HKALB Aug by Yvette Chiu

Diners Club ALB Japan Law Awards 2012 winners The Macallan ALB Hong Kong Law Awards 2012 finalists

august2012

NORTH ASIA EDITION

Game on

Hong Kongâ&#x20AC;&#x2122;s new Competition Law FATCA impact Complying with U.S. withholding tax revamp

PAGE 12

China compulsory licence Another layer of risk for Big Pharma PAGE 18

Indonesia projects

INSIDE

Waiting for infrastructure

n Deals SPOTLIGHT

PAGE 34

n THE BIG STORY

n LEAGUE TABLES

n SUNDRIES

INTERNATIONAL BAR ASSOCIATION

ANNUAL CONFERENCE DUBLIN 30 SEPTEMBER – 5 OCTOBER 2012

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

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

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

OFFiCiAL COrpOrATE SUppOrTErS

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

Fax: +44 (0)20 7842 0091

www.ibanet.org/conferences/Dublin2012

CONTENTS

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“The new regulation gives China a clearer regulatory basis and flexibility for issuing compulsory licences. But China is likely to continue to be prudent and measured.” Chiang Ling Li, Jones Day

20 COVER STORY Game on: Hong Kong’s new Competition Law

All eyes are on Hong Kong as the world’s last developed economy finally implements a competition law. In the making for over a decade, the bill has seen its fair share of controversy, attracting criticism from both SMEs and big businesses for being alternately toothless or overly harsh. Kanishk Verghese and Seher Hussain investigate the nuances of the bill, its effect on the marketplace, and the challenges facing Hong Kong in the future.

NEWS

FEATURES Bracing for FATCA

The U.S. Foreign Account Tax Compliance Act (FATCA) represents a major revamp to the U.S. withholding tax system – a revamp set to impose new reporting requirements on organisations throughout the AsiaPacific region, and cost financial institutions globally billions. And with time running out, many organisations in the region may not be ready to comply. Paul Pimentel investigates

The misunderstood drug CL

When administrative measures related to the strengthening of China’s compulsory licence framework came into effect from May 1, popular media misconstrued the regulation tweak. Various articles declared that compulsory licences could now be issued in China, and that Big Pharma companies were in trouble. Despite the sensational headlines, lawyers tell Candice Mak plainly that there is nothing revolutionary in the new law – compulsory licences were always in the law books – and that the clearer provisions will simply add another layer of risk to foreign pharmaceutical players.

Waiting to build

Indonesia may have been one of the most impressive growth stories of the past few years, but the fact remains that poor

infrastructure could really undo much of the good work. The country is in desperate need of ports, roads, railways, power and broadband. The Land Acquisition Law, signed in December 2011, but yet to be implemented, is expected to give provide infrastructure construction a major shot in the arm, apart from providing a major fillip to project finance, finds Ranajit Dam

Women in law

BRIEFS

LEAGUE TABLES

APPOINTMENTS

INDEX

SPONSORED PROFILE

J.P. Morgan

Escrow solutions: Reduce risk & facilitate results Minimizing transactional risk has never been more important. Commercial law firms on both sides of a transaction require flexible solutions to mitigate risks on behalf of their clients. Samuel Chen, Executive Director, Escrow Sales, Asia Pacific, J.P. Morgan Treasury Services T: (852) 2800 1922 E: samuel.yj.chen@ jpmorgan.com

n today’s economic climate, lawyers are acutely aware of the need to manage risks associated with their business while using resources in a costeffective manner. This is particularly important with transactions that may require long-term oversight and the careful monitoring of complex financial obligations. The solution to these challenges is provided by escrow accounts, which allow lawyers to mitigate risk for both their firm and for their client. An independent solution The right escrow structure can address risk issues for participants on both sides of a transaction and can be used to either prevent risks from occurring or to mitigate against existing risks. The escrow agent acts as a neutral third-party to the deal. An essential part of the value of an escrow is that it is a legal agreement, with the terms and conditions carried out by an independent escrow agent. The agreement controls the disbursements of assets pursuant to pre-agreed conditions agreed upon by the parties to the escrow. Escrow structures are often seen in mergers and acquisitions (M&A), good faith or hold back deposit, litigation/dispute resolution, construction funds, and collateral related deals (typically to ensure performance in trade and financing arrangements). When selecting an independent escrow agent, the scale and scope of its operations are important for peace of mind. By executing transactions with J.P. Morgan escrow services team, legal firms tap into an integrated global network of escrow specialists that are backed by the firm’s reach and financial strength. The benefits for the law firm While many commercial lawyers historically arranged joint solicitor accounts, holding client money in escrow themselves, they are increasingly aware of the risks involved and are concerned about compromising client relationships. An escrow solution lets the law firm diversify risk by handing over management of funds in a transaction to a neutral third party, allowing the firm’s lawyers to focus on what they do best. Some law firms have actually formulated internal

policies prohibiting solicitors from arranging joint solicitor accounts for their clients’ escrows. Going to a commercial escrow agent such as J.P. Morgan is no longer the exception, but the rule. A trusted provider As business activities and transactions become increasingly global and complex, clients look for an escrow provider that can translate their unique risk mitigation requirements into a simple, workable solution. J.P. Morgan’s escrow experts are knowledgeable in a wide array of transactions, including M&A, litigation/dispute resolution, construction funds, and collateral related deals (typically to ensure performance in trade and financing arrangements), and joint ventures. We are one of the few banks in the world with a dedicated escrow group, with more than 100 professionals around the globe in Asia, Europe, Africa and the Americas enabling clients to deposit a wide range of foreign currencies and who understands the varied nuances of regional settlement systems. Our on-the-ground specialists work closely with clients to navigate local laws and regulations in all major legal jurisdictions, helping commercial law firms close cross-border transactions easily and efficiently. Escrow is most commonly used in M&A transactions. The solution reduces the risks faced by both the buyer and the seller, while M&A experts structure the escrow to ensure the deal closes quickly and securely. For example, if a client is concerned about the accuracy of the acquired company’s financials, the bank can hold a percentage of the purchase price in escrow for up to 18 months. If no claims are made after this period, the funds are paid to the seller. This is just one example of the variety of solutions available. In such deals, the J.P. Morgan team works closely with our clients, guiding them through the steps and simplifying documentation, to ensure the transaction is completed in a timely manner. Beyond escrow, J.P. Morgan clients have access to a broad range of related solutions, including leading payment services, foreign exchange services and investment products that provide liquidity, safety, and return. This end-to-end solutioning capability is a powerful cocktail that allows clients to benefit from comprehensive solutions that deliver more than risk mitigation in complex deals.

"J.P. Morgan is one of the few banks in the world with a dedicated escrow group in Asia, Europe, Africa and the Americas."

BRIEFS

ASIAN LEGAL BUSINESS august 2012

SPONSORED PROFILE

Cadwalader, Wickersham & Taft LLP

VIE Contracts & Corporate Governance

n July, the U.S. Securities and Exchange Commission (the “SEC”) issued a “formal order of investigation” against New Oriental Education & Technology Group Inc. [NYSE: EDU] (“New Oriental”). The SEC appears concerned about New Oriental’s accounting practices and the inability of its variable interest entity (“VIE”) companies to transfer profits to foreign investors. Rocky T. Lee, Asia Managing Partner, Head of Greater China Corporate Practice

A similar intra-company liquidity concern plagued Sino-Forest Corporation (“Sino-Forest”) from June of 2011. Sino-Forest ultimately filed for bankruptcy and was delisted from the Toronto Stock Exchange after being accused of misstating its cash position and business assets in the People’s Republic of China (“PRC” or “China”). The VIE structure (the “VIE Structure” ) is inherently imperfect because it encompasses and intersects two different legal systems: common law and civil law. Complicating matters further, any Chinese issuer listed on the NASDAQ or the NYSE must simultaneously comply with PRC law, U.S. law, and both jurisdiction’s accounting rules. Tension has escalated between the PRC Ministry of Finance, the SEC, and the Public Company Account Oversight Board (“PCAOB”) over accounting and working paper disclosures. Stark differences between common and civil law systems account for some of the VIE Structure’s inherent risks. Furthermore, most legal and investment professionals are cognizant of the potential conflict of interest in the VIE Structure and its set of contracts controlling capital flows (the “VIE Contracts”). However, unsophisticated managers and ill-informed professionals have exacerbated the VIE Structure’s risk profile. As early as 2001, the fragility of the VIE Structure was exposed when dismissed CEO of Sina.com [NASDAQ: SINA], Mr. WANG Zhidong, refused to resign and asserted his majority shareholder interest in the domestic VIE company (the “VIE Company”) which held the requisite license to operate Sina.com’s internet business in China. Certain PRC foreign investment limitations and telecommunications regulations bar the listed company (“ListCo”) from owning any shares of the VIE Company. An episode reminiscent of the 2001 Sina.com incident occurred in April of this year involving Mr. Ron CHAN, the former CEO of ChinaCast Education Corporation [NASDAQ: CAST] (“ChinaCast”). Mr. Chan forcibly entered ChinaCast’s offices while accompanied by supporters to claim ownership of physical assets held by ChinaCast’s VIE Company. Countless other incidents have plagued the market.

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

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

Periodic strengthening of VIE Contracts since 2001 has not induced commensurate improvements in corporate governance. Such corporate governance improvements are predicated upon corporate managers actually enforcing their VIE Contracts (e.g. the VIE Company must actually make payments to the ListCo or a subsidiary thereof). Unfortunately, VIE Contracts are often loosely enforced, and rarely do we see effective intra-company capital flows because most companies prefer to reduce such flows to minimize their PRC tax liability. If funds actually flowed in accordance with the VIE Contracts, most if not all of the VIE businesses would pay more taxes. Taxes should not be a primary concern of managers, as auditors will have already provisioned such tax liabilities in the

company’s consolidated financial statement in accordance with U.S. GAAP rules. There is, however, a devious technical nuance where crossborder laws and accounting intersect with China’s currency control regime, one of the world’s largest. Under the PRC’s currency repatriation rules, a wholly foreign owned enterprise (“WFOE”), usually the ultimate PRC subsidiary of a ListCo, may only repatriate its Renminbi (“RMB”) profits offshore if the WFOE has complied with a complex set of PRC tax rules, foreign exchange circulars, and profitability requirements. If money was not periodically paid by the VIE Company to the WFOE pursuant to the VIE Contracts, PRC laws and foreign exchange regulations will likely prevent the WFOE from paying a dividend. This strikes at the heart of the threshold issue of financial consolidation: whether the financial performance of the VIE Company can be attributed to the ListCo when the failure to implement and enforce the VIE Contracts creates substantial doubt (or substantial uncertainty) as to the going concern of the ListCo because its RMB proceeds earned in China cannot be adequately repatriated. Severely limited offshore intra-company liquidity is but one of many symptoms of a WFOE failing to recover payments from the VIE Company. This prompts one to ask: at what point do years of non-enforcement of VIE Contracts by the company’s directors and managers trigger the termination and/or expiration of those VIE Contracts rendering them unenforceable? An interesting and related legal question is whether the principles of laches, estoppel, and statutes of limitation might be applied by PRC judges to VIE Contracts when parties persistently fail to fulfill contractual obligations. Let us also not forget to ask whether the WFOE actually provided substantive services to the VIE Company under the VIE Contracts. If the VIE Contracts are not enforceable then one can further anticipate that the VIE Company’s shareholders can walk away from a VIE Structure unscathed. Many Chinese companies employing the VIE Structure have succumbed to the aforementioned problems due in part to a failure by their corporate managers to understand the VIE Structure and adequately enforce VIE Contracts. Resulting intra-company liquidity problems then often precipitate deficiencies in corporate governance and improper payments to affiliates and related parties. As such, experience has taught us that corporate managers have a considerable role to play in triggering the inherent weaknesses of the VIE Structure. Strong corporate governance and sustainable business growth are created by people and not by contracts alone. By understanding the VIE Structure and requiring VIE Contracts to be actually enforced, corporate managers can thwart malfeasance, just as their laxity can trigger it. It is therefore incumbent upon each and every corporate manager to vigilantly implement corporate compliance programs in concert with VIE Contracts. Such vigilance on the part of corporate managers can ensure accountability and strengthen corporate governance, thereby bolstering the sustainable growth of offshore listed Chinese companies for shareholders and for the market at large.

Patent

ASIAN LEGAL BUSINESS august 2012

licence to force companies to provide access to certain drugs,” he says. One example of the new CL effect is, as Reuters reported on June 8, related to Gildead’s HIV drug, Tenofovir. The drug, known by its brand Viread, had worldwide sales of $737.9 million last year. China’s government, initially slow to acknowledge its growing problem of HIV/AIDS in the 1990s, now admits to having a ballooning number of HIV/AIDS cases. Although Gilead moved to share its IP rights on its medicines in a patent pool with generic drugmakers from many countries last July in return for a small royalty, China was excluded. This meant it had to continue paying high prices for Tenofovir. Since the change in China’s Patent Law, Gilead has offered certain concessions including giving China a substantial donation of Tenofovir if it continues to buy the same amount, said Paul Cawthorne, coordinator for Medecins Sans Frontieres’ Access Campaign in Asia. “This is all a negotiation game; this offer from Gilead came about once the news that the Chinese were considering issuing a CL came out. The end game is okay; you get a better deal or you use the CL. It’s a strategy that many countries use,” he told Reuters.

“I think the real threat is the possibility of the government dangling a compulsory licence to force companies to provide access to certain drugs.” Benjamin Bai, Allen & Overy

Big Pharma response Lawyers say the new CL regulation simply adds another layer of risk and challenge to what Big Pharma already deal with on a daily basis around the globe. “The risk won’t be any greater for them than in the U.S.,” says Bai. But he does counsel that “the MNCs (multinationals) should have a strategy in dealing

REUTERS/Michael Caronna

Patent

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Court-sanctioned compulsory licences

lthough the term “court-sanctioned compulsory licence” (CSCL) is not officially recognised, numerous academics and a growing number of lawyers are viewing this approach as amounting to a de facto compulsory licence (CL). In essence, it is where a court denies a permanent injunction but awards damages and so infringers continue infringing. “This is tantamount to the same thing as a CL,” says Allen & Overy Asia IP head, Benjamin Bai. The hallmark case demonstrating this judiciary route to obtain a de facto CL is found in the U.S., in a 2006 Supreme Court decision on eBay Inc v MercExchange LLC. According to a Fordham Law Review article by H. Tomcis Gómez-Arostegui: “The Supreme Court held that traditional equitable factors apply to injunctions in patent and copyright cases, and therefore, the mere fact that a defendant has infringed a patent or a copyright does not necessarily mean a final injunction must issue. In the three years since, lower courts have denied final injunctions more frequently than before and are now struggling with what relief, if any, to give prevailing plaintiffs in lieu of an injunction. Some courts permit plaintiffs to sue again later. But most award prospective relief to plaintiffs-sometimes a lump-sum damages award or more commonly a continuing royalty-to compensate plaintiffs for the defendant’s anticipated post-judgment infringements. Plaintiffs often object to prospective-compensation awards as constituting compulsory licences.” In China, although the prospect of a CSCL is still quite rare, it has happened in a handful of cases. In one famous instance, Wuhan-based China Environmental Project Tech (CEPT) sued Fujikashui Engineering (FKK) and Wuhan Huayang Electricity (WHE) in a Fujian Higher Court for patent infringement. After an eightyear long battle that went all the way up to

the Supreme People’s Court, FKK and WHE were found guilty of infringement and held jointly liable for damages in December 2009. Even though an injunction was granted against FKK, an injunction was denied against WHE for public interest reasons - thus resulting in a de facto CL, a CSCL. Upon paying a licence fee, WHE was able to continue using CEPT’s technology. August Zhang, a partner at Rouse, says that because the Supreme People’s Court made an interpretation that the court does not need to grant an injunction, CSCLs are possible in practice. “Particularly if you have a good reason for public interest, the Supreme People’s Court has made it clear that courts may not be able to stop the infringement of a patent and the infringer can continue use,” he says. Alison Wong of Bird & Bird agrees that a CSCL is rare: “Only in a case of public interest would a Chinese court refuse a permanent injunction.” She points out that if the courts too easily granted CSCLs in patent infringement cases, “the value of a 20-year patent right should be seriously undermined”. Despite the fact the CSCLs may lead to the same result as a CL, another school of thought from legal practitioners is that they are not CLs. By definition, a CL must be issued by the government and allows an individual or company to use a patent without seeking the owner’s consent, though it does need to pay the patent holder a set licence fee. Jones Day partner Chiang Ling Li says that CSCLs may not always end up with the same result as a CL, so including “CL” in the term is not accurate. Fangda Partners’ Fang Qi also does not view the CSCL as the same as a CL. He notes that a court’s refusal to grant an injunction would mostly originate from public interest concerns, which differs from the grounds for a CL as outlined in the Patent Law. “First, even though the court may not grant an

with the Chinese government when it waves a CL over their heads.” Li concurs and says that MNCs “do not need to be overly worried. But they need to consider management strategies”. Zhang feels that at the moment, what all his clients need to do is to “keep an eye on this development”, and find out whether there are real applicants in the process of applying for a CL on their products. “Keep in close contact with SIPO,” he says. Constant communication with the authorities is always recommended. “Big Pharmas need to keep open communica-

injunction in a case, the infringing party is still identified as an infringer and not a licencee. Second, because of the characteristics of civil litigation, the court is only dealing with one particular dispute instance. Thus, the fact the infringer may continue infringement in a particular dispute instance does not mean it can freely exploit the invention,” he says. Thirdly, he says the CLCS is an ex post remedy, and that the damages awarded in these particular cases are based on the infringer’s gains or patentee’s losses. “The royalty rate for a compulsory licence is decided ex ante, likely based on prevailing rates for comparable patented technologies between parties in similar situations,” Fang elaborates. “If one were to take a strict definition of CLs as government-agency granted rights, then court-sanctioned CLs are not CLs,” says Bai. “However, most people don’t take that narrow a view. There are definitional differences, but it does not change the fact that a de facto CL accomplishes the same goal as a regulatory CL.” Regardless of the varying viewpoints on the definition of CSCLs, the lawyers are in agreement that it is part of a host of IP litigation strategies. The judiciary route to acquire a CSCL is “easier and quicker” than applying and waiting for the government to issue a CL (especially given the fact that it has never acceded to a request). “A CL is a useful tool, like a bargaining chip; it works in a multifaceted way. The threat of a CL – both a court-sanctioned one and one from the government – should always be in anyone’s war chest,” says Bai. “When I defend patent infringement claims, I consider the option of going to a court to get a CSCL. In the meantime, I also weigh the option of getting a CL from the Chinese Patent Office. It’s a multipronged approach.”

tion and regular contact with authorities so that they are up to speed as to the government’s policy on how to implement the new CL provisions under the patents law,” says Wong. Other suggestions from IP specialists include brand owners reviewing pricing issues in China and considering whether there are any new licensing strategies to utilise.

Patent

ASIAN LEGAL BUSINESS august 2012

REUTERS/Richard Chung

“Even though nobody has been successful so far in applying for a compulsory licence, the developments do bring some possible concern for foreign drug companies.” August Zhang, Rouse

One core aspect for Big Pharma success in China is to ensure they are meeting the market’s demands for their products. If there is enough supply, it is likely the Chinese government will not focus much attention on the drug company. However, as Bai points out, “if the fear of an undersupply develops, the government may consider issuing a CL for generics to produce the drug to meet demand”. “The real solution is to be more engaged with the Chinese consumers, and to work with the government to make sure if you have a patent; that you meet domestic demand. This would be a win-win situation for the government and the drug companies, and a CL can be avoided,” he says. Bai is a proponent of the “holistic approach” to China – one that “balances profits with consideration for the real human aspect and the social responsibilities”,

and encourages Big Pharma to implement this type of strategy. Innovation-bound Rather than homing in on the potential issuance of a CL, outsiders should instead be watching China’s gradually-shifting pharmaceuticals landscape. Unlike India, which has developed a formidable generics industry, China’s ambition is to become the next great drug innovator country. “Thus, I do not see the widespread use of the CL for pharmaceutical products,” says Fang. Bai says that “from its latest Five-Year Plan, it’s clear that China wants to develop an innovative biotech and pharmaceuticals industry. This is a planned economy”. There has been financial support and incentives from the government to bolster research and development (R&D) efforts, and the authorities have consistently been encouraging domestic pharmaceuticals to acquire patents. “Domestic companies are continuing work on generics, but they are also developing the R&D side for innovation,” says Li. According to various statistics, 88 percent to 95 percent of Chinese pharmaceutical companies manufacture generic drugs. However, there are a handful

Patent

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“There is no need to panic as we have not seen aggressive enforcement of compulsory licences from SIPO, other than the issuance of the administrative measures.” Qi Fang, Fangda Partners

REUTERS/Jacky Chen

that are working on morphing into innovative players. Zhejiang-based Simcere Pharmaceuticals, a New York Stock Exchange-listed company, is one such example. “Innovation is the key driver of our progress towards excellence. In recent years, we have refined our strategy to focus on the development of first-to-market generic and innovative pharmaceuticals,” says the firm’s website. Last year, it received approval from the State Food and Drug Administration for a new disease modifying anti-rheumatic drug named Iremod. It was independently developed by the company, and will be the first Iguratimod drug on

the global market. Jiangsu Hengrui Medicine is another domestic player investing in R&D. Shanghai-based Hutchison MediPharma states on its website that it is “a novel drug R&D company focusing on discovering, developing and commercialising innovative therapeutics in oncology and autoimmune diseases”. The company has compounds in pre-clinical, phase I, phase II, and phase III development stages. With the developmental timelines being so long, an innovative drug will not go to market anytime soon from China. However, numerous domestic companies are working hard to make it a reality. “They are in the process of developing the next generation blockbuster drugs that will be sold all across the world,” says Bai. So when will China emerge as the newest drug innovator country? It is too soon to tell for sure, but industry watchers estimate that within a decade, China will likely reach its goal. “When has China not met its goals?” asks one domestic lawyer. “Look at China’s track record; it achieves whatever it states in its Five-Year Plan.” Since domestic Chinese drug companies are seemingly on the right track toward novelty and innovation, what Big Pharma really need to watch out for is the impending competition it will face from China in this generation – and not wring their hands over a nebulous potential CL grant.

LPO

ASIAN LEGAL BUSINESS AUGUST 2012

LPO

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LEGAL PROCESS OUTSOURCING (LPO) IS EVOLVING INTO A SOPHISTICATED MECHANISM BASED ON INNOVATIVE PROCESSES AND TECHNOLOGY SOLUTIONS THAT ALSO REQUIRE HIGHLY SKILLED LEGAL PROFESSIONALS AT ONSHORE LOCATIONS. WITH GREATER RECOGNITION FROM THE LEGAL COMMUNITY AND LARGE CORPORATIONS IN THE U.S., LPO VENDORS NOW PERFORM HIGH-END TASKS AND GENERATE MUCH HIGHER REVENUES, REPORTS RAGHAVENDRA VERMA

“W

e clocked $40 million with 670 employees last year,” says Pavan Vaish, global chief operating officer of UnitedLex. This revenue figure of $60,000 to $70,000 per employee, according to him, is far more than the $15,000 and $25,000 averages generated by the business process outsourcing industry and finance and accounting outsourcing respectively. Furthermore, UnitedLex has registered a 60 percent revenue growth in 2011, and hopes to continue the trend. It is noteworthy that the stagnation in the major economies of the world has not dampened spirits in the industry, which is benefiting from its ability to provide increasingly higher value addition. A critical aspect of its recent achievements has been global delivery – being capable of delivering services from multiple centres around the world, and most importantly, from close proximity of their client locations. A physical presence in the U.S. and UK not only attracts hitherto reluctant customers, but also helps in devising new costeffective delivery models. “With very robust processes and extensive use of technology, we create a tripartite relationship between law firm on one side, and company’s legal department on the other,” says Ram Vasudevan, CEO of QuisLex. According to him, the big LPO providers, including QuisLex, are involved in complex work streams relating to litigation, M&As, due diligence, and end-to-end contract management. With its new-found confidence, the primary pitch of the LPO industry does not any longer centre around cheap delivery options for the traditional legal tasks. According to Mark Ross, vice-president of Integreon, it is important that they are able to deliver a suite of options to their

clients. “A global delivery platform provides clients with choices, and enables LPO providers to allocate the most appropriate resources to a particular engagement,” he says. Integreon has 17 offices around the world including LPO delivery centres in New York, Washington D.C., Atlanta, Los Angeles, Fargo (North Dakota), London, Bristol, New Delhi, and Mumbai. It employs over 750 lawyers, paralegals, eDiscovery support staff, and project managers. “They help us provide 24x7 follow-the-sun legal services delivery to our clients,” says Ross. Onshore delivery also adds to the confidence and the comfort of the clients. According to Suchorita Mookerjee, director, legal operations at Bodhi Global in Pune near Mumbai, “most of the prospective customers are usually averse to outsourcing due to a perceived risk of poor operational performance of delivery centres at far away locations.” ANTI-OUTSOURCING DEBATE Furthermore, the outsourcing debate in the U.S. is as alive as ever before. Recently, while outlining the proposed amendment to the model rules of professional conduct for legal outsourcing in the U.S., a commission set up by the American Bar Association (ABA) made some very pertinent observations on the industry. In its report to the ABA’s House of Delegates, the “Commission on Ethics 20/20” said that “certain outsourcing is controversial in light of the current employment market for lawyers, and the economic hardships faced by lawyers currently seeking jobs.” The commission’s report said that the proposed changes are “neither an endorsement, nor a rejection of the practice of outsourcing.” Rather, it said that the proposals “respond to the existence and continuing growth of these practices, and are intended to clarify a lawyer’s

LPO

ASIAN LEGAL BUSINESS AUGUST 2012

obligations in this context so that lawyers who decide to outsource do so in an ethical and responsible manner.” In fact, the commission’s recommendations, which will be considered in ABA’s annual general meeting in August, do not demand any sweeping changes. One of them, for example, merely clarifies that the “lawyers may not engage in outsourcing when doing so would facilitate unauthorised practice of law.” At the same time, while admitting the complexities associated with the definition of outsourcing, the commission, in its 17-page report, said that the “diversity of outsourcing arrangements make bright lines impossible to draw.” FADING DISTINCTIONS Indeed, some of the complex tasks now undertaken by the LPO providers could easily be classified as those of law firms. For example, UnitedLex undertakes patent drafting assignments for the electronics, automotive and medical devices companies, which according to Vaish, is an extremely high-end task for them. “We also have eDiscovery professionals who are certified 30(6)B experts and testify on behalf of our clients,” he says. Regarding the talent employed to gain domain expertise for such specialist tasks, Vaish says that with the exception of some financial services, sector-specific skills are not required for LPO work. “We (only) need very deep skills in particular horizontal areas like forensics, eDiscovery, document review, contract management, and intellectual property,” he says. REUTERS/Beawiharta Beawiharta

CHOOSING DELIVERY CENTRES To maintain a cost-effective model, the LPO providers try to deliver most of their routine legal work out of India or other offshore centres. However, at the same time, clients are offered a choice from the available resources along with the linked cost structures. As expected, the services delivered from offshore

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“WITH VERY ROBUST PROCESSES AND EXTENSIVE USE OF TECHNOLOGY, WE CREATE A TRIPARTITE RELATIONSHIP BETWEEN LAW FIRM ON ONE SIDE, AND COMPANY’S LEGAL DEPARTMENT ON THE OTHER.” RAM VASUDEVAN, QuisLex

locations are always cheaper than those from within the U.S. or UK. In addition to cost, there are numerous other factors that determine the choice of outsourcing location. According to Ross, these include legislative restrictions such as the Data Protection Act in the UK, and the Export Control Regulations in the U.S. Furthermore, he says that the decision could depend upon the complexity of the task, familiarity with the client’s particular legal system, the amount and type of communication required, project duration, client comfort with a location, time zone preference, and language skills. Giving an example of a legislative restriction, Ross says that when a U.S. patent application drafting is outsourced to India, it is possible that the information sent to enable this drafting could be deemed technology, export of which may have been prohibited. He, however, adds that: “The ultimate arbiter as to determining the suitability of outsourcing a particular engagement must rest with the client; otherwise, we would be providing legal advice to our clients, and (thereby) engaging in the unauthorised practice of law.” TECHNOLOGY APPLICATION For managing their global delivery operations, it is important that LPO providers install workflow technology platforms to enable seamless interaction among various teams around the world. “Platform LPO vendors have an extra edge in the market as they offer integrated service delivery,” says Mookerjee. “Processes relating to document review for litigation support, contract management, due diligence, legal research, and intellectual property are best managed through a platform,” she says. As technology applications are integral parts of the LPO business, its innovative and integrated platform-based solutions tend to be far superior than the other systems. For this reason, many law firms and corporate legal departments prefer not to have in-house

technology solutions, and instead subscribe to SaaS (software as a service) solutions offered by LPO providers. According to Vaish, UnitedLex benefits hugely from this new trend of sharing technology platforms as it manages to attract even those customers who do not outsource their legal work. “The customers log in and work on our SaaS environment hosted in our private cloud,” he says. Furthermore, Vaish says that the clients are willing to pay a premium for processes that help in the effective use of its technology. No wonder then, the technology solutions generate almost half of UnitedLex’s revenue. The practice also helps the company to understand customer business, and become capable of offering other outsourcing solutions in the future. However, contrary to expectations, UnitedLex does not claim to use the latest technology, and there are good reasons for it to be slightly conventional. “While we want technology solutions that are best of breed, some of them may not be fully established, and therefore, we prefer proven and stable solutions,” says Vaish. “At the end of the day, we are in the business of reducing risk for our clients,” he says. COST PRESSURES Risk minimisation and compulsions of cost reduction always emerge as the two big competing factors in the corporate boardrooms discussing outsourcing options. According to Vaish, until a few years ago, there was no pressure on the in-house legal departments to cut costs; however, it is no more the case. “Companies are going into more and more litigation, and at the same time, legal budgets cannot go on increasing,” he says, “these companies then also put pressure on law firms to be more cost efficient.” The choice is not easy and initially, the companies and law firms are always very tentative in their approach to outsourcing. According to Vasudevan, who is based in the southern Indian city of Hyderabad, “the streams of work from a new client are often limited. But once they get comfortable with our quality and performance, the work increases significantly.” Furthermore, he says that most of the growth for QuisLex, which also has offices in New York and Chicago, comes through references and more work from existing clients. Though corporate in-house legal departments initiate the outsourcing trend, law firms are equally good customers for LPO providers. Confirming the trend, Ross says that both the streams contribute equally to Integreon’s business. The outsourcing benefits for law firms, according to him, include increased flexibility, increased scalability, use of the best technology, and continuous improvement in service delivery. Over the course of the last three years, says Ross, law firms like Simmons & Simmons, Allen & Overy, Pillsbury Winthrop Shaw

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QUISLEX

Best Practices for a Defensible Document Review By Andrew Goodman and Philip Algieri

he recent predictive coding cases in the U.S. - Da Silva Moore, Kleen Products and Global Aerospace - signal a growing judicial acceptance of the use of technology to effectively review everincreasing volumes of data. However, as Judge Carter noted in Da Silva Moore, “[t]here simply is no review tool that guarantees perfection.” It is critical that litigants follow Magistrate Judge Peck’s mandate that “counsel must design an appropriate process, including use of available technology, with appropriate quality control testing, to review and produce relevant ESI.” Ultimately, the defensibility of a party’s approach to document review will rely more on the review and quality control process employed than on which particular technology is used. In another context, Judge Grimm stated with regard to Federal Rule of Evidence 502 and potential waiver of privilege that, “Reviewing courts must remember that the bellwether test under Rule 502(b)(2) is reasonableness, not perfection.” What then, is the key to a defensible document review? The answer is to follow best practices that leverage people, process and technology.

A: 757 Third Avenue, 21st floor New York, NY 10017 T: (212) 376 5601 E: info@quislex.com W: www.quislex.com

Design a robust process A defensible review process begins with a reliable, tested, quality assurance program and a processoriented approach to quality measurement and reporting. ISO certifications are the internationally accepted standard when evaluating the robustness of a process, and an ISO 9001 certified Quality Management System for review is an ideal starting point in demonstrating defensibility. These certifications demonstrate that a review process has been thoroughly vetted by a reputable, independent third party and serve as an important indicator of quality to clients, courts, and opposing parties. Another key element of a robust process is the effective use of data-driven quality-improvement systems like

Six Sigma. Manufacturers have successfully utilized Six Sigma for decades, and its underlying principles can be applied to create methodologies to track and improve quality on large scale document reviews. Related techniques such as PDCA (Plan Do Check Act) or DMAIC (Define Measure Analyze Improve Control) can also be implemented to continuously improve the review process. Most importantly, it is not enough to just have processes; it is imperative that you adhere to these processes, document this adherence and be prepared to testify if required. Demonstrate quality and defensibility Key elements of demonstrating and proving defensibility are the use of advanced statistical methods and intelligent searching in your processes. A robust process that integrates these concepts can help you make defensible decisions regarding Early Data Assessment, intelligent document reduction or in utilizing a technology-assisted review solution. You should establish appropriate quality control protocols for every stage of the review and use advanced statistical concepts to select sample sets, measure accuracy and gauge performance. You must test and validate searches and search results, because as Judge Grimm noted in Victor Stanley, and Judge Scheindlin cited approvingly in Pension Committee, the failure “to assess the accuracy and validity of selected search terms” can constitute negligence. You create a more effective and defensible search process when you refine searches to accepted levels of recall and precision, use sampling methodologies backed by advanced statistical concepts to test results, and create efficient iterative feedback loops. In addition, the review process itself must be subject to the same rigorous processes. Finally, this overall emphasis on a quantitative approach to quality creates essential audit trails should anyone ever challenge your process.

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People Matter A process is only as strong as its weakest link, and even the most sophisticated process will fail without adequate human capital. A document review process that relies on the exclusive use of permanent employees at all levels is inherently more robust and repeatable than one that only uses full-time employees at key positions or above a certain level of responsibility. By relying exclusively on full-time employees, you can provide comprehensive training in your processes across all levels. As a result, your reviewers become immersed in your processes and develop institutional knowledge of your clients’ matters, industries, documents and preferences for handling document reviews, all of which makes them more effective than the usual temporary reviewer and bolsters defensibility. This applies beyond the “core” review team as well. You should have full-time experts, such as search specialists, statisticians and linguists, who help drive quality and defensibility. For example, a separate quality group that serves as an independent check on all projects can enhance the team’s performance on any given matter, and also take valuable insights learned across matters and industries and apply them to make all reviews more defensible. Incorporate Technology A defensible review process should also leverage technology to the maximum extent possible. By failing to do so, you subject yourself to the accusation that you have not chosen the most effective review option available to you. You should be able to work with any review tool to gather the data necessary to measure and drive quality, and your Six Sigma driven processes should allow you both to fill in the gaps where technology leaves off and to enhance a review tool’s strengths. It is also important to understand the difference in the search algorithms a particular tool employs and the implications these differences have on your processes. If you fail to account for such differences, you could be at risk if something goes wrong as a result of a particular technology’s unique features. Involve counsel at all times Your process should not be a “black box.” At the end of the day, counsel is responsible for the review and must stand behind the quality of your work product. Among other best practices, you should work with counsel to: (1) initiate project kick-off calls and project-

specific training; (2) assist in Early Data Assessments and search term validations to better understand the documents and reduce risk (and cost); (3) tailor your workflow to account for counsel’s preferences and the project’s requirements, and integrate them into your processes; (4) customize your quality and productivity reports and create a reporting schedule that ensures transparency into the review; and (5) perform calibration exercises where your review teams and counsel independently code and discuss a set of documents to make sure your responses are consistent. Throughout the review, you should stay in constant communication with counsel and continuously obtain and apply their feedback. By following these practices, you ensure that counsel has complete insight into the review, can make timely changes or improvements to the process and can appropriately monitor the review team’s performance and provide feedback. Conclusion Process is the key to a defensible document review, whether with regard to technology assisted review, validation of search terms, inadvertent production or any other aspect of document review that can be called into question as part of an adversarial process. By employing the best practices discussed above, you attain a higher level of quality, adopt the most defensible approach to document review and remove any doubt that what you have done is both appropriate and reasonable.

The authors are the Executive Director and Director of Litigation Services for QuisLex, Inc., a Chambers Band 1 Legal Process Outsourcing (LPO) company. 2 Da Silva Moore, et al. v. Publicis Group SA, et al., No. 11 Civ. 1279 (S.D.N.Y. Apr. 26, 2012) (No. 175), at 4 (Opinion & Order upholding Judge Peck’s ruling allowing predictive coding). 3 Da Silva Moore, No. 11 Civ. 1279 (S.D.N.Y. Feb. 24, 2012) (No. 96), at 25-26 (Opinion & Order approving the use of predictive coding). 4 Paul W. Grimm, Lisa Yurwit Bergstrom & Matthew P. Kraeuter, Federal Rule of Evidence 502: Has It Lived Up to Its Potential?, XVII RICH. J.L. & TECH. 8 (2011), http://jolt.richmond.edu/v17i3/article8.pdf, at 45. 5 See Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., 685 F. Supp. 2d 456, 465 (S.D.N.Y. 2010) (citing Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 259-62 (D. Md.2008)). 1

LPO

ASIAN LEGAL BUSINESS AUGUST 2012

Pittman, King & Wood Mallesons, and Corrs Chambers have publicly acknowledged LPO relationships with Integreon. According to him, “the law firms that embrace legal outsourcing are now viewed as innovative, ground breaking, and cognisant of their clients’ concerns.” CHALLENGES AHEAD There are many issues that the LPO companies themselves would need to resolve before they succeed in helping others. According to Mookerjee, there is a lack of industry wide standardisation of processes, materials and configurations, which according to her, makes global delivery difficult. Mookerjee is particularly concerned about the lax attitude among various Indian LPO providers towards information security and confidentiality aspects. “There are some small time players who do not put proper preventive measures for confidentiality and data protection,” she says. Mookerjee says that during recruitment interviews for Bodhi Global, many lawyers with prior LPO experience disclosed that in previous jobs, they were never subjected to body searches and used to carry personal electronic items including pen drives in the office premises. This, she says, may give a bad name to the entire industry. Furthermore, according to Mookerjee, the clients who experience laxity in quality or delivery of service in their first outsourcing venture rarely agree to consider that option again. She, however, claims that

However, the high attrition rate among these young lawyers, who form the main task force, is another challenge that the LPO industry has to deal with. “They have many career options, and by just becoming the highest payer, one doesn’t reduce attrition,” says Vaish. Hiring senior lawyers – with more than 15 years of experience – having appropriate skills face a different kind of problem. “The cost of hiring such a talent at offshore locations is very high, sometimes very similar to the cost in the U.S.,” says Vaish, “there are very few people with specialised skills, and (a) lot of companies are going after them.” According to Mookerjee, LPO providers in the U.S. look for qualified Juris Doctors with experience of seven to twelve years with law firms in relevant jurisdictions.

BRIGHT FUTURE With almost all the LPO providers employing less than thousand lawyers, a consolidation seems to be on the cards. “LPOs are “WHILE WE WANT TECHNOLOGY SOLUTIONS THAT ARE progressing towards large-scale acquisiBEST OF BREED, SOME OF THEM MAY NOT BE FULLY tions and mergers, ESTABLISHED, AND THEREFORE, WE PREFER PROVEN wherein big players AND STABLE SOLUTIONS. AT THE END OF THE DAY, WE ARE would like to consolidate their marIN THE BUSINESS OF REDUCING RISK FOR OUR CLIENTS. ket spread, capacity, PAVAN VAISH, UnitedLex and provide wider span of legal services through takeovers,” says Mookerjee. in the past decade of the LPO industry, she has never heard of an However, according to Vaish, currently instance of a data leak. there is very little to acquire, and companies Regarding the availability of workforce in India, Mookerjee says that have to build the business. For this reason, though young lawyers in the country have the required qualification, he says there are large venture capitalists they lack some important skills. For example, she says: “American investing in smaller companies. According to English is very different from the English that is taught in our schools. him, the LPO companies could provide global So we do have to train them in basic American business correspondelivery only if they achieve a certain scale dence.” because as the labour cost will keep rising, Another problem affecting the capability of global delivery is the the smaller LPO providers will face severe fluctuations in the amount of work, which is particularly common in margin pressures. The only way out, he says, litigation assignments. According to Vaish, “in the U.S. we are able to is by increasing productivity through investget temporary workforce. However in India, flexible staffing for proment in technology and processes, which will fessional talent like lawyers does not exist.” For this reason, he says be a tall task for a small company. that the offshore delivery centres are usually assigned with the base At the time, when corporations have to work, while the fluctuations are handled onshore. UnitedLex’s, India deal with increasing regulations around the delivery centre employs 500 lawyers, while there are around 150 in world and a virtual explosion in electronically the U.S. and 20 in the UK. British Telecom is one of its major clients. stored information, the role played by the LPO Availability of highly-trained lawyers in India was the basis for the industry cannot be overstated. Vasudevan start of LPO services, and will probably remain a major factor for the says: “LPO is enabling access to much better country’s position in the industry. “Today, 85percent of all the offshore information, which is leading to more effeclegal outsourcing companies are still located primarily or exclusively tive decision making and an improved way of in India, and despite the ongoing emergence of other destinations, implementing the law as a practice.” India will continue to play a dominant role,” says Ross.

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NEWS

REUTERS

Insight: China’s CNOOC scoped Nexen, partnered, then pounced By David Ljunggren, Denny Thomas and Michael Erman

When Canada’s Nexen Inc fired its CEO in January, an oil giant on the other side of the world sprang into action. Nexen had been on the wish list of Chinese state oil company CNOOC Ltd for five years. The removal of CEO Marvin Romanow was just the opening the Chinese needed to make their move, according to sources familiar with the situation. By the Chinese New Year later that month, CNOOC had hired BMO Capital Markets and Citigroup Inc as financial advisers, according to these sources. That kicked off negotiations culminating on Monday with a deal to buy Nexen for $15.1 billion, the biggest foreign acquisition ever by a Chinese company. The agreement is a triumph for China’s third-largest oil company, which had to abandon its $18.5 billion bid for Californiabased Unocal in 2005 because of bitter opposition on sovereignty grounds from U.S. lawmakers, and shows how far the Chinese have come as dealmakers on the global stage. It also feeds China’s demand for resources to sustain an economy that despite six quarters of deceleration still grew at 7.6 percent in the second quarter, and will give it a platform from which to grow further in Canada’s energy sector. Interviews with people familiar with the Nexen deal reveal CNOOC heeded lessons from the Unocal debacle. It also closely studied Australian miner BHP Billiton Ltd’s failed $39 billion bid to buy fertilizer maker Potash Corp in 2010 - a deal killed by the Canadian government - as it methodically went about laying the groundwork for the Nexen deal. Among its tactics was the establishment of a joint venture so it could become familiar with the target and its assets, as well as the way of doing business in North America. Importantly, it quickly started building relationships with governments in the countries where Nexen operates, including Canada, the United States and Britain, the sources said. CNOOC, which offered a 61 percent premium to Nexen’s Friday stock price, already has interests in Canada - including oil sands operations in Alberta, and shale gas in British Columbia - as well as extensive exploration and production holdings in the North

Sea, Gulf of Mexico and offshore West Africa. Nexen, Canada’s sixth-largest independent oil explorer and producer, also operates in the Gulf of Mexico, Colombia, the North Sea, Yemen and offshore West Africa. A big step for China is that the Nexen offer is for the entire company. In the wake of Unocal, many Chinese buyers have chosen to buy stakes in overseas companies rather than attempt full takeovers. “It’s partly the valuation, partly an evolution of the Chinese mindset. You couldn’t do this deal a year after Unocal,” one of the sources familiar with the deal said. “They had to have made the smaller steps in the meantime that made everyone comfortable that they knew how to behave responsibly, operate effectively, treat employees well.” SMALL STEP Nexen spokesman Pierre Alvarez declined to comment on how the deal came together, saying the company will provide details in its information circular to be sent to shareholders in about a month. A CNOOC media official said Nexen had been a partner of the company for years, declining to comment further on the deal. Despite its size, the deal may prove to be only a small step in China’s ambition to acquire resources and technology. In the West, and particularly in the United States, there is still suspicion about sales of major assets to Chinese companies because of Beijing’s controlling influence in the nation’s corporate sector and anti-China sentiment among some lawmakers. Although some experts and people familiar with the transaction expect the Canadian government to approve the deal, that could change if popular sentiment suddenly turned against it. Pulling off a similar deal in the United States is also likely to remain a pipedream for Chinese buyers. “My guess is that they continue to be wary of investments in the United States and concerned that they might either be blocked or subject to conditions that may be complicated for them,” said William Reinsch, president of the National Foreign Trade Council, a U.S. business association focused on international trade and investment issues. “I wouldn’t

take it as a given that (Canada) would simply say yes and move on.” CAREFUL PREPARATION CNOOC stepped up its pursuit of Nexen after Canadian Prime Minister Stephen Harper visited China in February and said he wanted to sell more oil to Chinese and Asian markets. Canada has also stressed the need for more foreign investment to help develop its oil sands. “CNOOC would have read very real signals into that... It would have been very strange for political leaders from countries at the most senior level to come and ask for investment and then say ‘No’,” said a person familiar with how the deal was forged. In the wake of Harper’s comments, the Chinese firm sought meetings with senior officials in the federal government and the government of Alberta to gauge the appetite for a possible approach. CNOOC, realizing a hostile bid of this size would be virtually impossible to pull off after BHP’s failed approach for Potash, felt a crucial advantage was that its approach had the full support of the Nexen board, the sources said. CNOOC hired Hill and Knowlton for lobbying in Canada and the United States, and Bell Pottinger in Britain, according to one source. New York law firm Davis Polk provided legal counsel. Hill and Knowlton declined to comment. The firm filed its lobbying disclosure forms in Washington on Monday but listed the effective date of registration as May 14. A Bell Pottinger official in the United States did not have an immediate comment. “I don’t think the problem is whether CNOOC can complete the deal,” said a China-based source familiar with the matter. “The key is whether CNOOC can successfully consolidate and manage the new company, whether it can reach its targets over the next five years.”

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

PROJECT FINANCE

INDONESIA MAY HAVE BEEN ONE OF THE MOST IMPRESSIVE GROWTH STORIES OF THE PAST FEW YEARS, BUT IT DESPERATELY LACKS PROPER INFRASTRUCTURE. THE LAND ACQUISITION LAW, SET TO BE IMPLEMENTED SOON, IS EXPECTED TO GIVE PROVIDE INFRASTRUCTURE CONSTRUCTION A MAJOR SHOT IN THE ARM, APART FROM PROVIDING A MAJOR FILLIP TO PROJECT FINANCE, FINDS RANAJIT DAM

o talk about Indonesia’s negatives might seem absurd at this point. For one, GDP growth is expected to be 6 percent in 2012, with the government estimating it to go up to 7.2 percent in 2013. Over the next several months, the country is slated to join the exclusive club of countries with an annual GDP of more than $1 trillion. In 2011, foreign direct investment reached a record $19.3 billion and exports grew by 29 percent, reaching $203.62 billion. Two of the three ratings agencies – Fitch and Moody's – now rate the country as investment-grade, a spectacular turnaround from the economic basket case that it was some 14 years ago following the Asian Financial Crisis. However, one of the major roadblocks to Indonesia’s growth was highlighted recently by the third ratings agency, Standard & Poor’s. In a report titled “Greater Investment In Infrastructure Could Rev Up Indonesia's Growth Engine,” it noted that the country scored poorly in efficiency and productivity mostly because of the poor state of its roads, airports, and other economic lifelines. These were resulting in increasing congestion in urban areas, high transport costs, electricity blackouts, and limited access to improved sanitation. “The inadequacies in Indonesia's transportation infrastructure are likely to hinder the country's global competitiveness unless addressed,” said S&P credit analyst Rajiv Vishwanathan in the report. “Indonesia is also at risk of deeper power shortages over the next few years as demand multiplies.” It is not something the government is unaware of. In June, finance minister Agus Martowardojo noted a number of growth challenges, singling out infrastructure issues. "There are still many obstacles to land acquisition," he said. To tackle this problem, Indonesia in December 2011 passed the Land Acquisition Law, which is set to reduce uncertainty in acquiring land for development, and allow for the acceleration of road, port and airport projects. “The Land Acquisition Law is an important milestone for infrastructure development,” says Ken Hawkes, partner at White & Case. “In the past, with no compulsory acquisition for land to support public infrastructure or other

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PROJECT FINANCE

REUTERS/Beawiharta Beawiharta

PROJECT FINANCE governmental uses, there was only the ability to acquire land privately and for negotiated prices. Projects that placed a heavy emphasis on land – such as toll roads – had to rely on separate negotiations with many land owners. This caused delays, and ultimately led to the termination of many projects.” Hawkes adds that while there are other causes of project delays in Indonesia – a complex bureaucracy, for example, when it comes to seeking approvals – the passage of the Land Acquisition Law should provide a boost to those infrastructure projects that have been delayed or affected in some way due to issues related to land acquisition. Luke Devine, a consultant with Baker & McKenzie, agrees on the importance of the law. “Land acquisition risk has been the single-largest problem in recent years which has held back the development of infrastructure projects, particularly in those land-intensive projects such as toll roads and transmission lines for power projects,” he says. “Having a clear, streamlined process with clear deadlines for the steps involved in the land acquisition process will significantly help turn a number of these projects from plan to reality.” He adds that the law

“THERE IS SIGNIFICANT PRESSURE ON THE PRESIDENT TO ISSUE THE IMPLEMENTING REGULATIONS REQUIRED BY THE NEW LAW, AS WITHOUT IT, THE COMPULSORY ACQUISITION POWERS AND PROCESSES UNDER THE LAW ITSELF CANNOT BE UTILIZED. AS A RESULT, THERE IS A HIGH LIKELIHOOD THAT THE REGULATION WILL BE ISSUED THIS YEAR.” LUKE DEVINE, Baker & Mckenzie will also enable state-owned companies that have public service functions (such as PT Perusahaan Listrik Negara, or PLN, the government-owned electricity company that has a monopoly over electricity distribution in Indonesia) to avail themselves of these new land acquisition powers, which will speed up the development of power generation projects. “To date, PLN has been reluctant to take on the responsibility of acquiring land corridors to connect new power plants to the existing grid because PLN does not

ASIAN LEGAL BUSINESS AUGUST 2012

have compulsory land acquisition powers, and PLN has instead been trying to push this responsibility to the private sector developers who similarly have no power to compulsorily acquire land,” says Devine. “It is expected with these new powers, PLN will take on the responsibility of transmission corridor land acquisition.” James Harris, managing partner, and Justin Patrick, associate at Hogan Lovells Lee & Lee term the law to be of “fundamental importance” as they see it facilitating the development of privately funded public infrastructure. “The law represents a formal statutory regime giving the government a power roughly equivalent to ‘eminent domain’ or compulsory purchase, so it is rightly receiving a lot of media attention,” they say. “Depending on its implementation, the law could potentially provide a huge boost to the government's public private partnership (PPP) programme.” WAITING FOR THE LAW The law may have been passed in December 2011, but it cannot be practically implemented because the government has yet to issue a presidential regulation on it. However, with local media quoting representatives of the private sector as saying that acquiring land is equal to between 75 and 85 percent of an infrastructure project’s completion, the pressure is mounting with every passing month. Even an IMF mission to Indonesia in early July pointed out the fact that the implementation of the law was sorely needed to accelerate infrastructure projects. “There is significant pressure on the president to issue the implementing regulations required by the new law, as without it, the compulsory acquisition powers and processes under the law itself cannot be utilised,” says Devine. “As a result, there is a high likelihood that the regulation will be issued this year.” He adds that the issuance of this regulation is expected to enable government and the relevant state-owned companies to take on a stronger commitment in infrastructure concession agreements in relation to completing land acquisition in a timely manner. This will help reduce the risk level for developers, which in turn, will attract a larger number of developers. “As these projects are awarded and move into project financing, it will certainly be a boon for project finance lenders,” he says. According to Devine, the biggest trend he expects to see once the law is implemented relates to the willingness of more developers to seriously commit to bidding for these new projects. “This is on the assumption that with these new powers, the government and stateowned companies take on firm obligations to deal with land acquisition under concession agreements, rather than leaving land acquisition as a risk that the private sector developers must find a way to deal with,” he says. “Hence, the volume of deals and higher levels of interest from serious developers is what is expected.” Meanwhile, Hawkes expects to see more investment coming from domestic developers and banks. “The Land Acquisition Law would benefit those projects that have the greatest need for land, such as toll roads,” he says. “Traditionally, investment in the Indonesian toll road sector has come from domestic construction and toll operating entities.” Harris and Patrick say that the passage of the law's implementing regulations - which is anticipated this year - should be viewed as the first step in improving Indonesia's land acquisition regime. “After the regulation is promulgated, there will have to be a period of settling into the new regime; that could take a few months or longer,” they add. “The market would also benefit from further reforms in relation to registering title to unregistered rural land and how rights of way are to be established.” Keeping that in mind, they do not expect the new regulation to have an immediate impact on the project finance market. “Most

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King & Wood Mallesons

Project Finance Deals with Chinese Factors

Liu Zhigang Partner King & Wood Mallesons’ Banking Group, Beijing Office

he history of Project Finance in China is not long, but it is rich. In its earliest stage, Project Finance was used mainly in power plant deals, then later extended to water plant deals and petrochemical projects. At that time, Chinese sponsors were short of funds and experience, and Chinese banks were short of foreign exchange and caught up in bad loans. Furthermore, China’s infrastructure base was very weak, and the production capability of Chinese entities was also unreliable. Therefore, the lenders in the Project Finance market were mainly foreign banks, whose loans included commercial loans, export credit, and soft loans. As well as the collateral on all project assets, the lenders were able to attain sponsors’ guaranties and even governmental guaranties for almost every project. Twenty years later, the Project Finance deals with Chinese factors have developed significantly. Nowadays, two main types of deals exist within the Project Finance model, with different attributes. The first are projects within mainland China and the second are projects outside mainland China. Projects in Mainland China The attributes of the current Project Finance market in mainland China include: Chinese banks have now become the main, if not the only, source of funds for projects; The large state-owned enterprises have now accepted this model (gradually), including PetroChina and Sinopec, the biggest players with the strongest negotiation position in the market; With few power plant projects in action, most projects are in the petrochemical, nuclear power plant, highway, bridge and other infrastructure areas; All deals are subject to regulations and rules promulgated by Chinese regulators. Applicable regulations include the Guidelines for Project Finance Business as well as indirect rules, for example, the Provisional Measures on the Administration of Fixed Assets loans, the Provisional Measures on the Administration of Working Capital Loans, the Guidelines for Syndications Loan Business, etc. It is largely a buyers market.

A: 40th Floor, Tower A, Fortune Plaza 7 Dongsanhuan Zhonglu, Chaoyang Beijing, 100020, P. R. China T: +86 10 5878 5126 F: +86 10 5878 5577 E: liuzhigang@cn.kwm.com W: www.kwm.com

Although there is a contractive domestic monetary policy, as well as a shortage of funds in foreign banks, borrowers still hold a strong negotiation position and are able to request favorable loan conditions. This is because the sponsors are generally powerful, the deals are generally very big, and government support is generally strong. The borrower sometimes requests a clause stating that if any member bank fails to grant its portion in the facility, the lead manager should take such portion. Another example is a clause stating that if a lender or agent fails to make the money available on time, such lender or

agent will be fined based on the default interest. Other clauses may be specific to China. For example, under the Provisional Measures on the Administration of Fixed Asset Loans, the China Banking Regulatory Commission (CBRC) requests that when the disbursement fund is not a small amount (over RMB 5 million or 5% of the total investment amount), the loan must be transferred directly by the lender into the bank account of the payee rather than payor (i.e., the borrower) under the applicable commercial contract. Projects outside Mainland China The second type of deal relates to projects outside of mainland China. In the past ten years, “outbound” deals increased rapidly. Among these deals, many took the project finance model and have the following features: Chinese banks have increasingly become leading actors in financing overseas projects. Although not yet market leaders, Chinese banks have gained more experience and influence as a result of their significant funds. Most of the sponsors or borrowers have a Chinese background. The lenders request collateral not only on the assets of the projects, but also request a guarantee or commitment from the Chinese holding companies. Most deals are in the natural resources industry. Due to the cross-border nature of the deals, certain rules and regulations are now applicable which otherwise would not be. For example, when the Chinese holding companies provide security to the lenders, the relevant foreign securities rules will become applicable. The Chinese holding companies must get approval from and register such securities with the State Administration of Foreign Exchange. When carrying out Project Finance outside of China, Chinese companies and banks face many unfamiliar rules and regulations. For example many deals have failed as a result of environmental issues as well as issues related to local residents, such as compensation for destruction of their homes. The Chinese companies and banks have been accustomed to the soft environmental and native requirement in China. When they step into the international market, they normally disregard the importance of these issues in the local jurisdiction. They may have made a feasibility report without considering such factors and thus arrived at a very low fee quote. When the project starts, they become aware of a large and unanticipated cost, or even potential material disputes. Stamp duty also sometimes becomes a major issue. In some jurisdictions, bank guarantees are required to be stamped. This additional cost normally also falls outside the Chinese companies’ and banks’ initial projections, and if the financial advisor or counsel failed to make it clear in advance, this factor might render the deal unprofitable.

PROJECT FINANCE

ASIAN LEGAL BUSINESS AUGUST 2012

Workers work to build new toll road in Jakarta. REUTERS/Supri Supri

immediately, the law should allow the government to acquire land for infrastructure projects more easily,” they say. “Naturally, infrastructure projects, such as roads and transmission lines, could facilitate project finance for private businesses indirectly, such as for pulp processing plants and industrial facilities. There is also tremendous potential for the law to facilitate PPP projects. But project finance for PPP projects in Indonesia will continue to be constrained by the speed at which the government can get bankable projects to market and complete tenders.” AREAS OF FOCUS Hawkes says that toll roads will probably be the initial area for investment once the new law comes into effect. “Anyone having experienced the traffic delays and seen the overloaded transportation infrastructure in Indonesia would agree that this is a high priority!” he quips. Devine agrees that the toll road sector will be of great interest to developers, and explains why it is likely to see more domestic interest than foreign. “However, as the revenues from these toll road projects are not linked to U.S. dollars, unlike, for example, the revenues from the power projects, the toll road projects lend themselves more to domestic developers and domestic financing, where the currency

of revenues can be matched with the currency of financing and equity return requirements,” he says. “That said, as the Indonesian rupiah has maintained a relatively stable level over the past decade, if the government can tighten up the bankability of the concession agreements, a healthy amount of foreign interest in these projects is expected.” Toll roads aside, he notes that the offering to the private sector for concessions in the other transportation sectors are more sporadic. “Indonesia's current master plan (Masterplan for Acceleration and Expansion of Indonesia, or MP3EI) does contemplate a number of airports and seaports being offered to private sector developers. But as there is not a long track record of private sector concessions for seaports and airports – and these projects may be exposed to issues around the ability of the government to dictate revenue levels by controlling tariffs to consumers and users – the level of risk around these projects is higher than for toll roads, and certainly much higher than the tried and tested models for power generation projects,” he adds. However, for Devine, power generation projects continue to be the most fertile area for project finance lenders. “The government is currently pursuing Indonesia's Second Fast-Track Program which is 10,000MW power projects, the majority of which are to be awarded to the private sector for development and financing. Hence, there has been significant interest from developers and lenders in these projects, and as there is a long-established model for internationally financed private sector power generation projects, a number of developers and lenders are familiar with the structure of these projects and the risks arising from these projects. Hence, the award of these projects has been moving relatively quickly.” Harris and Patrick at Hogan Lovells Lee & Lee say that coal-fired power plants may continue to receive a majority of funding because PLN's power-purchase agreement (PPA) terms for these projects are

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well established. “We can see from Genting's Banten 660MW IPP project that there may be appetite to finance these projects without a government guarantee,” they say. “However, multilateral support for such projects seems to be on the wane. The government has also indicated that, from an energy mix perspective, new projects will include cleaner energy sources (such as natural gas and renewables). The recent indications that natural gas exports may be subject to moratorium are one result of these policies.” They say that outside the power sector, however, the government's PPP programme has been relatively slow in ramping up. “However, the government has port, water, waste management and toll road projects in the pipeline, in addition to three mine mouth IPP projects proposed for Sumatera,” they add. “Development of transportation infrastructure is expected to be critical in facilitating the government's private development goals. Toll road projects appear to have made the most progress, but railway and port projects have also been in planning stages. Additionally, the Tanah Ampo terminal expansion in Bali is one project that has been recently promoted, with a formal tender process expected to kick off soon.” Harris and Patrick add that after the implementing regulations of the land acquisition law are promulgated, they expect to see an immediate positive effect on projects, such as some toll road projects, where the government initiator has been awaiting guidance on how to proceed with land acquisition. “We also expect that the government initiator will select the sites for most (if not all) new projects coming to market,” they say. “This is a departure from previous procurement schemes, where in some cases, the private sector would be required to select its own site based on criteria set by the government initiator.” A DIFFERENT KIND OF MARKET Baker & McKenzie’s Devine says that project finance in Indonesia differs from many of its neighbours in two ways. Firstly, a number of other markets in Asia, such as Thailand and Malaysia, have developed very deep liquidity in the domestic bank market, and have moved away from reliance on foreign currency borrowing to develop infrastructure projects. But Indonesia is different. “The depth in the market and the willingness of domestic banks to whom true project finance may still be somewhat of a novelty, has meant that Indonesia continues to rely heavily on foreign currency project financing,” he says. “Additionally, Indonesia is still perceived as a jurisdiction where developers and lenders face political risk in relation to the long-term concession agreements, and accordingly, most of the cross border project finance transactions will necessarily involve commercial project finance lenders needing political risk cover provided by export credit agencies and multilaterals such as the IFC, the Asian Development Bank and the like.” He notes that in other jurisdictions in Asia, even some developing jurisdictions such as Thailand, foreign lenders have been willing to provide uncovered financing to those infrastructure projects. Hawkes of White & Case also points out the lack of governmental support for key infrastructure projects. “For example, the lack of any direct guarantee for any of the state-owned entities that are engaging in infrastructure development – like PLN, the monopoly state utility,” he says. “This is gradually changing with the need for more infrastructure investment from the private sector. The Indonesia Infrastructure Guarantee Fund has been recently established to facilitate infrastructure investment though a structured guarantee from a state entity.”

PROJECT FINANCE

Devine says that the biggest problems faced by developers and lenders in Indonesia, however, are front-end issues, rather than issues with implementing the project finance model. “For instance, for a lot of the sectors where PPP models are still relatively new in Indonesia, such as airports and seaports, the challenge is to ensure that the concession model that is adopted by government is one which meets the ‘bankability’ requirements of international lenders,” he says. “Without a bankable model, potential bidders lose interest, tender processes become fraught with danger as winning bidders seek to knock the contracts into shape post-bid, and the biggest loser in this is Indonesia.” Additionally, he notes that as infrastructure concessions must be awarded through a competitive tender process, since internal government delays in preparing projects for the bidding stage have been a source of frustration for developers who are actively seeking new opportunities. Finally, he notes that in the past, issues surrounding the creditworthiness of the entity awarding the infrastructure concession to a private sector developer had been a big concern, as the authoriser took the form of a limited liability state-owned company, such as PT Jasa Marga in the toll road sector, PT Pelindo in the seaports sector, and PT Angkasa Pura in the airports sector. “This led to concerns as to how these entities were going to be able to fund termination and buy-out

“ANYONE HAVING EXPERIENCED THE TRAFFIC DELAYS AND SEEN THE OVERLOADED TRANSPORTATION INFRASTRUCTURE IN INDONESIA WOULD AGREE THAT THIS IS A HIGH PRIORITY!” KEN HAWKES, White & Case

payments under the concession agreements in the event of a government-related default under those concessions,” he says. “However in recent years, the government has removed the ‘authority’ role from these state-owned companies, and taken it back. Accordingly now, the government-related obligations under the concession agreements are supported by the full government balance sheet, hence reducing these creditworthiness concerns.” Devine says that the moves of the government bode well for the sector in general. “If these front end problems can be resolved, we expect to see a significant increase in the number of deals closed,” he says.

WOMEN IN LAW

ASIAN LEGAL BUSINESS AUGUST 2012

NETWORKING

NETWORKING IS A KEY ELEMENT OF ANY SUCCESSFUL LEGAL CAREER. SIX FEMALE PARTNERS TALK TO PAUL PIMENTEL ABOUT THE CHALLENGES OF NETWORKING FOR WOMEN IN THE LEGAL PROFESSION, AND HOW TO OVERCOME THEM

KNOW YOUR INDUSTRY It is very important to understand the industry you are in, and know the players. Networking within your industry is very important for success. Being seen to be "part of" the industry is key to increasing your share of the work available.

team. Several of my senior clients now were the young bankers on deals I did when I first came to Hong Kong 14 years ago. I think it is too easy to think that networking boils down to playing golf and other events that tend to be male-dominated. While there are large pockets of that, it is still possible to successfully network as a woman lawyer.

Writing articles and speaking at conferences is a good place MICHELLE TAYLOR to start to establish Asia Managing Partner your credentials in your Orrick, Herrington & Sutcliffe, Hong Kong industry. However, it should be used in moderation and not to the exclusion of face-time with clients and industry participants.

Make an effort to force yourself to talk to someone you don't know at events you go to â&#x20AC;&#x201C; cocktail parties, seminars, even CPD lectures. Start small, get over your nerves and then keep at it.

The simplest networking to do when you are a young lawyer just starting out is to develop a relationship with the junior clients on the

Sadly, there are many obstacles to effective networking among women in the profession. Some are talked about all the time, but oth-

PLAY TO YOUR STRENGTHS AND BE YOURSELF

ers are more subtle. The obvious ones are networking activities skewed towards men, such as visits to breweries and golfing events, or events held in the evening, which can be a challenge if you have children. What may be less obvious is that women tend to have a smaller pot of contacts they ELLE TODD can draw upon in the Partner first place. One of the Olswang, Singapore first groups law yers network with tends to be friends from college, university or law school. People also tend to have their closest friends be of the same gender as them. With women, those groups of contacts become smaller and smaller because many women drop out of the workforce to have children. For example, of all my friends from college, only one is still in the workforce.

WOMEN IN LAW

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I try and network in different ways. In terms of meeting people, it will be lunch or coffee rather than evening activities. I focus on my strengths, which include listening, responding and staying in touch. I remember little things about people, such as the fact that they’re going on holiday, and think of ways of helping them out. It’s also important to start building and maintaining your network early. When I started out, I thought I would only be judged on merit and how hard I worked. Later, I realised how valuable having this network of people is, and I wish I worked on that earlier.

BARRIERS GRADUALLY DISAPPEARING When I started out, there were fewer opportunities, and more social barriers. At that time, networking was difficult because many clients had concerns about working with a woman, such as whether a woman would be able to work late into the night, travel, and so on. Whenever we went to meet a prospective client, we always went in a team consisting of at least one male member. You needed the token male presence initially, as on the client side, there was no visible female representation. KUMKUM SEN Partner Bharucha & Partners, India

Now, there are several women in high positions in the senior legal ranks in most large corporations. Networking is always a challenge, but it’s not so much of a gender issue as it’s one of competition. There’s only so much legal work in any one organisation, and there are many firms pitching for that work. So networking in Delhi, Bombay, Bangalore as a female lawyer is not a problem. Most doors would open easily. In smaller cities, there could be issues as clients’ culture and background is different and they may not be comfortable with empowered women lawyers. There are few law firms, and women lawyers may face networking barriers. But Justice Leila Seth, the first woman judge to head a high court, started

practice in one such small town more than 50 years ago.

STANDING OUT IN A MALE-DOMINATED PROFESSION Obstacles women in Japan face when it comes to networking effectively are probably not that different from those in other jurisdictions, e.g. getting close to male clients through client entertainment may be easier in an allmale context, especially in some industries and practices where the clients are still maleoriented. REIKO SAKIMURA Partner Clifford Chance, Japan

As an associate, occasionally a female lawyer may, for no particular reason, be assumed by a client to be more junior, perhaps sometimes taken more lightly, than a male lawyer working in the same team. However, there can also be advantages to being a woman professional in a still predominantly male business culture. For a start, you are more likely to stand out, be remembered, make an impression; so long as that impression is good – by delivering excellent service – you can leverage on that for further developing your network. Women lawyers are often also in a better position to strike up close relationships with women clients.

PRIORITISE THE IMPORTANT OVER THE URGENT Relationships built on casual meetings with people who do not necessarily require my assistance at that point in time have translated to long-lasting key client relationships.

MICHELLE PHANG Partner Shook Lin & Bok, Singapore

I would advise prioritising between seemingly competing demands and learning to remember to choose what is important over what is urgent. Be wise with your time. Be discerning with what you commit to. We're not

Sadly, there are many obstacles to effective networking among women in the profession. Some are talked about all the time, but others are more subtle. ELLE TODD, Olswang, Singapore super-humans. Don't blindly follow a trend, but at the same time, ensure that whatever you've committed to, you undertake it with absolute drive and determination.

OVERCOME STIGMA BY PROVING IT WRONG When companies or individuals are looking for a legal service, they are looking for a firm they know they can trust. When they know the attorney on a personal level – whether as an acquaintance or through referral – the trust comes more easily. More women are becoming more prominent in the legal indusHANIM HAMZAH try, although it is still an Resident Partner industry dominated by Roosdiono & Partners, Indonesia men. For networking, I have joined some women-focused groups. But generally speaking, I look objectively at the value of any group for networking based on its members, focus and reach. I can believe that the stigma that men are more capable still exists, but that has not hampered my ability to network. For women starting out in the industry, I would say: Don’t presume you will face gender-related obstacles. And if you do, the best way to overcome any stigma is to prove it wrong. Just keep working hard, and show what you are capable of. It is important to remain up-to-date with happenings in the industry so that people know you are well informed. However, it is just as important to be confident when presenting that knowledge. As long as you are confident, people will take you seriously, regardless of any prejudice they may have.

Hong Kong Country Report

ASIAN LEGAL BUSINESS august 2012

Game on

REUTERS/Bobby Yip

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Hong Kong Country Report

Hong Kong’s new Competition Law All eyes are on Hong Kong as the world’s last developed economy finally implements a competition law. In the making for over a decade, the bill has seen its fair share of controversy, attracting criticism from both SMEs and big businesses for being alternately toothless or overly harsh. Kanishk Verghese and Seher Hussain investigate the nuances of the bill, its effect on the marketplace, and the challenges facing Hong Kong in the future.

nnounced on June 26, Hong Kong’s first cross border competition act has officially come into play. Broad-reaching in scope, it bars a substantial amount of anti-competitive activity including cartels and bid rigging, and possesses significant enforcement powers. Although often viewed as an unrestricted capitalist dreamland due to low taxes and ease of conducting business, certain markets in Hong Kong are simultaneously dominated by a handful of massive conglomerates. As such, the bill has faced fierce public debate from small and medium-sized enterprises (SMEs) that advocate for a tougher, more aggressive stance while the government has come under pressure from big businesses to relax the proposed restrictions. The resulting law is an intriguing mix, which sources say, will take some time to play out in the marketplace. A tale of mobiles and markets Prior to the bill, the only sector that was regulated by antitrust conventions was the telecom and broadcasting industry. Overseen by a committee that was set up post handover, the Competition and Policy Advisory Group had no enforcement powers. However, it would spot issues, which soon led to competition regulations for the telecom sector. Sources indicate that given the success of these policies, Hong Kong has seen one of the lowest mobile phone charge rates in the world, in addition to notably high levels of market penetration. Margaret Wang, counsel at Freshfields Bruckhaus Deringer, says: “We’ve benefited as a community from the competition regimes that are present in the telecom industry. So the development of an economy wide general competition law is likely to be a positive change for the domestic economy if it is enforced properly with the right safeguards in place.” People often equate free trade and minimal regulatory barriers in Hong Kong with a competitive domestic economy. But market observ-

ers note that this is not always the case. One of the most striking examples of the perceived anti-competitiveness of certain industry sectors is French hypermarket giant Carrefour’s attempted entry into Hong Kong over 10 years ago. Dominated by the supermarket duopoly of ParknShop and Wellcome, owned respectively by Hutchison Whampoa and Jardine Matheson, media reports indicate that the two closed ranks, forcing suppliers to ostracise Carrefour for lowering prices below theirs. The French retailer eventually pulled out, providing the Hong Kong Consumer Council with a list of 22 companies that allegedly applied pressure on it to not cut prices. A challenger to ParknShop and Wellcome is yet to be seen. The public debate is clearly very polarised between those that cite the fact that Hong Kong consistently scores as one of the freest economies in the world with vigorous competition, and others who use the Carrefour example to suggest that there are markets which are unfairly dominated by a few major players. However, most lawyers see this as a positive development. Clara Ingen-Housz, partner at Baker & McKenzie, affirms that “the ordinance is a way for Hong Kong to conform to international standards, and introduce principles that are now shared across the world, and specifically the Asia-Pacific region”.

“The Hong Kong Ordinance is no more vague than competition laws in other leading jurisdictions. However, people in Hong Kong need some time and guidance to better understand the concepts and the consequences in the way they conduct business.” Clara Ingen-Housz, Baker & McKenzie

Hong Kong Country Report Breaking it down Essentially, the ordinance is based on a threepart system. The first handles the gravest offences, prohibiting price fixing, bid rigging and even joint distribution agreements. The second focuses on abuse of significant market power, which is aimed at preventing businesses with a prevailing position in the industry from engaging in anti-competitive behavior. The final section deals with merger controls. John Hickin, partner at Mayer Brown JSM, elaborates: “The first point to make is that the ordinance is a cross sector law that includes fairly generally-worded provisions. That will give the commission the ability to target the hardcore cartel-type activity in Hong Kong, or wherever they find it. It’s going to be a powerful weapon once it’s established. However, there are certain significant omissions and concessions that have been made, which people have complained have watered down the effect of the law.” The most egregious of those concessions has been the merger control provision. At the moment, the ordinance only contains merger control restrictions if the transaction involves the telecom industry. Sources pinpoint this as a definite limitation for the regulator, as most major competitive regimes around the world include a broad-reaching merger control element. “There is no good theoretical reason for singling out the telecom sector for merger review,” says Thomas Cheng, Assistant Professor, Faculty of Law, at the

ASIAN LEGAL BUSINESS august 2012

“When you have a new law where there is uncertainty about the scope of application and a lot of pushback from the business community, it would take a very bold regulator to be using those dawn raid powers from day one.” Margaret Wang, Freshfields Bruckhaus Deringer

University of Hong Kong. Wang agrees: “The government has left the door open so that they can revisit this issue once the bill has been in operation for a few years.” Another bone of contention that practitioners highlight is the lack of standalone private action, which specifies that an individual with a complaint cannot bring a lawsuit in court to sue a wrongdoer. Under the current rules, the individual can only complain to the competition commission and wait for them to investigate. Other controversial sticking points include concessions by the government that have exempted businesses with a turnover of less than HK$40 million ($5.16 million) from certain offences, which is an increase from the previously suggested HK$11 million; as well as proposing that the maximum penalty that can be imposed is now capped at 10 percent of the local Hong Kong turnover; something which was originally suggested at 10 percent of the global turnover. The question of how to define market power also remains, and is a crucial debate for businesses as they may or may not be exempt from certain provisions depending on how their market power is characterised. Sources have differing views on this. “It’s impossible to say in advance how market power will be defined and evaluated in the context of a specific case, and that is what caused businesses some discomfort and anxiety,” says Cheng. “The determination of market power is very case-specific, and unless provided with a concrete case, it is very difficult for someone to say in the abstract how market power will be assessed and evaluated.” Ingen-Housz further details that: “The Hong Kong Ordinance is no more vague than competition laws in other leading jurisdictions. However, people in Hong Kong need some time and guidance to better understand the concepts and the consequences in the way they conduct business. The Competition Commission will assist in the process, in particular by issuing guidelines about a wide range of key substantive and procedural issues, such as market definition, market power or the handling of complaints. All in all, getting this ordinance off the ground is a huge enterprise for Hong Kong, and people need to understand that.” Finally, practitioners say that unlike many REUTERS/Erik de Castro

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Hong Kong Country Report

ASIAN LEGAL BUSINESS august 2012

“It is surprising how little effort has been made to ensure a consistent approach with the competition authorities in China.” Marc Waha, Norton Rose

REUTERS/Bobby Yip

antitrust regimes around the world, the ordinance does not specify that the impact on competition needs to be substantial. It merely references the fact that certain behaviour has the effect of restricting, preventing, or distorting competition. Ingen-Housz says: “But what if the distortion to competition is really minimal, for example, involving price fixing affecting a minor part of the Hong Kong economy. Do you really want to use the Hong Kong Competition Commission’s (HKCC) resources to be going after that kind of behaviour? Most laws around the world will request that the effect on the market be substantial; and the ordinance today does not contain that kind of language.” Whether it is merger controls, government concessions on turnover, or simply murky language, it is evident that the ordinance has gone through several iterations throughout its history. “As a result of all of those things, one could say that the impact of the law compared with what it might have been has been lessened,” says Hickin. “But having said that, it’s still a significant piece of legislation and will have an impact on the way that business is conducted throughout the territory.” EU building blocks Hong Kong’s government made it clear during the law-making process that the competition law follows the legislative rubric found in the EU. “If you look at the two key provisions - sections 6 and 21 - you see language that reminds one of the corresponding provisions in the EU law,” says Cheng. While the ordinance clearly has its roots in EU

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Hong Kong Country Report

law, several practitioners also note that the Hong Kong government refrained from referring to China’s anti-monopoly law, adopted in 2008, for guidance. “It is surprising how little effort has been made to ensure a consistent approach with the competition authorities in China,” says Waha. On the other hand, while Hong Kong and China’s relationship has become increasingly connected post handover, the legal system has arguably been an area where the former has taken the one-country-two-systems approach most seriously. “People in Hong Kong jealously guard their legal and judicial autonomy, and I think the legal profession still likes to keep a somewhat polite distance

from the mainland legal system,” says Cheng. Nonetheless, it is highly likely that the two authorities will ramp up cooperation as more cross border investigations emerge. For her part, Ingen-Housz is unsurprised by the absence of cooperation between the two authorities, stating that the Chinese law itself is very much modelled after the EU model. The origins of the ordinance aside, legal

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

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

prices, discounts below estimated marginal costs, and expected losses taken by rival hotels in the area. Such information would certainly convince a judge to order further material investigation. Three key statistical tests prove useful in this kind of litigation. Lead counsel should know about these tests when working with economists, particularly on competition law-related cases. The hypothesis test (or test of similarity) can show – with a certain level of certainty – that one hotel owner’s prices, occupancy rates and other factors are not like the other hotel owners’. For example, an economist can tell you with a 99.999 percent level of probability that hotels in a district advertise prices below their expected marginal costs. Economic methods can actually remove the distorting effects of factors like seasonal demand, how well the stock market is doing, the prices of inputs like labour, and so forth. The regression analysis can tell legal counsel how much the prices, quantity offered, amount of innovation, product quality, and so forth has changed in response to changes in factors like the number of other hotels in the area, the size of these hotels (the amount of assets they hold) and so on. Such regression analysis can show (with a certain level of confidence) that the profits of our hypothetical hotel owner have changed because of the actions of the other hotel owners. Economists can also do cost-benefit analyses – showing the profits our hypothetical hotel owner

http://ec.europa.eu/competition/antitrust/actionsdamages/rubinfeld.pdf

has lost because of collusion by neighbouring rival hotels. Such analysis can “take out” the effects of a weakening economy, changes in hotel regulations, and other factors. Economists can provide law firms and in-house counsel with information useful in three venues. They detect anticompetitive behaviour – showing with a level of probability – when rivals are engaged in such behaviour. Presenting proof of such behavior can be useful when asking regulators and judges for more in-depth investigatory work. They prove (in some jurisdictions) which anticompetitive behaviour occurs. We cannot directly observe secret meetings in which trading partners agree to manipulate prices, quantities, and so forth. But we can observe their effects. In some instances, a 99.999999 percent statistical probability of engaging in anti-competitive behaviour is enough for regulators or judges to provide injunctive relief, assess fines, and provide other remedies. In this way, an economist can be a lawyer’s best friend, while enforcing Hong Kong’s new Competition Law. Bryane Michael is currently at the University of Hong Kong’s Centre for Comparative and Public Law. He has previously advised on anti-competition law in Russia for the EU, and in the developing world for the OECD and World Bank since 1995. He has done his doctoral work in economics at Oxford and Harvard.

Hong Kong Country Report

ASIAN LEGAL BUSINESS august 2012

REUTERS/Kin Cheung

“People in Hong Kong jealously guard their legal and judicial autonomy, and I think the legal profession still likes to keep a somewhat polite distance from the mainland legal system.” Thomas Cheng, University of Hong Kong experts expect case law to provide the commission and the public with the actual details. “It is possible that Hong Kong courts will turn to EU case law more because of the government’s professed desire to follow the EU regime. But the devil is in the detail, and they will not be supplied until the courts actually decide cases. By then, we will know whether the Hong Kong law is really modelled after EU law,” says Cheng. Effects on the marketplace Much media attention has been focused on the HKCC’s range of enforcement powers as alongside traditional sanctions, it also has the power to conduct dawn raids. A hot topic, given its dramatic implications, Wang says: “Judging on the track record of regulators in Hong Kong, they are usually quite careful and especially when you have a new law

where there is uncertainty about the scope of application and a lot of pushback from the business community, it would take a very bold regulator to be using those dawn raid powers from day one.” Also notable are the leniency provisions. Businesses can approach the commission and report on cartel activity that they have been involved in with others, and can benefit from being treated more leniently for having blown the whistle. “That traditionally has been a destabiliser of cartels in many jurisdictions where this power has been included,” says Hickin. How will these new regulations and enforcement powers affect SMEs? “The greatest impact it will have is to the extent the businesses and SMEs currently pursue anything that would be deemed illegal under the competition law,” says Cheng. “For example, a lot of SMEs talk about prices in the context of trade association meetings. That would likely have to be stopped.” It is generally agreed that SMEs have less to worry about than big businesses. “SMEs, by definition, do not have market power in their relevant markets,” continues Cheng. “The only provisions in the bill that would apply would be the prohibition of the so-called serious offences.” For SMEs, their main focus in terms of compliance efforts

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Hong Kong Country Report

“Creating a real fair competition culture in an organisation takes some time to develop. It is something that needs to be done over the medium term. You can’t flip a switch and say we will now become compliant with the law.”

can expect to see a transition in client work; from playing an advisory role to enforcementrelated matters.

John Hickin, Mayer Brown JSM

should be on those offences. What about big businesses? Sources indicate that the ordinance will mostly affect companies that are selling in Hong Kong. Those companies, especially any with a significant degree of market power, will most likely have to undergo essential compliance. “Competition law is so new to Hong Kong and laissez-faire economics is so deeply ingrained in the mind of business people, that the idea that the law will prohibit some business conduct that has been so far deemed as perfectly legitimate, will be quite a foreign idea to them,” says Cheng. Advanced preparations As a result, companies are doing their utmost to avoid getting entangled in legal proceedings. Several have adopted a conservative and risk-averse approach by making preparations long before the law was passed. This has provided competition lawyers with ample work over the last few years, with a considerable increase in interest this year. “Our message to clients is that you still have time to get prepared,” advises Waha. Indeed, there is still time. The ordinance has been vetted, but now the commission awaits creation, and guidelines need to be issued before any active enforcement can occur. But despite a grace period that could last up to 18 months, Hickin stresses that clients should not delay their compliance preparations. “Creating a real fair competition culture in an organisation takes some time to develop. It is something that needs to be done over the medium term. You can’t flip a switch and say we will now become compliant with the law,” he says. The new law will not be completely foreign to all businesses. Several Hong Kong-based companies that have been selling abroad should possess sound knowledge and understanding of antitrust issues. The task of rolling out a compliance programme in Hong Kong should not be too rigorous for MNCs, as most already follow their own internal rules and standards around antitrust compliance. However, it is vital that these businesses take their programmes seriously. “It is not so much about penalties, but about the reputation and damage that they need to think about,” cautions Wang, who advises MNCs to review their business conduct and internal rules on antitrust compliance, and implement necessary changes quickly. Nonetheless, law firms with dedicated competition teams are witnessing a spike in inquiries and activity from Hong Kong-based businesses. Antitrust lawyers are keeping busy assisting businesses with creating compliance policies and training, reviewing existing contractual agreements with suppliers and competitors, and identifying areas of exposure. Once the commission has been fully formed and appropriate guidelines have been disseminated, private practitioners

Competing for talent The threat alone of enforcement will urge established market players to deliver quality products at the right prices, says Waha. He adds that the law will also enhance the possibility of new entrants to the market. Others, like Cheng, believe that the impact of the law on the market remains to be seen, as it will depend on the intensity of enforcement efforts. These efforts will in turn be a reflection of the individuals that are appointed to the commission. Few would contest that the greatest challenge for the newly elected chief executive and his government in the next 12 months is the search for, and the appointment of appropriate people for the commission. “This will be absolutely key in determining the nature and quality of the enforcement of this law. If the law is going to carry any weight, it is going to be a function of who is sitting on the commission,” states Ingen-Housz. To find individuals who have the political clout and the sense to drive the regulatory agenda forward will certainly be a challenge, given Hong Kong’s nascent competition law jurisprudence and the scarcity of human capital in this field. Open dialogue Once the commission and competition tribunal are set up and guidelines on enforcements are circulated, the commission is likely to invest heavily in public advocacy and education to inform businesses about the law. This will provide a valuable opportunity for businesses to engage with the government and put forward their concerns. “I don’t think that now that public consultation has ended and the bill has been signed, the door is closed. You should be proactive right now,” says Wang. The transition period is in effect, and the government is on the search for appropriate individuals to spearhead the competition commission. Case law surrounding anti-competitive behaviour in Hong Kong is still far on the horizon, but businesses need to gear up for this inevitability and review their operations, compliance standards and contractual agreements. The stage is set. “We have the bones, but now we have to see flesh on these bones,” says Waha.

japan law awards

ASIAN LEGAL BUSINESS august 2012

Best Best of the

Asian Legal Business (ALB) is delighted to announce the official list of winners at Diners Club ALB Japan Law Awards 2012, held on June 7 at the Ritz Carlton, Tokyo. The 8th annual event, co-hosted by Diners Club and ALB, welcomed Guest of Honour – C. Lawrence Greenwood, Jr. – Senior Managing Director for Government Relations (Japan) at MetLife. He was joined by over 200 lawyers, in-house counsel, investment bankers, and CEOs from Japan who assembled to celebrate with the winners as they accepted their awards on stage. Awards in a total of 24 categories were presented to firms, companies and individuals. Anderson Mori & Tomotsune claimed the most awards. Five in total, including IP Law Firm of the Year, Employment Law Firm of the Year and Best China Practice of the Year. The firm also acted on the CIC & GLP JV Acquisition of Modern Logistics Facilities transaction, which won Real EsDEAL AWARDS CATEGORIES

tate Deal of the Year, and on Resona Holdings Global Offering, which won Equity Market Deal of the Year. Freshfields Bruckhaus Deringer, Mori Hamada & Matsumoto, Morrison & Foerster/Ito & Mitomi and Nagashima Ohno & Tsunematsu each took home three trophies on the evening. Domestic investment bank Nomura was one of the big winners – winning Japanese Investment Bank of the Year, Japan In-House Team of the Year; M&A Deal of the Year and Diners Club Award Japan Deal of the Year (for its work on the Takeda Pharmaceutical Acquisition of Nycomed Deal) In addition to recognising the collective talents of law firms and inhouse legal teams, the awards also singled-out Japan’s leading individual talents. Ken Siegel of Morrison & Foerster/Ito & Mitomi took home the trophy for Managing Partner of the Year, while Tomohiko Oshikawa of JP Morgan was awarded Diners Club Award Japan In-House Lawyer of the Year.

IN-HOUSE AWARDS CATEGORIES

FIRM AWARDS CATEGORIES

Award

Winner

Award

Winner

Award

Winner

Debt Market Deal of the Year

Bain Capital Debt Financing for its Acquisition of Skylark

The Japan In-House Counsel Network Award Banking & Financial Services In-House Team of the Year

Sumitomo Mitsui Financial Group

IP Law Firm of the Year

Anderson Mori & Tomotsune

Equity Market Deal of the Year

Resona Holdings Global Offering

Morrison & Foerster/Ito & Mitomi

Energy & Resources Deal of the Year

Tokyo Gas LNG Purchase and Equity Interest in Australia Queensland Curtis LNG Project

Japanese Investment Bank In-House Team of the Year

Nomura

Canadian Chamber of Commerce in Japan Award Litigation Specialist Law Firm of the Year Employment Law Firm of the Year

Anderson Mori & Tomotsune

Insolvency Law Firm of the Year International Investment Bank InHouse Team of the Year

Morgan Stanley MUFG Securities

Dual Winners: Bingham McCutchen; Nishimura & Asahi

Offshore Law Firm of the Year

Maples and Calder

American Chamber of Commerce in Japan Award International Arbitration Law Firm of the Year

Herbert Smith

Best China Practice of the Year

Anderson Mori & Tomotsune

Managing Partner of the Year

Morrison & Foerster/Ito & Mitomi - Ken Siegel

International Deal Firm of the Year

Davis Polk & Wardwell

Japanese Deal Firm of the Year

Mori Hamada & Matsumoto

M&A Deal of the Year

Takeda Pharmaceutical Acquisition of Nycomed

Real Estate Deal of the Year

CIC & GLP JV Acquisition of Modern Logistics Facilities in Japan

Structured Finance Deal of the Year

JAL Turnaround Financing

Technology, Media & Telecoms Deal of the Year

Lenovo - NEC Joint Venture

Diners Club Award Japan Deal of the Year

Takeda Pharmaceutical Acquisition of Nycomed

Trading Company In-House Team of the Year

Itochu Corporation

Japan In-House Team of the Year

Nomura

Diners Club Award Japan In-House Lawyer of the Year

JP Morgan - Tomohiko Oshikawa

CONGRATULATIONS! The Baker & McKenzie Tokyo office would like to congratulate all the winners of the 2012 ALB Japan Law Awards. We modestly accepted Deal of the Year Awards in the following categories: Debt Market - Bain Capital Debt Financing for its Acquisition of Skylark Energy & Resources - Tokyo Gas LNG Purchase and Equity Interest in the Australia Queensland Curtis LNG Project We combine an uncompromising commitment to excellence with fluency in the way we think, work and behave—an instinctively global perspective, commercially pragmatic advice, a genuinely multi-cultural approach and a passion for collaborative relationships. With more than 3,800 lawyers in 43 countries, we have a deep understanding of the language and culture of business around the world and are able to bring talent and experience needed to navigate complex issues across practices and borders with ease. To learn more, please visit us at www.bakermckenzie.com or our Tokyo site at www.taalo-bakernet.com. Baker & Mckenzie GJBJ Tokyo Aoyama Aoki Koma Law Office is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm.

japan law awards

ASIAN LEGAL BUSINESS august 2012

DEAL CATEGORIES Debt Market Deal of the Year

Winner Bain Capital Debt Financing for its Acquisition of Skylark Firms: Baker & McKenzie GJBJ; Mori Hamada & Matsumoto; Nagashima Ohno & Tsunematsu; Nishimura & Asahi; Ropes & Gray Bank: Mizuho Corporate Bank (L-R) C. Lawrence Greenwood, Jr., MetLife; Kosuke Shibukawa; Taku Ishizu, Nishimura & Asahi; Gavin Raftery; Shinichiro Kitamura, Baker & McKenzie GJBJ; Tsuyoshi Imai, Ropes & Gray; Rintaro Shinohara, Mori Hamada & Matsumoto; Shinichi Araki, Nagashima Ohno & Tsunematsu

Equity Market Deal of the Year

M&A Deal of the Year

Structured Finance Deal of the Year

(L-R) Keiko Takabayashi, Deutsche Securities Inc.; Takeshi Nakao, Freshfields Tokyo; Lokki Woo; Andrew Welch, Nomura Securities Co. (L-R) Alan Cannon, Simpson Thacher & Bartlett; Kazuhiro Yoshii, Anderson Mori & Tomotsune; Shinichi Araki, Nagashima Ohno & Tsunematsu

Winner Resona Holdings Global Offering Firms: Anderson Mori & Tomotsune; Linklaters Tokyo; Nagashima Ohno & Tsunematsu; Simpson Thacher & Bartlett

Energy & Resources Deal of the Year

(L-R): Anne K.T. Hung, Baker & McKenzie GJBJ; Klaus Pfeifer, Thomson Reuters

Winner Tokyo Gas LNG Purchase and Equity Interest in Australia Queensland Curtis LNG Project Firms: Baker & McKenzie GJBJ; King & Wood Mallesons

Winner Takeda Pharmaceutical Acquisition of Nycomed Firms: Bech-Braun; Blake, Cassels & Graydon; CMS Cameron McKenna; Edwards Wildman Palmer; Freshfields Bruckhaus Deringer; Plesner; White & Case Banks: Credit Suisse; Deutsche Bank Group; Goldman Sachs; Moelis; Nomura

(L-R) Claire Chino, ITOCHU Corporation; Hiroki Aoyama, Mori Hamada & Matsumoto

Winner JAL Turnaround Financing Firms: Clifford Chance; Mori Hamada & Matsumoto; Okuno and Partners Banks: Development Bank of Japan; Japan Bank of International Cooperation

Real Estate Deal of the Year

(L-R) Etsuko Hara, Anderson Mori & Tomotsune; Daniel Lin, Milbank Tweed; Theo Seltzer, Morrison & Foerster/Ito & Mitomi; Naohiro Nishimura, Nagashima Ohno & Tsunematsu; Thomas Granger, Walkers; Edmond Courtroul, Galileo Japan

Winner CIC & GLP JV Acquisition of Modern Logistics Facilities in Japan Firms: Anderson Mori & Tomotsune; City Yuwa Partners; Milbank, Tweed, Hadley & McCloy; Morrison & Foerster/Ito & Mitomi; Nagashima Ohno & Tsunematsu; Walkers Bank: M3 Capital Accountant: KPMG

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

japan law awards

Technology, Media & Telecoms Deal of the Year

Diners Club Award Japan Deal of the Year

(L-R) Takeshi Nakao; Will Heath, Freshfields Tokyo

(L-R) Keiko Takabayashi, Deutsche Securities Inc.; Takeshi Nakao; Will Heath; Akiko Yamakawa; Nick Wall; Peter Lawle, Freshfields Tokyo; Lokki Woo, Nomura Securities Co.; Marco Reverdito, Citi Cards Japan, Inc.

Winner Lenovo - NEC Joint Venture

Winner Takeda Pharmaceutical Acquisition of Nycomed

Firms: Clifford Chance; Freshfields Bruckhaus Deringer

Firms: Bech-Braun; Blake, Cassels & Graydon; CMS Cameron McKenna; Edwards Wildman Palmer; Freshfields Bruckhaus Deringer; Plesner; White & Case Banks: Credit Suisse; Deutsche Bank Group; Goldman Sachs; Moelis; Nomura

japan law awards

ASIAN LEGAL BUSINESS august 2012

IN-HOUSE CATEGORIES The Japan In-House Counsel Network Award Banking & Financial Services In-House Team of the Year

Trading Company In-House Team of the Year

FIRM CATEGORIES Offshore Law Firm of the Year

Winner Maples and Calder

(L-R) Charles McJilton, Second Harvest Japan; Claire Chino; Susumu Aoyama; Junji Higashi, ITOCHU Corporation Royanne K. Doi, The Japan In-House Counsel Network

Winner

International Deal Firm of the Year

Itochu Corporation

Winner Sumitomo Mitsui Financial Group

Japanese Investment Bank InHouse Team of the Year

Diners Club Award Japan InHouse Lawyer of the Year

(L-R) Theodore Paradise; Miles Hawks, Davis Polk & Wardwell; Mas Nakamura, Nakamura Arai Partners Office

Winner (L-R) Tomohiko Oshikawa, JP Morgan; Marco Reverdito, CitiCards Japan, Inc. And Mr Oshikawa was also presented with a gift, by last yearâ&#x20AC;&#x2122;s winner, David Monroe, Nikko Asset Management (L-R) Jane Lewis, Thomson Reuters Japan; Andrew Welch; Lokki Woo, Nomura Securities Co.

Winner JP Morgan - Tomohiko Oshikawa

Winner Nomura

International Investment Bank In-House Team of the Year

(L-R) Surya Soni, Morgan Stanley MUFG Securities; Ayako Hashimoto, Thomson Reuters

Davis Polk & Wardwell

Insolvency Law Firm of the Year

Japan In-House Team of the Year

(L-R) Lokki Woo; Andrew Welch, Nomura Securities Co.; Klaus Pfeifer, Thomson Reuters

(L-R) Yuki Oi, Nishimura & Asahi; Hideyuki Sakai, Bingham McCutchen

DUAL Winners

Winner

Morgan Stanley MUFG Securities

Nomura

Bingham McCutchen Nishimura & Asahi

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

japan law awards

Japanese Deal Firm of the Year

(L-R) Jane Lewis, Thomson Reuters Japan; Toru Ishiguro and team, Mori Hamada & Matsumoto

Winner Mori Hamada & Matsumoto

japan law awards

Employment Law Firm of the Year

IP Law Firm of the Year

(L-R) Kazutoshi Kakuyama, Anderson Mori & Tomotsune; Edward Gilbert, Shinsei Bank

Winner

Best China Practice of the Year

(L-R) Yasufumi Shiroyama, Anderson Mori & Tomotsune; Jeremy Entwisle, JP Morgan

Winner

(L-R) Hiroshige Nakagawa, Anderson Mori & Tomotsune; Tsuneyuki Fukamachi, Thomson Reuters Japan

Anderson Mori & Tomotsune

American Chamber of Commerce in Japan Award International Arbitration Law Firm of the Year

(L-R) Emi Rowse; David Gilmore, Herbert Smith; Eric Sedlak, Jones Day and ACCJ Governor

ASIAN LEGAL BUSINESS august 2012

Canadian Chamber of Commerce in Japan Award Litigation Specialist Law Firm of the Year

(L-R) Louise Stoupe, Morrison & Foerster/Ito & Mitomi; Haig Oghigian, Baker & McKenzie

Winner

Herbert Smith

Morrison & Foerster/Ito & Mitomi

Winner Anderson Mori & Tomotsune

Managing Partner of the Year

(L-R) Shozo Uchida, Westlaw Japan; Ken Siegel, Morrison & Foerster/Ito & Mitomi

Winner Morrison & Foerster/Ito & Mitomi - Ken Siegel

award sponsors event partner

SUPPORTING ORGANISATIONS

CANADIAN CHAMBER OF COMMERCE IN JAPAN CHAMBRE DE COMMERCE DU CANADA AU JAPON

Diners Club

Diners Club International is owned by Discover Financial Services (NYSE: DFS), a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Established in 1950, Diners Club International became the first multi-purpose charge card in the world, launching a financial revolution in how consumers and companies pay for products and services. Today, Diners Club is a globally recognized brand serving the payment needs of select and affluent consumers, offering access to more than 450 airports lounges worldwide, and providing corporations and small business owners with a complete array of expense management solutions. With acceptance in more than 185 countries and territories, millions of merchant locations and access to over 845,000 cash access locations and ATMs, Diners Club is uniquely qualified to serve its card members all over the world. Website: www.dinersclub.com

ALB SUPPORTS

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proudly presented by

hong kong Law Awards

Conrad, Hong Kong – 7 September

THE FINALISTS REVEALED The 11th annual The Macallan ALB Hong Kong Law Awards 2012 recognises the excellence and outstanding achievements of Hong Kong’s leading law firms and inhouse legal teams, as well as the top deals and dealmakers of the past 12 months. ALB congratulates all the finalists across 37 categories.

ASIAN LEGAL BUSINESS august 2012

WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business COMPLETENESS OF INFORMATION –BANKS, ACCOUNTANTS AND LEGAL ADVISORS Please note that the names of banks, accountants and legal advisors on a transaction reflect the information received from nominees and this information may be incomplete. Omission of an advisor from the list should therefore not be taken as commentary on the role that party played in the deal. If your firm is missing from this list, please contact iris.ma@ thomsonreuters.com with the requisite information and we will ensure that the list of winners, to be published in 2012 Nov issue, is updated as appropriate. FIRM MERGERS – NAMING OF FIRMS A number of firms have changed names during 2011 and 2012 following mergers. While the 2012 Law Awards relates to work undertaken between April 2011 to March 2012, we have allowed firms to refer to themselves with their new branding if this is considered desirable. However, new entities were not eligible for any “firm of the year” awards if they did not exist in 2011.

Wealth Management Law Firm of the Year FINALISTs • Baker & McKenzie • Herbert Smith • Stephenson Harwood • Withers

Dispute Resolution Law Firm of the Year

FINALISTs • Baker & McKenzie • Clifford Chance • Clyde & Co • DLA Piper • Freshfields Bruckhaus Deringer • Gall • Herbert Smith • Hogan Lovells • King & Wood Mallesons • Latham & Watkins • Linklaters • Mayer Brown JSM • Simmons & Simmons • Stephenson Harwood • Vivien Chan & Co • Wilkinson & Grist

Insolvency & Restructuring Law Firm of the Year

FINALISTs • Baker & McKenzie • Gall • Hogan Lovells • Latham & Watkins • Linklaters • Mayer Brown JSM • O’Melveny & Myers • Stephenson Harwood • Tanner De Witt

hong kong Law Awards

BDO Limited Award Matrimonial Law Firm of the Year

FINALISTs • Boase, Cohen & Collins • Haldanes • Withers

Insurance Law Firm of the Year

FINALISTs • Baker & McKenzie • Clyde & Co • Herbert Smith • Kennedys • Mayer Brown JSM • Simmons & Simmons • Stephenson Harwood

Intellectual Property Law Firm of the Year

FINALISTs • Baker & McKenzie • Bird & Bird • Freshfields Bruckhaus Deringer • Hogan Lovells • Mayer Brown JSM • Simmons & Simmons • Vivien Chan & Co • Wilkinson & Grist

Investment Funds Law Firm of the Year

FINALISTs • Baker & McKenzie • Clifford Chance • Debevoise & Plimpton • King & Wood Mallesons • Kirkland & Ellis • Linklaters • Mayer Brown JSM • Sidley Austin • Simmons & Simmons • Simpson Thacher & Bartlett • Stephenson Harwood • Weil, Gotshal & Manges • White & Case

IT/Telecoms Law Firm of the Year

FINALISTs • Baker & McKenzie • Freshfields Bruckhaus Deringer • Herbert Smith • Hogan Lovells • King & Wood Mallesons • Paul, Weiss • Vivien Chan & Co

hong kong Law Awards

Real Estate Law Firm of the Year

FINALISTs • Baker & McKenzie • Mayer Brown JSM • Paul Hastings • Stephenson Harwood

Shipping Law Firm of the Year

FINALISTs • Clyde & Co • Holman Fenwick Willan • Ince & Co • Mayer Brown JSM • Stephenson Harwood

Construction Law Firm of the Year

FINALISTs • Baker & McKenzie • Clyde & Co • DLA Piper • Haley & Co in association with Clayton Utz • Hogan Lovells • King & Wood Mallesons • Mayer Brown JSM • Pinsent Masons • Simmons & Simmons • Stephenson Harwood

Boutique/Specialist Law Firm of the Year FINALISTs • Charltons • Gall • Haley & Co. in association with Clayton Utz • So Keung Yip & Sin

Criminal Law Firm of the Year

ASIAN LEGAL BUSINESS august 2012

Employment Law Firm of the Year

FINALISTs • Baker & McKenzie • Herbert Smith • Linklaters • Mayer Brown JSM • Simmons & Simmons • Stephenson Harwood

Offshore Law Firm of the Year

FINALISTs • Appleby • Conyers Dill & Pearman • Maples and Calder • Ogier • walkers

Corporate Citizen/CSR Law Firm of the Year

FINALISTs • Baker & McKenzie • Clifford Chance • Freshfields Bruckhaus Deringer • Hogan Lovells • King & Wood Mallesons • Linklaters • Skadden, Arps, Slate, Meagher & Flom

Taiwan Deal Firm of the Year

FINALISTs • Baker & McKenzie • Jones Day Taipei • LCS & Partners • Lee and Li • Tsar & Tsai

withers award PRC Firm, Hong Kong Office of the Year

FINALISTs • Boase, Cohen & Collins • Haldanes

FINALISTs • Jun He • Zhong Lun

AzureTax Award Tax Law Firm of the Year

Korea Deal Firm of the Year

FINALISTs • Baker & McKenzie • DLA Piper • Withers

FINALISTs • Bae, Kim & Lee • Kim & Chang • Lee & Ko • Shin & Kim • Yulchon

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

hong kong Law Awards

Korea Deal of the Year

Debt Market Deal of the Year

FINALISTs • Asiana and Daewoo Sale of Korea Express Shares Firms: Lee & Ko; Shin & Kim • Fila Korea acquisition of Acushnet Company Firms: Bae, Kim & Lee; Kim & Chang; Lee & Ko; McDermott Will & Emery; Orrick, Herrington & Sutcliffe; Shin & Kim; Walkers; Yulchon Banks: Korea Development Bank; Nomura • Jinro - Hite merger Firm: Kim & Chang • Lone Start Funds-KEB Holdings Sale of Stake in Korea Exchange Bank to Hana Hinancial Group Firms: Bae, Kim & Lee; Kim & Chang; Linklaters Banks: Credit Suisse; Hana Daetoo Securities • NACF Debt Liability Reorganisation Firm: Clifford Chance • Negotiations of KNOC Oil and Gas Concessions in Abu Dhabi Firms: Hadef & Partners; Kim & Chang; Linklaters; Shearman & Sterling • Restructuring of Novelis Term Loan Agreement Firms: Bae, Kim & Lee; Skadden, Arps, Slate, Meagher & Flom; Torys Bank: Bank of America Merrill Lynch • Sale of Hyundai Engineering & Construction to the Hyundai Motor Group Firms: Bae, Kim & Lee; Kim & Chang Banks: Bank of America Merrill Lynch; Korea Exchange Bank • Sales of KB Financial Group Shares Firms: Cleary Gottlieb; Clifford Chance; Kim & Chang; Yulchon Bank: Citigroup Global Markets Korea • Samsung Electronics America Debt Offering Firm: Simpson Thacher & Bartlett Banks: Citigroup Global Markets; Goldman Sachs International; J.P. Morgan Securities; Merrill Lynch International; Samsung Securities • Samsung Electronics Sale of Its Hard Disk Drive Business to Seagate Technology Firms: Lee & Ko; Paul Hastings; Shin & Kim; Wilson Sonsini Goodrich & Rosati • SK Telecom Acquisition of Hynix Semiconductor Firms: Bae, Kim & Lee; Kim & Chang; Shin & Kim Bank: Korea Exchange Bank • Spin-off of Shinsegae business into E-Mart Firm: Lee & Ko

FINALISTs • Bank of China Commercial Paper Programme Firms: King & Wood Mallesons; Mayer Brown JSM; White & Case; Latham & Watkins Bank: DBS Bank • China Resources Gas Group MTN Programme Firm: Latham & Watkins Bank: DBS Bank • CITIC Pacific Bond Offering Firms: Clifford Chance; Jun He; Linklaters; Zhong Lun • CNOOC Finance Notes Offering Firms: Clifford Chance; Commerce & Finance; Davis Polk & Wardwell; Linklaters; Walkers • CNPC (HK) Overseas Capital Bond Offering Firms: Appleby; Clifford Chance; Davis Polk & Wardwell; Jun He; King & Wood Mallesons; Shearman & Sterling • HKSAR iBonds Offering Firm: Clifford Chance Banks: Bank of China (Hong Kong); HSBC • Hutchison Whampoa 1.5bln Investment Grade Notes Offering Firms: Allen & Overy; Drew & Napier; Maples and Calder; Shearman & Sterling; Woo, Kwan, Lee & Lo Banks: Goldman Sachs (Asia); J. P. Morgan Accountants: KPMG; PwC • Mega Advance Investments Senior Notes Offering Firms: Commerce & Finance; Conyers Dill & Pearman; Haiwen & Partners; Linklaters; Mayer Brown JSM • The PRC Government (Ministry of Finance) Bonds Issuance Firms: Haiwen & Partners; Linklaters; Simmons & Simmons • Yanzhou Coal Mining Company Notes Offering Firms: Baker & McKenzie; Davis Polk & Wardwell; Freehills; Jingtian & Gongcheng; King & Wood Mallesons Banks: Deutsche Bank; UBS

hong kong Law Awards

ASIAN LEGAL BUSINESS august 2012

China Legal Career Award Equity Market Deal of the Year FINALISTs • Alibaba Group Private Secondary Sale of Shares Firms: Debevoise & Plimpton; Goodwin Procter; Paul, Weiss; Simpson Thacher & Bartlett Accountant: PwC • Bank of Communications Share Placement Firm: Simpson Thacher & Bartlett • Beijing Jingneng Clean Energy IPO Firm: Latham & Watkins Banks: Bank of China International; Barclays Capital; Goldman Sachs; UBS • Chow Tai Fook Jewellery Group Hong Kong IPO Firms: Commerce & Finance; Conyers Dill & Pearman; Freshfields Bruckhaus Deringer; Haiwen & Partners; Iu, Lai & Li; Linklaters Banks: Citigroup Global Markets; Credit Suisse; Deutsche Bank; Goldman Sachs; HSBC; J.P. Morgan ; Rothschild; UBS; VMS Investment Group Accountant: Deloitte Touche Tohmatsu • CITIC Securities Global Offering Firms: Baker & McKenzie; Freshfields Bruckhaus Deringer; Jiayuan; King & Wood Mallesons; Latham & Watkins Banks: ABCI; Bank of America Merrill Lynch; BOCI; BOCOM International; CCBI; CITIC Securities (HK); CLSA/ CA-CIB; HSBC; ICBCI Capital; Morgan Stanley Accountant: Ernst & Young • Glencore International IPO Firms: Clifford Chance; Jun He; Linklaters; Mourant Ozannes Banks: Citigroup; Credit Suisse; Morgan Stanley • HKT Spin-off on the Hong Kong Stock Exchange Firms: Anderson Mori & Tomotsune; Conyers Dill & Pearman; Freshfields Bruckhaus Deringer; GW & Associates in association with Gibson, Dunn & Crutcher; Haiwen & Partners; King & Wood Mallesons; Nagashima Ohno & Tsunematsu; Reed Smith Richards Butler Banks: CICC; DBS Bank; Deutsche Bank; Goldman Sachs; HSBC; J.P. Morgan; Mizuho; Standard Chartered Bank Accountant: PwC • Hui Xian RMB REIT IPO Firms: Baker & McKenzie; Commerce & Finance; Guantao; Linklaters; Maples and Calder; Wilkinson & Grist; Woo, Kwan, Lee & Lo Banks: BOCI Asia; CITIC Securities Corporate Finance (HK); HSBC • MGM China IPO Firms: DSL Lawyers; Freshfields Bruckhaus Deringer; Henrique Saldanha; Herbert Smith; Walkers; Weil, Gotshal & Manges Banks: Bank of America Merrill Lynch; BNP Paribas Capital; CLSA; Deutsche Bank; J.P. Morgan; Morgan Stanley; The Royal Bank of Scotland • New China Life Insurance IPO Firms: Commerce & Finance; Davis Polk & Wardwell; Freshfields Bruckhaus Deringer; King & Wood Mallesons; Slaughter and May; Sullivan & Cromwell Banks: CICC; Goldman Sachs; UBS • Prada IPO Firms: Bonelli Erede Pappalardo; Clifford Chance; Davis Polk & Wardwell; Fangda Partners; Haiwen & Partners; Jun He;

Slaughter and May Banks: CLSA; Goldman Sachs • Shanghai Pharma H-share IPO Firms: Clifford Chance; Freshfields Bruckhaus Deringer; Grandall; King & Wood Mallesons; Sullivan & Cromwell Banks: BOCOM International Securities; CICC; Credit Suisse; Deutsche Bank; Goldman Sachs Accountants: PwC; Shinewing • Sun Art Retail Group IPO Firms: DLA Piper; Freshfields Bruckhaus Deringer; Herbert Smith; Jun He; King & Wood Mallesons; Lee and Li Banks: BNP Paribas; CICC; Citigroup; Goldman Sachs; HSBC; Morgan Stanley; UBS AG, Hong Kong Branch

Synmax Translation Award M&A Deal of the Year FINALISTs • AIG Strategic Sell-down of Its Shareholding in AIA Firm: Linklaters • AXA SA Acquisition of the Asian Insurance Businesses Previously Held by AXA Asia Pacific Holdings Firms: Allens Arthur Robinson; Appleby; Haley & Co in association with Clayton Utz; Freehills; King & Wood Mallesons; Norton Rose Banks: J.P. Morgan; Macquarie Bank; UBS • Chareon Pokphand Food Acquisition of a Controlling Interest in CP Pokphand Firms: Davis Polk & Wardwell; Linklaters Bank: UBS AG, Hong Kong Branch • China Petroleum & Chemical Corporation and ENN Energy Holdings Pre-Conditional Voluntary Cash Offer for China Gas Holdings Firms: Haiwen & Partners; Kirkland & Ellis; Linklaters; Sullivan & Cromwell Bank: Citigroup Global Market Asia

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• Cinda Selling Stake to UBS, Standard Chartered, Citic Capital Holdings and China’s national pension fund Firms: Clifford Chance; Sullivan & Cromwell • Joy Global Acquisition of Shares in International Mining Machinery Holdings Firm: Hogan Lovells • Northumbrian Water Group Takeover by UK Water Firms: Freshfields Bruckhaus Deringer; Hogan Lovells • Ping An Selling Stake to Chow Tai Fook Firm: DLA Piper • Yunfeng Capital investment in Alibaba Group Firm: Simpson Thacher & Bartlett

Pinsent Masons Award Construction In-House Team of the Year FINALISTs • Dragages • Gammon • Leighton • MTR Corporation

Banking & Financial Services InHouse Team of the Year

FINALISTs • Bank of America Merrill Lynch • Citigroup Global Markets • Deutsche Bank AG, Hong Kong Branch • HSBC • ICBC • Standard Chartered Bank

Insurance In-House Team of the Year FINALISTs • AIA • Aon/Essar • AXA • Chubb/Federal • Prudential

Lewis Sanders Award Investment Bank In-House Team of the Year FINALISTs • Bank of America Merrill Lynch • Citigroup • Deutsche Bank AG, Hong Kong Branch • Goldman Sachs (Asia) • J.P. Morgan Securities (Asia Pacific) • Morgan Stanley • Nomura International (Hong Kong) • UBS AG, Hong Kong Branch

hong kong Law Awards

Paul, Weiss Award IT/Telecoms In-House Team of the Year

FINALISTs • Alibaba Group • Hutchison Telecom • PCCW/HKT • SunGard

Paul, Weiss Award Media & Entertainment In-House Team of the Year FINALISTs • Microsoft • News Corp • PCCW/HKT • Yahoo!

Holman Fenwick Willan Award Shipping In-House Team of the Year FINALISTs • COSCO Pacific • Hutchison Port • Maersk • Noble Group • Pacific Basin

Real Estate In-House Team of the Year FINALISTs • Cheung Kong • Hongkong Land • Hutchison Whampoa • MTR Corporation • Shun Tak

Hong Kong Corporate Counsel Association Award Innovative In-House Team of the Year FINALISTs • Alibaba Group • COSCO Pacific • Hongkong Land • Morgan Stanley • MTR Corporation

hong kong Law Awards

ASIAN LEGAL BUSINESS august 2012

The Macallan Fine Oak Single Malt Scotch Whisky Award Hong Kong In-House Lawyer of the Year

Managing Partner of the Year

FINALISTs • Baker & McKenzie - Poh Lee Tan • Davis Polk & Wardwell - William Barron • Freshfields Bruckhaus Deringer - Robert Ashworth • Gall - Nick Gall • Hogan Lovells - Allan Leung • King & Wood Mallesons - Stuart Fuller • Li & Partners - Robin Li • Mayer Brown JSM - Y. M. Elaine Lo • Stephenson Harwood - Voon Keat Lai • Vivien Chan & Co. - Vivien Chan • Weil, Gotshal & Manges - Akiko Mikumo

FINALISTs • Alibaba Group - Tim Steinert • Bank of America Merrill Lynch - Peter Siembab • COSCO Pacific - Michelle Hung • Credit Suisse - Patricia Sindel • Morgan Stanley - James Bidlake

IPP Wealth Advisers Ltd Award Hong Kong Dealmaker of the Year

FINALISTs • Baker & McKenzie - Dorothea Koo • Clifford Chance - Amy Lo • Davis Polk & Wardwell - Eugene Gregor • Freshfields Bruckhaus Deringer - Robert Ashworth • Kirkland & Ellis - Nicholas Norris • Linklaters - William Liu • Paul, Weiss - Jeanette K. Chan • Simpson Thacher & Bartlett - Celia Lam • Stephenson Harwood - Voon Keat Lai

The Macallan Highland Single Malt Scotch Whisky Award Hong Kong Law Firm of the Year Finalists will be announced on the event night

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

Event Partner

hong kong Law Awards

BDO Limited

BDO Limited is the Hong Kong member firm of BDO International Limited, a global accountancy network with over 1,100 offices in more than 130 countries and over 48,000 people providing advisory services throughout the world. BDO Limited is served by 50 directors and a staff of over 1,000. Since our establishment in 1981, we have committed ourselves to facilitating the growth of businesses by advising the people behind them. Our professional services include assurance, taxation, business recovery, forensic accounting, litigation support, matrimonial advisory, risk advisory and business services. We possess comprehensive knowledge of accounting standards, tax and investment regulations prevailing in Hong Kong , China and other major countries, and conduct ourselves with the highest professional standards.

The Macallan

The Macallan is one of the world’s most awarded and admired Single Malts. This peerless reputation has been built by the commitment of The Masters of Spirit and Wood, those craftsmen at the heart of The Macallan for almost two centuries. Their obsessive pursuit of perfection has ensured the consistent quality that has characterized The Macallan since it was legally licensed in 1824. The Macallan Fine Oak The Macallan Fine Oak is Triple Cask Matured in a unique, complex combination of Exceptional Oak Casks; Spanish oak seasoned with sherry, American oak seasoned with sherry, and American oak seasoned with bourbon. This Triple Cask combination delivers an extraordinarily smooth, delicate yet complex Single Malt. American oak casks, which have previously held bourbon or sherry, impart a subtle, delicate colour with hints of apple, floral, vanilla and sweet citrus aromas and flavours. European oak casks, which have previously held sherry, impart a deep, rich colour with aromas and flavours of dried fruit, spice and chocolate orange. The Macallan Sherry Oak Over many years, The Macallan became synonymous with a sherry oak style. Its character is driven by oak sherry casks from Spain. The long journey from acorn to glass begins in the forests of northern Spain. In these ancient forests grow the mighty European oaks that will become the predominant casks to mature The Macallan Sherry Oak. From this rich timber are the casks hand fashioned in Cadiz, Spain, where traditional toasting changes the chemistry of the wood and adds yet another vital ingredient to the maturing process. The casks will then be filled with aged sherries and left to season for up to two years in Jerez, before they are deemed ready to begin the 2,000 mile journey to The Macallan distillery in Speyside in Scotland. Here they will receive The Macallan ‘new make’ spirit that will slowly mature into the satisfying complex Single Malt.

Award sponsors AzureTax Ltd

AzureTax is exclusively dedicated to high-level global tax planning and wealth protection and spearheads a transparent, strategic and ethical approach to tax advice. Answering the increasing need for tax planning to be a discipline in its own right, AzureTax provides independent, innovative and rigorous solutions which deliver both results and long term accountability. Our professionals bring clarity to the often complex and ever changing world of tax. We are committed to each client and their individual needs. This gives AzureTax its distinct edge. Contact details AzureTax Ltd Chartered Tax Advisers, Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway Hong Kong. Tel: 852 2123 9370 Fax: 852 2122 9209 website: www.azuretax.com

Contact details BDO Limited, 25/F, Wing On Centre, 111 Connaught Road Central, Hong Kong Tel: +852 2218 8288 Fax: +852 2815 2239 E-mail: info@bdo.com.hk Website: www.bdo.com.hk

China Legal Career

CLC is a leading legal executive search firm with offices in Beijing, Shanghai and Hong Kong to cover the whole Greater China legal market. We work with top US and UK law firms for their partner and associate placements, and with multinational corporations for their senior legal talent placements. We differentiate ourselves by our depth and width of our local connection, specialization in legal search and focusing on the high echelon of the market. Our recruiting consultants all come from international and legal background who adhere to the highest ethical standards and conduct searches in strict compliance with professional codes. Contact details Beijing: +86 10 6510 2236 Shanghai: +86 21 6360 7270 Hong Kong: +852 2545 5907 Email: clc@chinalegalcareer.com Website: www.chinalegalcareer.com

Holman Fenwick Willan

Holman Fenwick Willan is an international law firm advising businesses engaged in all aspects of international commerce. With offices in Asia-Pacific, the Middle East, Europe and South America, the firm has a built a reputation worldwide for excellence and innovation and has focused the development of its capabilities in the following core sectors: Aviation; Construction, Engineering & Infrastructure; Commodities; Energy; Financial Institutions; Insurance & Reinsurance; Logistics; Mining; Ports & Terminals; Real Estate: Shipping; Space; Superyachts and Travel, Cruse and Leisure . We have over 125 years experience of working with other law firms in jurisdictions throughout the world. Established in 1978, our Hong Kong office has been serving international and domestic clients in China and the Asia region for 34 years. Contact details Paul Hatzer, Holman Fenwick Willan LLP 15th Floor, Tower One, Lippo Centre, 89 Queensway, Admiralty, Hong Kong Tel: +852 3983 7788 Email: paul.hatzer@hfw.com

IPP Wealth Advisers Ltd

Founded in 1983, IPP originates from Singapore where it is the oldest and most established financial advisory, with client Assets Under Advice of around $2 Billion, making us one of the largest in Asia. Already with an office in Kowloon, this year IPP has expanded with a new office in Central, offering dedicated expat and international financial advice. With a subsidiary registered with PIBA and another approved by the SFC (Type 1 and Type 4), IPP is uniquely placed to offer our clients a full range of services. Contact details IPP Wealth Advisers Ltd Tel: +852 3713 7188 Email: expat@ippfa.com.hk Website: www.ippfa.com/eag or www.ippfa.com.hk Contact person: Ian Pryor

hong kong Law Awards

Lewis Sanders Legal Recruitment

Lewis Sanders is a specialist legal recruitment consultancy offering a full range of recruitment solutions. Using our extensive market knowledge, and expertise we place lawyers at all levels with international law firms, global financial institutions and multi-national companies across Asia. We provide detailed marketspecific knowledge and up to date information on job opportunities, salaries and market trends. Lewis Sanders has built its reputation on its core values of integrity, trust and professionalism. This approach has enabled us to establish and maintain long standing relationships with candidates and clients and has positioned us as one of Hong Kong’s leading legal recruiters. Contact details Lindsey Sanders, Managing Director +852 2537 7409 lsanders@lewissanders.com Emily Lewis, Managing Director +852 2537 7408 elewis@lewissanders.com 2001, Winway Building, 50 Wellington Street, Central, Hong Kong Tel: +852 2537 7410 Fax: +852 2537 7412 Email: recruit@lewissanders.com

Paul, Weiss

Paul, Weiss is an international law firm with one of the world’s leading Communications and Technology practices. In Asia, our team consistently wins Asia’s top “IT/Telecommunications Law Firm of the Year” awards in recognition of our M&A, private equity and regulatory efforts in the telecommunications and IT sectors. The firm represents a wide variety of providers and users of communication goods and services, as well as other entities with interests in communications and technology businesses and regulatory decision making. Contact details Jeanette K. Chan, Partner, Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor, 3A Chater Road, Central, Hong Kong Tel: +852 2846 0300 Email: jchan@paulweiss.com

Pinsent Masons

Pinsent Masons is a full service global law firm with over 1500 lawyers worldwide. It provides a full range of legal services to major international corporations, institutions and public bodies. The firm specialises in providing legal advice to the Infrastructure, Energy & Natural Resources, Advanced Manufacturing & Technology Services, and Financial Services Sectors. Pinsent Masons has been active in Asia for 30 years and has offices in Hong Kong, Shanghai, Beijing, Singapore, Doha, Dubai, Munich and throughout the UK. Contact details Pinsent Masons, 50/F Central Plaza 18 Harbour Road Hong Kong Tel: +852 2521 5621 Vincent Connor, Head of Hong Kong Office: vincent.connor@pinsentmasons.com Brian Scott, Business Development Executive: brian.scott@pinsentmasons.com

ASIAN LEGAL BUSINESS august 2012

Thomson Reuters

Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the legal, tax and accounting, financial, science and media markets powered by the world’s most trusted news organization. Thomson Reuters employs more than 55,000 people in over 100 countries worldwide.

Sweet & Maxwell

Sweet & Maxwell, a proud part of Thomson Reuters, has more than 200 years of heritage in legal publishing and content development. Sweet & Maxwell delivers detailed and specialist knowledge, understanding and commentary across a wide range of essential subjects reflecting the very latest issues in Hong Kong law and business in traditional an innovative formats. From trusted print works such as the Hong Kong White Book and Archbold Hong Kong to the leading, online legal research tool, Westlaw HK, we are committed to developing comprehensive and substantive local content for lawyers and related professionals in Hong Kong. Contact details Eric Vogt, Senior Regional Marketing Manager Thomson Reuters, 10/F Cityplaza 3, Taikoo Shing, Hong Kong Tel: +852 3762 3200 Email: eric.vogt@thomsonreuters.com

Withers

Withers is the world’s only international law firm dedicated to providing fully integrated local and cross-border advice in relation to the business and personal interests of successful people. With 107 partners and over 270 other lawyers, we have unparalleled expertise in tax law, trusts, estate planning, family law and other legal issues facing individuals and their families. Withers now has a top ranking for Private Client/Wealth Management in Chambers Asia and won the Asian Legal Business Matrimonial Law Firm of the Year award in 2011. Today, the firm has ten offices in Asia, US and Europe. Contact details Marcus Dearle Withers Suite 2005-07, 20/F, Gloucester Tower The Landmark, 15 Queen’s Road Central, Hong Kong Tel: +852 3711 1600 Email: Marcus.dearle@withersworldwide.com

Supporting Organisations

Synmax Translation

Founded in 2007, Synmax Translation has since been fully committed to providing high-quality legal translation services to international and domestic law firms, investment banks, PE/VC funds and MNCs. Most of our translation professionals have legal education in U.S./U.K. as well as in China and boast years of working experience in translating legal documents in the area of capital markets, PE/VC investments and cross-border M&A transactions. Synmax Translation seeks to be your reliable business partner and most preferred go-to service provider in addressing your needs for legal translation. Contact details Mr. Kevin Lu Shanghai Synmax Translation Consulting Co., Ltd. Suite 2104, Tower C, Wanda Plaza, 526 Nianjiabang Rd. Pudong New District, Shanghai 201318, PRC Toll: 400 888 1072 Direct: +86 21 3823 0421 Mobile: +86 134 8204 1399 Email: kevinlu@synmaxtrans.com Website: www.synmaxtrans.com

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ASIAN LEGAL BUSINESS august 2012

SPONSORED UPDATE: CHINA China Encourages Private Investment in Telecommunications Industry

CHINA

On June 27, 2012, the Ministry of Industry and Information Technology of China (“MIIT”) issued the Implementing Opinions to Encourage and Guide Further Investment of Private Capital in the Telecommunications Industry (“Opinions”). The Opinions are in line with a package of favorable policies in relation to investments to be made by private capital issued by the State Council in 2010. The principle is to further open up the China telecommunications industry to private companies and broaden their investment channels. Private companies are encouraged to engage in the following activities:

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