wang – Professor and Dean at Tsinghua University School of Law and was attended by more than 250 senior inhouse counsel, solicitors, and CEOs. Jun He claimed five awards for its exclusive practices including Banking, Litigation and Tax, as well as the coveted China Law Firm of the Year. King & Wood Mallesons was awarded for its role on one winning deal, in addition to taking home the Insolvency and Restructuring Law Firm of the Year and Beijing Law Firm of the Year awards.

In addition to recognising the collective talents of law firms and in-house legal teams, the ALB China Law Awards also singled-out China’s leading individual talents. Eugene Gregor of Davis Polk & Wardwell was honoured as the China Dealmaker of the Year, while Wang Ling of King & Wood Mallesons was awarded the Managing Partner of the Year accolade.

Five firms took home two awards each on the evening including Baker & McKenzie, Davis Polk & Wardwell, Fangda Partners, Global and Zhong Lun. ALB ushered in the New Year with a redesigned and repurposed magazine and website.

Our refined new look compliments the reliable, accurate and insightful news, analysis and commentary delivered by a new team of professional legal journalists. ALB is taking full advantage of being a part of Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals.

ALB wishes to thank the hundreds of legal and industry professionals who enthusiastically helped the Awards by assisting with the months of research into the industry that produced the final winners.

china law awards

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

27

DEAL AWARDS CATEGORIES Synmax Translation Award Debt Market Deal of the Year

Synmax Translation Award Equity Market Deal of the Year

(L-R) Eugene Gregor, Davis Polk & Wardwell; Christine Chen, JP Morgan; Sandy Xie, Synmax Translation; Zhan Yue, Commerce & Finance

(L-R) Richard Wang, Freshfields; Harry Du, King & Wood Mallesons; Matthias Voss, Allen & Overy; Han Ji, Jun He; Kevin Lu, Synmax Translation

Winner: CNOOC bond offering

Winner: Hutchison Port Holdings Trust Singapore IPO and listing on SGX

Firms: Commerce & Finance; Davis Polk & Wardwell; Herbert Smith; Walkers Banks: Bank of America Merrill Lynch; Barclays; BOCI Asia; Citi; Goldman Sachs; JP Morgan

Firms: Allen & Gledhill; Allen & Overy; Freshfields Bruckhaus Deringer; Jun He; King & Wood Mallesons

FINALISTS

• CITIC Securities Global Offering

• Prada Hong Kong IPO

• Hui Xian RMB REIT IPO

• Renren US IPO

• MGM China IPO

• Shanghai Pharma H-share IPO

• Baosteel dim sum bond offering

• New China Life Insurance Hong Kong IPO

• Sino-Ocean Land Share Placement

• Beijing Enterprises Water Group bond issue

• PICC Property & Casualty Company H-share simultaneous

FINALISTS • Chow Tai Fook Jewellery Group Hong Kong IPO

• Agile Property bond issue

rights issue

• China Eastern Airlines Dim Sum bond

Westlaw China Award M&A Deal of the Year

• China SCE offshore bond issue • CITIC Pacific Hong Kong bond issuance

FINALISTS • Affinity Equity Partners and Unitas Capital sale of Leader Har vest Power Technologies

• CNPC notes offering • ICBC International Securities

• AVIC acquisition of Teledyne Technologies Subsidiaries

• Country Garden notes offering

• Baring Private Equity Investment in Ambow Education

• Evergrande Real Estate Group high yield bonds and RMB

• Chemspec International privatisation

• China National Agrochemical acquisition of Makhteshim Agan

denominated bonds offerings

Industries

• Financing the acquisition of two leased aircraft within Tianjin

• China Resources Pharmaceutical Group - Beijing Pharmaceuti

Bonded Area

cal Group merge

• Fosun International High Yield bonds offering • Guangzhou R&F Properties high yield bonds offering • ICBC senior notes offering • Intime Department Store high yield dim sum bond • Longfor Properties high yield bonds offering • SDIC Huajing Power convertible bonds issue • Sinopec convertible bond issuance • State of Grid bond issue • Tencent Holdings senior notes offering

• China Three Gorges Corporation Buys EDP Stakes (L-R) Thomas Ng, Linklaters; Mr Brad Hildebrandt, Hildebrandt Institute

• Intel acquisition of Infineon Technologies AG Wireless Solutions Business

Winner: Industrial and Commercial Bank of China Acquisition of 80 percent of Standard Bank Argentina S.A. Firms: Fernandez Madero & Lombardi; Hope, Duggan & Silva; Jones Day; Linklaters Banks: Credit Suisse; ICBC International Accountant: Deloitte Touche Tohmatsu

• Kirin - China Resources joint venture • Pearson acquisition of Global Education & Technology Group • PepsiCo strategic alliance with Tingyi • Ping An Bank acquisition of Shenzhen Development Bank • Shanda Interactive Entertainment privitisation • Temasek further investment in China Construction Bank

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28

ASIAN LEGAL BUSINESS may 2012

China Dealmaker of the Year

TMT Deal of the Year

IN-HOUSE AWARDS CATEGORIES Banking and Financial Services In-house team of the year

(L-R) Jon Eichelberger, Baker & McKenzie; Zhu Maoyuan, Zhong Lun; Greg Liu, Paul Weiss

Winner: Disney joint venture for development of Shanghai Disneyland

Eugene Gregor, Davis Polk & Wardwell

Firms: Baker & McKenzie; Paul, Weiss; Zhong Lun

Winner: Davis Polk & Wardwell Eugene Gregor

FINALISTS • DST investment in 360Buy.com

FINALIsTS

• Ericsson purchase of Nortel Network multi service switch busi ness • France Telecom acquisition of Congo China Telecom from ZTE Corporation and Democratic Republic of Congo • JPMorgan Pre-IPO Investment in a PRC high-tech software developer state-owned company

• Baker & McKenzie - Marco Marazzi

• Dacheng - Hongji Qian • DLA Piper - Steven Liu • Fangben - Jin Chunqing

• Lagardère sale of its magazines businesss to Hearst Corporation

• Freshfields Bruckhaus Deringer - Melissa Thomas

• Motorola sale of its networks business to Nokia Siemens net-

• Han Kun - Yinshi Cao

works in Hong Kong and China

(L-R) Yang Jie, Bank of China; Melissa Thomas, Freshfields

• Clifford Chance - Tim Wang

• Linklaters - Thomas Ng

• Motorola spinoff of mobile device and home business

• Morrison & Foerster - Charles Chau

• Renren US IPO

• Paul, Weiss - Jack Lange

• Series A&B financings of XIU Holdings Limited

• Weil, Gotshal & Manges - Steven Xiang

• Shanghai Media Group acquisition and restructuring of SVA Information Industry • Siano Mobile patent litigation • Tencent - Groupon joint venture

Winner: Bank of China FINALISTS • • • • • • • • • •

Agricultural Bank of China Bank of America Merrill Lynch China CITIC Bank China Construction Bank China Development Bank ICBC JP Morgan New China Life Insurance Ping An Insurance Standard Chartered Bank

Investment Bank In-House Team of the Year

Foreign Company In-House Team of the Year

Chinese Public Company In-House Team of the Year

(L-R) Rocky T. Lee, Cadwalader, Wickersham & Taft; Gang Dong, Morgan Stanley

(L-R) Tim Cranton; Weidong Yu, Microsoft China

(L-R) Dr Wang Zhemin, Tsinghua University School of Law; Li Wei, Ping An Insurance

Winner: Morgan Stanley

Winner: Microsoft China

Winner: Ping An Insurance

FINALISTS

FINALISTS

FINALISTS

• Bank of America Merrill Lynch

• Alcatel-Lucent Shanghai Bell

• Alibaba.com

• CICC

• Caterpillar

• Beiqi Foton Motor

• CITIC Securities

• COSCO Pacific

• China Vanke

• JP Morgan

• Innovation (Beijing) Software Development

• UBS

• JP Morgan • Mary Kay (China) Cosmetics • Siemens China

China Law Awards 2012 Winner of Guangdong Law Firm of the Year With about 104 lawyers and totally 260 employees, Guangda is one of China’s leading law firms. Headquartered in Guangzhou, Guangda has branches in Shanghai, Beijing and Shenzhen. Guangda is also a founding member of the Sino-Global Law Alliance (SGLA) founded in September 2007, which connects highly regarded law firms across China.

Guangda provides comprehensive and integrated legal services, covering mainly corporate and securities, real estate and construction, international business, and litigation and arbitration.

Amongst others, Guangda was elected by the Ministry of Justice as one of China’s Ministerial-level Model Law Firms in October 2000. Guangda was also awarded by Guangzhou Municipal Bureau of Justice as one of the Top Ten Law Firms in Guangzhou in 2007. Moreover, Guangda consecutively won five awards of the Guangzhou Best Law Firm by Asia Legal Business since 2006 and the award of the Best Guangzhou Law Firm of the Year by respectively China Law and Practice, and Asian Legal Business.

Guangzhou Office - Headquarter Address: 27/F, Dongshan Plaza, 69 Xianlie Zhong Road, Guangzhou, P. R. China Post Code: 510095 Telephone: +86 20 8732 2669 Fax: +86 20 8732 2706 Email: info@gdlawyer.com

Beijing Office Address: 601, Office Tower C1, The Towers Oriental Plaza, No.1, East Chang An Avenue, Dong Cheng District, Beijing, P.R.China Post Code: 100738 Telephone: +86 10 8587 0068 Fax: +86 10 8587 0079 Email: gdbj@gdlawyer.com

Shanghai Office Address: Suite 802, Zhi Jun Tower, 1223 Xie Tu Road, Shanghai, P.R.China Post Code: 200032 Telephone: +86 21 5150 2576 Fax: +86 21 5150 2817 Email: gdsh@gdlawyer.com

Shenzhen Office Address: Room A, 6/F, Benyuan Building, No.6015, Shennan Road, Fu Tian District, Shenzhen, P. R. China Post Code: 518040 Telephone: +86 755 3336 2728 Fax: +86 755 3336 2729 Email: gdsz@gdlawyer.com

www.gdlawyer.com Guangda HP ad.indd 1

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ASIAN LEGAL BUSINESS may 2012

Jun He Law Offices Award SOE In-House Team of the Year

FIRM AWARDS CATEGORIES Banking Law Firm of the Year

Corporate Citizen Law Firm of the Year

(L-R) Xiao Wei, Jun He; Zhang Tianxu, China Telecom

Winner: China Telecom Dong Xiao, Jun He

FINALISTS

Winner: Global

• China Southern Power Grid • Chinalco

FINALISTS

• CNOOC

• • • • • •

• Datang Telecom Technology & Industry Group • New China Life Insurance • Zhejiang Materials Industry International

Energy and Resources law firm of the year

(L-R) Liu Jinrong, Global; Angela Yao, Thomson Reuters

Winner: Jun He

FINALISTS

Global Guantao King & Wood Mallesons Llinks Zhejiang L&H Zhong Lun

• • • • •

Beijing Yingke Deheng Law Firm Fangda Partners Grandall MWE China

IP Law Firm of the Year

International Arbitration Law Firm of the Year

Zhou Zhongqi, CCPIT (L-R) Jon Eichelberger; Marco Marazzi, Baker & McKenzie; Barry Yang, Ericsson (China)

Winner: CCPIT

Winner: Baker & McKenzie (L-R) Paul Deemer, Vinson & Elkins; Hong Yuwen, China National Aviation Fuel Group Corporation; Holly Warrington, Vinson & Elkins

FINALISTS FINALISTS • Allen & Overy

• Hogan Lovells

Winner: Vinson & Elkins

• Clifford Chance

• King & Wood Mallesons

• Fangda Partners

• Linklaters

FINALISTS

• Global

• O’Melveny & Myers

• GoldenGate Lawyers

• Pinsent Masons

• Allen & Overy

• Herbert Smith

• • • • • • •

An, Tian, Zhang & Partners Beijing Yingke Chang Tsi & Partners Fangda Partners Hofftern Jade & Fountain Jincheng Tongda & Neal

• • • • • •

Jun He King & Wood Mallesons Lifang & Partners Longan Run Ming Tahota

• Baker & McKenzie • Clifford Chance • Global

Insolvency & Restructuring law firm of the year

• Guantao

Winner: King & Wood Mallesons

• Herbert Smith • Jun He

FINALISTS

• King & Wood Mallesons

• DeHeng Law Offices • Fangda Partners

• Linklaters

• Guantao

• Shearman & Sterling

• Llinks

• White & Case

• W&H

Huang Tao, King & Wood Mallesons

天册律师事务所始创于1986年, 是中国知名的大型律师事务所 之一,综合实力连续多年排名浙 江省首位。核心服务领域为公司业务、国际投资、国际贸易、金融证券、房地产、 知识产权及民商事诉讼和仲裁，在上海设有分所。天册通过专业化分工，团队合作 模式，根据客户的各种需求，以天册律师的专业和技能帮助其价值目标的实现，在 专业法律服务领域的卓越表现广受业界首肯。

Since 1986, T&C has grown and become a full-service law firm with national prominence. Today, we are recognized nationally for our transactional and litigation practices, focusing in the areas of corporate law, cross-border transactions, banking and securities, real estate, intellectual property, civil litigation and alternative dispute resolution. Client success is foremost at T&C, for which we are able to deliver a broad scope of quality legal services required for both international and domestic clients. We pride in our team orientation approach to develop effective and efficient legal strategies and innovative solutions to our clients for their business value realization. 联系方式 Contact us: 电话 Tel:+86-571-87901111

传真 Fax:+86-571-87901500

邮箱 E-mail: tc@mail.hz.zj.cn

地址 Add: 浙江省杭州市杭大路1号黄龙世纪广场A座11楼 11/F Block A 1 Hangda Rd, Hangzhou, Zhejiang

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ASIAN LEGAL BUSINESS may 2012

Litigation Law Firm of the Year

Offshore Law Firm of the Year Winner: Maples and Calder FINALISTS • Appleby • Conyers Dill & Pearman • Ogier • Walkers

(L-R) Ye Xiaozhong, China Mobile; Kang Yi, Jun He

(L-R) Greg Knowles, Maples and Calder; Li Ling, State Grid International Development; Jenny Nip; Anthony Webster; Terence Ho, Maples and Calder

Winner: Jun He FINALISTS

Real Estate Law Firm of the Year

Shipping Law Firm of the Year

(L-R) Du Yilong, Beijing Gao Hua Securities; Zhu Maoyuan, Zhong Lun

Michael Yu, Global

• Chang Tsi & Partners • Fangda Partners • GoldenGate Lawyers • Grandall • Hofftern • Jade & Fountain • Jin Mao PRC Lawyers • King & Wood Mallesons • Llinks • Run Ming • Shanghai Kai-Rong • Tiantong & Partners

Private Equity Law Firm of the Year

Winner: Zhong Lun

Winner: Global

FINALISTS

FINALISTS

• AllBright Law Offices

• Jade & Fountain

• Beijing Yingke

• King & Wood Mallesons

• City Development

• SG & Co

• Dacheng

• Shanghai Kai-Rong

• Guantao • Jiangsu Dongheng

• Sloma & Co

• Jincheng Tongda & Neal

• Wang Jing & Co.

• King & Wood Mallesons

• Wincon

• Llinks (L-R) Brian Huang, Standard Chartered Bank (China); Michael Qi, Fangda Partners

Winner: Fangda Partners

• Tahota • Tianjin Goldenland • V&T • Zhonglun W&D

FINALISTS • Allen & Overy

• King & Wood Mallesons

• Baker & McKenzie

• Linklaters

• Clifford Chance

• Llinks

• Davis Polk & Wardwell

• MWE China

FINALISTS

• DeHeng Law Offices

• O’Melveny & Myers

• DHH

• DLA Piper

• Paul, Weiss

• FenXun

• Global

• Shearman & Sterling

• GoldenGate Lawyers

• Guangsheng & Partners

• Sheppard, Mullin, Richter &

• Hesen

• Guantao • Han Kun • Jun He

Hampton

Rising Law Firm of the Year

Winner: Tiantong & Partners

• Hofftern • Jade & Fountain • Run Ming • Shanghai Young-Ben • Tahota

(L-R) Jiang Yong and team, Tiantong & Partners; Yu Lemin, Sinochem Corporation

最佳中国上市公司法务组 Chinese Public Company In-house Team of the Year 中国平安是中国第一家集多元金融为一体的综合金融服务集团。作为行业的先锋与典范，中国平安始终坚持“守法”的经营理念，为 建设中国合法、合规性最高企业做出了不懈的努力。中国平安拥有300余名高素质的专业法律人员，在集团首席律师姚军的带领下，以“ 集中管控、分级授权”为原则，建立了涵盖公司保险、银行、投资、财富管理、知识产权、劳动人事等领域完善的法律风险管控体系。近 年来，平安法律系统凭借优秀的人才、完善的制度、优质的服务，始终走在理论与实践的最前沿，不断提升公司的法律风险管控水平，钻 研金融行业前沿法律课题，积极参与立法进程，为中国平安实现国际领先的综合金融“百年老店”的战略目标提供了强有力的支持。 Ping An is the first integrated financial services group in China. As an industry leader and role model, Ping An adheres to the business tenet of “abide by law” and is committed to building China’s best enterprise in terms of legal compliance. At present, there are more than 300 high-quality legal personnel working within Ping An group, led by Mr. Yao Jun, the Chief Legal Officer of Ping An. According to the principle of “Centralized control and hierarchical authorization”, a comprehensive legal risk control system has been established in Ping An, which covers the areas of insurance, banking, investment, fortune management, intellectual property and labor disputes. Drawing upon its excellent pool of legal talents, sound management system and high-quality services, the legal team of Ping An has always been at the forefront of theory and practice in recent years. It has made great efforts to improve professional capacities and legal risk management skills, research on the frontiers of legal development in the financial industry, and actively participate in the relevant legislative process, with a view to providing strong support for achieving Ping An’s strategic goal of becoming a leading international integrated financial “century-old shop”.

china law awards

34

Tax Law Firm of the Year

ASIAN LEGAL BUSINESS may 2012

West China Law Firm of the Year

North East China Law Firm of the Year

Dong Xiao, Jun He Cheng Shoutai, Tahota

Winner: Jun He

(L-R) Grace Ma, Deheng Law Firm; Jennifer Jia Chen, China Investment Corporation

Winner: Tahota FINALISTS

Winner: Deheng Law Firm

• Hwuason

FINALISTS

• King & Wood Mallesons

• Exceedon & Partners

FINALISTS

• Llinks

• Solton & Partners

• Dalian Zhiku

• MWE China

• Yunnan Ba Qian

• Qilu

• Shanghai ForTran

• Zhonghao

• Wang, Wu, Yang and Ma • Wincon

YRD Region Law Firm of the Year

Tianjin Law Firm of the Year

(L-R) Zhang Tianxu, China Telecom; Shen Hai Qiang, Zhejiang T&C

Guangdong Law Firm of the Year

(L-R) Simon Bai, Winners; Yvonne Cheung, ALB

Winner: Zhejiang T&C

(L-R) Jenny Zheng, UBS Securities; Ning Zhu; Guangda

Winner: Winners

Winner: Guangda

• High Mark

FINALISTS

FINALISTS

• Jiangsu Hengzhi

• Tianjin Changfeng

• China Commercial

• Jiangsu Jin Hui Ren

• Tianjin Goldenland

• City Development

FINALISTS

• Yongheng Partners

• Guangdong Deliang

• Zhejiang DOS

• Guangdong Kings

• Zhejiang L&H

• Guanghe

• Zhejiang Zeda

• Wang Jing & Co.

Shanghai Law Firm of the Year

FINALISTS

Beijing Law Firm of the Year

FINALISTS

• AllBright Law Offices

• Beijing Yingke

• City Development

• Chang Tsi & Partners

• Grandall

• Dacheng

• Jade & Fountain

• DeHeng Law Offices

• Jin Mao PRC Lawyers

• Global

• Llinks

• Guantao

• MWE China

• Haiwen & Partners

• Shanghai ForTran

• Han Kun • Hofftern • Jincheng Tongda & Neal

(L-R) Hu Jun, Fangda Partners; Tong Liping, Shanghai Electric

(L-R) Yu Tengqun, China Railway Group; Harry Du; David Olsson, King & Wood Mallesons

Winner: Fangda Partners

Winner: King & Wood Mallesons

• Jun He • Zhong Lun

C

hina Telecom is honored to receive the the “SOE In-House Team of the Year” at the 2011 Asian Legal Business China Awards. It is another winning after China Telecom has won the “China InHouse Team of the Year” and the “Chinese Company In-House Team of the Year” at the 2009 Asian Legal Business China Awards.

China Telecom is the world’s largest wireline telecommunications and broadband services provider and the world’s largest CDMA mobile operator. China Telecom will strive to enhance strengths in innovation, service, efficient centralisation and operation management, and take more solid steps towards the goal of being a “world-class integrated information service provider” so as to create more value for shareholders.

China Telecom has an in-house team working closely with the internal clients. The ward of “SOE In-House Team of the Year” has recognized its excellence in the provision of effective support and systematic legal solutions ,as well as the wealth of knowledge and expertise. The in-house team will progress together with company and continue to contribute to offering high quality services by the company to the customer.

China Telecom HP ad.indd 5

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china law awards

Hong Kong Law Firm of the Year

ASIAN LEGAL BUSINESS may 2012

Japanese Law Firm of the Year

Korean Law Firm of the Year

(L-R) Stephen Yao, Thomson Reuters, Legal China; Hiroshige Nakagawa, Anderson Mori and Tomotsune Crisp Zhou; Deacons

Winner: Anderson Mori and Tomotsune Winner: Deacons

(L-R) In Soo Pyo; Chang Hwa Kim, Bae, Kim & Lee

Winner: Bae, Kim & Lee FINALISTS

FINALISTS

• Mori Hamada & Matsumoto

FINALISTS

• Vivien Chan & Co.

• Oh-Ebashi LPC & Partners

• Jipyong & Jisung

• Woo, Kwan, Lee & Lo

• Uryu & Itoga

• Lee & Ko

Managing Partner of the Year Singapore Law Firm of the Year

China Legal Career Award International Law Firm of the Year

(L-R) Stephen Yao, Thomson Reuters, Legal China; Wang Ling, King & Wood Mallesons

Winner: King & Wood Mallesons Wang Ling (L-R) May Wong, ALB; Christopher Chuah; WongPartnership

(L-R) Maggie Lo, Clifford Chance; Frazer Xia, China Legal Career; Tim Wang, Clifford Chance

FINALISTS

Winner: WongPartnership

• Beijing Yingke -

FINALISTS

• Global - Liu Jinrong

• V&T - Wang Jihong

• Guantao - Cui Liguo

• Zhong Lun - Zhang Xuebing

• Jun He - Xiao Wei

• Zhonglun W&D - Chen Wen

• Rajah & Tann

Xiangrong Mei

• MWE China - John Z.L. Huang

Winner: Clifford Chance FINALISTS • Allen & Overy

China Law Firm of the Year

• Baker & McKenzie

FINALISTS

• Davis Polk & Wardwell

• AllBright Law Offices

• Freshfields Bruckhaus Deringer

• Beijing Yingke • Dacheng • Global

• Linklaters

• Guantao

• Morrison & Foerster

• Jingtian & Gongcheng • Jincheng Tongda & Neal

Winner: Jun He

• Hogan Lovells

• Grandall • Han Kun

(L-R) Andrew Goldner, ALB; Xiao Wei, Jun He; Dr Wang Zhemin, Tsinghua University School of Law

• Herbert Smith

• Paul, Weiss • Shearman & Sterling

• King & Wood Mallesons

• Skadden, Arps, Slate, Meagher & Flom

• Llinks

• White & Case

• Zhong Lun • Zhonglun W&D

王律师事务所 中国业务 王律师事务所是一家较早开展中国业务的新加坡律师事 务所，我们的中国业务组曾赢得多个奖项，是公认的市 场领军者。通过与我们分布在区域内的其他办事处及分 所的其他业务组的紧密配合，本所的中国业务组能为我 们的客户提供完整的法律服务。在为客户提供与中国相 关的投资、融资、并购、资产处置、纠纷解决等法律服 务方面，本所拥有骄人的记录。 With the largest presence in China among Singapore law firms, our award-winning China Practice is a recognised market leader. We work closely with our other regional offices and practices to seamlessly support the legal needs of clients across jurisdictions.

We have a strong track record advising clients on their China-related fund-raising activities, investments, acquisitions and disposals.

wongpartnership.com 新加坡 | 中国 | 中东 王律师事务所已依据新加坡《有限责任合伙条例》（第163A章）的规定， 注册登记为有限责任合伙律师事务所（机构号：T08LL0003B)。

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China Country Report

ASIAN LEGAL BUSINESS may 2012

Countering the Recent economic growth data show that China’s economy is growing at its slowest since the global financial crisis. But the prospect of a hard economic landing has not diminished lawyers’ confidence in China as a market, thanks to the profession’s countercyclical characteristics, writes Liu zhen

China Country Report

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39

slowdown Hard Landing?

Worries of a possible “hard landing” of the world’s second-largest economy have risen with China’s quarterly growth rate dropping to its slowest in three years. The National Bureau of Statistics on April 13 announced that the annual rate of GDP growth in the first quarter slowed to 8.1 percent from 8.9 percent in the previous three months, and a run rate below the official 7.5 percent 2012 target.

Meanwhile, more doubts were cast upon the world’s number one exporter by the sub-par trade figures. China has set a 10 percent growth rate for exports and imports in 2012, but both targets were missed in March, with imports expanding just 5.3 percent from a year ago while exports grew 8.9 percent. Worse still, the global demand for China’s exports may remain weak as its two biggest trading partners – the European Union and the United States – remain wobbly and strained under concerns of unemployment.

Some economists say Beijing is actively pursuing a slower growth strategy to create room for structural economic reforms without sparking a surge in inflation.

The official forecast for 2012 GDP growth has been cut to 7.5 percent, an eight-year low.

Businesses are making adjustments in anticipation of a slowdown, but for the legal industry in China, it is business as usual.

“The business of providing legal services has the characteristics to counter the economic cycle,” Michael Qi, a partner at Fangda Partners, tells ALB. “Even the in best market environment there are money-losing firms; and in the worst market, there are profit-making firms.”

REUTERS/Stringer Shanghai

Cooling off However, legal firms do feel the pinch as business from sectors hardest hit by the slowdown begins to trickle - for example real estate, which accounts for 13 percent of China’s GDP in 2011.

Over the past two years, the government has applied strict policies to reduce rampant property speculation, which helped push up inflation. Chinese Premier Wen Jiabao recently said that restrictions to curb speculation in the real estate market will stay firmly in place, as

40

China Country Report home prices, which have soared tenfold in the last decade, remained “far from returning to reasonable levels.”

China’s average new home price fell 0.7 percent last month from a year earlier, the first decline in two years, according to a Reuters calculation.

Investment in the sector grew 19.6 percent in March from a year earlier, down from 27.8 percent in the first two months of the year.

“Real estate is an industry dependent on the international environment and domestic policies. The recent restricting policies have caused great difficulties for developers,” says Xue Yunhua, an executive partner of Guangda Law Firm, which has significant interest in the real estate sector. “The need for legal services in this sector has gone down, following the serious decrease in land acquisition, trade, house leasing, mortgage, financing, and so on.”

Some lawyers say that the impact of the slowdown in the property sector could, to some extent, be compensated by heavy investment in infrastructure construction. A large part of China’s 4 trillion yuan ($635 billion) stimulus package, plus some 20 trillion yuan of funds from local government borrowings since 2009, has poured into public infrastructure projects such as the high-speed rail, city underground transportation, and water diversion programmes.

“The Chinese government is reputedly still the richest in the world,” says Tong Xin, a partner of Guanghe Law Firm. ”There is still business for us in government-backed construction projects.”

“The business of providing legal services has the characteristics to counter the economic cycle.

Even in the best market environment there are money-losing firms; and in the worst market, there are profit-making firms.”

Michael Qi, Fangda Partners Countercyclical characteristics The capital and securities markets haven’t escaped the slowdown either. The tight monetary policy adopted to curb inflation has squeezed liquidity, leading to the suspension or cancellation of many initial public offerings (IPOs).

But lawyers can make money in a sluggish market as much as in a prosperous one, says Qi, citing the examples from 2008 and 2009.

Instead of IPOs, delistings have created business for attorneys, particularly by those Chinese companies that have been barely hanging onto the U.S. stock markets with hopelessly high costs and low share prices. Seven Chinese companies applied to delist from the U.S. stock exchanges in the first two months of 2012, in addition to six in 2011, notes Diane Frankle, a partner at Kaye Scholer.

Other practices that have newly become lucrative for law firms include corporate restructuring and litigation, as well as mergers and acquisitions.

“The strongest survive, with the weak dying out and being swallowed up. The pace of industrial consolidation goes up in the chilly winter,” says Qi. Similar phenomena are taking place also in the legal industry, adds David Fu, a partner at Global Law Office. He highlights the recent trend of mergers among law firms, in particular international ones, since the crisis broke out in 2008.

“A firm has to be full service to survive different economic climates,” says Fu. “For instance, a firm relying too much on the capital markets practice would be badly hurt under the monetary contraction.”

According to Fu, a firm should proactively expand its portfolio of

ASIAN LEGAL BUSINESS may 2012

practices to reach a “reasonable combination” either by self development or by merger with others.

“We may also see more mergers among Chinese firms,” he says.

Focusing on Beijing clients With state-owned enterprises relatively unscathed by the economic slowdown, law firms have set their sights on cultivating their SOE clientele. As such, many law firms have offices in Beijing to remain close to their clients, who also have their headquarters in the capital.

“Other cities have their own advantages, like Shanghai is the location of the securities markets and Shenzhen boasts many private enterprises. But these industries have been affected by the crisis while the central SOEs remain strong and cash-rich,” says Fu. “Their decisions and transactions have to be made in Beijing and the payment to the lawyers takes place here.”

In addition, the top government departments overseeing businesses are in Beijing, such as the banking, securities and insurance regulatory commissions, as well as the powerful central planning body, National Development and Reform Commission.

“The client would think Beijing firms have the advantages as all the relevant government authorities are in Beijing,” says Xue. For a firm with a strong governance focus like Bingham McCutchen, Beijing is “the appropriate place to start,” says Jay Zimmerman, the firm’s global chairman.

Bingham McCutchen recently opened an office in Beijing.

By the end of 2008, Beijing had 18,635 lawyers working for 1,121 firms, and in Shanghai there were 10,071 lawyers and 889 firms.

Moreover, 95 percent of the 188 foreign firms in China are registered in the two cities. As of 2009, Beijing had 74 and Shanghai had 104.

Revenue-wise, however, Beijing firms earned twice as much as Shanghai-based firms in 2010, at 11.3 billion yuan ($1.79 billion) and 5.8 billion yuan ($0.92 billion). In comparison, another Chinese municipality, Tianjin had only 590 million yuan ($ 93.6 million) revenue, according to Westlaw China research.

Investing abroad Aside from opportunities in the domestic market, firms can also leverage on China’s increasing overseas investments.

“The Chinese government has made it clear that it is a matter of policy that they will be increasing foreign direct investment. They have also made it clear that they will be increasing a focus on tangible investment, for example,

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China Country Report

41

Vehicles move on the Guomao Bridge in Beijing. REUTERS/Jason Lee

government bonds. Furthermore, China’s continuing growing need for agriculturerelated products and services, for energy, for technology and communications, are all bound to produce increasing cross border commerce,” Zimmerman tells ALB. The crisis has created a favourable environment as many overseas companies are in dire need of capital and offer plenty of undervalued high-quality assets. Large SOEs have made their mark in energy, petrol, minerals and other commodities investments across Africa, Latin America, and elsewhere.

Most recently, State Grid International Development took a 25 percent stake in Redes Energéticas Nacionais, SGPS, S.A. of Portugal.

“The timing is right for the Chinese companies to go out to the U.S., Europe, and to many other countries. The Chinese companies have the capability, financially and operationally, and have the willingness to do it,” adds Ye Xiaowei, Bingham’s Beijing co-head.

Private enterprises have also increasingly taken part in this overseas investment rush, with more and more deals closed in manufacturing and consumer goods production, which is part of the “national strategy” in

order to accelerate the “industrial upgrading”, says Fu. He notes the example of privately-owned Geely Automobile, which took over Swedish premium brand Volvo from Ford Motor Co in 2010.

However, not all overseas ventures have been successful. In 2004, China’s Legend Holdings acquired IBM’s PC business but has struggled on the world stage, especially in developed markets despite its Lenovo PC’s domination in the home market.

“The manufacturing industries are getting smarter with time,” says Qi. “With the lessons learnt from the failed attempts of purchasing the production bases and retailing channels, now the Chinese companies cautiously buy only the technology, patents and brands, and keep the production and the market domestic.”

The developed management experience and systems of the Western companies are attractive for the Chinese investors, according to Fu. Domestic competition is getting tough in times of crisis but many believe potential and opportunities exist in other continents.

Meanwhile, Western investment in China is expected to continue, as Zimmerman suggests, because the size and growth of the Chinese market are too large to be ignored by international corporations. But the preferential policies for foreign capital that had lasted for decades might only be reserved for high-tech, green, medical and high-end service industries, and a few other sectors, according to the 2011 version of the Guideline of Foreign Investment Industry List published by the National Development and Reform Commission.

“The Chinese government has become picky towards foreign investment,” says Fu. “But even with the raised bar, a continued strong growth in cross border mergers and acquisitions, both outbound and inbound, in the next years is very likely.”

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Real estate

ASIAN LEGAL BUSINESS may 2012

Social housing boom While the speculative property market has been effectively cooled down by stringent regulations, other segments of the real estate sector are being promoted. It is in this space of affordable housing, senior housing, mixed use facilities, R&D parks and other project types that investment opportunities are emerging, finds Candice Mak

W

hat do a luxury Chinese apartment tower, a workers’ dormitory, a low-income housing block, and an empty field have in common? asked a Feb. 28 Reuters report. It was revealed that all of them qualify as affordable housing projects under a government scheme that policymakers hope will cool public anger over high housing prices. Analysts are also counting on this scheme to keep China’s property sector afloat. China aims to construct 36 million units of state-subsidised housing, also known as affordable or public or social housing, between 2011 and 2015.

Since the beginning of the year, the government has enacted three new and specific measures that address its goals of creating more affordable housing: (i) The Notice on Practically Performing Well the Financial Capital Arrangement and Other Relevant Works of Affordable Housing Projects in Year 2012, which was issued by the Ministry of Finance in January; (ii) The Notice on Further Increasing the Working Force and Practically Performing Well the Construction of Affordable Housing Projects in Year 2012 within the Development and Reform System, which was issued by the National and Development and Reform Commission in February; and (iii) The Notice on Performing Well the

2012 Urban and Rural Affordable Housing Projects, which was issued by the Ministry of Housing and Urban-Rural Development in March.

According to Fangda Partners’ real estate head, Wang Yingying, the Ministry of Housing and Construction is in the process of drafting procedures on involving the private sector in the development of affordable housing.

Real estate

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In February, Reuters reported that the Ministry of Finance had announced that the income of local government bonds and property taxes would be first used for affordable housing projects. The ministry, through a statement on its website, said that local governments could set apart their fiscal budget to support the transformation of shanty towns, and allocate funds to improve supporting facilities around af-

fordable housing communities. It also said that commercial banks can give discounts on loans to these projects, but the period cannot be more than 15 years.

Although the government’s current scheme was only recently accelerated to full throttle,

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REUTERS/Aly Song

44

Real estate Joel Rothstein, a Beijing-based real estate partner at Paul Hastings, points out that China’s current Five-Year Plan already has a number of provisions that allude to creating situations for greater social equality. “If you look at some of the language in the plan, it talks about guiding the housing policy in a socially equitable way,” he says. As an example of how the policy is filtering through the system, banks in certain cities such as Beijing, Shanghai and Guangzhou have begun to establish programmes offering preferential interest rates for loans to first-time home buyers.

Wang says the banking programme is in line with China’s policy of restricting speculative investment in the property sector, as it encourages purchase opportunities for those who truly need it. Like Rothstein, from a macropolicy perspective, she “understands the aim of the government is to significantly increase the supply of housing within a relatively short time and then with the increase in supply, the price of housing will go down naturally,” she says. “This will enable a lot of low-income people to have their own houses, so it is mainly for social sustainability and the creation of a fair market.”

Rothstein agrees that the government is promoting non-speculative housing so that would-be first time home buyers, who will purchase only one property, can use it as their residence. “The idea behind the government’s policies is not to cut off the market but to limit excessive speculation, gently deflate any bubble, and channel investment into certain areas which the government views as fostering a more efficient and productive use of resources,” he says. From the high targets of affordable housing construction and promotion of their development, it is clear the government wants to promote this one area of real estate activity. The Paul Hastings partner points out that while the real estate industry is an extremely important part of China’s GDP and the government does not want to completely choke it off, it also does not want a bubble. This results in China having a dual housing policy – where certain segments are encouraged, while others are being cooled down. “The way they can deflate this without killing it off is by channeling development into areas that work with government policy that promotes wider social goals,” he says. “One of the big social goals of the current plan is social equality, and the efficient use of land resources.”

Stumbling blocks Despite the noble intention of creating a greater supply of affordable housing for citizens, there have been rumblings of doubt on

ASIAN LEGAL BUSINESS may 2012

whether the programme will prove to be a salve for China’s real estate woes. The programme, which targets 36 million units of new housing by 2015 at a cost of nearly $800 billion, has underpinned demand for steel, cement and metals from the world’s second-largest economy as the larger real estate sector cools. But as Reuters noted in its Feb. 28 report, the huge numbers do not add up enough to ease concerns about the possibility that the Chinese economy might be paying the price for the government’s crackdown on “speculative” real estate projects.

It is an illusion to try to hang on to the notion that social housing will have a massive pull on raw materials in China. “It does have a pull, but not significant enough to make up for freezing commercial real estate spending,” said Shanghai-based Nicholas Zhu of ANZ Bank.

To gauge the status of the scheme, Reuters visited a dozen building sites in the dusty city of Shijiazhuang south of Beijing. A middle-income city of 10 million including satellite towns, Shijiazhuang is one of the few to have published a public list of its affordable housing projects.

Tall towers rising from flat fields and former industrial sites laid to rest the assumption of some that local governments are simply faking affordable housing project starts to meet central government targets. In Shijiazhuang at least, the projects are real. However, a good portion of what is being built is already-planned construction relabeled as affordable housing. Those projects are not delivering the additional demand for concrete, steel, glass or aluminum window frames that typically

Real estate

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“The idea behind the government’s policies is not to cut off the market but to limit excessive speculation, gently deflate any bubble, and channel investment into certain areas which the government views as fostering a more efficient and productive use of resources.”

Joel Rothstein, Paul Hastings

REUTERS/Punit Paranjpe

ensure that construction gives an outsized boost to economic growth.

If the affordable housing programme cannot deliver additional demand, the restrictions on commercial housing may deliver a greater blow to the broader economy than Beijing intended. For two years, China has restricted bank lending to the real estate sector and limited citizens’ ability to buy multiple homes, or homes in other cities, to curb speculation in the high-end housing sector. The campaign has now finally started impacting prices.

Off-market housing Reuters visited projects ranging from tall residential towers measuring 60 square metres or less — what most Chinese would call affordable housing — to factories and school dormitories. Out of all the places Reuters visited, at least two projects were found to be a part of luxury housing developments. This seems to reflect what is happening across the country.

Recent government announcements indicate that new off-market, affordable housing units will increasingly be made up of reclassified, non-commercial projects like dormitories attached to schools, hospitals, government departments, and state-owned enterprises. “There is a big difference between government definitions and what a normal person would consider an ‘affordable house’,” said Beijing-based consultancy GK Dragonomics research manager Rosealea Yao. Reclassification jibes

with a shift in official targets from housing starts - which critics charge are easily faked - to completions. Beijing targets five million completions this year, up from the official count of 4.32 million completed last year.

Nationwide, affordable housing numbers are confusing. As citizens seethed over redhot property prices, Chinese Premier Wen Jiabao said last year that China would build 36 million units by 2015, with the construction of 10 million units beginning in 2011 alone.

However, Beijing later retreated in the face of limited local budgets and allegations that corrupt insiders get dibs on homes. It shelved its plans for subsidised apartments to sell to low-income buyers in favour of modest apartments to rent to the poor. The target for 2012 starts is now seven million units.

Many analysts felt that the original target was so far removed from reality that actual starts this year may exceed last year’s numbers. Official, yet widely disbelieved, statistics put affordable home starts at 10.43 million in 2011. The Bank of America Merrill Lynch estimates that the number of units actually under construction will rise to 7.3 million this year from 3.7 million last year. “Social housing starts have been overstated, but still the increase in construction of off-market housing will more than offset the fall in the market segment,” said a recent report by GK Dragonomics. But ANZ’s Zhu said that this was not the case. His back-of-the-envelope calculations showed that government targets for affordable housing would absorb only about 50 million tonnes of steel. That is only one-sixth of China’s current construction steel output, and this means that the real estate freeze could still create a dangerous glut.

Excuse to relax Even if reclassified projects do not represent new demand per se, they could allow the government to declare victory and relax the

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Real estate controls strangling the commercial property sector. Three sites visited by Reuters in Shijiazhuang turned out to be newly completed dormitories. Two were at factories, while the third was a teachers’ dorm for a rural high school. Beijing is “taking a two pronged approach of temporarily repressing demand for commercial units, and also building lowerpriced housing for the population that has been priced out of the commercial market,” said CLSA strategist Andy Rothman. “Once they make progress on both fronts, they can ease the current restrictions on commercial home sales.”

Some property developers are committing to build affordable housing to get approval for more lucrative developments. That lets local governments balance their budgets with land sales. Some cities use “slum clearing” to move poorer residents out of the valuable city centre and auction off the land to yet another glitzy developer. As of 2010, about 90 percent of Shanghai’s “affordable housing” units qualified as “slum clearing” versus 40 percent nationally, land use data showed. At the luxury “European Landscape” compound in Jinzhou near Shijiazhuang, an affordable housing block was tucked into a commercial development with decidedly upscale ambitions. “The top sterling villa community of Jinzhou! The ecological slope courtyard, the coastal holiday villa!” a brochure boasted.

“The government is encouraging privately owned real estate developers to get involved in this area by providing incentives and more channels of financing.”

Wang Yingying, Fangda Partners

“European Landscape” and its sisters target demand for investment properties at the high end of the market.

But urbanising China needs new homes for young couples and replacements of the cramped quarters endured by many, especially migrant workers. GK Dragonomics estimated that 40 percent of people in Chinese cities do not own their own homes. China, therefore, needed to build 10 million units a year until 2030 to meet a 70 million unit shortfall and also to upgrade shoddy housing. “All we are waiting for is for the real estate developers to recognise they have got to switch away from the speculative real estate market to affordable housing - not just the ones the government is requiring them to build, but affordable

ASIAN LEGAL BUSINESS may 2012

housing in a wider sense for first-time buyers,” said Rafael Halpin of MEPS, a British steel consultancy, to Reuters. “Once you see that transition, you have a second property boom driven by real demand.”

Rewarding participation Convincing private real estate developers in China to embrace the affordable housing market is still very challenging, say the lawyers that ALB interviewed. All of them agreed that the low profit margins of constructing these projects was the key deterrent, and that unless the developers could be guaranteed something extra beyond any meagre earnings, they would be reluctant to take on a social housing development. For now, most of the developers working on the projects are state-owned. “(Private) developers are always looking at their exit.

There is no developer out there that would be interested in owning and operating an affordable housing project on a long term basis,” says Rothstein. “They need to know someone will buy their units for a certain price, so whatever strategy is done, the developer would have to know that someone will buy them out at a reasonable price.”

Chen Ling, Dacheng Law Firm’s head of real estate said that though affordable housing construction is a lower-margin project, it remains a “safe” job for developers. “They (developers) should remember that there is a squeeze on bank loans right now, but if they participate in affordable housing construction, they can obtain loans more easily, their cash flow will accelerate and the risk to their business will shrink.”

If the government can guarantee the developer a certain return or provide an approval for another project in exchange, then it is more likely that it would take on a project. “The government is encouraging privately-owned real estate developers to get involved in this area by providing incentives and more channels of financing,” says Wang.

Cheap land grants, says Rothstein, are one way in which a developer can be encouraged to build affordable housing. Wang highlights that in addition to receiving land at low premiums from the government, if developers can receive bank loans with discounted rates or have public facilities fees waived, they may be more open to working on affordable housing projects. “The government may approach big developers to see whether commercially it is a business case with the incentives they are offering,” says Wang. According to Chen, there are several well known real estate enterprises participating in the construction of low-income housing, such as China Vanke, R&F Properties, and Poly Real Estate and China State Construction Engineering Corporation. “Participating in affordable housing construction is a good chance for these developers to expand their investment field, and be socially responsible,” she says.

Investment opportunities So far, there have been limited investment opportunities in the affordable housing sector because, according to Wang, the scheme is new and lacks clear legal regulations. However, when specific types of “social housing” are assessed, pockets of investment opportunity do surface.

One significant segment is senior housing, which Wang deems as “very attractive” and Rothstein says is “different, because it is not necessarily targeted at only low-income individuals. It is a business model for a profit-making enterprise.”

“The market needs it and there is huge demand for senior housing, but there is a lack of relevant regulations and a lack of relevant experience,” says Wang. It is precisely this lack of homegrown experience where foreign investment and involvement can emerge. Senior homes go beyond typical, regular housing projects – they require services in addition to the residence. They require a high level of medical, catering, and other services support. “Operating a senior living facility is operating a business,” says Rothstein. “This requires a different type of skills set than someone who just builds a building and then walks away from it.

Real estate

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“Participating in affordable housing construction is a good chance for these developers to expand their investment field and be socially responsible.”

Chen Ling, Dacheng Law Firm

You need specialised expertise and knowledge about how to manage, market and operate this kind of facility.” So, investment openings exist for investors who have specialised operational skills in senior housing.

According to Rothstein, there are opportunities to create joint ventures.

“For example, a domestic developer or investor in China with no experience in senior care and living facilities may need to seek out a foreign investor joint venture partner with the right experience in the industry in order to successfully launch and operate a project,” he says.

This need for expertise in specialised real estate projects is not confined to senior housing. Mixed use facilities, logistics facilities, warehouse projects and research and development (R&D) parks are some other types of unique developments that would benefit from offshore expertise and funding. “You really need to have the specialised skills and knowledge of how to design, manage and operate these projects, and this is what some foreign investors have,” says Rothstein. He also says that he could envision there being multiple joint venture arrangements between, for example, an expert in logistics facilities, a private equity fund to provide some capital, and a PRC developer who has construction contacts. “None of them can do a project alone,” he opines.

Non-traditional businesses are entering the real estate sector and keeping legal practitioners busy. Ikea, the Swedish furniture and home goods company, has begun a model project in Beijing where it is building a shopping mall that its shop would anchor. Rothstein says that Tesco, the UK-based supermarket chain, has a real estate fund that develops projects. “Actually, it has a concept that has been used in England and other markets that the company ultimately may want to bring to China. They want to build housing projects in which they attach Tesco stores,” he says.

U.S. pharmaceuticals giant Merck is in the process of developing and constructing its Asia R&D headquarters in Beijing, a major project that by 2014 will house 600 employees. The China Daily reported in December 2011 that the drug maker would invest $1.5 billion in R&D within the next five years. “You have all these companies and businesses that have real estate aspects doing deals now,” Rothstein says. “As a practitioner, you have to expand the range of clients you are targeting and trying to work with.”

Broadening skills set Paralleling the swing in the market is the need for real estate legal practitioners to also enhance and broaden their skill sets. Key real estate issues remain the same, as do the transaction techniques. But there is a need to properly understand the commercial side of the various sectors that have bled into the real estate market. “Compared to

the traditional type of real estate business, we now need to not only have a basic knowledge of the real estate profession, but also to expertly deal with financing, accounting, and tax issues, among others, to better meet the new business’ needs,” says Chen.

It is also important to read the market and know where the trends are headed. Rothstein predicts the healthcare sector in China will see a boom. “There have been many reforms going on in the country with the healthcare industry, so I think there will be a lot of opportunities in the senior care, hospital and pharmaceuticals sectors.” Because of this, Rothstein sat in on his firm’s healthcare practice group’s meetings when he went back to the U.S. recently for the annual partners retreat. “Even though I am a real estate attorney, I feel this is an interesting area where there is this intersection going on,” he says. “I wanted to know more about what we could do and what connections we have as a firm with companies that might be interested in doing deals in China.” For the past few years, his team has been focused on areas that add value for clients rather than transacting plain vanilla deals. “To stay at the top of the real estate market, you really have to develop specialised expertise and knowledge, and anticipate where the market is going to determine where the opportunities are,” he adds.

Down the road On the affordable housing front, many challenges still lie ahead. Lawyers point out that nobody is quite sure how the properties will be constructed, who exactly will be developing these projects, and where the funds are coming from. Then, once the housing is completed, how transparency and fairness can be achieved when allocating the placements. “It is very challenging,” says Wang. “But we will see and remain hopeful that this reform can really work.”

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SPONSORED UPDATES

ASIAN LEGAL BUSINESS may 2012

Sponsored Update

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FUJIAN

International tax

Trademark Infringement Issues in China’s OEM Business Model

Liechtenstein /Hong Kong Double Tax Treaty is attractive for Intellectual property owners

T

he question of OEM trademark infringement liability has been a subject of ongoing discussion among judges, administrative agencies, and academia.

It remains highly controversial especially when the cases involve the fact that the OEM products are solely intended for export to a jurisdiction where the buyer is the registered owner of the trademark in question.

Before 2009, when most courts dealt with the trademark infringement cases with above-mentioned facts, few tended to pay attention to the circumstances that the products were to be shipped to an oversea market where the purchaser enjoyed exclusive right to use the trademark, but placed much weight on the registration status of an identical or similar trademark in China and whether the manufacturing activity in this territory violated the rights of the registered owner in China and misled the consumers instead. Courts in Zhejiang and Guangdong provinces, where OEM manufacturing is prevalent, for example, have ruled in the favor of Chinese trademark owners in previous cases with similar facts.

In December 2007, Fujian Higher People’s Court upheld a lower court’s decision in favor of OEM manufacturer, but that case didn’t get much attention. Then in November 2009, the Shanghai Higher People’s Court affirmed a lower-court’s decision in which it exempted an OEM manufacturer from trademark infringement liability, on the grounds that Chinese OEM manufacturer’s goods were produced in accordance with the foreign buyer’s specifications and were intended for export to the place where the buyer is the only legal owner of the trademark, thus such goods did not cause confusion to the public in China.

This non-infringement court ruling and the reasoning behind has a subsequent impact not only on the intellectual property academia, but also on the courts and law enforcement departments in other localities.

It’s believed that Shanghai customs now generally would not honor Chinese trademark owner’s request to seize exporting goods bearing its trademark as long as such goods are shipped to the trademark owner in a foreign jurisdiction. In May 2010, the General Administration of Customs wrote to the Supreme People’s Court to seek guidance on whether the case alike constituted trademark infringement and the Supreme People’s Court gave a negative reply.

It’s fair to say that the general trend has turned in favor of OEM manufacturer and trademark owner in foreign countries, however, as the SPC’s reply is not a typical legal document, it remains to see whether local authorities (or some local courts) will take different approaches in interpreting and enforcing the Trademark Law and determine the manufacturer is not liable for using the foreign trademark in the course of OEM labeling.

Jiansheng Xu (Ron) / 徐建生, Partner T: +86 592 239 3355 F: +86 592 239 2255 E: xu.jsh@sphere-logic.com A: Sphere Logic Partners / 世礼律师事务所

26/F, COSCO Building, 268 Lujiang Road

Xiamen, China 361001

A

new tax law is applicable from 1 January 2011, whereby Liechtenstein introduced a new tax

provision on intellectual property rights. In order to make sure that the new Liechtenstein tax law is in line with the regulations on state aid set out in article 61 of the agreement on the European Economic Area (EEA), this regulation was submitted to the EFTA Supervisory Agency (ESA) and approved as compliant.

According to the new Liechtenstein intellectual property scheme, 80% of the income derived from intellectual property rights created or acquired after 1 January 2011 is tax deductible. With an ordinary tax rate of 12.5% in Liechtenstein, income from intellectual property will only be taxed at 2.5%. Not only income from licence agreements or the sale of intellectual property rights qualifies for the intellectual property scheme, the deduction can also be made if the intellectual property rights are used by the company itself. In this case, the 80% deduction applies to the income arising from the intellectual property that would have been generated if the use had been assigned to a third party. The regulation is applicable for patents rights, trademarks, designs and utility models, provided that they are registered in Liechtenstein or abroad. Prior to making the 80% deduction, associated tax-relevant expenses including write-downs on intellectual property rights can be claimed.

You will find further information regarding the new Liechtenstein tax law, including an English translation of the new Liechtenstein tax law, by clicking the below link of the Liechtenstein Tax Office: http://www.llv.li/amtsstellen/llv-stv-english_content.htm There is a Double Taxation Agreement with Hong Kong and a growing network of DTAs with other jurisdictions, which makes a Liechtenstein company an attractive location for the exploitation of intellectual property rights, used in conjunction with a Hong Kong company.

Debbie Annells, CTA (Fellow) Managing Director A: AzureTax Ltd – Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong T: +852 2123 9339 (direct line), +852 2123 9370 (main line) F: +852 2122 9209 W: www.azuretax.com, a member of AzureTax Group Supervised by the UK Chartered Institute of Taxation for purposes of anti money laundering legislation.

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金管局发布公司治理守则正式修改稿

49

PRC New Guidelines Innovate the IPO Process

2011年6月14日，新加坡金管局的公司治理委员会 (Corporate Governance Council) 对2005年7月1 日发布的公司治理守则 (Corporate Governance Code)，提出修改意见征求稿。历经约一年，在听 取众多公众意见后，金管局于2012年5月2日发布 公司治理守则的正式修改稿。公司治理守则的修改 主要体现在董事的独立性、董事会组成、董事培 训、替任董事、薪酬及其披露、风险管理及股东的 角色与其权益。其修改的主要内容为：

On 28 April 2012, the China Securities Regulatory Commission (CSRC) issued the Guiding Opinions on Further Deepening the Reform of New Share Offering System (关于进一步深化新股发行体制改革的指导意 见, the “Guiding Opinions”), with effect from the date thereof. The Guiding Opinions are aimed at promoting a reasonable price/earnings ratio to curb speculative trading and reducing the administration’s intervention in the IPO process. The highlights of the Guiding Opinions are as follows:

独立董事：(i) 独立董事须独立于管理层及持有公 司10%权益的股东；(ii) 独立董事担任9年后，其独 立性须经特别审阅。

• Enhance responsibilities of relevant professional teams To ensure the authenticity, accuracy, sufficiency and integrity of information disclosure, the Guiding Opinions expressly set out the corresponding responsibilities of issuers, underwriters, law firms, certified public accountants and other intermediaries involved in the IPO process.

In particular, the Guiding Opinions encourage competent law firms to participate in the drafting of the prospectus.

董事会组成：(i) 若上市公司董事会主席与首席执行官为同一人， 或是近亲属，或同为管理层，或主席非独立，则董事会中至少半 数须为独立董事; (ii) 该项要求须在财务年度截止于2016年5月 1日后的年度股东大会完成；(iii) 提名委员会须决定董事担任上 市公司的数量，并在年报中予以披露。

•

董事培训：上市公司须安排现任及新的董事进行相关培训，并 在年报中予以披露；提名委员会需对培训项目进行审阅，并向董 事会提供建议。

The Guiding Opinions: (1) expand the object scope of enquiry by, inter alia, encouraging individual investors to participate in the pricing enquiry and offline placement; (2) in principle, increase the portion of offline placement to 50%; and (3) invite independent third parties to assess the information disclosed by proposed issuers.

替任董事：一般不得聘任替任董事，除非是特殊情况的特定时 间。

•

薪酬及披露：(i) 须逐一披露每位董事及首席执行官的薪酬 ； (ii) 须对前五位非董事或首席执行官的高管的薪酬以新币25万 元范围进行披露；(iii) 若公司雇员为董事或首席执行官的直系 亲属的，且其薪酬超过新币5万元，则其薪酬须以每新币5万元 为阶位进行披露。

Price / earnings Ratio (the “P/E Ratio”) > 25%

The issuer of the listing company is obliged to disclose supplemental information to the investor addressing potential risks after the official publication of the prospectus if the P/E Ratio estimate arising from the pricing enquiry process is 25% higher than the average P/E Ratio of listed industry peers. In the event that the actual earnings are less than the estimated earnings after listing, then the CSRC may, depending on the circumstances of the case, take measures against the directors, management, underwriter and certified public accountant respectively.

The CSRC may not, however, take action against the company if the discrepancy between the actual and estimated earnings is due to force majeure.

风险管理：(i) 董事会需对公司的风险管理负责，决定公司可以 承担的风险及其程度，并且确保管理层维持有效的风险管理及 内控制度；(ii) 董事会须说明其是否得到首席执行官及财务执行 官关于下列的确认：财务报表正确、真实反映了公司的运营和财 务状况；已实行有效的风险管理及内控制度。

The aim of such a P/E Ratio limitation is to ensure that the offering price of new shares reflect the real value of enterprises, thereby protecting investors’ rights and interests.

股东大会：所有股东大会决议须根据持有的有效表决权进行表 决，并在公告中说明各项决议的表决情况。

•

新的公司治理守则将自财务年度从2012年12月1日始算的年度 报告开始生效。

Increasing the volume of trading shares

The Guiding Opinions remove the three-month lock-up period for institutional investors via offline placement and also allow secondary offerings (存量发行), namely, share offerings extended by existing shareholders of issuers to institutional investors subject to prescribed limitations over qualification, quantity and timing.

On 8 May 2012, CTS International Logistics Corporation (港中旅华贸国 际物流股份有限公司) issued and announced its IPO prospectus. As this is the first prospectus issued after the implementation of the Guiding Opinions, it has drawn much interest from the financial and legal sectors, which are watching the progress of this IPO keenly and to assess the real impact (if any) of the Guiding Opinions on this and future IPOs.

吳艷娟, 企業事務部资深法律顧問 T: +65 6322 2232 F: +65 6534 0833 E: wuyanjuan@loopartners.com.sg

陶丽, 合伙人 T: +86 1 39 1100 0063 F: +86 21 6211 2387 E: li.tao@victorylegalgroup.com

陈姝, 企業事務部资深法律顧問 T: +65 6322 2230 F: +65 6534 0833 E: chenshu@loopartners.com.sg A: 俊昭法律事務所 16 Gemmill Lane, Singapore 069254 W: www.loopartners.com.sg

Proper adjustment on enquiry scope and allocation proportion

郭雩, 律师 T: +86 136 0184 7618 F: +86 21 6211 2387 E: jean.guo@victorylegalgroup.com

A: VICTORY LEGAL GROUP 双胜律师事务所 Unit J, 14 Floor, Huamin Empire Plaza, No. 726, Yan An West Road, Shanghai, 200050 PRC W: www.victorylegalgroup.com

50

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Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 700 lawyers worldwide. Paul, Weiss is headquartered in New York and has offices in Tokyo, Washington, D.C., Wilmington, Beijing, Hong Kong, Toronto and London.

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

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fUIJIAN Sphere Logic Partners is a mid-sized business law firm known for its offering of value, sophisticated legal solutions in a leaner approach across a range of practice areas, critical to the success of clients. We maintain an established global network with numerous law firms and relevant service providers. Our seasoned and culture-ready professionals assist clients in cross-border investment, M&A and financing, governance and daily operations, identification of business opportunities and solving of complex legal disputes.

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Europe For many decades, SZA Schilling, Zutt & Anschütz has been one of the most reputable German corporate law firms. It advises clients in nearly all areas of corporate and commercial law. The main focus of practice is on corporate law, M&A, capital markets, labor law, antitrust law, intellectual property, competition law and trust law. Clients included nine of the 30 enterprises listed on the DAX.

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ATMD Bird & Bird has been voted Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.

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Established in 1948 by representatives of 40 American firms, the ACCJ, a fully independent chamber of commerce, has grown into one of the most influential business organizations in Japan, with more than 2,700 members representing more than forty countries and 1,000 companies.

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The Japan In-House Counsel Network (“JICN”) is a diverse and dynamic community of corporate legal professionals working in Japan. Its members give legal related advice to both large and small companies in a broad range of industries including banking and finance, insurance, health care, manufacturing, and technology. JICN seeks to enhance the competency and professional development of its members through regular continuing education courses and skills training seminars. It also offers members opportunities to network, and exchange ideas and information relevant to their work as corporate legal professional.

The Hong Kong Corporate Counsel Association is the pioneer association run for in-house counsel by in-house counsel in Hong Kong. It provides an efficient and effective range of benefits and services for its members’ professional development, including continuing legal education, a platform for networking and the exchange of ideas, information and experiences that are unique to the in-house role.

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SUNDRIES

ASIAN LEGAL BUSINESS may 2012 Compiled by SEHER HUSSAIN

18.3

bI L L I O N

The net worth of brothers Raymond and Thomas Kwok who were arrested in Hong Kong on suspicion of corruption by the Hong Kong Independent Commission Against Corruption.

Together, the brothers chair Sun Hung Kai Properties, Asia’s largest developer by capital value, and also control the second-largest family fortune in Hong Kong

The Long and the Short of It Stylish Indonesian women will soon be stopped short in their tracks as the country’s Religious Affairs minister has just declared a potential ban on miniskirts. Proclaiming that any skirts that end above the knee will be considered pornographic, the minister plans to enforce the ruling through a nationwide taskforce; that is if a series of new anti-porn laws end up going through. Jumping on the bandwagon was a politician from the ruling Democratic Party who added that female MPs and staff in the Parliament building should also be prohibited from wearing skimpy hemlines. “You know what men are like. Provocative clothing will make them do things,” he was quoted as saying. However, some believe the politician and his cronies are deflecting attention from growing dissent across the country through divertive measures like this. Politics, a dirty business? In Indonesia, perhaps it is a sartorial one as well.

QUOTE OF THE MONTH

“Duck chain… no longer in the Soup” Website AsiaOne’s headline for a story about Singapore roast duck chain Dian Xiao Er agreeing to buy out Soup Restaurant Group’s stake in the chain for S$7.9 million, thereby ending a pending lawsuit

ONE THAT GOT AWAY

‘NOW, I DEAL WITH HAPPY PEOPLE’ A former banking lawyer, Valentine Willie is now a celebrated curator and collector, running two renowned galleries in Singapore and Kuala Lumpur with associated outposts in Bali and Manila. Willie, who says he has no regrets about leaving the legal world behind, chats here with ALB about the pleasures of dealing with art buyers and how his trips as a lawyer helped serve as a launch pad for his business.

a day off from work to check out artists and galleries, so by the time I got into the business, I already knew everyone! If I was in any other profession, I would not have had that; it opened a lot more doors than if I was an engineer.

What inspired you to leave the profession of law?

I had practiced for about 18 years, and was the managing partner of Lind, Willie, Wong & Chin, a large law firm in Sabah. I took a two-year sabbatical, but got bored after six months after which I decided to try starting a gallery in Kuala Lumpur. If it did not work out, I was planning to go back to law. But turns out I never had to go back.

What do you enjoy most about your career now?

One of the things that I did when I was a lawyer was to help people in trouble; I would always see people in distress. Now it is very different and people come to me to buy art, so I am dealing with happy people. That makes a big difference.

Do you miss anything about being a lawyer?

Nothing at all! I would, however, say that when I was a lawyer, I got to travel around the region, and during that process, I used to visit galleries across Southeast Asia. So I would not be that down on the profession of law because it afforded me that chance. I used to take

Does your experience in the legal world inform your career now at all?

Oh yes! Being a lawyer certainly helps in terms of the legal issues.

Even while negotiating, if you are a lawyer, you are always a lawyer.

It gives you an inbuilt awareness of good faith, and you know there are always two sides to a story.

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中国国际经济贸易仲裁委员会是1954年经中央人民政府政务院批准，由中国国际贸易促进委员会（中国国际商会）组 织设立、独立处理经济贸易争议的常设涉外仲裁机构。中国国际经济贸易仲裁委员会设立分会。中国国际经济贸易仲裁 委员会及其分会是统一的仲裁委员会，适用统一的《仲裁规则》和统一的《仲裁员名册》。 为了适应形势发展需要，进一步规范业务管理，提高工作效率，为当事人提供优质的仲裁服务，2012年1月，根据我国 《仲裁法》以及国务院1988年有关批复精神，中国国际经济贸易仲裁委员会对其《仲裁规则》进行了修订。该《仲裁规 则》于2012年2月经中国国际贸易促进委员会（中国国际商会）批准，将自2012年5月1日起施行。 自2012年5月1日起，中国国际经济贸易仲裁委员会2012年《仲裁规则》将统一适用于中国国际经济贸易仲裁委员会及 其分会。 该《仲裁规则》已在中国国际经济贸易仲裁委员会官方网站www.cietac.org上发布，敬请查阅。 特此公告。 中国国际经济贸易仲裁委员会 二○一二年四月二十四日

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