China Legal Business 6.11

ISSUE 6.11

Market for legal talent: Recovery imminent

法律人才市场回暖趋势渐显

Hong Kong’s legal profession: On the shoulders of a rising giant

香港律师业：立于崛起巨人之肩

Private equity:

Back with a vengeance

私募股权：律所业务发展的催化剂

CHINA

从价格战 转向价值战 Market imperative: More flexible billing

Alibaba: Inside the legal department 专访阿里巴巴集团 总法律顾问

n DEALS ROUNDUP n UK, US REPORTS n Lateral moves n LATEST CAPITAL MARKETS DATA n APPOINTMENTS

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Editorial >>

The Great Mid-Tier Marketing Opportunity

W

hile the financial crisis has forced many top-tier firms to cut costs and put recruitment plans on hold, some mid-tier firms are enjoying their time in the sun.

The tough commercial times have made both domestic and international companies far more price-sensitive across the board, and their legal departments have been no exception. Many in-house counsel, under pressure to reduce their legal spend but short of resources within their own teams, have been eyeing the lower rates and lengthening track records of the better mid-tier firms, with a new keenness.

The more nimble and prudent of those firms, sensing their one-shot opportunity to shine in front of clients that were previously the wellguarded domain of the top-tiers, have seen fit to outlay more on brandbuilding and new initiatives in client relationship development. As a result, a number of mid-tier firms are achieving strong growth in certain areas.

Han Kun, for example, has seen more multinational companies, PE firms and investment banks asking for legal advice. Corporate, M&A and capital markets are some of the practice areas where the firm has experienced tangible growth. And Shanghai’s Jade & Fountain has even taken the opportunity to set up its new tax, capital markets and international trade & anit-dumping practices.

One marketing director at a mid-tier international firm noted that slower times have shown the benefit of keeping up – or even boosting – marketing expenditure. “Previous downturns have taught us that organisations that maintain their marketing activities are more likely to increase their market share,” the marketing director said.

All the more so given that more and more of their larger rivals are now also responding to market conditions by offering significant discounts and billing flexibility where previously there was little or none.

In the heightened competitive environment that accompanies any slowdown in economic growth, winners and losers emerge. Certain midtier firms can ensure they fall into the first of those groups by marketing themselves as the smart alternative to the mega-firms for clients who are seeking quality legal expertise at lower overall cost.

After all, mid-tier firms have more to offer than lower prices. They can be more responsive, they’re not burdened by rigid, high-cost internal structures, and many can offer superior specialist expertise in niche areas.

Now, more than ever, is the time to get that message to the market.

The tough commercial times have made both domestic and international companies far more price-sensitive across the board 2

IN THE FIRST PERSON “We would use more experienced lawyers when the transactions are more complicated, even if it means we have to pay them more” Yao Jun, general counsel, Ping An Insurance, (p11)

“We are now acting for industrial players who think that this is the right time to expand their business in China” Janet Hui, partner, Jun He (p33)

“I expect to see large-scale, traditional PE investments becoming more mainstream activities, compared to venture capital investments which were prevailing in the past decade” Richard Xu, Han Yi (p38)

CHINA

ISSUE 6.11

HK SG

CN ALB In-House Legal Summit China - Beijing – 2009 26 November 2009, Swissôtel Beijing Hong Kong Macau Center

s se s EE ou sine FR n-H Bu s* r I l & er Fo nse ead u L Co

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Asia’s most respected legal industry publication, Asian Legal Business Magazine, is proud to present ALB In-house legal summit Beijing on 26 November 2009. Now in its sixth year, this special one-day event is tailored to bring together leading senior-level corporate counsel, business leaders and private practice lawyers.

Why you should attend: t *O EFQUI XPSLTIPQT GPDVTJOH PO UIF MBUFTU MFHBM JTTVFT QSFTFOUFE CZ UPQ EPNFTUJD BOE JOUFSOBUJPOBM MBX ĂśSNT t .BOBHJOH 1BSUOFST 'PSVN &YQMPSJOH OFX XBZT PG 4JOP 'PSFJHO DPPQFSBUJPO JO B OFX XPSME XIFSF $IJOB XJMM QMBZ B MBSHFS SPMF t 1BOFM EJTDVTTJPO PO UIF WJUBM SPMF PG JO IPVTF DPVOTFM CZ TPNF PG $IJOB T NPTU EJTUJOHVJTIFE BOE EZOBNJD DPSQPSBUF DPVOTFM t 0QQPSUVOJUJFT UP OFUXPSL BOE NFFU MFBEJOH MFHBM FYQFSUT BOE QFFST t 7*1 OFUXPSLJOH MVODIFPO CSFBLT Topics include: t " :FBS PG &DPOPNJD 5SBOTJUJPO JO $IJOB BOE UIF 6OJUFE 4UBUFT 3JTLT BOE 0QQPSUVOJUJFT GPS $IJOFTF $PNQBOJFT t 5JNF GPS TPNF )PVTF ,FFQJOH t &TTFOUJBM &NQMPZNFOU -BX %FWFMPQNFOUT .VTU ,OPX GPS &NQMPZFST t 1-64 *O IPVTF 1BOFM %JTDVTTJPO o 5IF $IBOHJOH 'BDF PG $PSQPSBUF (PWFSOBODF BOE 3JTL .BOBHFNFOU Distinguished speakers include: Keynote Speaker Ferheen Mahomed Regional General Counsel Societe Generale

Gregory Sy Attorney-at-Law (New York)/ Senior Foreign Counsel Grandall Legal Group

Wenjie Sun Partner, Attorneyat-Law Grandall Legal Group

Will Fung Senior Foreign Counsel Grandall Legal Group

Malhar S. Pagay Partner Pachulski Stang Ziehl & Jones LLP

Zhaokang Jiang Partner in Charge of Asia Practice Sandler Travis & Rosenberg

Isabelle Wan Senior Partner & Leader, Employment Law Practice TransAsia Lawyers

Don S. Williams Partner Wilson Sonsini Goodrich & Rosati

Laura H. Luo Associate Wilson Sonsini Goodrich & Rosati

Adam Duthie Head of European Commercial Group Withers Worldwide

Guy Facey Hong Kong Regional Head of Corporate Withers Worldwide

Joe Field Senior Regional Partner-Asia Withers Worldwide

Managing Partners Forum &YQMPSJOH /FX 8BZT PG 4JOP 'PSFJHO $PPQFSBUJPO JO B /FX 8PSME 8IFSF $IJOB 8JMM 1MBZ B -BSHFS 3PMF Featuring: Weidong Wang Executive Partner Grandall Legal Group

Jesse TH Chang Managing Partner TransAsia Lawyers

Don S. Williams Partner Wilson Sonsini Goodrich & Rosati

Adam Duthie Head of European Commercial Group Withers Worldwide

The Changing Face of Corporate Governance and Risk Management – In-house Panel Discussion Featuring: Benny Chen Associate General Counsel, Greater China Procter & Gamble (Guangzhou) Ltd.

4

Jin Wang Head of Legal, Greater China Region Shell (China) Limited

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CONTENTS >>

contents 10

34

10 Billing trends International firms are increasingly being pressured into offering alternative fee arrangements to attract and retain more clients. This has also meant PRC firms have been forced to be more flexible with their billing

40

ALB China issue 6.11 30

COVER STORY

ANALYSIS 12 Hong Kong’s legal profession: on the shoulders of a rising giant “International strategy” now has a new meaning among local Hong Kong firms, as the SAR’s lawyers increasingly recognise the importance of cooperating with the mainland 14 Market for legal talent: recovery imminent Lawyers are hoping that reports of a recovering economy will breathe life into a barren legal recruitment market. ALB investigates whether firms are on the lookout for new lawyers

FEATURES 30 TMT As China hurtles along the path of technological advancement, investors face a whole new world of opportunity and growth in technology, media and telecommunications law 34 Private equity While the rest of the world takes a year-long hiatus from private equity transactions, China’s domestic PE industry remains very active and is fast evolving

4

40 In-house perspective: Alibaba Group Legal advisors have to evolve as fast as Alibaba itself to keep, or win, mandates. ALB meets the company’s in-house team 42 Insurance Recent amendments to China’s Insurance Law have not only painted a bright picture for investment funds, but have also nudged Chinese law firms into keeping an eye open for more insurance work

REGULARS 6 18 • • • • • • • • •

DEALS NEWS Jin Neng zeros in on clean energy sector DeHeng Law Offices launches in Hangzhou Zhongyin hires ex-Bakers partner and plans expansion First AML litigation decision emerges Lovells/Hogan & Hartson merger talks advance Slaughter and May opens office in Beijing China Mobile settles AML lawsuit outside court Gaopeng adds two partners in Beijing CIC turns to Vinson & Elkins for Kazakhstan encounter

17 19 21 47 48

Opinion – Daniel Lee, Lee and Li UK report US report Mergermarket M&A update Thomson Reuters Capital Markets update

COMMENTARY 15 ADR CIETAC 22 Regulatory Paul Weiss 23 Singapore Loo & Partners 24 Arbitration SIAC 25 International tax Azure Tax 26 Regulatory Tahota

PROFILES 13 GoldenGate 29 Longan Law Firm 45 Kai-Rong

ISSUE 6.11

CHINA

NEWS | deals >>

| CHINA / HONG KONG |

deals in brief

►► Alibaba.com – China Civilink acquisition 阿里巴巴收购China Civilink 85%股权 Value: US$79m Firm: Slaughter and May Lead lawyer: Benita Yu Client: Alibaba.com Firm: Fangda Partners Client: Alibaba.com Firm: Jincheng, Tongda & Neal Client: China Civilink

Benita Yu Slaughter and May

• Deal was complicated by a new shareholders’ agreement between Alibaba.com and the remaining founders of China Civilink

| CHINA/KAZAKHSTAN | ►► China Investment Corporation – JSC KazMunaiGas 中投购哈萨克斯坦石油勘 探公司股权 Value: US$939m

Firm: Vinson & Elkins Lead lawyers: Xiao Yong, Paul Deemer, Francois Feuillat Client: CIC Firm: GRATA law firm Client: CIC • Vinson & Elkins acted on CIC’s purchase of approximately 11% of Global Depositary Receipts of JSC KazMunaiGas Exploration Production • Vinson & Elkins has experience advising China’s top oil and gas companies like PetroChina, Sinopec, CNOOC, ZhenHua Oil

6

“It only took one month for the transaction to reach completion.

Considering the size of the deal and the fact that it’s a Chinese company’s overseas M&A, one month is a remarkable short time frame. As the target company involves state-owned equity, there were some challenging regulatory issues for us to resolve” Xiao Yong, Vinson & Elkins

“Fangda advised on PRC due diligence and in that sense we had to work very closely because obviously the findings had to be worked into the sale purchase documentation” Benita Yu, Slaughter and May

| CHINA / AUSTRALIA | ►► Sinochem – Nufarm acquisition 中化报价24亿美元收购澳大 利亚Nufarm Value: US2.44bn

• Deal is subject to approval from regulators in China and Australia

| CHINA |

Value: US$351m

Firm: Beijing Guantao Law Firm Lead lawyer: Liu Rong Client: Issuer • Guantao’s first time advising on issuance of MTNs • Guantao completed due diligence into the issuer and its 13 subsidiaries including two listed companies

| CHINA | ►► Financial Street Holding bonds issuance 金融街控股发行债卷 Value: US$820m

Firm: Guantao Lead lawyer: Cui Liguo, Liu Rong, Zhan Yonghong Client: Issuer Firm: King & Wood Client: Underwriter

Cui Liguo Guantao

• Bonds listed on the Shenzhen Stock Exchange and is the biggest listing in Shenzhen seen this year • This bond issuance follows the successful raising of RMB10bn via the non-public additional offering of shares in 2007 and public additional offering of shares in 2008

Firm: Blake Dawson Lead lawyer: Marie McDonald Client: Sinochem Firm: Arnold Bloch Leibler Lead lawyer: Jonathan Wenig Client: Nufarm

• Nufarm is a longstanding client of Arnold Bloch Leibler

►► Datang Telecom Science and Technology Research Institute notes issuance 大唐电信发行债卷

• Both Slaughter and May and Fangda had dealings with Alibaba. com when it first listed in 2007

HEADLINE DEAL

• Blake Dawson also represented China Minmetals in its merger with OZ Minerals and Zhongjin Lingnan in its takeover of Perilya

Jonathan Wenig Arnold Bloch Leibler

ISSUE 6.11

NEWS | deals >>

| CHINA / HONG KONG | ►► China Vanadium IPO 中国铁钛通过香港IPO筹资 2.66亿美元 Value: US$264m Firm: Hogan & Hartson Lead lawyers: Gordon Ng, Man Chiu Lee Client: Issuer Firm: Paul, Hastings, Janofsky & Walker Lead lawyers: Sammy Li, Raymond Li, David Grimm Client: Joint underwriters Firm: Commerce & Finance Client: Joint underwriters • Hogan & Hartson recently represented Duoyuan in its New York IPO which raised US$88m • China Vanadium is the second largest operator and the largest non-state-owned operator of iron ore mines in Sichuan

| CHINA / HONG KONG | ►►KKR – International Far Eastern Leasing investment KKR牵头财团投资远东国际 租赁 Value: US$160m

Firm: Paul Weiss Lead lawyers: John Lange, Jeff Samuels Client: KKR, GIC and CICC Firm: Commerce & Finance Lead lawyer: Kang Yan Client: KKR, GIC and CICC Firm: Maples and Calder Lead lawyer: Anothony Webster Client: KKR, GIC and CICC Firm: Paul Hastings Lead lawyer: Vivian Lam Client: International Far Eastern Leasing Firm: Tian Yuan Lead lawyer: Zhu Xiaohui Client: International Far Eastern Leasing

►► YOUR MONTH AT A GLANCE Firm

Jurisdiction

Deal name

Value Deal type (US$m)

Arnold Bloch Leibler

China/Australia

Sinochem – Nufarm acquisition

2,440

M&A

Blake Dawson

China/Australia

Sinochem – Nufarm acquisition

2,440

M&A

Blake, Cassels & Graydon

China/ Australia

Sichuan Hanlong - Moly Mines subscription agreement

200

Debt market

Beijing Sino-Pro

China/Taiwan

VisionChina Media – DMG acquisition

160

M&A

Chen & Co

China

Canadian Solar share listing

108

Equity

Commerce & Finance

China/ Hong Kong

China Vanadium IPO

264

Equity

China/ Hong Kong

KKR – International Far Eastern Leasing investment

160

Private equity

China/Hong Kong

Evergrande IPO

780

Equity

China

China Real Estate Information IPO and SINA merger

China/ Australia

Sichuan Hanlong - Moly Mines subscription agreement

Corrs Chambers Westgarth

1,000

Equity, M&A

200

Debt market

Debevoise & Plimpton

China/ Taiwan

Primus Nan-Shan – Nan Shan Life Insurance

Davis, Polk & Wardwell

China

Tianwei New Energy – Hoku Scientific proposed investment

Denton Wilde Sapte

China/ South Africa

Standard Bank of Africa syndicated loan

1,000

Fangda

China/ Hong Kong

Alibaba.com – China Civilink acquisition

79

China

China Real Estate Information IPO and SINA merger

Freehills

China/ Australia

Sichuan Hanlong - Moly Mines subscription agreement

Freshfields

China/Korea

China Unicom – SK Telecom share buyback

China/Hong Kong

Evergrande IPO

China/Taiwan

Primus Nan-Shan – Nan Shan Life Insurance

Fried, Frank

China

Merrill Lynch Far East – Tianneng Power International share placement

Gide Loyrette Nouel

China/Turkey

Guantao

China

2,150 50

1,000 200 1,300 780 2,150

M&A Private equity Debt market M&A Equity, M&A Debt market Equity Equity M&A

50

Equity

Taiyuan Iron & Steel (Group) – Turkish mining companies investment

300

Equity

Datang Telecom Science and Technology Research Institute notes issuance

351

Debt market

China

Financial Street bonds issuance

820

Debt market

Grandall Legal Group

China/Taiwan

VisionChina Media – DMG acquisition

160

M&A

GRATA

China/Kazakhstan

CIC – JSC KazMunaiGas

939

M&A

Haiwen & Partners

China

Canadian Solar share listing

108

Equity

Hogan & Hartson

China/ Hong Kong

China Vanadium IPO

264

Equity

Jincheng, Tongda & Neal

China/ Hong Kong

Alibaba.com – China Civilink acquisition

79

M&A

Jun He

China

Commercial Aircraft Corporation of China – United Eagle investment

King & Wood

China

Financial Street bonds issuance

820

Debt market

China/Hong Kong

Evergrande IPO

780

Equity

China

China Real Estate Information IPO and SINA merger

China

Canadian Solar share listing

China/Taiwan

Primus Nan-Shan – Nan Shan Life Insurance

2,150 2,150

Latham & Watkins LCS & Partners

1,000

1,000 108

Private equity

Equity, M&A Equity M&A

Lee and Li

China/Taiwan

Primus Nan-Shan – Nan Shan Life Insurance

Maples and Calder

China/ Hong Kong

KKR – International Far Eastern Leasing investment

M&A

China/Hong Kong

Evergrande IPO

China

China Real Estate Information IPO and SINA merger

1,000

O’Melveny & Myers

China

China Real Estate Information IPO and SINA merger

1,000

Equity, M&A

Orrick

China/Korea

China Unicom – SK Telecom share buyback

1,300

Equity

China/Taiwan

VisionChina Media – DMG acquisition

160

M&A

Paul, Hastings Janofsky & Walker

China/ Hong Kong

China Vanadium IPO

264

Equity

China/ Hong Kong

KKR – International Far Eastern Leasing investment

160

Private equity

Paul Weiss

China/ Hong Kong

KKR – International Far Eastern Leasing investment

160

Private equity

Shearman & Sterling

China

China Real Estate Information IPO and SINA merger

1,000

160

Private equity

780

Equity Equity, M&A

Equity, M&A

Does your firm’s deal information appear in this table?

Please contact

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alb@keymedia.com.au

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7

NEWS | deals >>

Firm: Walkers Lead lawyers: Denise Wong Client: International Far Eastern Leasing • Commerce & Finance was PRC Zhu Xiaohui Tian Yuan legal advisor to China South City’s US$404m IPO • Sinochem is major shareholder of International Far Eastern Leasing

| CHINA/KOREA | ►► China Unicom – SK Telecom share buyback 中国联通购回韩国SK Telecom特权股 Value: US$1.3bn Firm: Orrick Herrington & Sutcliffe Lead lawyer: David Cho Client: SK Telecom Firm: Freshfields Lead lawyer: Teresa Ko Client: China Unicom

• Simpson Thacher’s team included at least 19 partners and lawyers in Hong Kong, Beijing, New York, Palo Alto and London

"The VisionChinaDigitalMedia Group acquisition will provide China with a platform for the development of a nationwide digital mobile television industry and exemplifies the emerging strength of the Chinese technology economy" David Lee, Orrick Herrington & Sutcliffe

| CHINA/TAIWAN |

| CHINA/HONG KONG |

Firm: Debevoise & Plimpton Lead lawyer: John Vasily Client: AIG Firm: Lee and Li Client: AIG • China Strategic Holdings holds 80% of Primus Nan-Shan Holding shares • Debevoise worked with AIG on several other recent matters; Lee and Li has been involved in a number of Nan Shan’s acquisitions • Given the complexity of the deal, law firms had to form large global teams to handle important issues

►► VisionChina Media – Digital Media Group acquisition 华视收购DMG Value: US$160m

• Freshfields and Orrick have both worked for assigned telecom companies since 2002

Firm: Simpson Thacher Lead lawyers: Chris Lin, Ian Ho, Richard Lin, Frank Chen, Townshine Wu, Katharine Moir, Daniel Foster Client: VisionChina Media

• Teresa Ko previously advised China Unicom on US$1bn alliance with Spain’s Telefónica

Firm: Grandall Client: VisionChina Media

| CHINA/TAIWAN | ►► Primus Nan-Shan Holding – Nan Shan Life Insurance acquisition 博智金融中策集团收购南山 人寿 Value: US$2.15bn

Firm: Freshfields Lead lawyers: Robert Ashworth, Chris Wong Client: China Strategic Holdings Firm: Simpson Thacher Client: Primus International Firm: LCS & Partners Client: Primus International

Firm: Orrick, Herrington & Sutcliffe Lead lawyers: David Lee, Mark Seneca, Steve Malvey, Elizabeth Cole, Nancy Chen Client: Digital Media Group Firm: Beijing Sino-Promise Client: Digital Media Group • This transaction is subject to customary closing conditions • Deal represents one of the largest acquisitions involving a venturebacked China-based private company by a public company

►►Merrill Lynch Far East – Tianneng Power International share placement 天能动力配股 Value: US$50m

Firm: Fried Frank Lead lawyers: Victoria Lloyd, Joshua Wechsler Client: Merrill Lynch • Fried Frank recently advised underwriters of China Lilang US$150m IPO

| CHINA/HONG KONG | ►► Canadian Solar share listing 阿特斯加拿大CSI上市 Value: US$108m

Firm: Haiwen & Partners Lead lawyer: Bian Hao Client: Underwriters

David Zhang Latham & Watkins

Firm: STB Lead lawyer: Chris Lin Client: Underwriters • Haiwen was legal advisor to BBMG on its Hong Kong IPO worth US$884m • Chen & Co assisted Sinopharm on its US$1.13bn IPO on HKSE

| CHINA/HONG KONG | ►► Evergrande IPO 恒大地产二次上市

Firm: Chen & Co Lead lawyer: Lin Zhong Client: Issuer Firm: Latham & Watkins Lead lawyers: David Zhang, Allen Wang Client: Issuer

Firm: WeirFoulds Lead lawyer: Wayne Egan Client: Issuer

Value: US$780m

Firm: Commerce & Finance Client: Issuer

Lin Zhong Chen & Co

Firm: Sidley Austin Client: Issuer Firm: Maples and Calder Client: Issuer Firm: Freshfields Client: Underwriter

8

ISSUE 6.11

NEWS | deals >>

| CHINA / AUSTRALIA | ►► Sichuan Hanlong (Group) Co – Moly Mines subscription agreement 四川汉龙收购澳洲钼矿公司 逾半股权 Value: US$200m

Firm: Corrs Chambers Westgarth Lead lawyer: Anthony Latimer Client: Sichuan Hanlong

Firm: Blake, Cassels & Graydon Client: Moly Mines

• Commerce & Finance is long-standing legal advisor to Evergrande, advising on US$897m debt-and-equity financing in 2007 • Freshfields has been representing underwriters in three propertydeveloper IPOs this year

| CHINA | ►► Commercial Aircraft Corporation of China – United Eagle investment 中国商用飞机投资鹰联航空 Value: US$1bn

Firm: Jun He Client: COMAC Firm: Tahota Client: Sichuan Airlines • Agreement involved COMAC, Chengdu government, Sichuan Airlines Group and United Eagle • Tahota is Sichuan Airline’s longterm legal advisor • Tahota was also involved in Sichuan Airline’s acquisition of 56% of the additional shares in United Eagle in March 2009, and leasing of the first Tianjin assembled Airbus A320 from Dragon Aviation Leasing

www.legalbusinessonline.com

| CHINA | ►► Tianwei New Energy – Hoku Scientific proposed investment 天威新能源投资美国HOKU Value: US$50m

Firm: Freehills Client: Moly Mines

Firm: King & Wood Client: Underwriter

• Merger was executed concurrently with CRIC’s IPO on NASDAQ • Skadden is longstanding legal advisor to CRIC

• Corrs has advised Yanzhou Coal on its proposed acquisition of Felix Resources; Baosteel on its strategic cooperation with Aquila Resources and MCC as its Australian counsel, for the Shanghai bourse component of its recent dual IPO in Hong Kong and Shanghai

Firm: Davis Polk & Wardwell Lead lawyer: Howard Zhang Client: Tianwei • Hoku will Howard Zhang issue 60% of Polk & shares to Tianwei Davis Wardwell and cancel US$50m of secured prepayments

by Tianwei and Tianwei, providing US 50m in debt to Hoku

• Corrs has also previously advised Moly Mines on its Spinifex Project

CHINA/SOUTH AFRICA | CHINA | ►► China Real Estate Information CORP IPO – CIRC 与新浪乐居合并上市 Value: US$1 bn

Value: US$1bn

Firm: Denton Wilde Sapte Lead lawyer: Isaac Felberbaum Client: Syndicate banks

Firm: Skadden Lead lawyers: Julie Gao, Jonathon Stone, Rita Rodin Johnston Client: CRIC Firm: Fangda Partners Client: CRIC

►► Standard Bank of Africa syndicated loan 中国银行首次为南非银行提 供贷款

Julie Gao Latham & Watkins

Firm: Maples and Calder Client: CRIC Firm: Commerce & Finance Client: Joint underwriters Firm: O’Melveny & Myers Lead lawyers: Kurt Berney, David Roberts Client: Joint underwriters Firm: Shearman & Sterling Client: SINA

• Loan represents the first loan from four Chinese banks – Industrial and Commercial Bank of China (Macau), Bank of China, China Development Bank and China CITIC Bank – into South African market

• DWS was recommended to the banks by the borrower’s international finance team • Borrowers were represented by their in-house counsel

| CHINA/TURKEY | ►► Taiyuan Iron & Steel (Group) – Turkish mining companies investment 太原钢铁投资土耳其矿业公司 Value: US$300m

Firm: Gide Loyrette Nouel Lead lawyers: Guillaume RogierBrierre, Yan Lan Client: TISCO • Deal is the first of its kind involving a Chinese state-owned enterprise in the Turkish mining sector • Acquisitions include 15 chrome mining licences • GLN also advised TISCO on Turkish employment issues for Chinese staff and on further business investments in Turkey

| CHINA | ►► Sichuan Changhong Electric convertible bonds issuance 四川长虹可分离债上海发行 Value: US$439m

Firm: Tahota Client: Issuer • Tahota is Changhong’s long-term legal advisor and has represented the company in stock listings last year

“The CRIC IPO and Sina merger will lead more people and companies to think of creative ideas and innovative deal structures that could work in legally permissible regimes. The deal opens ways for people to imagine more and be creative. The concurrent execution of two transactions also presented challenges in terms of timing, workload and multiple parties involved” Julie Gao, Skadden 9

NEWS | analysis >>

Analysis >>

Firms answer clients’ call for value

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arge-scale international firms are increasingly being pressured into offering alternative fee arrangements to attract and retain clients. Firms like O’Melveny & Myers and Kirkland & Ellis have recently moved away from hourly billing. Large PRC firms have also had to be more flexible in billing.

For many years, smaller PRC firms have sold their legal services at highly competitive rates, offering clients ‘off-the-record’ discounts instead of introducing formally stated alternative billing policies. Now, given fewer high-end transactions in the market

10

compared to previous years, larger players are joining the price war.

The result is some serious lowballing. “Our pitch was the lowest we could possibly go but we still got

undercut,” said a partner at a midsized PRC firm which recently lost three out of five pitches – due to fee differences – to a firm ranked within the ALB China 10 largest firms.

►► Alternative fee arrangements of international firms

To compete globally, international firms like Kirkland & Ellis have introduced discounting rates to extract promises of future work. Mayer Brown, O’Melveny & Myers (which also implemented volume discounts) and Reed Smith are all offering fixed-fee structures to their clients.

The Chinese legal market, however, has called for special treatment. Due to the fact that clients are more sensitive to cost and local players offer extremely competitive fee reductions, international firms have to offer Chinese clients lower fees than they do in other markets. Hogan & Hartson, for example, uses a different billing structure in China, Orrick offers percentage discounts, and O’Melveny & Myers examines capital market transaction fees on a case-by-case basis.

ISSUE 6.11

NEWS | analysis >>

We would use more experienced lawyers when the transactions are more complicated even if it means we have to pay more. But if we think that the price is too steep, it can always be negotiated” Yao Jun, general counsel, Ping An

Many clients prefer fixed fees or capped fees. However, sometimes an incentive component is tacked onto the fixed fee arrangement to push firms towards the best possible results.

“In litigation cases, we would prefer a success-based, fixed-fee arrangement. If the result of the litigation is good, the firm will receive a certain amount on top of the fixed fee,” said Yao. “In transactional matters, this arrangement spurs the external counsels to work more efficiently and complete a deal within a given timeframe, a win-win situation for the client and the firm.”

In today’s market, few firms would argue with that. ALB

Against the background of the downturn, domestic and international clients have been increasingly cost sensitive, and a buyers’ market has allowed them to impose their agendas on firms. At the same time, domestic firms are sometimes willing to concede even more ground in order to establish relationships with new clients that may pay off in the long term.

different billing methods, but a firm must be able to come up with the most ideal and reasonable billing solution for the type and complexity of the transaction,” said Yao. “Obviously, we prefer a fixed-fee billing structure due to budget control. We would usually pre-arrange a timeframe where the work would be expected to be completed and hence cap our legal expenses.”

Price competition – the client view

以服务价值取胜

Despite price-slashing becoming increasingly common, former legal director for Kodak in Asia, Mao Rong, who recently joined Reed Smith as counsel in Beijing, argues that discounts vary with the project or transaction and domestic or smaller firms don’t have to give a hefty discount to win a mandate.

“Regardless of the GFC, every penny that a company spends has to make good sense. In-house counsels are looking for expertise from firms that can provide something an internal team cannot. If the selected firm can eventually prove the value of its services, companies are always willing to pay,” Mao said.

Similar to Kodak, large domestic companies’ purchasing decisions are based primarily on perception of service value rather than price alone. Despite budget restrictions, China Ping An Insurance’s external counsels include Jun He, Zhong Lun, DeHeng Law Offices, Commerce & Finance, DLA Piper and White & Case – all of which are among China’s largest firms.

“When we engage law firms, we consider the complexities of the matter, the experience of the lead lawyers and the approximate time frame. We hire more experienced lawyers when the transactions are more complicated even if it means we have to pay more. But if we think that the price is too steep, it can always be negotiated,” said Yao Jun, general counsel of Ping An.

Cap on fees

How firms structure fees is matterdependant.“Different firms exercise www.legalbusinessonline.com

在

市场竞争压力增大的背景下，一些大型跨国律 师事务所纷纷开始采用更加灵活的收费安排， 以吸引并保留客户。而中国律师事务所则继续以在 价格上提供优厚折扣的方式争取更多业务机会。 以极具竞争力的价格出售法律服务在中低端法律 服务市场中已经屡见不鲜。由于市场形势的转变 以及全球金融危机的影响，大型律师事务所亦相 继加入价格战。 中小型律所普遍反映，大型律所正以低价抢占原 由中小型律所拥有的市场份额。一家中等规模的律 师事务所近期在五个竞标项目中的三项里，由于价 格差距败给一家规模排在中国前十强的律所。该事 务所合伙人表示：“我们的收费已是事务所能承受的 最低限度，但我们还是痛失业务机会。” 受买方市场影响，越来越多的中国事务所大幅降 低收费，努力在快速发展的法律市场占据更多份 额。同时，他们将折扣视为与新客户建立业务关系 的激励手段，以期在日后获得更多回报。

客户看重信价比

尽管降价风潮日渐加剧，原柯达公司亚洲法律总 监茅榕律师认为，折扣幅度须视项目或交易的情 况而定，律师事务所的降价做法并不意味着会赢 得更多客户。 茅榕认为：“无论是否遇到全球金融危机，企业的 每一分开支都应物有所值。内部顾问律师需要律师 事务所的专业能力，完成内部法律团队无法完成的 工作。如企业选择的律师事务所能证明自身的服务 价值，企业肯定愿意支付更高费用。” 尽管预算收缩，跻身财富500强公司的中国平安 保险集团仍长期聘请多位外部法律顾问，充分印证 茅榕的观点。平安的外部法律顾问包括君合、中

伦、德恒、通商、欧华和伟凯，均属中国规模最大 的律师事务所。 姚军表示：“律师事务所收费是否合理，要和具体 情况联系起来。平安在购买法律服务时，会考虑工 作本身的难度、律师的经验、花费的时间。比较复 杂的项目，我们会聘请经验比较丰富的律师，花的 时间可能会多一些，律师的收费也会高一些。但如 果在律师报价时我们觉得费用超过我们的预期，我 们也会与律师进行适当沟通，对价格进行协商。”

协商收费受青睐

不同律师代理费的收取方式各有不同的特点和适用 空间，从某种意义上来说，对公司客户没有优劣之 分。关键是要结合具体个案的情况和特点，选择相 对最适合的收费方式。为更好地握法律服务开支的 上限，越来越多的客户目前更倾向于谐商固定费 用。姚军表示：“就诉讼项目而言，采取固定收费的 情况较多。对于重大疑难案件，公司会采取全部或 者部分风险收费的模式，这种方式将律师代理效果 与律师最终收取的代理费相挂钩，既能有效避免当 事人在诉讼初期较大的成本投入，也能最大限度的 激发律师的办案积极性，在代理费的支付上，实现 委托人与代理律师利益的平衡和双赢。” 而在跨国项目中，虽然按小时计费为主流，但多数公 司仍更倾向于固定收费方式。姚军表示指出：“就投资项 目而言，律师一般愿意按小时收费，但从公司成本控制 的角度，我们还是比较喜欢固定收费的方式。成本也是 我们选择律师事务所的一项标准。为此，我们往往会与 律师进行一个妥协，即在约定的时间内，设置一个固定 收费的上限；超过该时限的，再按小时收费或再进行协 商收费。当然，如果项目本身确实无法确定需要多少法 律服务时间，我们也可以接受按照小时收费的方式。”

“Regardless of the GFC, every penny that a company spends has to make good sense. In-house counsels are looking for expertise from firms that can provide something an internal team cannot. If the selected firm can eventually prove the value of its services, companies are always willing to pay” Mao Rong, former legal director, Kodak Asia 11

NEWS | analysis >>

Analysis >>

Hong Kong’s legal profession: on the shoulders of a rising giant

immediate opportunity lies in China’s outbound investment trend. “Our dual capability in Hong Kong/PRC law will give us an obvious edge over our competitors in servicing the financing and investment needs of globalising Chinese companies,” he said. In capital markets, for example, he expected King & Wood would soon be engaged as both PRC and Hong Kong counsel for the Hong Kong IPOs of Chinese issuers.

Changing perception

“International strategy” has a new meaning among local Hong Kong firms, as SAR lawyers increasingly recognise the importance of cooperating with the mainland

T

raditionally, the international strategy for Hong Kong law firms has largely been characterised as working in association and merging with an international firm. Examples include Hong Kong powerhouse JSM’s merger with US firm Mayer Brown and Kwok & Yih’s merger with Australian firm Mallesons Stephens Jaques. Only recently have firms started using a new route to international expansion – joining forces with top-tier PRC firms and accompanying them on their globalisation path.

Arculli Fong & Ng and XJ Wang & Co are the first two Hong Kong firms to implement this approach, having recently fully merged into King & Wood and Jun He respectively, after a three-year association. The mergers allow the two mainland high-flyers to become the first PRC firms permitted to practice Hong

12

Kong law. Meanwhile, they offer the Hong Kong partners access to a vast pool of resources and clients in China.

“Increasingly the work we do is mainland-related and our connection with the mainland has significantly outgrown our connection with the US and UK markets. It has become imperative for us to adopt a ‘Chinalisation’ strategy,” said King & Wood’s senior partner in Hong Kong, Ching-Wo Ng, who was a founding partner at Arculli Fong & Ng. “The high-end corporate legal services market in Hong Kong mostly involves cross-border issues, and is very competitive. Local firms that have positioned themselves in this segment increasingly need to join forces with either a leading international firm, or a top-tier mainland firm.”

Arculli’s merger with King & Wood will bring new opportunities for both firms. Ng noted that one

The Hong Kong-mainland relationship has come a long way. Five years ago, a merger with a PRC firm wouldn’t have been viewed as strategically sound or practically necessary for a Hong Kong firm. But rapid development of the mainland legal market and its law firms has triggered the change.

“Hong Kong firms have been forging relationships with mainland firms for a long time, but the need has never been greater,” said Huen Wong, president of the Law Society of Hong Kong and the managing partner of Fried Frank’s Hong Kong office. “Things have changed so much in the mainland. China’s legal services are more sophisticated, more lawyers are specialised, and firms are managed and operated to a much higher standard. Cities like Beijing and Shanghai continue to be important financial and legal centres,” he said.

On the other hand, the rise of China in the global economy and the growing international presence of Chinese enterprises are a catalyst for closer cooperation between firms. Ronald Arculli, the chairman of HKEx and member of the Executive Council of the HKSAR, agrees that mainland China is the key to ensuring Hong Kong’s legal profession remains relevant.

“Just as the attention of western economies has turned towards Asia – particularly China – as a relative safe haven in troubled times, so too should we as a profession be looking to China,” said Arculli during his keynote speech at the 2009 ALB Hong Kong Law Awards, held in September. “We should be looking to establish even closer ties with the mainland’s burgeoning legal community and facilitate the flow of people, know-how and best practice between each other.”

“This process is one which has already been occurring, but efforts now need to be stepped up. China’s relative ISSUE 6.11

NEWS | analysis >>

resilience through a global financial crisis that has been so disastrous for so many economies across the world has actually served to accelerate the shift in the economic balance of power from the west to the east. We, as leading lawyers in Hong Kong, have a chance to have a fundamental effect on how that shift occurs and whether the end result takes a desirable form.”

The Delta force

Having recognised the tremendous scope for cooperation, the Law Society of Hong Kong has shown its commitment to engage more with lawyers across the border, and form working groups on a range of subjects and projects which straddle the two jurisdictions. “We’ve been talking about co-operation for too long. I am not interested in signing any more MOUs and we’ve had enough of training programs and seminars,” said the Law Society’s president. “Now we need to achieve something concrete for both sides to work together.”

The short-to-medium-term focus, according to Wong, will be working more closely with firms in Guangdong,

particularly the Pearl River Delta region, which are closer geographically with similar cultures and language.

“In the next decade, the integration between Hong Kong and the PRC will increase in breadth and depth.

“Increasingly the work we do is mainland-related ... our connection with the mainland has significantly outgrown our connection with the US and UK” ching-wo ng, king & wood A tremendous opportunity for collaboration will be brought about by closer integration,” he said.

Under his leadership, the Hong Kong Law Society has partnered with Shenzhen Lawyers Association to form a number of working committees, focusing on identifying and locating projects in Guangdong requiring legal services work from both PRC and Hong Kong lawyers. Many opportunities have already been identified in a host of large-

scale, cross-boundary infrastructures that will spur the region’s closer integration and create a world-class “PRC Metropolis”.

Among them are the Hong KongZhuhai-Macau Bridge, the GuangzhouShenzhen-Hong Kong Express Rail Link, and the Qianhai service park in Shenzhen’s Nanshan District. “Many of the projects involve complex crossborder matters and require substantial financing. They will benefit all firms in the region, big or small,” Wong said.

In the US$5.6bn Hong Kong-ZhuhaiMacau Bridge project, a consortium of law firms led by Pinsent Masons’ Hong Kong office has won the bid to provide legal services. Jun He (Beijing), TeamWin (Guangdong), and DSL Lawyers (Macau) are the other members of the consortium, which is jointly governed by the laws of three different legal jurisdictions.

Hong Kong law firms have the potential to play an unprecedented role in aiding China’s globalisation and achieving strong inter-regional cooperation. Their relevance could be greater than ever before. ALB

三星集团中国区法律部负责 人田永富先生加入金阙所

Firm Profile

GoldenGate

长

Tian Yongfu

期供职于三星集团担任中国区法律部负责人的田永富先生，近日加入北京市金阙 律师事务所，成为事务所商务法律部的合伙人。田先生的加入将大大提升金阙所 在商务领域的法律服务水平。 金阙所近来业务发展迅速，不断吸纳优秀人才。事务所在国际仲裁、外商直 接投资、并购、知识产权等领域取得令人瞩目的成绩。事务所的律师团队具有丰富的国际商务 经验，能够为客户提供综合性解决方案以及管家式服务。主要客户包括中国有色集团、四方集 团、奥美集团、三星中国、美卓、ADC、RITZ酒店，以及SPAR等等。 国际著名律师联盟TAGLaw最近正式接纳金阙所成为其会员。TAGlaw成立于1999年，在世 界100多个国家和地区拥有140余个律师事务所会员，律师人数超过7500名。金阙所是TAGlaw 在中国的第二家会员，另一家位于中国上海。

Former Head Counsel for Samsung China joins GoldenGate

T

he long time head counsel for Samsung China, Mr. Tian Yongfu, has joined GoldenGate as partner of its commercial law practice group.

Mr. Tian will be an invaluable contribution to GoldenGate’s practice.

GoldenGate has been undergoing rapid expansion. The firm’s strengths in International Arbitration, FDI, M&A and Intellectual Property have earned recognition from clients and peers alike. The expertise and knowledge within the firm allows it to

www.legalbusinessonline.com www.legalbusinessonline.com

provide comprehensive and practical solutions for clients. Main clients include CNMC, Si Fang Group, Ogilvy & Mather, Samsung China, Metso, ADC, Ritz and SPAR etc.

GoldenGate was recently admitted as a member of TAGLaw, a global alliance of high quality independent law firms. TAGLaw was established in 1999, and now has over 140 member firms in more than 100 countries, totaling more than 7500 lawyers. GoldenGate is only the second Chinese law firm to become a member, the first being a firm in Shanghai.

GoldenGate Suite 2311-2312, The Spaces International Center, No.8 Dongdaqiao Road, Chaoyang District, Beijing, China 100020 Tel: +8610 5870 2028 Fax: +8610 5870 2026 E-mail: mail@goldengatelawyers.com Website: www.goldengatelawyers.com

北京市金阙律师事务所 北京市朝阳区东大桥路8号尚都国际中心A座2311-2312室 电话：+8610 5870 2028； 传真：+8610 5870 2026 邮件: mail@goldengatelawyers.com 网址: www.goldengatelawyers.com

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NEWS | analysis >>

香港律师业：立于崛起巨人之肩 以

往，香港律师事务所主要通过与国际律师事务 所联营和合并实现国际化策略。例如，香港孖 士打律师事务所与美国美亚博国际法律事务所合并， 郭叶律师行则与澳大利亚万盛律师事务所合并。近年 来，香港律所逐渐开始通过全新方式进行国际扩张， 即与一流的中国律师事务所合作，协助中国律师事务 所推动业务国际化。 夏佳理方和吴正和律师事务所以及王小军律师行是 率先采用该方式扩大业务的香港律师事务所。在历经 三年的联营之后，两所分别与金杜和君合完全合并， 使这两家大陆一流的律师事务所成为最早获准在香港 提供法律服务的大陆事务所。与此同时，香港合作伙 伴也通过合并获得大陆巨大的人力资源和客户基础。 金杜香港分所高级合伙人吴正和曾是夏佳理方和 吴正和律师事务所的创始合伙人，他表示：“在我们 的业务中，与大陆相关的业务不断增加，我们与大 陆业务联系的紧密程度已远远超出英美市场。采用 中国化的业务策略势在必行。香港的高端公司法律 服务市场多数涉及跨境事务，极具竞争力。越来越 多的香港本地律师事务所希望与领先的跨国事务所 或一流大陆事务所联手。” 夏佳理方和吴正和律师事务所与金杜的合并将为 双方带来诸多全新机遇。吴律师指出其中一个最大 的机遇在于当前中国企业积极开展境外投资。他表 示：“我们在香港和中国法律领域拥有双重服务实 力，在为致力于全球化的中国企业满足融资和投资 需求方面，我们相对其他香港律所拥有明显的竞争 王桂埙表示：“香港律师事务所与大陆事务所建立合

Analysis >>

作关系由来已久，但目前，市场对合作的渴求达到前 所未有的程度。原因在于中国大陆正发生翻天覆地的 巨变。现在，中国的法律服务更为完善，在特定领域 有更多专业律师，律师事务所的管理和经营方式也达 到较高水准。北京和上海这样的大城市将继续发挥区 域性金融和法律中心的作用。” 另一方面，中国在全球经济中不断崛起，中国企业 融入国际市场的程度不断加深，这些都将推动两地律 师事务所建立更密切的合作关系。香港联交所主席兼 行政会议成员夏佳理先生认为，中国大陆是香港法律 服务行业在新经济时代保持发展的关键因素。 今年9月，夏佳理先生在2009年《亚洲法律杂志》 香港法律大奖活动上做主旨演讲时指出：“随着西方 经济的注意力转向亚洲，尤其是经济低迷时期仍保 持相对稳定的中国，我们作为法律专业人士，也应 将目光投向中国。我们应与中国大陆的法律业界建 立更为密切的联系，推动双方之间的人才、知识和 实践方法的交流沟通。 夏佳理先生表示：“这项工作目前已经在进行中，但 需要不断加大合作力度。全球金融危机令众多国家一 筹莫展，中国却保持相对稳定，这实际上有助于加速 改变东西方经济失衡的状况。我们作为香港的领先律 师，应积极参与其中，推动东西方经济达到平衡。”

珠三角机遇

在认识到巨大的合作范围后，香港律师会将积极邀 请大陆律师参与，组建工作组，集中解决涉及两地 的一系列课题和项目。香港律师会会长表示：“我们

空谈合作的时间已经太长。我对于签署合作备忘录 毫无兴趣，培训计划和研讨会已经足够了。这些都 是20年前两地沟通的方法，现在双方的合作需要迈 出实质性步伐。” 王桂埙表示，为达到中期合作目标，香港将与广东 省律师事务所建立更密切的合作关系，尤其注重珠三 角地区，因为这里的地理位置临近香港，且文化和语 言类似。王桂埙表示：“未来十年内，香港与珠三角的 整合将加速进行，深度和广度均不断提高。通过深度 整合，将会带来巨大合作机会。” 在王桂埙的领导下，香港律师会与深圳律师协会合 作，建立诸多工作委员会，主要在广东省内发现并确 定需要大陆和香港律师同时参与的项目。 大规模的跨境基础设施合作已经催生诸多机遇，定 将进一步促进该地区的整合，形成世界级的“珠三角大 都会”。其中包括港珠澳大桥、广州－深圳－香港高速 铁路和深圳南山区的前海服务园区。王桂埙表示：“诸 多项目设计复杂的跨境事务，且需要大规模融资。该 地区的所有事务所无论大小，均可从中获益。” 以造价高达56亿美元的港珠澳大桥项目为例， 由品诚梅森带领的律师事务所联合在竞标中胜出， 获得提供法律服务的机会。君合（北京）、圣和胜 （广东）、DSL Lawyers（澳门）均是该事务所联合 的成员，参与该复杂项目，该大桥项目受中国、香港 特区和澳门特区三地法律的管辖。 在推动中国国际化并建立稳固地区间合作方面，香 港律师事务所可发挥前所未有的重要作用。因此，香 港法律业的发展将迎来无比光明的前景。

Lawyers want work Lawyers in China are hoping that reports of a recovering economy will breathe life into a barren legal recruitment market. ALB investigates whether firms are already on the lookout for new lawyers

T

he Chinese government has been aggressive in its pursuit of economic stability, with the nation reporting GDP growth of 8.9% in the third quarter of 2009.

The flow-on effects of the stimulus package are starting to affect the legal industry as China marches towards an economic recovery. “We have seen that the markets are coming back, not strongly, but lay-offs have paused,” said Nick Zhang, a director of LawInn HR Consulting.

Zhang noted that even though some international firms in China are busier and looking for good candidates, they struggle with headcount restrictions from global headquarters – so legal

14

positions are not created quickly and efficiently. However, this is not the case with all international law firms – DLA Piper, for example, has confirmed that it is currently looking to recruit more lawyers for its offices in China.

“The market sentiment has definitely picked up and we see lots more work to come. Although investors may not invest this year, I would say that they are preparing to invest next year,” said Janet Hui, a partner at Jun He. “In fact, we have built up new practice groups this year because we think there are new business opportunities being generated out of the GFC.” Earlier in 2009 Jun He introduced cost-saving measures which included a reduction in salary packages to accompany a reduced working week.

ISSUE 6.11

NEWS | news >>

Update >>

CIETAC COLUMN CIETAC《建设工程争议评审规则》即将出台

为

了满足中国建设建筑行业解决纠纷的多重需要，建立健全建设工程争议解决专家评审机制，作为专业的争议解决仲裁机构，中国 国际经济贸易仲裁委员会（英文简称CIETAC）通过全面论证、广泛调研，在充分吸收国际、国内成熟经验基础上，拟在近期推 出《建设工程争议专家评审规则》。 该规则适用于解决工程勘察、设计、施工合同等与工程有关的争议；既适用于国内合同的争议解决，也适用于涉外或国际合同的争议解决。 争议评审的当事人包括但不限于有直接合同关系的各方。 规则将设立常设评审组和临时评审组制度，当事人既可以在签订合同时确定评审组成员，或者在约定的时间内确定评审组成员，成立常设评审组， 跟踪合同进展情况，协助预防争议；也可以就某特定争议的解决成立临时评审组。专家评审机制是快速解决争议的非诉途径，与仲裁、诉讼相比， 程序更为简便灵活。相信这套规则将充分契合建设行业的特殊需要，对于有效预防、减少和快速公正地解决建设工程合同争议有着重要的价值。

“The Board Rules for the Settlement of Construction Disputes” of CIETAC is about to be Promulgated

A

s a professional Dispute Resolution Organization, China International Economic and Trade Arbitration Commission (“CIETAC”) is about to issue “The Board Rules for the Settlement of Construction Disputes” (“The Rules”) to meet the needs of resolving disputes in construction industry.

The Rules apply to both domestic and international disputes over contracts for resolving construction-related disputes, such as contracts for survey, design and construction.

The Rules will set up a standing evaluation group and a provisional evaluation group system, where the parties may not only make an agreement on the members of evaluation group while signing the contract or at the appointed time, and set up a standing evaluation group to follow up the progress of the contract and help prevent disputes, but also set up a provisional evaluation group on certain disputes. Comparing with arbitration and litigation, Dispute Board Mechanism is a non-litigation channel for quickly resolving disputes and the procedure is more simple and flexible. It is believed that The Rules will fully fit the special needs of the construction industry for effectively preventing, reducing the disputes arising from construction contracts.

www.cietac.org 地址：中国北京西城区桦皮厂胡同2号国际商会大厦六层 邮编：100035 电话: +8610 82217788 | 传真: +8610 82217766 / 64643500

However, in an encouraging signal for legal recruitment, the firm has recently reversed the measures in response to an increase in legal work.

“Starting from this month, all the lawyers resume a 100% salary package and also they are coming back to work as normal,” Hui said. “We are now recruiting but not as extensively as in the past – we would recruit, say, about 40 to 50 lawyers a year and two to three interns a month.”

Zhong Lun lawyers report a positive experience throughout the financial crisis. “We did not, in principle, lay off any lawyers or even reduce salaries.

Our firm is as strong as before and we can handle peak levels of work,” said Anthony Zhao, a partner at the firm’s Shanghai offices. “The good thing is that through this financial crisis our lawyers have become more loyal. They appreciate the efforts we made.”

Career developments

LawInn’s Zhang has found that there has been an increase in demand for in-house counsel. “We have received www.legalbusinessonline.com

Add: 6/F, CCOIC Building, 2 Huapichang Hutong, Xicheng District, Beijing 100035, P.R.China Tel: +8610 82217788 | Fax: +8610 82217766 / 64643500

requests from local companies for international practice lawyers as they are expanding overseas. It is a difficult task because most international lawyers have experience with inbound investment into China and not outbound. Also the salary packages offered by local companies still cannot match the salaries offered by the international law firms. There is still a huge gap,” he explained.

Lawyers who specialise in a particular area are also benefiting from increased opportunities. “The market is looking for lawyers in particular practice areas such as real estate, capital markets and IP. There are not that many corporate

practice positions and there are still a lot of candidates available with this experience,” Zhang said.

He has also noticed that PRC law firms are luring lawyers who have international exposure with the promise of partnership. “There are two obstacles to this. First, is the lawyer willing to give up a high guaranteed salary? Top local law firms are willing to pay a salary partner around RMB500,000 to RMB800,000,” said Zhang. “Second, senior associates may be willing to move to a local firm for partnership, but can they bring clients with them? Local law firms will use partnership to attract lawyers but are not willing to pay if they do not have a practice.”

“The market is looking for lawyers in particular practice areas such as real estate, capital markets and IP sectors. There are not that many corporate practice positions and there are still a lot of candidates available with this experience” Nick Zhang, director, LawInn HR Consulting 15

NEWS | analysis >>

►►Trends in China’s legal talent market Impact of global financial crisis • Demand for legal services declined over the last year, with some firms making redundancies • Legal professionals are lowering their salary expectations • Lawyers do not expect the legal services market in China to hit bottom and trend up until December 2009 at the earliest Overseas study • Increasing numbers of Chinese lawyers are returning from the US with LLM qualifications • US-qualifiedlawyers and/or LLM continue to be among the most highly paid practitioners in China Building support and training systems • Law firms are focusing on improving systems and upgrading skills of professionals and staff during this downturn Demand for rainmakers • Law firms are looking for lawyers with strong business development skills.

Source: “2008 LawInn Legal Salary Survey & Review”, March 2009

The salary gap may close fairly quickly, as more international lawyers are willing to accept a salary cut in order to progress their career with a PRC firm. However, these firms still require lawyers with PRC qualifications. “We are looking for more PRC-qualified lawyers, but we think international exposure is good [for lawyers] though,” Hui said. “Clients don’t come to us for US law advice or UK law advice – they want PRC law advice.”

Demanding outlook

Lawyers are also attracted by the great potential for career development in China’s nascent legal services industry.

“Legal practice in China is still a new industry,” said LawInn’s Zhang.

“So most young lawyers have great opportunities to become well-known in a certain practice area. It's not like in mature legal service markets where you have so many experts ahead of

you. If you have fresh and current experience in a fast-growing practice area, you may actually be more valuable than some senior lawyers or partners that do not have on-theground experience,” he added.

Law firms of course compete with one another in two markets: for clients and for lawyers. “At the moment they are only focusing on finding clients and projects, but soon they will have to focus on legal talent as things are starting to pick up,” said Zhang. Although salary expectations are low at the moment, he believes that when salaries do rebound, they will do so very quickly.

Right now the legal recruitment market is still conservative but the outlook is positive. “The market is recovering but there are still uncertainties, so people would like to watch out for a few more months,” said Zhong Lun’s Zhao. ALB

“Market sentiment has definitely picked up and we see lots more work to come. Although investors may not invest this year, I would say that they are preparing to invest next year” Janet Hui, partner, jun he

法律人才市场回暖趋势渐显 在

保持经济稳定方面，中国政府采取积极果敢的举措，2009年第三季度，中 国公布的GDP增长率为8.9%。随着中国经济开始复苏，经济刺激计划开 始影响到法律服务行业。 LawInn 法律人才咨询机构总裁张宁表示：“我们注意到，市场正在回暖，尽管 反弹不算强劲，但裁员情况已基本遏止。” 张先生指出，有部分在中国开展业务 的跨国律师事务所开始业务繁忙，正积极物色人选，但全球总部下达的编制限 制令他们掣肘，因此无法大规模展开招聘计划。不过，并非所有跨国律师事务 所都遇到这种情况。欧华已经明确表示，近期有意聘请更多律师，扩大中国代 表处规模。 君合合伙人许蓉蓉表示：“市场情绪已有所好转，我们的业务开始增多。尽管 投资人可能在今年暂缓投资，但我认为，他们定在为来年的投资积极筹备。实 际上，鉴于我们认为全球金融危机将催生全新业务机会，君合已于今年新建业 务团队。” 今年初，君合引入成本控制管理方式，采取与减少工作时间对应的减薪方案。 不过，在法律招聘市场出现利好信号的情况下，君合近期取消成本节省管理措 施，回应业务量的增加。许律师表示：“从本月开始，所有律师都已恢复100%薪 金，并按照正常时间工作。我们现在已恢复积极招募人才的状态。在过去，我 们每年约招募40至50位律师，每月招募2至3名实习生。” 在度过全球金融危机的过程中，中伦律师事务所的律师未受明显影响。中伦合 伙人赵靖表示：“原则上我们没有解聘任何律师，甚至没有降薪。事务所始终保持 良好运作，我们能够很好处理大量工作。金融危机的积极作用在于，危机过后， 律师对中伦的忠诚度将更高。律师都对管理层在金融危机期间的不懈努力深表感 激。” 市场需要哪类人才？ 张先生发现，市场对企业内部律师的需求明显增加。他表示：“本地公司在扩大 海外业务的过程中，会要求我们帮助寻找具有国际业务经验的律师。这项工作 难度较高，原因在于，多数跨国律师深谙中国国内投资，但很少涉足中国企业 赴海外投资。还有，本地企业提供的薪水也无法与跨国律师事务所相比，两者 之间存在巨大差距。”

16

拥有专长的律师亦通过机遇的增加而获益。张表示：“市场正寻找在房地产、 资本市场和知识产权等领域拥有专长的律师。目前市场上公司事务律师的职位 不足，具备相关经验的律师较多，企业选择余地较大。”

中国的职业发展

张还注意到，中国律师事务所正积极吸引拥有跨国业务能力的律师，并承诺提 供合伙人职位。他表示：“此类人才招聘面临两大障碍。其一，律师是否原因放 弃稳定的高薪？顶尖的中国本地律师事务所向合伙人支付的薪金约为500,000至 800,000人民币。其二，高级律师可能希望进入本地事务所担任合伙人，但这些高 级律师能否带来客户呢？本地律师事务所会利用合伙人职位吸引律师加入，但如 果律师无法帮助事务所扩大业务，则事务所不愿兑现高薪承诺。” 薪金差距可能在较快时间内弥合。越来越多的跨国律师原因接受薪金削减，以 便进入中国律师事务所谋求职业发展。不过，中国律师事务所仍要求律师具备中 国律师执业资格。许蓉蓉表示：“我们正积极寻找更多具备中国律师执业资格的律 师。找到我们的客户并不需要美国法律顾问或英国法律顾问，他们需要中国法律 顾问。不过，我们认为，拥有跨国法律经验是律师的一大优势。” 在中国的职业发展前景亦对律师具有吸引力。Zhang 表示：“法律服务在中国仍 是新兴行业。对年轻律师而言，多数人都有机会在特定领域成为著名律师。如果 在成熟的法律服务市场，各个领域都会有众多专家，中国的情况截然不同。如果 您在快速增长的业务领域拥有最新经验，与没有实际经验的高级律师或合伙人相 比，您将更具价值。”

人才市场前景

律师事务所在两个市场内相互竞争；一个是客户市场，一个是律师市场。张认 为：“目前，律师事务所正集中寻找客户和项目，随着市场回暖，他们很快会将重 点转向人才市场。”尽管当前市场的薪金预期较低，但 他坚信，薪金水平定会快速 回弹。目前，法律人才招聘市场仍偏于保守，但前景十分光明。赵靖认为：“市场 正在复苏，但仍存在不确定性，观望心态可能会持续数月。” ISSUE 6.11

NEWS | news >>

>> O pinion

Daniel Lee

senior associate Lee and Li Attorneys-at-Law

F

oreign investors doing business in China need to find good business lawyers to guide them through complicated and somewhat opaque legal and regulatory environments.

American, European and other Western investors can already rely on numerous US or European law firms in China whose foreign lawyers are capable of speaking the investor’s language and can therefore serve as a bridge between foreign clients and their PRC counterparts.

Investors from Taiwan are not as fortunate.

Initially presuming that since both sides speak the same language communication is not an issue, many of these investors during the course of their business gradually realise that their thoughts have not been fully conveyed to their PRC lawyers, or, worst-case, find themselves in disputes that stem from previous miscommunication. These difficulties occur partly because Taiwanese businessmen sometimes underestimate the subtle differences in Mandarin or Mandarin terms when communicating with their PRC lawyers; sometimes, a failure to capture a simple nuance by the other side may end up causing a huge misunderstanding. This type of lawyer-client communication issue may be further worsened if the PRC lawyer does not have much experience in dealing with Taiwanese clients, or if the Taiwanese clients are new to the mainland market.

As cross-Strait economic ties continue to strengthen, more and more inbound and outbound business activities between these

www.legalbusinessonline.com

Does your lawyer really understand you?

– lawyer-client communication issues in the cross-Strait legal environment two markets are likely to take place. Taiwanese companies with operations in the mainland are now considering, in addition to the capital markets in China and Hong Kong, returning to the capital markets in Taiwan for their initial public offerings; and once the barrier to entering the mainland’s financial market is lifted, financial institutions in Taiwan will enthusiastically introduce financial products that have been developed in Taiwan for years but are still new to the mainland’s market. We can expect therefore to see a great increase in demand from these Taiwanese businesses for high-quality legal services in the mainland.

We can also expect to see Taiwanese law firms extend their practice into the mainland’s market, as requested by their clients in Taiwan, once the green light is given by the Chinese government.

Some legal experts from Taiwan have long foreseen this coming trend: some of them have obtained degrees from law schools in the mainland, and some have obtained bar licenses for China (which recently opened up to people in Taiwan in 2008). We will see these talents serve a crucial role on the platforms to be set up in China

by Taiwanese law firms, and we believe that the legal market on the Island will be dramatically altered due to this new development.

Now more than ever, it is important for lawyers working on cross-Strait matters to recognise that communication risk and act accordingly to pre-empt misunderstanding or disputes further down the track.

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NEWS | news >>

news in brief >> Jersey companies approved for Hong Kong listings, BVI is next Jersey companies have been formally approved for listings on the Hong Kong Stock Exchange.

The development comes after more than a year’s negotiation, research and document preparation involving government officials in Jersey, representatives from Jersey Finance and the finance industry. Jersey joins Bermuda and Cayman Islands as the only offshore jurisdictions formally approved for Hong Kong listings.

Companies incorporated in the British Virgin Islands (BVI) may also soon be able to list on the HKSE, according to a guidance letter recently issued by the HKSE which confirms that it is considering an approval.

The Hong Kong government has been trying to increase Hong Kong’s competitiveness as a financial centre and has implemented a number of initiatives in the past few years to achieve that goal. “One of the initiatives was to encourage the HKSE to permit listings of companies incorporated in other jurisdictions. What has been happening is that the HKSE is gradually recognising other jurisdictions,” said Spencer Privett, joint managing partner of Maples’ Hong Kong office.

泽西岛注册公司获准赴香港上市，英属维尔 京群岛注册公司紧随其后

泽西岛注册公司正式获得赴香港联交所上市的许可。此 项进展的前期筹备工作超过一年，包括多次谈判、研究 和文件编写，泽西岛政府官员、Jersey Finance 代表及 金融行业均参与其中。泽西岛与百慕大和开曼群岛一并 成为唯一获得香港上市正式许可的离岸司法管辖地。 在英属维尔京群岛注册的公司不久亦可能获准赴香港 联交所上市，香港联交所近期公布的指引函确认，联交 所正考虑给予批准。 香港政府致力于提升香港作为金融中心的竞争力，为 实现该目标，过去数年内采取诸多措施。Maples and Calder 香港办事处联合主管合伙人 Spencer Privett 表 示：“政府的举措之一是，鼓励香港联交所允许其它司 法管辖地成立的公司赴港上市。目前，香港联交所正在 逐步承认其它司法管辖地。”

Run Ming defends Johnson & Johnson in high-profile litigation Run Ming, Johnson & Johnson’s long-term legal advisor, is now assisting the company in its first Chinese litigation case regarding consumers’ right to know.

The case was filed by Chinese consumer and mother Shi Xia, alleging inaccurate labelling of product ingredients. Run Ming is representing the company in its defence against Shi’s claim, with executive partner Wang Yadong and senior associate Gao Song leading the legal team. Shi is advised by Beijing Xinping Law Firm’s Zhang Tao.

润明为强生首例消费者知情权案辩护

Shanghai >>

Shanghai Jin Neng zeros in on clean A

s the country drives itself towards a low carbon economy, many firms are acquiring and expanding necessary expertise to better service clients in the emerging renewable energy industry. A few forward-looking and adventurous lawyers have even taken one step further – founding their own firms focusing primarily on the sector.

Newly established Jin Neng in Shanghai is the most recent example of such a step.

Yue Wenhui, formerly a partner with Shanghai Sea & Sky law firm, has left the firm he co-founded in 2001 to set up Jin Neng. Now, in its first month of operation, Jin Neng has only three partners and several lawyers and staff. However, Yue revealed that the goal is to develop the firm into a largesized, full-service firm focusing on the clean energy industry.

During his time at Sea & Sky, Yue gained considerable experience advising a large number of state-owned mining and natural resources companies on their joint-exploration and production projects and investments in countries such as Laos, Thailand, Burma, Vietnam, Kazakhstan and Kyrgyzstan. He currently serves as the chairman of the energy and resources and environmental law committee of the Shanghai Lawyers Association.

“The country's unwavering commitment to tackle global warming and cut its emissions has triggered hundreds of billions of dollars being invested into the renewable and clean energy sector,” said Yue. “The sector has shown strong growth and will continue to realise its vast potential. The need for lawyers specialising in this area will undoubtedly be compelling in the near future.”

润明是强生公司的长期法律顾问，现正协助强生处理与 消费者知情权相关的首个诉讼案。 身为母亲的中国消费者史女士针对强生公司提起诉 讼，认为强生的产品成分标签存在不 实之处。润明现代表强生公司针对史 女士的诉讼提供辩护，由执行合伙人 王亚东及高级律师高嵩带领 律师团队。原告聘请北 京薪评律师事务所的 张韬担任代理人。

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ISSUE 6.11

NEWS | news >>

energy sector Opportunities aside, new entrants in this area have to face intensifying competition from top and midtier firms, both for market share and legal talent. Firms that have established themselves as leading players in capital markets, M&A, PE and VC investment and IP hold the advantages in terms of attracting new clients and projects. Experienced lawyers, meanwhile, are most easily snapped up by established firms.

Hiring new team members for the firm may present some challenges to Yue and the other founding partners of Jin Neng. But as the old saying goes: ‘Big results require big ambitions’. ALB

上海金能应绿 色潮流而生

绿

色清洁能源以及气候变化正成为 法律服务行业里的热门话题，并 催生出许多法律服务发展的新机 遇。众多律所纷纷加强自身在该 领域的专业知识和服务水平。近日，一家旨在 为新能源领域客户提供全方位法律服务的律师 事务所 – 金能，在上海成立。 该所的创始以及主任合伙人为岳文辉律师。 在创办金能前，他曾担任上海中远蓝天律师事 务所的主任合伙人，并在协助多家煤矿和自然 资源公司在东南亚以及中亚国家和地区进行投 资以及开展联合勘探和生产项目方面有十分丰 富的经验。岳律师目前还担任上海律师协会环 境与资源法研究委员会主任。 岳律师表示：“大力发展绿色能源以及节能 减排已成为今后经济发展的必然方向。该新 兴领域里的法律服务前景十分可观，为律所 专业方向拓展提供了广阔空间。”该所于9月底 正式成立，目前拥有三位合伙人和数位律师及 辅助人员。岳律师指出规模化发展是该所的长 期成长策略。 尽管存在机遇，但新设立的律所在市场份额 和法律人才方面，仍需面对大中型事务所的激 烈竞争。在资本市场、并购、私募股权、风险 投资和知识产权领域拥有领先优势的事务所在 吸引新客户和项目方面优势明显。与此同时， 大型事务所对资深律师的吸引力也更大。 对岳文辉和金能的其他创始合伙人而言，为 事务所招募人才将面临不小的挑战。不过常言 道：“不积跬步无以至千里。”

www.legalbusinessonline.com

uk report Changes ahead for Slaughter and May Change is afoot at Silver Circle firm Slaughter and May. The firm is planning to close its Paris office in April next year, as the firm’s solo Paris partner Andrew McClean prepares to return to London to join the City finance practice.

Slaughters had decided to retain its singlepartner its Paris practice after it allied with French firm Bredin Prat in 2006, but its closure now will leave Slaughters with just one significant overseas office – the 11-partner branch in Hong Kong. (In Brussels the firm has only two partners; and its only other overseas office, Beijing, only opened two months ago.)

The firm is also reportedly considering a move into legal process outsourcing (LPO), following in the footsteps of other firms, including Clifford Chance and Simmons & Simmons. The UK’s top firms have been being urged by clients for some time now to embrace alternative models and Slaughters is now in talks with an LPO agency regarding the prospect of outsourcing low-level legal work, including document review and due diligence.

Freshfields PE undergoes shake-up Freshfields has reshuffled management of its worldwide PE practice, following the appointment of Ed Braham as global head of corporate in July.

The changes are as follows: Hamburg-based partner Nils Koffka – previously joint head of the global PE group alongside London-based partner Chris Bown – will now head up the infrastructure and transport group, working alongside head of sector Nick Bliss; Chris Bown will now head the London PE team; and Cologne-based partner Ludwig Leyendecker will become sole leader of the global PE practice.

Each of the appointments will last for four years.

Clifford Chance bosses may go Recent reports suggest that Clifford Chance (CC) could soon see the size of its management team decrease in a bid to streamline its management set-up. Currently CC’s day-to-day management rests with the firm’s 17-member management committee, headed by managing partner David Childs and includes two executive partners, finance director, director of global business services and 12 members from across the firm’s main practice areas and offices.

The news comes as the firm approaches a series of senior leadership elections as Child’s and Perrin’s roles draw to a close (end of April 2010), and Jeremy Sandelson’s term as London managing partner nears completion at the end of this year. The firm is also set to vote on practice group head roles for real estate and tax, pensions and employment - both terms are set to end on 31 December UK firms still bearing the brunt of the GFC Despite news that the global economy is steadily strengthening, some UK firms are still feeling the blow of the GFC. Denton Wilde Sapte is a case in point, having recently launched its second redundancy consultation; 29 members of staff in the firm’s London and Milton Keynes offices are likely to be affected, but none of these will be fee-earners. The cull is expected to be complete by mid-November.

Ashurst has also seen a series of staff departures in recent months. According to reports, 22 partners have left the firm since January. The top 10 City law firm, which had 235 partners at the beginning of May, has now lost approximately 10% of its partnership as it stood at the beginning of the current financial year.

Several former partners have taken positions at rival firms, including Barlow Lyde & Gilbert, Field Fisher Waterhouse, Milbank Tweed, Pinsent Masons and Simmons & Simmons

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ROUNDUP • Clifford Chance recently split its Central and Eastern Europe and Russia managing partner role into two. Jan ter Haar, recently appointed Moscow managing partner, will take over the Moscow and Kiev offices. Another partner will be elected to oversee Bucharest, Prague and Warsaw • UBS has revealed its new-look global panel, on which Herbert Smith and DLA Piper appear for the first time. The two firms join existing advisors Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, Simmons & Simmons and White & Case.

• Herbert Smith senior partner since 2005, David Gold, has confirmed that he will not stand for re-election.

Nominations for the law firm’s top management role will take place in November

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NEWS | news >>

news in brief >> MoFo confirms no cut to starting salaries in Asia First-year associates in Morrison & Foerster’s Asia and New York offices are safe from the firm’s decision to cut starting salaries to US$145,000 elsewhere; first-year associates in Asia and New York can expect to receive the full US$160,000 in their first year.

“Starting salaries at Morrison & Foerster in New York and Asia will be US$160,000, the same as last year, and starting salaries in other US offices will be US$145,000,” said Morrison & Foerster in an official statement.

It comes as no surprise that the firm expects to be able to maintain higher starting salaries in Asia, where law firms are reporting a tightening in the labour market.

美富证实不会削减亚洲律师的起步薪金

美富律师事务所决定在全球范围内将第一年入职律师的 起步薪金削减至145,000美元，亚洲地区和纽约办公室 的律师除外；亚洲和纽约办事处第一年入职的律师将足 额得到160,000美元的薪金。 美富在官方声明中指出：“美富纽约和亚洲办事处律师 的起步薪金将为160,000美元，与去年持平，其它美国办 公室律师的起步薪金将变更为145,000美元。” 该举措表明，美富期望在亚洲地区维持较高的起步 薪金，表明律师事务所在亚洲人才市场上面对的竞争 相对激烈。

China Mobile settles AML lawsuit China Mobile has settled a lawsuit filed by a customer alleging the carrier abused its market position to charge users fees. It has agreed to pay RMB1,000 (US$146) to Zhou Ze, a lawyer of Beijing Wentian Law Firm who sued China Mobile under the nation’s new anti-monopoly law.

Zhou had originally asked for RMB1,200 for the two years worth of RMB50 monthly fees he was charged.

China Mobile’s legal advisor, Xue Junfu of the Beijing Jinde Law Firm, said the payment was acknowledging the company’s gratitude for Zhou’s suggestions, not a reimbursement. Under the settlement agreement, Zhou had withdrawn this lawsuit from Beijing’s No. 2 Intermediate People’s Court.

中国移动反垄断诉讼达成庭外和解

有消费者针对中国移动提起诉讼，认为该运营商滥用 市场支配地位，强行向用户收费。中国移动同意向原 告周泽支付1000元人民币（146美元）奖励补偿，周泽 是北京问天律师事务所的律师，依据中国最新颁布的 《反垄断法》向中国移动提起诉讼。周泽原本要求中 国移动1,200元人民币的补偿，即两年内每月50元人民 币的月租费。 中国移动的代理律师表示，奖励补偿应视为公司对周 泽促进服务的建议表达谢意，并非退款补偿。依据双方 达成的协议，周泽由北京市二中院撤诉。

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Beijing >>

Zhongyin hires ex-Bakers partner, plans expansion A 2008 merger with Beijing Zhengtai law firm has made Zhongyin one of the country's ten largest firms by number of lawyers. According to ALB China 20, the Beijingheadquartered firm had 263 lawyers, including 36 partners, spread across more than ten branches and representative offices at June 2009.

The firm's strong growth has caught the attention of many peers, certainly including Baker & McKenzie's former Taipei partner Steven Hsu. With 13 years of experience practising law in Taiwan and an MBA from Beijing Tsinghua University, Hsu has recently joined Zhongyin's Beijing head office as senior consultant and managing director of the firm's marketing centre.

"I've realised that China one day will become the largest market in the world and I would not want to miss the growing chance. So I've decided to leave Taiwan and move to the mainland," said Hsu. His practice focuses on capital markets, M&A, corporate strategic alliance and FDI. In addition to strengthening Zhongyin's expertise in these legal areas, Hsu's appointment will also boost the firm's new development strategy, of which expansion and globalisation is an important part.

"We've fixed our eyes on international expansion and more international

business. Hsu's international experience and perspectives will help us better execute our goal of becoming a large, international PRC firm," said Zhao Cenghai, managing partner of the firm Having already established representative offices in Toronto and Frankfurt, the firm is currently exploring the possibilities of forming strategic alliances with London and Hong Kong law firms. Locally, it is planning to open (or is opening) branch offices in Fuzhou, Wuxi, Jinan, Tianjin and Qingdao. ALB

中银吸引原麦坚时合伙人加入，积极扩张业务

继

2008年与北京证泰律师事务所合并后，按 照律师人数计算，中银成为中国第十大律 师事务所。根据《亚洲法律杂志》中国律师事务 所规模20强榜单，截至2009年6月，总部位于北 京的中银律师事务所拥有263位律师，包括36位 合伙人，拥有十余个分支机构和代表处。 中银的强劲增长引起诸多业内同行的关注，其中 当然包括贝克•麦坚时前台北办事处合伙人许进胜。 许律师在台湾法律界拥有13年工作经验，获北京清 华大学 EMBA 学位，近期加入中银北京总部担任高 级顾问律师和事务所市场营销中心执行总监。 许进胜表示：“我认为中国大陆日后定会成为 全球最大市场之一，我不愿错失该市场的发展机 会。因此，我决定离开台湾，赴大陆发展。”

许进胜的业务专长包括资本市场、并购、企业 战略联合和外商直接投资。许进胜的加入不仅能 巩固中银在上述领域的专业实力，还有助于推动 事务所执行全新发展战略，实现业务扩张和国际 化发展的目标。 中银执行合伙人赵曾海表示：“我们积极着眼于 国际扩张，希望获得更多国际业务。许进胜律师 的国际经验和理念可帮助我们更好地实现发展目 标，成为国际化的大型中国律师事务所。” 中银已经在多伦多和法兰克福建立代表处，目 前正积极努力，希望与伦敦和香港律师事务所建 立战略联合。对于中国本土市场，中银计划在福 州、无锡、济南、天津和青岛成立办事处，其中 部分办事处已经成立。 ISSUE 6.11

NEWS | news >>

Hangzhou >>

DeHeng hires AllBright lawyer for Hangzhou launch

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enior lawyer Wu Lianming has left AllBright to head DeHeng’s newly established Hangzhou office. The branch will focus on three practice areas – capital markets, real estate and M&A – and currently houses five partners and 10 lawyers.

“Hangzhou offers great business opportunities for DeHeng, especially with the rising demand for capital markets legal services and the growing enterprise base,” said Wu. Hangzhou’s first legal services centre was established earlier this year, an initiative by local government authorities to facilitate the provision of legal services to business. The local legal industry has been growing strongly in recent months.

In August this year, five new law firms were established, including DeHeng Hangzhou office, and 44 new lawyers were admitted to the local Bar. With over 680 lawyers, DeHeng Law Offices is the third-largest PRC firm, according to ALB China 20. The firm’s new office increases its total number of branch offices worldwide to 15. ALB

德恒设立杭州分所

us report Billable hour moribund?

Recent reports suggest that Mayer Brown is considering a move away from traditional hourly billing, in a bid to satisfy client demand for greater certainty during the downturn. The transition would see the firm offering fixed fees for all transactional work, as well as more regularly using abort agreements and success fees.

Overhauling fee structures would affect core transactional practices including corporate, banking and real estate. The UK’s Reed Smith is said to be considering a similar switch for transactional work within its financial industry group and corporate and real estate practices.

‘Merit lockstep’ system trialled at Bingham Bingham McCutchen may soon move to adopt a ‘merit lockstep’ system, which will see base pay on lockstep but introduce a merit component into bonuses. Having discussed options with partners and associates – who preferred the predictability of an overall lockstep approach – the firm has decided not to abandon lockstep, but will work towards a system whereby bonuses are not solely determined by meeting a billable hours target.

Although billable hours will continue to play a significant role in determining bonuses, less tangible factors such as teamwork and the overall market rates for bonuses will also be taken into account. Bingham

joins other US law firms who have recently made the move away from lockstep compensation, including Orrick and Howrey.

Shearman turns focus onto Brussels office Shearman & Sterling recently turned a spotlight onto its Brussels office in a bid to rebuild the beleaguered branch, after a raft of defections last month left it without any partners. The New York-headquartered firm has relocated Düsseldorf partner Hans Meyer-Lindemann to Brussels, along with three other associates, who will attempt to beef up the office and repair the damage.

Maintaining healthy European capabilities is important to the firm and Meyer-Lindemann has already begun dividing his time between the German and Belgium offices.

King & Spalding launches Paris branch King & Spalding recently opened the doors to its new Paris branch, following the receipt of required regulatory approval from the Paris Bar Council.

The Paris office is the firm’s ninth new outpost established since January 2007. It will be run by Eric Schwartz and James Castello, formerly of Dewey & LeBoeuf; arbitrator Kenneth Fleuriet, who has relocated from the firm’s London office, and a team of four associates, including another three lawyers hired from Dewey.

高

级律师吴连明近日离开锦天城，加盟德恒最 新成立的杭州分所并担任主要合伙人。该分 所的业务重点集中在三大领域，分别为资本市场、 房地产和并购，现有五位合伙人和十位律师。 吴连明表示：“杭州市场能为德恒提供难得新业务 发展机会，杭州资本市场法律服务需求不断增长和 企业数量不断增长所提供的机会尤其突出。” 杭州首个法律服务中心于今年年初成立，得到 当地政府的大力支持，旨在方便企业获得法律 服务。近月来，杭州当地的法律服务行业发展强 劲。今年8月，杭州新成立五家律师事务所，其 中包括德恒杭州办事处，有44位新律师在当地律 师协会注册。 根据《亚洲法律杂志》中国律师事务所规模20 强榜单，德恒是中国第三大律师事务所，拥有 680多位律师。全新办事处成立后，德恒在全球 范围内的分支机构总数达到15个。

►► Beijing and Shanghai firms with Hangzhou offices Beijing • Dacheng 大成 • Grandall 国浩 • Huatai 华泰 • King & Wood 金杜 • Giant & Goal 国纲 • Jingda Law Firm 京大 • Huamao & Guigu 华贸硅谷 Shanghai • Yishi Law Firm 毅石 • Jianwei Law Firm 建纬 www.legalbusinessonline.com

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ROUNDUP • Howrey is set to launch a Paris anti-trust practice following the hire of a six-lawyer team from Clifford Chance, led by Paris CC competition partner Claude Lazarus and counsel Audrey Amsellem. Both Lazarus and Amsellem will join the US firm as partners on 1 November, bringing with them a team of four associates • Corporate veteran Hugh Nineham replaced Doron Ezickson as new London office head for McDermott Will & Emery. Ezickson spent 18 months in the role after replacing David Dalgarno • Shearman & Sterling recently advised the underwriters on Brazil’s biggest IPO to date – the $8bn (£5bn) listing of Banco Santander’s Brazilian subsidiary. Davis Polk & Wardwell were also involved • Dewey & LeBoeuf will join Slaughter and May to act as key advisers on insurance giant Aviva’s NYSE listing. The world’s fifth-largest insurance group, formerly known as Norwich Union in the UK, will make a secondary listing on the NYSE on 20 October and trade under the stock code AV • Steven Molo of Shearman & Sterling and Jeff Lamken of Baker Botts recently announced that they would be leaving their respective firms to start up MoloLamken – a new firm model litigation boutique with low overhead and a flexible billing structure.

• Canadian firm Fasken Martineau recently opened an office in Paris following a local merger and the addition of a four-lawyer team from Dewey & LeBoeuf.

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NEWS | news >>

Update >>

Shanghai >>

Regulatory

First AML litigation

Jurisdiction over Online Games in China – Conflict Instead of Clarity

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C

hina’s online gaming industry has suffered from the overlapping authority of the Ministry of Culture (the “MOC”) and the General Administration of Press and Publication (the “GAPP”). When China’s State Council recently attempted to simplify the regulatory environment and streamline approval processes, it triggered a highly public spat between MOC and GAPP. On September 17, 2009, the Office of the State Commission for Public Sector Reform published a notice (the “RC Notice”) designating MOC as the sole regulator for online games. Under MOC’s unified administration, GAPP would be responsible for approving the publication of online games before their launch. The Notice specified that MOC was not empowered to duplicate the prepublication review conducted by GAPP. But once a game had been released online, it would be entirely under MOC’s administration.

The attempted clarity brought by the RC Notice turned out to be short lived. MOC took the view that “publication”, for which GAPP has approval authority under the RC Notice, only refers to games distributed through physical media such as disks. For all games that users can download from the Internet, MOC would have sole authority.

On October 9, 2009, GAPP issued a notice (the “GAPP Notice”), which disputes the MOC’s interpretation of the RC Notice. The GAPP Notice asserts that the provision of online games to the public is a “publishing” activity that falls under GAPP’s jurisdiction. The operation of games that have not been approved by GAPP is stated to be illegal. The GAPP Notice lists several steps that GAPP may take in case of violation.

The GAPP Notice further stresses the prohibition of foreign investment in, or de facto control over, online game operations. GAPP specifically targets the administration of multiplayer matchmaking platforms by foreign entities as a prohibited form of covert control. The prohibition has wide ranging implications for existing game operators, some of whom are listed overseas. Will GAAP truly enforce such prohibition?

It is also unclear whether GAPP or MOC will prevail in their rivaling interpretations of the RC Notice. This conflict is likely to endure for some time, and an eventual solution may come only from the State Council or from the Propaganda Department of the Chinese Communist Party, which often has the final say in media and Internet matters.

Written by Jeanette Chan, partner Hans-Günther Herrmann, Counsel Sean Li, paralegal Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A, No. 7 Dong Sanhuan Zhonglu, Chao Yang District, Beijing 100020, PRC Email: jchan@paulweiss.com Ph: (8610) 5828-6300 or (852) 2846-0300

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Jeanette Chan

ince the Anti-Monopoly Law (AML) came into effective in August 2008, a number of private actions have been brought before the court against business giants such as Baidu, Shanda, China Mobile, Sinopec Beijing Oil Products Company and China Netcom. After a year-long wait, the first court decision in a private anti-trust litigation has finally been made.

On 23 October 2009, the Shanghai No. 1 Intermediate People’s Court dismissed the abuse of dominance case filed by Beijing Sursen Electronic Technology against Shanda Interactive Entertainment and Shanghai Xuanting Entertainment Information Technology.

Shanghai Co-Effort law firm’s IP partner You Minjian and lawyer Li Yan represented the defendants, and Shanghai Diligence Law firm’s partner Sun Ying acted as the plaintiff’s legal advisor.

While the public has paid much attention to this case, Shanda’s general counsel Jerry Zhang noted that the court decision is an expected one and didn’t cause a stir in the company. “I don’t view this case as a relevant private anti-trust litigation against abuse of dominant position. It didn’t involve any typical issues or matters concerning the AML law,” said Zhang. “So the final result is reasonable and within our expectations.

“This case is significant because it’s the first case adjudicated by a court under the new AML regime, but it hardly has any precedent value for pending and future antitrust litigation,” he said. Zhang also noted that ensuring his company’s compliance with AML has become an integral part of the in-house legal department’s work, but because it’s such a new area, there are very few experienced lawyers in private practice that companies can turn to.

This case, although it involved only a few thousand dollars worth of damage, has attracted significant attention from the international business and legal communities.

Lawyers are expecting to see decisions in a number of cases such as this one in which plaintiffs have attempted to test the boundaries of the AML. Companies perceived to be monopolistic will also be keeping a close eye on the developments. ALB

►► Beijing Sursen and Shanda and Xuanting – update

Beijing Sursen Electronic Technology, an online digital book website operator, sued Shanghai Shanda Network Development and Shanghai Xuanting Entertainment Information Technology for allegedly abusing its market-leading position for online literature under the Anti-Monopoly Law. The plaintiff was seeking a public apology and RMB16,820 (US$2,463) in damages.

The plaintiff claimed that it had commissioned two authors to write a sequel to a popular novel series originally published by the defendants. According to the plaintiff, the authors were later “threatened” by the defendants and as result of these threats stopped writing the sequel.

The Shanghai Court rejected the claim, holding that the plaintiff had failed to adduce sufficient evidence to prove that the defendants held a dominant position in the market for online literature, or that the defendants had forced the authors to stop writing sequels to the novel.

In addition, the court found that the defendants had been justified in their actions as they were merely attempting to protect their IP rights.

ISSUE 6.11

NEWS | news >>

Update >>

decision emerges

Singapore 新交所拟修改“最低价位变动”和“强制购入 范围”

为

降低交易成本，增强市场活跃性，提升交易所的竞争 力，新交所正在考虑修改最低价位变动(Minimum Bid) 及强制购入范围(Forced Order Range)，并于2009年9 月1日发出公告，就此拟修改方案征求公众意见。

最低价位变动拟调方案

首例反垄断网络案件宣判 自

2008年8月反垄断法实施以来，一些针对行业龙头企业反垄断的诉讼 已经立案。第一批面对反垄断诉讼挑战的公司包括百度，中国移动， 盛大以及中石化等。在经过了一年多的等待后，业界终于迎来首例反垄断 诉讼案的法庭判决。 10月23日，针对北京书生电子技术有限公司起诉上海盛大网络发展有限公 司、上海玄霆娱乐信息科技有限公司的垄断纠纷案，上海市一中院驳回原告 的诉讼请求，认为两被告的行为具有正当性，不构成垄断和不正当竞争。 上海协力律师事务所资深合伙人游闽键为盛大网络的代理律师，上海得勤 律师事务所合伙人孙颖代表原告。据悉，游闽键为盛大网络的常年法律顾 问，曾多次代理盛大网络的诉讼案件，尤其是涉及知识产权的纠纷。 在外界积极关注此案的同时，盛大的公司总法律顾问张蓥锋指出，法院的 裁决完全在意料之中，并未在公司内部激起波澜。张蓥锋律师表示：“判决结 果理所当然，在我们的意料之中。此案件不算有代表性的反垄断诉讼案件， 也没有涉及到特别复杂或者焦点的法律问题，因此对以后的法垄断诉讼案件 的借鉴意义并不大。但是作为首例反垄断诉讼判决，它的意义更多在于让大 家知道和了解反垄断法。” 张律师还指出，确保公司经营符合《反垄断法》的规定和要求已成为内 部法务部门日常工作的一部分，但由于该服务领域刚刚起步，律师事务所 仍然相对缺乏在该领域有丰富经验的律师。在此次诉讼案件中，盛大聘请 曾经在诉讼案件中合作多次，并在知识产权领域有丰富经验的协力合伙人 游闽键为其代理人。 尽管此案仅涉及数千美元赔偿，却吸引跨国企业和法律服务行业的普遍关 注。例如，富而德律师事务所一直关注此案进展。 富而德中国反垄断、竞争和贸易部合伙人兼联合主管韩亮表示：“尽管此案 情况特殊，被告所谓的滥用主导地位在其它司法管辖地并不具有典型意义， 但上海法院的判决仍值得关注，该判决表明，对于达不到必要证据标准的反 垄断诉讼请求，法院不愿予以支持。” 对于多个与本案类似的诉讼案例，可视为原告在试探《反垄断法》的底 线，律师期待看到更多判决结果。在行业内占据支配地位的企业亦会严密 关注诉讼进展。

www.legalbusinessonline.com

根据股价不同区间，新交所考虑将股票的最低出价调低，即股价 低于20分的最低出价将从0.5分调至0.1分；股价介于1元至1.995元 的，将从1分调为0.5分；股价10元以上的（含10元），从2分拟调 为1分。 目前，所有在新交所交易的债券的最低价位变动均为0.1分。新 交所拟对此进行修改，将债券的最低价位变动定为1分或0.1分，使 之与挂牌基金相同。该项变动将使新交所更具灵活性，可根据债券 具体价位情况，将价位高的最低价位变动设为1分，而价位低者定 为0.1分。 新交所此项拟议修改，即更低的价位变动使得投资者可在更合理 的价位报价，并缩小价差（bid-ask spread），从而降低投资者的 交易成本，增加市场的流动性，也将使新交所的最低价位变动与其 他主要亚洲交易所一致，提高新交所的竞争力。

强制购入范围拟调方案

新交所考虑拟对所有交易的股票、挂牌基金及债券采取更大的强 制购入范围，以辅助最低价位变动之修改，并随之将对挂牌基金 与债券的错误交易政策（Erro Trade Policy） 进行修改。 与上述最低价位变动相相似，对高价位的挂 牌基金及债券来说，更大的强制购入范围将提 供更大的灵活性，而对于低价位的挂牌基金和 债券，新交所拟修改错误交易政策，以加强对 错误交易的保护。 吳艷娟 企業事務部法律顧問 Ph: (86) 15901669188 Fax: (65) 6534-0833 E-mail: wuyanjuan@loopartners.com.sg

吳艷娟

賈文怡 企業融资部法律顧問 Ph: (65) 6322-2230 Fax: (65) 6534-0833 E-mail: joycejia@loopartners.com.sg 俊昭法律事務所 88 Amoy Street, Level Three, Singapore 069907

賈文怡

23

NEWS | news >>

Global >>

arbitration 新加坡通过《国际仲裁法》修改法案 The International Arbitration (Amendment) Bill Passed by the Singapore Parliament

• 新增“仲裁协议”形式 修改后的法律明确规定，仲裁协议可以以电子通信方式订立，例 如电子邮件和数据电文等。 • 扩大法院作出临时措施的权限，以协助国际仲裁 不论仲裁地是否在新加坡，在仲裁庭无法或无权作出相关程序命 令时，新加坡法院可以作出许可临时措施的庭令，以便于仲裁的 顺利进行。 • 建立仲裁裁决认证机制 修改后的法律授权律政部长指定个人或机构认证证明仲裁裁决和 仲裁协议，以便于裁决在其他纽约公约成员国的承认和执行。 The current arbitration regime embodied in the International Arbitration Act (IAA) was drafted on the basis of the 1985 UNCITRAL Model Law on International Arbitration. The new Bill incorporates the key amendments that were introduced by the 2006 UNCITRAL Model Law. The new Act is expected to enter into force by the end of November. The proposed amendments include: • Section 2, which modernises the definition of ‘arbitration agreement’ by expressly including agreements made by “electronic communications” such as emails and data messages; • Section 12A , which empowers the Singapore High Court to grant interim orders in aid of international arbitration irrespective of whether the place of arbitration is Singapore, in line with Article 17J of the 2006 Model Law. In Swift-Fortune Ltd v Magnifica Marine SA (2007), the Singapore Court of Appeal ruled that a Singapore court had no statutory power under the IAA to grant interim orders or relief to assist arbitrations conducted abroad, unless it involved a dispute that was justifiable in Singapore. Section 12A addresses the issues raised in this case and the court will now have the power to make orders such as freezing injunctions regardless of whether the matter would be justifiable before a Singapore Court.

• Section 12A(2) provides that the court will only intervene and grant these orders in limited situations to support arbitration where the arbitration tribunal itself is unable to do so); (Law Minister K Shanmugam stated: “Consistent with the policy of limited court intervention, the court can exercise these new powers only when the arbitral tribunal or arbitral institution has no power to act, or is unable to act for the time being effectively.”); and • Section 19C , a new section which empowers the Minister of Law to appoint individuals or entities to authenticate and certify awards and arbitration agreements for the purpose of enforcement in any contracting state to the New York Convention. 注：以上信息仅供参考。相关修改条文的具体表述，请参见最终颁 布实施的新加坡《国际仲裁法》。

作者：葛黄斌，新加坡国际仲裁中心

By Prof Ge Huangbin, Head of China Desk Singapore International Arbitration Centre 地址： 32 Maxwell Road #02-01 Singapore 069115 电话 T : (65) 6221 8833 | 传真 F : (65) 6224 1882 电邮 E: gehuangbin@siac.org.sg 网站 W: www.siac.org.sg

24

Prof Ge Huangbin

Lovells/Hogan & Hartson L ovells and Hogan & Hartson are discussing a merger which could result in the creation of one of the world's largest firms, and one which would rank the fifth-largest international firm in Greater China in terms of the number of lawyers employed. The firm's worldwide management committee – which Robert Lewis includes Asia and Middle East managing DAS partner Crispin Rapinet – approved the merger in a meeting in late October, and now awaits a December vote from partners. It is believed that Hogan & Hartson initiated the merger.

If successful, it could create a global legal powerhouse with 2,800 lawyers worldwide, according to ALB 50 figures.

This would put it only slightly behind Clifford Chance in terms of overall size. In Greater China, the firm would be the fifth-largest international firm with 156 lawyers. The merger would be advantageous to US-based Hogan, whose 40 lawyers in its China and Hong Kong offices would be supplemented by Lovells' 116. It will also benefit from the Sino-Global Legal Alliance, which Lovells founded with nine PRC firms in 2007.

When contacted by ALB, China-based partners at both Hogan and Lovells would not comment, but a Lovells spokesperson provided the following statement: “We review our US strategy on a regular basis and we have recently been taking a closer look at market developments and the opportunities that we believe are available to us. Beyond that, we are not in a position to comment further and are not going to start naming or confirming individual firms or the nature or progress of any discussions we might be having with them.”

Some leading legal figures said that the merger is not likely to have a significant effect on the Asian legal market.

"You have many firms, and many independent firms, growing in China and Malaysia and Asia as a whole, so I don't think this means they will be dominating the Asian

路伟与霍金•豪森探讨合并可能

总

部位于伦敦的路伟以及总部设在华盛顿的霍金•豪森正在商讨有关两所 合并的可能性。如果两所成功合并，他们在大中华区的人员规模将超 过156位律师，成为该地区第五大国际律所。 路伟全球管理委员会将在10月底的会议上评估合并的影响，亚洲和中东 业务执行合伙人 Crispin Rapinet 是委员会成员之一。业界普遍认为此次合 并由霍金•豪森发起。 根据《亚洲法律杂志》的统计数据，如合并成功，将形成超大型全球律 师事务所，在全球范围内拥有2,800位律师。在总体规模方面，仅略逊于高 纬绅。在大中华地区，新事务所将成为第五大跨国律师事务所，拥有156位 律师。合并可令总部位于美国的霍金•豪森获益匪浅，该事务所在中国和香 港的办事处拥有40位律师，合并后将迎来路伟116位律师的加盟。霍金•豪 森亦可通过中世律所联盟（SGLA）获益，该组织于2007年由路伟联合9个 中国律师事务所创立。 《亚洲法律杂志》与两家事务所联络时，路伟和霍金•豪森的中国合伙人 均三缄其口，但路伟发言人提供下列表态：“我们定期回顾美国业务战略， ISSUE 6.11

NEWS | news >>

merger talks advance legal market," said one source. "It's impossible for the merged firm to take over the China, Korea and Japan markets.”

“If you look at the JSM tie-up, I don't think that has made a huge difference to the market either,” the source added.

While the decision depends on the partnership vote, management at both firms would have to look at issues over brand transition and the cultural differences between UK and US firms.

“Traditionally there have been problems with US and UK tie-ups because of the cultural differences," said a source. "The US firms are based on a meritocracy and UK firms are based on the lockstep. It doesn't mean they can't work Jun Wei Hogan & Hartson it out, but it will be something to consider.”

“The name issue would be a very difficult one for the partners; names are always one of the hardest things because there's a lot of goodwill associated,” said a source. “Both firms are likely to trade with both names for many years.” ALB ►► Lovells + Hogan & Hartson in Greater China Firm

Lovells Hogan & Hartson Lovells + Hogan & Hartson

Total number of partners and lawyers 116 40 156

Total number of partners and lawyers in PRC 52 29 81

Total number of partners and lawyers in HK 64 11 75

►► Four largest internAtional firms in Greater China Firm

Baker & McKenzie JSM < Linklaters DLA Piper

Total number of partners and lawyers 281 243 179 178

Total number of partners and lawyers in PRC 98 47 49 54

Total number of partners and lawyers in HK 183 196 130 124

►► Firmwide revenue (2008/2009) Lovells: £531m

Hogan & Hartson: US$922.5m*

Source: ALB 50, *The American Lawyer.

Note: < JSM (in association with Mayer Brown LLP and Mayer Brown International LLP)

近期正深入考虑可以利用的市场发展趋势和业务机会。除此之外，我们无 法透露更多情况，不会指明是哪家事务所，也不会透露与协商的性质或进 展相关的资料。 部分知名法律人士指出，双方的合并不会对亚洲法律市场造成重大影响。 有业内人士表示：“在中国和亚洲市场，众多国际所和本地所在共同成长， 我认为此次合并并不意味这两家事务所将主导亚洲法律服务市场，特别是 中国、韩国和日本等市场。孖士打的合并就是很好的例证，我认为其合并 没未给市场带来较大影响。” 合并与否的最终决定还要看今年年底的合伙人投票结果而定，除此之外， 双方管理层还必须考虑内容繁杂的融合、过渡事宜以及英美律师事务所之间 的文化差异。有业内人士指出：“根据以往经验，文化差异会造成英美律师事 务所在合作过程中出现问题。美国事务所倡导精英文化，英国事务所则循规 蹈矩。这并不意味着双方不能合作，但文化差异必须予以考虑。” 业内人士还表示：“新事务所的名称对双方都是难题，名称往往是合并过程 中最难解决的问题，因为有太多无形价值与之相关。未来数年内，双方很可 能在业务过程中继续使用两个名称。” www.legalbusinessonline.com

Update >>

International Tax German tax cheat sues Bank of Liechtenstein’s trustee subsidiary

A

convicted German tax evader has launched a legal bid for compensation from LGT Treuhand, claiming the Liechtenstein trust company’s failure to inform him that his confidential details had been stolen harmed his chances of escaping prosecution for tax evasion.

The unidentified businessman asked a Liechtenstein court to award him Euro13 million (approx US$18.6 million) in damages against the former subsidiary of LGT bank in what is regarded as a test for other tax cheats whose identities German authorities gleaned from a CD-ROM of client names two years ago.

The businessman was convicted of tax evasion in 2008 by a German court. He was sentenced to a suspended prison term of two years and a fine of euro7.5 million ($11 million).

A ruling is not expected before next year; but many (bank) trustee companies who have “disclaimed” on tax advice must be very nervous about this case.

Cayman Islands- the Tax Haven “with Taxes”

After lengthy discussions, the British overseas territory confirmed that it has finally secured permission from the UK to obtain a CI$50m (£38m) bail-out loan to plug a 35pc-40pc collapse in revenue this year.

The severe shortage of cash meant it was days away from being unable to pay its civil service.

The island’s government has also signalled that it is ready to cave into UK conditions on slashing government expenditure and an independent report on reform of its tax system that could see it start to impose direct levies to obtain further loans worth CI$229m. The Cayman Islands authorities claim that the UK has backtracked on stricter original proposals that insisted on direct taxes.

There is no community enhancement fee now, no income tax now, no property tax now, no death tax now,” said William McKeeva Bush, leader of government business, in a live television address. But he added that this could change, suggesting the islands have already begun to consider new ways of raising tax revenue.

The Cayman Islands had so far resisted the idea of direct taxation of its residents and companies, arguing that this would jeopardise its livelihood as one of the world’s biggest financial centres with the 12th richest GDP per head.

The island’s lenient tax laws enticed 10,000 financial institutions to its shores by mid-2008. At the peak of the hedge fund boom, more than CI$3.4 trillion was flowing through Cayman Island institutions en route to London, New York and other financial centres.

By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

Debbie Annells

25

NEWS | news >>

Beijing >>

Update >>

Regulatory What Lies ahead for Foreign Investors on China NPLs Market?

T

he pressure for Chinese four asset management companies (AMCs) to sell state-owned banks’ nonperforming loans (NPLs) creates a tremendous market which opened to foreign investors in 2001. But in recent years, deals rarely get done since the increasingly numerous hurdles for foreign investors. The newest hurdle is created by the Supreme People’s Court on April 2009 for it issued the Summary of Minutes of the Symposium on Hearing Cases about Assignment of Distressed Claims Involving Financial Institutions(Summary).

Targeting at protecting state interests, the Summary sets out a series of guidance instructing courts to deal with the NPLs claims, including: • the list of unacceptable claims mainly concerning the “policy loans” • the local government is entitled of pre-emption to purchase the NPLs from AMCs under the same conditions • reasons cause the NPL sales to be invalid or revocable • application of the existing judicial interpretations

For the investors, among other things, the most prominent issue is that NPLs sales can be invalidated if necessary regulatory approvals haven’t been obtained. In 2001, the State Council approved AMCs to draw foreign capital into the asset restructuring and disposal. Then, in 2005, the Ministry of Commerce issued a Notice, requiring strict examination upon the approvals of such investment. Since the Notice is not an “Administrative Regulations”, lacking of such approvals may not necessarily lead the whole investment to be invalid subject to the PRC Contract Law. However, the Summary clarifies that the effectiveness should be subjected to the approvals because the mandatory provision in the Notice is empowered by the State Council.

As a result, now the NPLs investment is definitely invalid if the foreign investors failed to obtain the approvals to purchase the NPLs or approvals to establish the investment vehicle. Furthermore, all the relevant security contracts shall become invalid accordingly. On the other hand, however, it usually takes months, or years, to wait for the approvals.

Those regulatory obstacles, together with the lack of information for pricing, the “allocated” land problem, make it almost impossible for foreign capitals to collect debts of SOEs. On contrast, local investors and AMCs have access to state financing, experience dealing with administrations and even reduced legal fees that give them a marked competitive advantage over international investors.

Dew Lee, Associate 李露, 律师 Tahota Law Firm Level 27 Building A, The World Trade Centre Gulou South Street, Chengdu 610015,P. R. China Landline: +86 28 86625656 Email: dewlee@yahoo.cn http://www.tahota-lawyer.com

26

Dew Lee

Highly respected firms to present to in-house lawyers in Beijing

N

ow in its sixth year, ALB In-house Legal Summit Beijing 2009, to be held on 26 November, is a must-attend event for any in-house lawyer. This one-day event will line up a number of workshops, plenary sessions and panel discussions, with renowned firms such as Withers Worldwide and Grandall Legal Group participating.

The Employment Law workshop by TransAsia should be one of the most popular. Employment law expert Isabelle Wan, head of TransAsia Lawyers’ employment law practice, will highlight the major reforms affecting employers’ rights and obligations under the new, more regulated labour and employment-law regime. Withers’ partner and Hong Kong regional head of corporate, Guy Facey, will present the topic.

Wilson Sonsini Goodrich & Rosati and Pachulski Stang Ziehl & Jones LLP will give a workshop on “2010 – A year of Econonic Transition in China and the US”, with the risks and opportunities for Chinese companies in the coming year covered in the workshop. Speakers include partner Don Williams and associate Laura Luo from Wilson Sonsini, and Malhar Pagay, a partner with Pachulski.

Lawyers from Dacheng Law Offices will speak on the application of evidence rules in IP litigation in China, and Sandler Travis & Rosenberg’s partner in charge of the Asia Practice, Zhaokang Jiang, will cover whether firms are ready for a customs and trade auditm or investigation.

Another highlight will be the in-house panel discussion on the changing face of corporate governance and risk management, as many new laws and regulations have been introduced in recent years.

“This is the sixth ALB In-house Legal Summit to be held in Beijing. Like its sister event in Shanghai, the event always attracts a large room full of in-house counsels from both multinational and domestic companies, keen to hear expert comment on the latest substantive legal topics straight from the leading firms in each practice area,” said ALB regional managing editor George Walmsley. “Many of our delegates also comment what a fantastic forum it is for meeting their in-house peers and comparing notes on everything from billing practices to their favourite firms to use for each type of work.” ALB For more details of the ALB In-house Legal Summit Beijing 2009, please visit www.theinhousesummit.com

ISSUE 6.11

NEWS | news >>

Beijing >>

Slaughter and May opens in Beijing G

eorge Goulding, partner at Slaughter and May, has packed his bags and is on his way to the firm’s new Beijing office. This move comes a year after Slaughter and May announced its plans to open a Beijing office, with Carol Wong, a lawyer with four years PQE, joining Goulding.

Together they will establish Slaughter and May’s presence in the PRC and widen their circle of acquaintances.

This is a strategic move by the firm and will obviously allow it to get closer to the Chinese corporate community; and be on the ground to handle PRC aspects of transactions.

A presence in Beijing will also assist Slaughter and May to develop its alliances with PRC law firms. Goulding did not mention any specific names but he did confirm that Slaughter and May are getting closer to a handful of PRC firms. “They are the names that you would expect to see – the top independent firms,” he said.

Slaughter and May will also be establishing its presence in Beijing alongside its European “best-friends” Uria Menéndez (Spain) and De Brauw Blackstone Westbroek (The Netherlands). The three law firms will have neighbouring offices. However, Goulding was quick to point out that each law firm in the PRC has to be independent. “Each of the three best friends has its own licences, own authorised representatives, exclusive office space, separate computer systems and telephone systems,” Goulding said. “We will work together as and when appropriate, as we work together with PRC firms.” ALB

司力达抵京 司

力达律师事务所合伙人 George Goulding 已经踏上路途，赴新成立的 北京代表处任职。司力达一年前宣布成立北京办事处的计划，如今终 于实现。拥有四年 PQE 经验的 Carol Wong 律师将协助 Goulding 开展业 务。二人将帮助司力达扩大中国市场份额，积累更广泛的人脉。 成立北京代表处是对司力达具有战略意义的举措，司力达将借此更贴近 中国企业，近距离处理与中国相关的业务。在北京成立代表处还可帮助司 力达与中国律师事务所建立业务合作。Goulding 未提供具体的名称，但证 实司力达正与多家中国事务所合作密切。Goulding 表示：“他们都是中国市 场鼎鼎大名的事务所。” 司力达还将与欧洲合作伙伴 Uria Menendez（西班牙）和 De Brauw Blackstone Westbroek（荷兰）共同开发北京市场。三家律师事务所的北京 办公室将彼此相邻。不过，Goulding 明确指出，三家律师事务所在中国市场 各自独立。他表示：“三家合作事务所均有自己的执照、授权代表、专用办公 空间、独立的电脑系统和电话系统。我们会在适当的时候共同工作，我们也 会与中国律师事务所合作。”

www.legalbusinessonline.com

27

NEWS | news >>

高朋扩大规模，新增两位合伙人

►► LATERAL HIRES Name

Leaving from

Going to

Practice areas

Location

Mao Rong

Kodak

Reed Smith

Corporate, M&A

Beijing

Fan Chao

Zhongyi

Gaopeng

real estate, finance, IP

Beijing

Guo Jinhui

Jin Tuo

Gaopeng

Litigation

Beijing

Yang Guangping

n/a

Winners

Tax

Tianjin

Jane Yao

Colin Ng & Partners

Harneys

Banking & finance, investment funds, listings

Hong Kong

Monica Chu

A Cayman and BVI law firm

Harneys

Corporate, banking & finance, investment funds

Hong Kong

►► 2009 PROMOtions Name

Firm

Title

Practice

Location

Wang Zhong

Clifford Chance

Senior associate

Corporate

Beijing

Katherine KE

Clifford Chance

Senior associate

Finance

Shanghai

Paula Liu

Clifford Chance

Senior associate

Corporate

Shanghai

►► Relocation Name

Firm

Title

Practice

Location

Geofrey Master

JSM

partner

business & technology sourcing

Hong Kong

Kodak

Reed Smith

Kodak in-house director smiles for Reed Smith After a decade of in-house expertise, Kodak’s former director of legal affairs for the Asia-Pacific region, Mao Rong, has moved on to Reed Smith’s Beijing office as counsel. Her practice areas will focus on cross-border M&A and corporate transactions involving China and the US. Mao’s responsibilities in Kodak included managing the company’s legal affairs and supporting its management and business operations in the region.

She worked closely with managing directors, business units and function leaders on major projects and transactions and provided regional support for worldwide M&A and restructuring projects. Prior to joining Kodak, she was in private law practice in the US and Asia for a decade.

“I’m looking forward to helping American and European MNCs to set up operations, diversify, and comply with Chinese and US regulatory demands in China,” said Mao, who is dual-qualified to practise in China and New York.

On top of cross-border M&A and Mao Rong corporate practices, Reed Smith is also expanding its life sciences initiatives. Practice head Gordon Schatz, who moved to Beijing in early 2009 from Washington DC, is working closely with pharmaceutical and medical device clients on corporate, compliance and litigation matters.

柯达法律总监转投礼德

茅榕在柯达公司担任内部法律顾问已有十年之久，并 曾担任柯达亚太区法律事务总监。近日，她已顾问律

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师身份加入礼德律师事务所北京代表处。她主要为涉 及中国和美国市场的跨境并购和公司交易提供法律 咨询和服务。 茅榕在柯达负责管理公司法律事务期间，曾与执行 总监、各业务部门和部门负责人密切合作，参与重大 项目和交易，并为全球范围内的并购和重组项目提供 地区支持。进入柯达之前，她曾在美国和亚洲的律师 事务所工作十年。 茅榕获中国和纽约双重律师执业资格，她表示：“我 希望协助美国和欧洲的跨国公司在中国开展多元化经 营，确保其业务符合中国和美国的监管要求。” Various

Gaopeng

Gaopeng grows with the addition of two partners Beijing-based Gaopeng & Partners has appointed Fan Chao and Guo Jinhui as senior partner and partner respectively. Prior to his appointment at Gaopeng, Fan was a senior partner at Beijing’s Zhongyi & Partners, where he moved from being legal assistant to senior partner in his 10 years with the firm. Fan’s practice areas are real estate, finance, IP, international trade, mergers and capital markets.

Meanwhile, Guo specialises in criminal cases.

Before joining Gaopeng he was a partner at Beijing’s Jin Tuo and previously worked in Beijing’s procuratorial organ as the court clerk and procurator.

Gaopeng now has four offices and 51 partners and lawyers. Earlier this year, the firm also appointed US-qualified Stephen Lou as senior foreign counsel and Jiang Jianjun into partnership in its Shanghai office. In July 2009, the firm increased its international offerings by joining ALFA International, a global legal network and alliance comprised of 133 international law firms.

北京高朋律师事务所近期任命范超和郭金辉分别担 任高级合伙人和合伙人。 进入高朋之前，范超曾在北京众一律师事务所担任 合伙人。他在众一开始律师职业生涯，10年工作时间 内，由律师助理一路升任高级合伙人。他的业务重点 包括房地产、金融、知识产权、国际贸易、企业合并及 资本市场。 郭金辉在诉讼和咨询方面经验丰富，专门受理刑事案 件。进入高朋之前，郭金辉曾在北京金拓律师事务所工 作，最早曾在北京某检查院法庭书记员和检察官。 高朋现有4家办事处，聘请51位合伙人和律师。今 年初，高朋任命持美国执业资格的柳尧广担任高级 外国法律顾问，任命上海办事处的江建军担任合伙 人。2009年7月，高朋律师事务所加入 ALFA 国际联 盟，提升跨国法律服务实力，ALFA 国际联盟是133家 跨国律师事务所组成的国际法律合作网络。 Various

Harneys

Harneys hires new associates in Hong Kong Harney Westwood & Riegels has boosted its Hong Kong team with three additions. These hires are a clear indication of the firm’s strategic direction. “The bottom line is that we are growing our business in Asia and we hope to develop both our client base and our team during 2010,” said Michael Gagie, managing partner of Harneys’ Hong Kong office.

Harneys’ newest senior associate, Jane Yao, is joining from Colin Ng & Partners. She has experience in M&A, IPOs and FDI into China. Yao will also be able to bring a new perspective and understanding on transactions with Chinese elements, as from Jane Yao 1995 to 2002 she was the deputy head of the legal department at the Shenzhen Bureau of Justice.

Harneys also lured associate Monica Chu from a competing Cayman and BVI law firm, and hired Tiffany Tang as a corporate administrator.

离岸律师事务所 Harneys 在香港新聘律师

Harney Westwood & Riegels 新增三位律师，扩大香 港业务团队。最新聘用充分表明事务所的战略发展方 向。Harneys 香港办事处主管合伙人 Michael Gagie 表示：“发展亚洲业务是我们的底线，我们希望在2010 年扩大客户基础和业务团队。” Jane Yao 是 Harneys 最新聘请的高级律师，此前在 黄德森律师事务所工作，在并购、IPO 以及外商赴中 国直接投资领域经验丰富。Jane Yao 可为事务所的交 易业务带来全新视角和理念，突出中国元素。1995至 2002年间，她曾担任深圳司法局律师管理处副主任。 Harneys 还吸引律师 Monica Chu 加入，她曾在开 曼群岛和英属维尔京群岛的律师事务所工作，同时聘 请Tiffany Tang 进入 Harneys 担任公司事务主管。 Clifford Chance

Clifford Chance lawyers rewarded with promotion Fifteen Asia-based Clifford Chance lawyers are celebrating their promotions to senior associate. Most of the lawyers are from the corporate and finance ISSUE 6.11

practices and nearly half began their careers at the Magic Circle firm. In China, those promoted are Wang Zhong from the Beijing office and Katherine Ke and Paula Liu in Shanghai. Alex Cheung, Helen Fok, Celina Fu, Christina Hui, Richard McDade, Karen Wong and Alan Xu received promotions in Hong Kong.

高纬绅律师获升职奖励

高纬绅律师事务所亚洲地区的十五位律师欣然迎来成 为高级律师的机会。多数得到晋升的律师来自公司和 金融业务团队，其中46％的律师在英国五大律师事务 所开始职业生涯。 中国地区得到晋升的律师分别为：北京办事处 的 Wang Zhong、上海办事处的 Katherine Ke 和 Paula Liu、以及香港办事处的 Alex Cheung、Helen Fok、Celina Fu、Christina Hui、Richard McDade、Karen Wong 和 Alan Xu。 Washington DC

Hong Kong

JSM expands BTS practice in Asia JSM, in association with Mayer Brown, is expanding its business & technology sourcing (BTS) practice by relocating partner Geofrey Master from Washington DC to Hong Kong. Master will lead the expansion of the firm’s BTS Geofrey Master practice in Asia.

Asia is currently seeing a rapid growth in outsourcing, so Master’s appointment as lead BTS partner in Asia is well-timed. “Cost pressures and the profound implications of changes in technology have led businesses to look to outsourcing as an effective means to achieve cost efficiency and process improvements and obtain access to cutting-edge technologies and business processes,” said Master. “Additionally, regional enterprises are increasingly looking to outsourcing and other service arrangements to acquire the scale and capabilities to be able to compete globally.”

孖士打扩大亚洲地区的商业和科技采购业务

孖士打与美亚博国际法律事务所合作开拓商业和科 技采购业务，将合伙人 Geofrey Master 由华盛顿特 区调至香港工作。Master 将带领事务所开拓亚洲地区 的商业和科技采购业务。 目前，亚洲的外包业务正快速增长，任命 Master 领导亚洲地区的商业和科技采购业务合伙人恰逢其 时。Master 表示：“成本压力和科技变革的前景促使 企业将外包视为有效业务手段，可降低成本，改善流 程，实现一流的科技应用和业务流程。此外，越来越 多的亚洲地区的企业日趋注重外包和其它服务安排， 以便获得规模优势和业务实力，参与全球竞争。” Nankai University

Winners

Winners hires tax counsel and sets up tax practice Tianjin leading firm Winners has appointed the

highly respected scholar in the fields of finance and tax law, Yang Guangping, as a special counsel to expand its newly established tax practice group.

Yang Guangping currently serves (and will continue to serve) as the director of the North-East Asia Finance and Taxation Research Center of NanKai University, and the associate professor of NanKai University, School of Law. “As companies continue to grow, they will increasingly take into account compliance issues and profit maximisation when conducting strategic planning and making investment decisions. So we expect specialised finance and tax legal services will be in large demand in the market,” said the firm in a statement. “With China’s tax regime advancing further, tax planning and tax risk management will be critical in every stage of a company’s lifecycle, from establishment to restructuring and insolvency.”

金诺聘请税务顾问律师，启动税务业务

天津领先律所金诺，近期与南开大学东北亚财税法研 究中心签署战略合作协议，聘请该中心主任、日本一桥 大学法学博士、南开大学法学院副教授杨广平先生担任 其财税法律业务顾问，并启动财税法律服务业务。 金诺表示，随着经济不断发展，在进行战略规划和投 资决定时，企业和投资者需要的不仅仅是合规性的服 务，也需要对其投资运营财务成本的最小化考量，对法 律风险和税务风险同时进行防范。为满足上述需求，就 需要同时具有法律和财务双重知识背景、能够兼顾合 法与效益的专业人士即税务律师。

Firm Profile

Longan Law Firm

围魏救赵、攻其必救—美国 337调查之应对技巧

截

至2009年5月，我国遭受美国337 调查91起，连续6年成为337调查 最大受害国。所谓美国337调查， 是指美国贸易委员会（ITC）根 据美国《1930关税法》第337节（简称“337 条款”）对不公平的进口行为进行调查，并采 取制裁措施的作法，在实践中，337调查一 般集中于知识产权领域（专利或商标）。如 遭受337调查并被ITC发布排除令，则侵权产 品及上下游产品均将就此退出美国市场。因 而，337调查日益成为我国高技术含量产品 对美贸易的严重威胁，而如何应对，也就日 益显得重要。 如果遭受337调查，除按常规思维积极应诉 以外，能够审时度势，制定行之有效的应对策 略也是至关重要的。隆安律师曾经成功处理了 一起由337调查启动的跨国专利纠纷，一家国 内半导体行业的龙头企业被一家同行业的世 界级美国企业在美国提起337调查，ITC裁定

www.legalbusinessonline.com

该国内企业产品侵权。这意味着：如果不能 扭转局面，该企业产品将失去美国市场。隆 安律师经过权衡与研判，代理该国内企业向 中国境内司法机构就该美国企业侵犯国内企 业产品专利权申请诉前禁令并获得成功，而 这同样意味着：该美国企业的相关产品在中 国境内将被禁止销售。于是，国内企业的被 动局面因此得以扭转，双方以全面和解的方 式结束了两者之间长达两年半之久的诉争， 此种“围魏救赵、攻其必救”的应对策略收到 了良好的效果。 Jiali Xu, managing partner Email: Jialixu@longanlaw.com Longan Law Firm Room188,Beijing International Club,21Jianguomenwai Street,Beijing 100020 Tel:8610 65325588 Fax:8610 65323768 Mob:86 Jiali Xu13601011122 www.longanlaw.com

29

FEATURE | TMT >>

TMT Deals ►► China Unicom share buyback Firm: Freshfields Bruckhaus Deringer Client: China Unicom

TMT: a brave new wo

Firm: Orrick Herrington & Sutcliffe Client: SK Telecom • Off-market share repurchase • China Unicom’s US$1.3bn share buyback from SK Telecom

►► VisionChina Media’s acquisition of Digital Media Group Firms: Orrick Herrington & Sutcliffe; Beijing Sino-Promise Client: Digital Media Group Firms: Simpson Thacher & Bartlett; Grandall Client: VisionChina Media • Merger in exchange for cash and stock totaling US$160m • Creates largest mobile television advertising network in China

►► The Carlyle Group share swap with Taiwan Mobile Firms: Paul, Weiss, Rifkin Wharton & Garrison; Lee and Li Client: The Carlyle Group Firm: LCS & Partners Client: Taiwan Mobile Co • Carlyle Asia Partners exchanged its holdings in kBro, a large cable TV operator, to become the second largest shareholder in Taiwan Mobile Co

►► Non-public offering of shares in Fiberhome Telecommunication Technologies Co Firm: Zhong Lun Client: Fiberhome Telecommunication Technologies Co • Non-public offering of not more than 60 million shares

►► Technology services outsourcing Firm: Mayer Brown JSM Client: AT&T • Global multi-supplier broad scope technology services outsourcing involving services estimated to be valued at US$3bn, including support for implementation of the transaction throughout the Asia-Pacific region

30

As China hurtles along the path of technological advancement, investors fac and growth in technology, media and telecommunications law

C

hina is in the midst of a technological revolution.

With the development of telecommunications infrastructure and a rapid increase in the internet penetration rate comes a voracious appetite for technologyrelated services and media content.

“People talk about the potential of a ‘colour’ revolution in China. Basically, because the population is rapidly becoming much more educated and financially prosperous, there’s an increase in demand for the sorts of services that people were less likely to demand when they were less educated and less prosperous. They want content, they want to read about interesting ideas, and they want access to that sort of stimulus, ” says Connie Carnabuci, a partner at Freshfields Bruckhaus Deringer.

China has the greatest number of Internet users in the world and yet the penetration rate amongst its population is relatively low. If you add to this the size of the country and its large – and increasingly wealthy – population, you’ll start to see why investors are racing to be a part of the TMT sector in China.

Meanwhile, the Chinese government is straining to resolve the balance between the demands of its populace and its desire to maintain control over telecommunications and the media.

Regulations versus technology

Lawyers in the region all point to the challenges presented by a developing legal framework. A case in point is the public spat between the Ministry of Culture (MOC) and the General Administration of Press and ISSUE 6.11

FEATURE | TMT >>

Foreign investment

www.legalbusinessonline.com

30%

• 25%

Consolidation

As the TMT sector faces increasing competition and demand for services, 40,000

China 2009: Internet users and penetration rates

38800 29800

35,000 30,000

25300

20%

25,000 21000

15%

0%

2005.12

2006.6

2006.12

22.6%

19.1%

13700

12.3%

5%

11100

12300

10.5%

10%

22.5%

20,000 16200

9.4%

Publication (GAPP) in respect to the regulation of online gaming.

In China, an online game is a cultural product and accordingly, online game operators require a cultural product-operating permit from MOC. As an online game is ‘published’ on the Internet, GAPP has jurisdiction over its publication and a publishing permit is required.

“There is confusion – you go to GAPP and MOC for a permit but who is responsible for regulation?” says Jeanette Chan, a partner at Paul Weiss. “The State Jeanette Chan Council has issued three Paul Weiss principles which set forth in general terms how the media sector is to be regulated, and this includes online games, but it is not very clear.”

8.5%

ce a whole new world of opportunity

In China’s online gaming business, foreign investment is not permitted.

However, foreign investors have long circumvented prohibitions against direct foreign investment in certain sectors in China, including the internet sector, through the use of the variable interest

entity (VIE) structure. This involves contractual arrangements between a wholly foreign-owned domestic entity and a domestic license-holding operating entity. Lawyers working within the TMT sector in China are very familiar with the VIE structure and its use has long been tolerated by regulatory authorities in China.

However, the recent release of a joint notice by GAPP, the National Copyright Administration, and the National Office of Combating Pornography and Illegal Publications (Notice 13) has thrown up some confusion about the validity of the VIE structure. It prohibits foreign investors from entering into arrangements to gain control over online gaming operators.

“It’s noteworthy that Notice 13 to date has not been endorsed by other PRC government authorities, in particular the Ministry of Commerce and the Ministry of Information Industry,” says Morrison & Foerster’s Shanghai office managing partner, Charles Comey.

“This is one in a continuing series of pronouncements in an area in which we expect further developments. It is premature at this point to write off the VIE structure,” he adds. With all this uncertainty, foreign investors in online gaming in China will no doubt be turning to their lawyers for regulatory advice.

16.0%

world

Both GAPP and MOC have issued conflicting notices which expands on their authority over the implementation and management of online games. “While we recognise that there are different layers of government administration over the sector, we certainly do not wish to see any conflicts or loopholes that it may create, and hope that along with the rapid development of the industry there will be more coherency and certainty in the regulatory environment,” Anthony Zhao says Anthony Zhao, a Zhong Lun partner at Zhong Lun. Online gaming operators are now in a state of limbo about their operations while the debate continues. “Our online gaming clients are a bit confused. Our advice is to ‘watch this space’, keep doing what you’re doing and continue to get permits from both MOC and GAPP,” says Chan. In the meantime, a solution may come only from the State Council or from the Propaganda Department of the Chinese Communist Party.

15,000 10,000 5,000

2007.6

No of internet users

2007.12

2008.6

2008.12

2009.6

0

Penetration rate

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FEATURE | TMT >>

“China has very much been looking to the amazing experience that India has had and has targeted the development of the services industry. China sees huge potential in being a service provider to the world” Geofrey Master, Mayer Brown JSM

many smaller companies are looking to consolidate with other TMT players to either obtain or maintain a share of the market.

For example, Paul Weiss’ Chan recently acted for The Carlyle Group in a US$1.8bn deal to create the largest pay-TV operator in Taiwan. And Carlyle Asia Partners exchanged its holdings in kBro, a large cable TV operator, to become the second largest shareholder in Taiwan Mobile Co (TWM). “Other cable operators are going to follow suit – a Telco merger or a combination,” says Chan. “They are getting together and asking ‘what can we do together?’

We can share the resources, amortise amongst different users.”

Other media operators are also seeking consolidation: VisionChina Media (VCM) entered into an agreement to acquire all of the shares in Digital Media Group (DMG). The merged company will combine VCM’s outdoor digital network and DMG’s national subway network to create the largest mobile television advertising network in China. “This transaction exemplifies the emerging strength of the Chinese technology economy, [and] it also highlights a growing consolidation in the Chinese media sector,” said David Lee, a partner at Orrick, Herrington David Lee & Sutcliffe who advised Orrick DMG on the transaction.

Consolidation is also likely to occur in the outsourcing market where domestic IT outsourcing companies will seek consolidation to form a force against foreign competitors.

Outsourcing – China versus India

The Chinese government has identified the IT outsourcing sector as an area in which the nation can excel, in much the same way as China became a global leader in manufacturing. “If you look at it, it’s almost like a sleeping giant. The amount companies spend on services is staggering, the peripheral support for computers is huge,” says Geofrey Master, partner at Mayer Brown JSM. “China has very much been looking to the amazing experience that India has had and has targeted the development of the services industry. China sees huge potential in being a service 32

provider to the world.”

The country has grand ambitions to develop its domestic expertise in the outsourcing industry. “China wants to be a world leader in the provision of outsourcing services, to compete with and surpass India for being the country of choice for offshoring multi-national corporations,” says Mark Parsons, counsel at Freshfields Bruckhaus Deringer. To that end, the Chinese government is currently stimulating the growth of an IT outsourcing sector and encouraging people to embrace outsourcing. It has introduced tax incentives and invested in resources to train its workforce.

Yet although the outsourcing market in China is growing, it is still very fragmented. China hasn’t yet built up the expertise and confidence that the big providers in India have – the reality is that Chinese outsourcing companies face a steep development curve in this sector.

“Customers will expect defined services, service levels and solid methodology.

[The contract] allows the supplier and the customer to work together to give the customer a level of assurance that in fact what it thinks it is going to receive and what it needs to receive is what it is going to receive. It elevates the contract to a position it hasn’t historically been in,” says Master.”

The success of China’s outsourcing sector will also depend on the development of language skills and an understanding of the protection of IPR.

IP rights

The protection of intellectual property rights in China is an issue that looms large. Any large multi-national corporation is going to think carefully about its IP, when making the decision to outsource its IT services to a provider in China. There is always the risk of a breach of IP rights anywhere in the world, but the framework in China which regulates IP rights is still relatively young. This means that the cultural awareness of IP rights and what constitutes a breach of IP rights is still developing.

“You’ve got to have in your business plan a line item for how you will implement an IP strategy. You can’t go into China and register your IP and think you’ll be fine… I am a big believer in self-help,” says Carnabuci.

ISSUE 6.11

FEATURE | TMT >>

Enforcing IPR through the legal system is a viable option but it should be viewed as a last resort. There are better ways of minimising the risk of something being misappropriated. This means establishing security systems and processes to prevent Mark Parsons an initial breach of IP Freshfields rights.

The Chinese government has highlighted the importance of IP rights and is working on educating people about the value of intangible property.

The landscape is changing, and as confidence grows business activity will increase as well.

What’s on the horizon?

Given the huge potential for growth in China there continues to be an enormous amount of interest in the TMT sector, from both foreign and domestic players. However, despite strong consumer demand for technology and media, China has not been immune to the effects of the financial crisis. It comes as no surprise that TMT lawyers have also taken a bit of a hit.

“There has been a change in the deals that we are doing. Before the GFC, there were a lot of M&A or securities-related transactions – a lot of deals from private equity funds or other industrial players that would like to expand their market share in China very quickly,” says Janet Hui, partner at Jun He. “All of a sudden they stopped, but it was in line with the market. We are now acting for industrial players who think that this is the right time to expand their business in China. ►► Internet use in China As at 30 June 2009:

The number of internet users is 338 million, since late 2008 representing an increase of 40 million

The internet penetration rate in China is 25.5%

The number of rural The number of mobile internet users in China is 95.65 million internet users is 155 million

www.legalbusinessonline.com

These are long-term investors who are less affected by the GFC and are committed to China.”

Hui also points out that clients are still concerned about funding and so price remains an issue. “Before the crash the prices went up like crazy, but now it needs to get to a more realistic level,” she says. Investors remain conservative – and perhaps even over-cautious – about committing to deals. However, there is an increase in enquiries from clients and Hui predicts that activity will pick up in 2010.

This is a sentiment shared amongst other law firms. As a strategic move to capture the growing outsourcing market, Master recently relocated to Hong Kong to drive Mayer Brown JSM’s business & technology sourcing practice in Asia. “As a specialty group, we believe that the region warrants it. We will support transactions that are coming into the region but also those [domestic] companies that are developing and require global capabilities,” he says.

Carnabuci and Parsons also have observed an increase of work flowing in from the consolidation of the outsourcing market and contracts, both domestically and globally, for outsourcing services.

“In terms of outsourcing, there’s a huge amount of potential work for the banks – both for Chinese domestic banks and foreign banks who are setting up presences within China. On the outsourcing side, we typically find ourselves Connie Carnabuci acting on the customer Freshfields end,” says Carnabuci.

M&A work will continue – though it will be slow and investors may choose to cherry-pick assets. Certainly, some investors are taking advantage of the times and investigating if there are any bargains to be had.

Lawyers will also be closely monitoring regulatory changes within China. In particular, advice work on regulatory changes and compliance may arise as a result of the restriction of foreign investment in the TMT sector.

Lawyers may have to be ready with alternatives or more creative solutions to circumvent prohibitions if such restrictions eventuate. ALB

“We are now acting for industrial players who think that this is the right time to expand their business in China. These are long term investors who are committed to China” Janet Hui, Jun He

33

FEATURE | private equity >>

Private equity: growth accelerator

While the rest of the world takes a year-long hiatus from making private equity transactions, Chinaâ&#x20AC;&#x2122;s domestic PE industry, now led by domestic players, remains active and is fast evolving.

A strong private equitymarket will not only drive economic growth but also foster a more sophisticated domestic PE legal fraternity 34

ISSUE 6.11

FEATURE | private equity >>

“We are in the right place, even at the wrong time.

We are increasingly busy here. The view is clear – in Asia and especially China that the market has turned and some kind of bottom has been reached ... People are now investing again” David Eich, Kirkland & Ellis

T

he Blackstone Group’s recent joint venture with the Shanghai government may well mark another important turning point in the domestic private equity (PE) landscape.

Blackstone, which with $93.5bn of assets under management is among the world’s largest PE firms, has signed a memorandum of understanding with the government of the Pudong New Area. The global PE powerhouse, one of several to now have a presence here, will set up its first regional renminbidenominated PE fund in Shanghai, called the Blackstone Zhonghua Development Investment Fund.

It will raise RMB5bn (US$732m) for investments in Shanghai and neighbouring areas.

The indicative significance of this joint venture has many PE lawyers excited about the market’s prospects.

“This groundbreaking development sees a major global PE firm showing serious commitment to the market.

It will help grow the PE industry in China and has the potential to even change the landscape of this industry,” says Richard Xu, founding and managing partner of Shanghai-based HanYi, a law firm that has a primary focus on PE transactions.

Allowing a top-tier global PE house to form and manage an RMB investment fund will also set a good example and model for the domestic players and other local governments in different cities. In the view of domestic lawyers, this JV will help raise the bar for the entire industry.

“Opening the domestic market to quality global players will help China build an orderly private equity

www.legalbusinessonline.com

industry, as well as foster corporate governance and strengthen capital markets,” says Jeremy Dai, a partner of Zhong Lun. “It’s a good chance for domestic PE managers to gain the institutional know-how and technical skills from their international counterparts on PE practices.”

Similar to Blackstone, many other leading foreign PE companies – which are usually ahead of the curve in spotting developing business trends – are refocusing on or expanding their presence in this market. International law firms are also seizing the opportunities by simply following their clients’ footprints.

US PE heavyweight Kirkland & Ellis (K&E) has recently opened an office in Shanghai, its second one in Asia after Hong Kong. The Shanghai office, co-managed by senior partners Li Xiaoyang and Li Chuan, focuses on complex transactions involving China for international PE firms and corporations and will represent Chinese entities active abroad.

“For a very large number of PE clients, particularly those in Asia, China is increasingly their core focus, and they are making longterm investments here. So our China strategy isn’t creative at all; we are simply doing what they are doing,” says David Eich, senior partner in K&E’s Hong Kong office and the head of the global PE practice in Asia.

“The opening of our Shanghai office allows us to be closer to a larger set of managing directors in the Greater China market. It’s amortising our existing assets and resources across a large pool of potential clients,” Eich says.

In-house insight: carlyle group asia General counsel: Wayne Bannon Location: Hong Kong • Notable achievements over the last 12 months Working, alongside Carlyle investment professionals, to assist our portfolio companies and executives navigate the extremely challenging financial and economic environment. Developing investment structures, alongside internal compliance and oversight procedures, to allow Carlyle funds to invest and take advantage of the opportunities that will arise throughout Asia in coming months • Law firms used most often Carlyle and its Asia Funds use a wide spectrum of law firms across the region.

To mention a few, Paul Weiss, Linklaters, Clifford Chance, Simmons & Simmons, Allen & Overy, HanYi Law Offices, King & Wood, Nagashima Ohno & Tsunematsu, Nishimura & Asahi, Lee and Li, Gilbert + Tobin, Freehills • Areas where work is most frequently outsourced Regulation and compliance, investments and transaction management, fund formation and management. Over the next 12 months, I wouldn’t anticipate a change in these areas but the overall percentage spent on the individual areas will, most likely, change.

The likelihood of change in the regulatory environment for private equity in the US, Europe and possibly Asia, will almost certainly mean legal spend on regulation/compliance will increase as PE firms implement changes to take account of new regulations • How has budget for external counsel changed in the last 6-12 months?

We do not have a fixed budget. Legal spend has remained generally constant in 2009 when compared with 2008 and is likely to rise in 2010, both on the regulation/compliance side (as per above) and on the investment side. As deal flow and exit options returns, legal spend on investment structuring may also be expected to increase • How can external legal counsel serve you better?

Know your client, both on the deal side and on the legal/compliance side. This will allow you to provide real value-added services during a transaction. Clients do remember (and reward) flexibility and innovation on fees

35

FEATURE | private equity >>

“Many dominant international PE funds have been very quiet in the past 18 months.

This has provided good opportunities for the domestic PE firms to thrive. Some of the domestic players have been very active in the market during a period when deal activity witnessed a significant downturn” David Blumental, Vinson & Elkins

36

Recovery on the horizon

W

hile the PE scene in other parts of the world is still relatively quiet, there is no doubt that the worst of the GFC is over for PE in China. Funds managers and lawyers have all sensed that the market is recovering, as deal flow has started to gradually pick up from the second quarter of 2009.

Domestic PE houses such as Hopu, Hony Capital and CDH are leading the recovery. “Many dominant international PE funds have been very quiet in the past 18 months. This has provided good opportunities for the domestic PE firms to thrive. Some of the domestic players have been very active in the market during a period when deal activity witnessed a significant downturn,” says David Blumental, partner of Vinson & Elkins in Beijing.

The strong performance of the PE practices of domestic firms has breathed life into law firms. “We’ve experienced an increase in work load starting from the end of the second quarter. Prior to that, most of the mandates were for restructuring and exit strategies, but now we’re involved in more new deals, due diligence and deal executions,” says Xu. Deal activity slowed down dramatically in about September 2008, and until the second quarter of 2009 many PE firms were largely reviewing existing projects; only a few new investment deals were closed.

To some, K&E’s expansion in the supposedly uncertain present may look risky, but the firm’s China business has turned out to be “surprisingly” encouraging. “We are in the right place, even at the wrong time. We are increasingly busy here. The view is clear – at least in Asia, especially China that the market has turned and some kind of bottom has been reached.

It seems the disability in financial markets has ended and people are now investing again,” says Eich.

Although things are looking up, challenges remain. One of the main issues that stop transactions being closed is valuation. “We are at a time where some level of uncertainty is still

swirling around the market and global economy. In many cases, it’s difficult for the founder and the investor to reach an agreement on valuations,” says Blumental.

An advancing and more sophisticated legal framework, meanwhile, has slowed down the pace of deal making. “In the more developed and regulated legal environment, PE investors are more careful and are spending more time and energy on making sure they don’t overlook any major PRC compliance issues, and are paying more attention to evaluating investment risks,” says Xu. Many PE managers reportedly now engage many specialists in different fields to examine target companies more thoroughly.

“PE clients now demand an increased level of skills and attention from more experience lawyers. Lawyers have to be more careful when they advise on transactions, and need to be more updated on regulatory changes and how these changes are practised in China,” he says.

Positive regulatory changes

A number of encouraging regulatory changes that have been – or are about to be – issued have signified the fact that the government is trying to foster the growth of the PE sector. These changes will create all the mechanics required for PE funds to do deals more efficiently, channel liquidity into promoting private investments and drive economic development.

Among the new regulations and draft rules relevant to the PE industry, the draft of the Administrative Measures for the Establishment of Partnership Enterprises by Foreign Entities or Individuals in China (FIP regulations) has been regarded as the most single important rule for foreign PE fund managers, investors and their lawyers. FIPs resemble the prevalent structure for most international and offshore funds, and will permit foreign investors to utilise a PRC partnership structure to form onshore RMB PE funds.

“Everyone is talking about RMB funds these days,” says Blumental.

ISSUE 6.11

FEATURE | private equity >>

“RMB funds are now favoured by many founders of target companies, largely because the domestic capital markets enjoy a higher price-to-earnings ratio than overseas markets. And they are more nimble and faster, so they can have better access to good deals that need quick action.”

In the absence of a national legal framework for FIPs, cities like Tianjin, Shanghai and Beijing all adopted their own local rules and structures to promote formation of RMB funds, allowing foreign fund managers to participate “indirectly” through their direct or indirect subsidiaries established in China.

The latest draft of the FIP regulations allows a foreign investor, subject to governmental approvals, to directly form a PRC limited liability partnership (LLP) as a general partner or to directly invest in a PRC LLP as a limited partner. It has been approved in principle by the State Council, and has been returned to the Ministry of Commerce for further refinement.

Many people are holding their breath and waiting to see what this new rule will look like.

“The FIP regulations will provide a much-needed national legal framework for foreign fund investors to put money into the hands of fund managers who are already living and working in China,” says Xu. “It’s interesting to see how the central government consider or perceive foreign investment coming into China in this form. And there is still some legal uncertainty regarding the formation and operation of FIPs, particularly issues surrounding foreign investment restrictions, tax and foreign exchange controls.”

The regulations that allow commercial banks to provide loans for M&A deals is another critical step towards a better legal framework for the PE industry.

“From the PE perspective, permitting commercial banks to finance serial acquirers’ M&A transactions is a sea change ... Another piece of the soft infrastructure that China needs to have a real M&A and PE market has been created,” Eich says.

The government’s policy to broaden the investment areas available for institutional investors, such as pension funds, social security funds, banks, insurance companies and securities www.legalbusinessonline.com

companies, is regarded as other positive initiative to the development of the industry.

“With more large, established institutional investors coming to the PE playing field, the market will be better regulated and more protections will become available for investors.

Lawyers, therefore, will have a more important role to play in domestic PE fund formations and transactions,” says Dai.

Deals pipeline strong

Although many in the industry doubt the mega-deals such as those of 2007 will be seen again for some time, lawyers have recognised many other opportunities which come out of the volatility of this market, such as distressed businesses, public securities arbitrage, PIPEs and Chinese outbound investment. In the meantime, opportunities will arise out of China’s continuous march towards one of the largest PE markets globally.

“I expect to see large-scale, traditional PE investments becoming more mainstream activities, compared to venture capital investments which were prevailing in the past decade,” says Xu. “Due to the growing size of domestic companies, the increased scale of the economy and the more mature market conditions, more traditional PE deals are becoming visible, deal sizes and volumes are moving upward, and deal structures are changing quickly and becoming more sophisticated.”

He also anticipates many PE investors will soon realise their gains through successful exits, as the capital markets stabilise and the currency becomes more convertible.

For local PE practices that want to keep up with the market, organic growth alone won’t cut it. They will need significant contributions and flows of expertise from international firms, for when PE has been a major practice for much longer.

“Hopefully, many talents from foreign law firms will come to this part of the world, either working directly with foreign law firms or joining PRC firms, to help build up this emerging practice area in China,” says Xu. International firms, meanwhile, will continue to focus on assisting international funds investing into China

Noticeable PE transactions in 2009 ►► Hopu /Temasek— CCB

Value: US$7.3bn Private sale of China Construction Bank H shares

by Bank of America, to a group of investors including, China Life Insurance, Hopu Investment Management and Temasek.

• Advisor to target: Commerce & Finance • Advisor to bidders: Clifford Chance • Advisors to seller: Cleary Gottlieb Steen & Hamilton; Deacons

►► Hopu and COFCO – Mengniu Dairy

Value: US$790m Hopu Investment Management and China National Oils, Foodstuffs and Cereals Corp (COFCO) have acquired a 21.23% stake in China Mengniu Dairy Company for US$790m through the purchase new and existing shares.

• Mengniu’s long-standing external advisors: Norton Rose; Maples and Calder

►► Hopu – BOC

Value: US$650m Hopu Investment Management bought 30% of the Bank of China shares that sold by the Royal Bank of Scotland in January 2009.

• Advisor to bidders: Herbert Smith; Gleiss Lutz; Stibbe • Advisor to seller: Linklaters • Advisor to financial advisors: Davis Polk & Wardwell; Slaughter and May

►► KKR consortium – International Far Eastern Leasing Value: US$160m A consortium of investors, consisting of Kohlberg Kravis Roberts, GIC Special Investments and CICC invested US$160m into International Far Eastern Leasing Company, a leader in the finance leasing industry in China and a subsidiary of Sinochem Corporation.

• Advisors to bidders: Paul Weiss; Commerce & Finance; Maples and Calder • Advisors to seller: Paul Hastings; Tian Yuan; Walkers

37

FEATURE | private equity >>

“Lawyers are at the centre of PE transactions and should be PE firms’ closest partners… The future for the PRC lawyers who have the expertise and skills in PE is just unlimited” Peter Fuhrman, chairman of China First Capital

38

in the coming years. However, some large firms have started working on a new category of deal activity – globalising PRC companies forging strategic partnerships with global PE funds.

“As China-based world-challenging companies are looking to become world champion companies, they need to expand their global presence and business. They can benefit greatly by having a strategic partner that knows how to run a global business. It’s a neat fit for those companies to join force with North America or European global PE funds and together create a global business,” says Eich. “This area will see huge development in the future and it is just about to erupt right now.”

K&E are currently advising on several deals in this category, and Eich believes that a handful of large international firms that have the capability to deliver M&A across three time zones are also involved in a number of ongoing deals.

While PE firms are providing the much-needed capital, advice and management know-how to accelerate the growth of Chinese enterprises, their demand for quality legal services are also helping foster a stronger, domestic PE capability. “Lawyers are at the centre of PE transactions and should be PE firms’ closest partners,” says Peter Fuhrman, chairman of China First Capital, a Shenzhen-based boutique international investment bank focusing on China’s high-growth private small and medium enterprises.

Like elsewhere in the world, legal documents and contracts in a PE investment are extremely detailed and specialised. It requires very experienced and capable lawyers to be involved. However, as international PE law firms are barred from providing PRC legal advice and many lack local expertise, domestic PE transactions inevitably need to engage PRC lawyers who are familiar and skillful in this area of work.

“Currently, there is a drastic shortage of experienced local PE legal talent, given the tremendous growth in China’s PE market. I tell every lawyer I work with in China ‘if you want to have a successful future career, become an expert in PE’. The future for these PRC lawyers who have the skills in PE is just unlimited,” says Fuhrman. ALB

Noticeable PE transactions in 2009 ►► KKR – Ma Anshan Modern Farming Value: US$150m Kohlberg Kravis Roberts’s investment in Ma Anshan is the first foreign investment in the dairy industry since last September, and marks a shift in focus from downstream diary processors to upstream raw milk suppliers.

• Advisor to KKR: Paul, Weiss, Rifkind, Wharton & Garrison

►► Carlyle Group – Yashili Group

Value: Undisclosed The Carlyle Group has acquired a 17.3% stake in Guangdong Yashili Group Co, one of China’s largest infant formula companies.

• Advisors to bidder: Han Yi

►► PE investment into Chery

Value: US$293m Chery Automobile has raised about US$293 million by selling a 20% stake to domestic private equity investors, including Bohai Industrial Investment Fund Management and CDH Investments. The investment will enable Chery to establish a footstone for its planned IPO in Shanghai.

►► TPG and Hony Capital – Wumart

Value: US$213m TPG Capital and Hony Capital have jointly invested a total of US$213m in Wumart Stores, a Hong Kong-listed Chinese retailer, for a total of 10.9% stake in the company.

• Legal advisors to seller: Skadden, Arps, Slate, Meagher & Flom; Haiwen & Partners

►► Bain Capital - Gome Electrical Appliances Value: US$439m Bain Capital has agreed to invest as much as US$439m to acquire a minority stake in Gome, one of the biggest Chinese electrical appliances retailers.

• Advisors to bidder: Appleby; Skadden

ISSUE 6.11

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Feature | interview >>

In-house perspective

Alibaba Group:

Inside the law

Legal advisors have to evolve as fast as Alibaba itself to keep, or win, mandates. ALB meets the company’s in-house team

Alibaba group’s in-house legal team, led by general counsel Tim Steinhert (centre)

A

libaba Group is a company that has flourished since its humble beginnings. Starting as a small operation, it is now a global powerhouse controlling various subsidiaries including Alibaba.com, Taobao.com, Alipay.com and China Yahoo!. Alibaba Group has captured the e-commerce market in China.

In a world on the brink of a new economic era, many global players are looking to China for salvation, whereas Alibaba Group has set its eye on the rest of the world. A company with those ambitions requires the support of dedicated employees, so the inhouse legal team for the group and its subsidiaries is constantly evolving.

“I think our expertise and our size and coverage makes us unique among Chinese companies, and reflects the strength of our business and our business ambitions to grow domestically and internationally,” says Alibaba Group’s general counsel, Tim Steinert.

The team

Steinert came to Alibaba from the Hong Kong office of Freshfields Bruckhaus Deringer, where he spent seven years as a partner specialising in private M&A and securities. It was during the Alibaba.com IPO in 2007 where Freshfields was an adviser that 40

he jumped from private practice to inhouse law.

Steinhert leads a legal team of over 50 people (32 who are lawyers) including specialists in M&A, IP, disputes, listing compliance, securities, financial services and commercial transactions. And it’s easy to see why Alibaba was keen to have Steinert at the helm. Fluent in Mandarin, he also has significant experience with legal transactions in Asia, having started his career in Beijing with Coudert Brothers in 1989.

Headquartered in Hangzhou, Alibaba now has around 17,000 employees, with only around 250 people based outside the mainland. “In the past, our business was more focused on China, but the legal issues we have been facing more recently have been increasingly international,” Steinert says.

Uncharted legal territory

As e-commerce companies, Alibaba. com and Taobao.com facilitate the relationship between buyers and sellers in an online marketplace. However, this creates situations where some sellers can offer products that may infringe on third-party IP rights.

This model has created a new (and rapidly evolving) area of law around the enforcement of these types of commercial relationships.

It can be challenging to navigate through any legal framework, but especially so in China. “The internet business is relatively new and therefore the legal issues that arise are in some ways undeveloped,” Steinert says, pointing to privacy, online defamation and third-party IP rights as examples. In addition, lawyers for Alipay.com must also deal with the uncertainty of China’s regulations surrounding online payment and settlement, as there is currently no established framework regulating these transactions.

Steinert and Alibaba Group understand that regulations are currently being drafted in China.

“The People’s Bank of China will be the regulator and the regulations will provide a licensing framework,” he says. Earlier this year, the group entered a strategic alliance with the Bank of China to collaborate on e-commerce initiatives, including online payment and the development of the Alipay smart card.

Despite the developing laws, the legal issues are not entirely foreign.

“The laws in China may be different but the underlying principles of the law and the approach on issues in China are similar to the rest of the world,” says Steinert. “For instance, the obligation of the marketplace with respect to third-party IP in China is similar to that in the US and Europe,” Steinhert explains. It also helps that the in-house legal team has specialists in trademark, domain names and patents law.

M&A activity

Alibaba Group is pursuing expansion plans; creating Alibaba Strategic Investment, a team which functions very much like a venture capital fund.

The team identifies and invests in early-stage companies that may be of strategic benefit to the group or its subsidiaries, either through improving technology, people, products or markets.

Brief history of Alibaba Group

• Alibaba Group founded

1999

• Alibaba Group raises US$25 mn from Softbank, Goldman Sachs, Fidelity, and other institutions

1999-2000 ISSUE 6.11

Feature | interview >>

In addition, the subsidiaries of Alibaba Group also pursue their own M&A strategies. “We have M&A specialists who can support our collective needs. An in-house M&A specialty is unique for companies in mainland China. We may also outsource some of the work, but we have people internally who can do it,” says Steinert.

Not every in-house legal team has M&A specialists but the Alibaba team has strong support from management.

“Our management appreciates the value that having skilled lawyers inhouse brings,” Steinert says.

Outsourcing policies

Even though the legal team has strong in-house capabilities, Alibaba Group and its subsidiaries still seek assistance from external legal counsel when necessary, usually for particular transactions and specialist needs. To ensure it receives the highest quality support, the group invites law firms

“The internet business is fairly new and therefore the legal issues that arise are in some ways undeveloped” Tim Steinert, general counsel, Alibaba Group to pitch for the legal work when the need arises – rather than keeping a set panel of firms. “We look first and foremost to expertise; firm expertise and then team expertise. The team has to be able to meet our needs on a transaction,” says Steinert.

Legal expertise also has to be applied with a deep understanding of the internet business and of Alibaba Group. “Lower down the list are things like availability and their

• Alibaba.com becomes profitable

2002

• Consumer e-commerce website Taobao.com is founded

• Online payment system Alipay is launched

2003

www.legalbusinessonline.com

2004

►► structure of Alibaba Group’s legal department • 8 Hong Kong/US qualified lawyers

General Counsel

• 24 PRC qualified lawyers

Tim Steinert Alibaba Group – 10 lawyers Corporate finance, M&A, investment, group structuring, shareholder matters, disputes and IP Subsidiaries – 20 lawyers

Commercial transactions, product and service structuring, trust and safety legal support, general regulatory compliance, employment law, purchasing, finance support and other administration

track record onshore or offshore.

Of course, they have to speak Chinese for deals relating to China.”

Steinert also identifies value-formoney as an important factor in selecting external legal counsel.

“We expect that the firms will give us good value for the fees they charge. We are an intelligent user of external legal services,” he says.

According to Steinhart, the group sometimes works on an estimate basis, sometimes on a cap basis and sometimes on a non-cap basis.

Yet this does not mean that Alibaba looks for low-cost law firms – there is an understanding that quality legal work can be more expensive.

“Logically, fixed-fees are only appropriate where you have an accurate idea of the volume of work.

It’s not in anybody’s interest if the volume of work significantly exceeds the original calculation and the client insists the cap be maintained, because that is not good for the relationship and you may not get the quality of service that you deserve,” Steinert says.

He notes that PRC domestic law firms are more willing to work on a capped basis on a variety of transactions, including on litigation.

“This is not as widely accepted outside China… International law firms are willing to cap in certain transactions but this cap is normally subject to a lot of assumptions.”

►► Outsourced legal work Financial services 5%

2006

2007

2008

IP 30%

Commercial 15% M&A 30%

Litigation 5%

Note: Estimate based on total fees paid in the past 12 months.

Expansion plans The group’s business eye is set on a joint venture plan in India, as this is Alibaba. com’s largest supplier market after China.

It saw 138% sales growth in India last year, with SME membership surpassing one million in June 2009. A new business unit – Alibaba Cloud Computing – is also being launched, to showcase computing, memory and network services, while providing another level of internet service for customers.

As the business expands so will the requirement for legal services. The in-house legal team is already looking to boost its depth and expertise.“As an international company, our legal department has to deal appropriately with laws in the jurisdictions where we are more active. So, as we expand internationally, I expect we will have to expand our legal department capabilities as well,” Steinert says.

• Internet-based business software • Koubei.com merged with • Alibaba Group company Alisoft launched forms strategic • Alibaba China Yahoo! to form partnership with Group makes • Alibaba.com lists on the Hong Yahoo! Koubei a strategic Kong Stock Exchange Yahoo! Inc. • Alimama integrated with investment in • Alibaba Group launches and takes over Taobao Koubei.com Alimama, an online advertising operations of • Alibaba Group R&D exchange company China Yahoo!

Institute established

2005

Other 15%

• Alisoft merged with Alibaba R&D Institute • Alisoft’s Business Management Software division injected into Alibaba.com • Koubei.com injected into Taobao as part of the “Big Taobao Strategy” • Alibaba.com acquires up to 99.67% interest in China Civilink

2009

41

FEATURE | insurance >>

New insurance law – beyond the duty of insuring

R

ecent amendments to the Chinese insurance law have not only painted a bright picture for investment funds, but have also nudged Chinese law firms into keeping an eye out for more insurance mandates. Effective from 1 October 2009, the revised Insurance Law strengthens regulatory supervisions and provides more rights for the insured. But the bright spot of the revised law that has the greatest potential to boost the economic

42

standing of China is the clause to expand the investment channels of insurance companies.

In contrast to previous stringent restrictions which only allow investments in government bonds and financial bills, insurance funds can now make investments in stocks, securities-investment funds and “immovable assets” – real estate and infrastructure. Although it was said in March 2009 that detailed regulations of the investment into “immovable

assets” would be announced on 1 October, this is yet to be released.

The limitations of the previous law resulted in large amounts of insurance funds remaining uninvested.

The latest statistics released from the China Insurance Regulatory Commission (CIRC) state that the total capital of China’s insurance industry is approximately US$518bn to March 2009. US$325bn of that was available for investments, and at the end of January, 84% of the total amount ISSUE 6.11

FEATURE | insurance >>

invested was attributed to bank deposits and bonds.

Intended to maximise the value of insurance funds as well as bring additional liquidity to the securities and assets market, the revised law has significantly expanded investment options for insurance companies. As the amount of funds available for investments continues to increase, insurers who want to diversify their investments and achieve higher returns are moving forward with the new rules.

From April 2009, the corporate bonds category has been expanded to include domestically issued mid-term notes (MTNs), and other debt financing instruments issued by non-financial enterprises. The amendments also stipulate that insurance companies no longer need to obtain pre-approval from CIRC to make direct investments into the share market.

The scope of debt investment into infrastructure projects has also been expanded under the new law. Life insurers and non-life insurers can now invest 6% and 4% of their assets in bonds backed by infrastructure projects respectively.

Despite the economy’s excitement over the investment pipeline of insurance funds, lawyers in China seem unsurprised. “The revised law confirms the direction in which insurance companies are moving,” says Stuart Valentine, a partner in Mallesons’ China practice.

“Life insurance is a long-term business and investments in real estate are very natural. One of the reasons why the Chinese government took so long to implement this is because the real estate market was overheated over the past few years. So the government has been limiting investment in real estate. They were waiting for the sector

to cool, so this implementation can help boost this sector,” he explains.

Anticipating enthusiasm from insurance clients, King & Wood partner Wang Jianzhao talks about applications made by clients even before the amendments have been enforced. “Many of our long-term clients have already approached us regarding their suppressed interests in investment channels,” he says. “Even real estate sector clients have contacted us in the hope that investment from insurance companies can help resolve their financial problems. What clients don’t understand is that the specific regulations have not been released yet – and these special regulations that are tied to insurance companies make such transactions very complex.”

Valentine says that an influx in interest is also inevitable. “Insurance companies who are operating in China are desperate to invest, because what was available to them previously was very limited.” Chinese regulators are confident that the changes will support reform and development of the country’s capital markets, and enhance the ability of insurance companies’ self-asset allocation and investment management.

The changes are also boosting the bottom lines of insurers such as China Life Insurance, the world’s top life insurer by market value, and rivals Ping An Insurance and China Pacific Insurance.

“Insurance companies who are operating in China are desperate to invest because what was available to them previously was very limited” Stuart Valentine, Mallesons

Bank on insurance

In September 2006 the CIRC issued the “Notification for Insurance Entity to Invest in the Equity Stake of the Bank”. The policy allows insurance companies to have an equity stake in non-listed banks, with recent deals made in accordance with the Notification. China’s largest insurance company, China Life Insurance

►► China’s Insurance Law – revised key amendments • • • •

Chinese insurers will now be able to make investments in real estate.

CIRC now has greater power in regulating affiliate transactions between insurance companies.

Insurance companies are required to establish information disclosure systems to reveal affiliate transactions.

Insurance contracts must state the responsibilities of insurers and the insured, the coverage of claims and the timeframe and procedure for filing and settling claims.

• An exception clause provided by insurance companies to dismiss off claims and exclude rights of insured and benefits will no longer be valid.

www.legalbusinessonline.com

43

FEATURE | insurance >>

“The revision more stringently protects the rights of the insured and requires the insurance companies [to] make compensation” Duan Song, Grandall

44

invested into Guangdong Development Bank, and Ping An Insurance also merged with Shenzhen Development Bank earlier this year. Ping An engaged DLA Piper and DeHeng Law Offices to be its international and PRC counsel respectively on the deal.

As part of the transaction, it also acquired a 16.7% stake in the issued shares of SDB from Newbridge Capital, a private equity fund under the former Texas Pacific Group, SDB’s largest shareholder. The insurance group established a financial platform to invest in private equity, property and infrastructure in light of these changes.

The platform includes Ping An Trust, Ping An Asset Management, Ping An Securities and Shenzhen Ping An Innovation Capital Investment Company, which will focus on investing in banks and financial assets.

The latest legal amendments have inserted a new clause whereby banks are allowed to invest in insurance companies. As a result, this saw China Great Wall Asset Management’s (CGWAM) insurance JV with Japan’s largest life insurer, Nippon Life.

Created in Beijing to clear bad loans, the venture, which is aided by Great Wall’s acquisition of 50% of the shares in consumer electronics maker SVA Group, is part of Great Wall’s strategy to shed its non-core assets. This new development has undoubtedly shifted weight and will continue to offer many

opportunities for Chinese lawyers as more clients seek help to comply with new regulations.

“The expansion of insurance funds’ investment channels will definitely result in an influx in investment in securities, real estate, private equity and infrastructure,” says Duan Song, a partner with Grandall. “This provides Chinese lawyers with more opportunities to render legal services for them in terms of legal risks control, drafting legal documents, negotiations and introduction of investment procedures,” he adds.

The practice of insurance

The question that lies ahead for the inevitable influx of interest in insurance law is whether Chinese firms are prepared. When compared to promising sectors such as capital markets and banking law, it is not unknown for insurance law to attract little interest from lawyers.

Legal professionals tend to engage their focus more towards opportunities that more popular markets can offer, and may neglect what the insurance sector has available. However, the revised law might well change that, as an increasing number of investors are seeking potential JV partners. Insured parties are also constantly looking for assistance to make sure they have indemnity from their insurers, and to comply with new CIRC regulations.

ISSUE 6.11

Firm Profile

Kai-Rong

Shanghai Kai-Rong:

Mastering insurance

S

ix-year finalist for ALB’s Insurance Law Firm of the Year title, Kai-Rong Law Firm continues be to a forceful contender within the insurance sector.

Kai-Rong is one of the first private law firms in Shanghai with over a decade of experience in the legal industry. The firm’s core practice includes aviation, insurance & re-insurance and shipping & maritime.

Kai-Rong believes that its success is attributed to its traditional strategies, “We still pledge to the quality of our services, that is our priority, from there we can provide the efficiency and effectiveness to our clients,” says Jin Yu-Lai, managing partner of Kai-Rong.

The firm also executes no-frills in their charges, giving clients a better sense of what their legal expense will be upfront. Kai-Rong calls it “a clean bill”.

Building insurance Kai-Rong’s extensive experience in representing top-tier insurance companies has earned itself a strong reputation within the insurance sector. The firm’s business thrives on client referrals and its list of long-term clients include AIA, Zurich Insurance, Allianz, HSBC Insurance, People’s Insurance Company of China, Min An Insurance, Dah Sing Insurance and Ping An Insurance.

“Our decade-worth of focus and experience practising within the insurance sector has endowed us with valuable skills and foresight. Clauses in the insurance law are constantly subjected to changes according to economic trends and this sometimes causes problems for our clients.

However, Kai-Rong professionals understand the works of the courts very well and are very swift in resolving issues,” said Jin. Their experience allows them to properly advise their clients on actions to take regarding their problems, even if it means a settlement rather than taking it to court when they foresee a likely unfavourable outcome.

The focus in the insurance sector has however not prevented the firm from fortifying a range of other practice areas like international trade litigation and commercial arbitration as the movement towards trade liberalisation in China gives rise to more and more international disputes. Kai-Rong has acted for some high profile clientele in www.legalbusinessonline.com

international trade disputes, including Sri-Tan International and Minmax Resources.

With five partners, two consultants and nine lawyers who are all effectively bilingual, the firm is planning to hire more talents to strengthen and expand practice areas.

International Ventures In its relentless endeavours to lead its competition in offering an internationally diversified legal service, the firm continues to extend their traditional advantages in other fields of practice and geographies.

“The doors of the Chinese legal service sector have opened to welcome MNCs and foreign insurance companies into our economic market. There will definitely be more to learn from international firms and companies in terms of operational procedures and standards,” said Jin. Reaching out to international networks, Shanghai Kai-Rong has allied itself with German firm Urwantschky Dangel Borst & Partner and Studio Legale Zunarelli E Associati in Italy. “We are considering building our service network through cooperation with other domestic and international law firms or even set up our own branch,” said Jin. Despite many existing referrals from clients and legal counterparts, Kai-Rong continues to move forward rapidly. The firm recognises the need to build even stronger relationships with firms and insurance companies so as to seize its lead in the insurance sector. “Our first step is to proactively release information regarding our notable representations to the media so market leaders can seek us out knowing our strengths,” said Jin.

A reputable leader Jin specialises in maritime, aviation, insurance, company, finance and risk investment sectors.

He is also a holder of many prominent legal titles in the industry – legal counsel in Shanghai Pu-Dong District’s Government, arbitrator for both Singapore Maritime Arbitration Centre and China Maritime Arbitration Commission, director of China Maritime Law Association and Maritime Law Committee of China Bar Association.

Jin’s expertise within the insurance sector is most recently expressed by his co-authoring

Jin Yu-Lai

of the 2009 edition of Getting the Deal Through: Insurance.

He is well-reputed for many of his successful representations for top-tier insurance companies. He acted for Ping An and Concord Insurance separately in a marine cargo subrogation case. He also represented Royal & Sun Alliance Insurance Shanghai in a dispute on liability insurance claim for more than US$430,000. His most significant achievement is his representation for one of China’s largest insurance company, PICC in a series of cases arising from cargo loss of a claim amount of US$2m.

►►Kai-Rong’s recent notable insurance deals • Acted for Cargolux and Alliance along with eight co-insurers against Xiamen TAECO for insurance indemnity claims worth US$14m • Acted for Bombardier and USAU against collective insurance indemnity claims • Acted for RSA Shanghai against insurance indemnity claim by Immecc • Acted for RSA Shanghai against of insurance indemnity claim by MC Margarita M • Acted for Ping An and Shanghai Reeferco Container against Cosco for dispute of contract • Acted for China United Property Insurance against Solar Shipping & Trading and Songa Shipholding for dispute of contract • Acted for Concord Insurance and New India Assurance against Guangzhou Salvage Bureau for claims of cargo losses Shanghai Kai-Rong Law Firm Suite 2206-07, Golden Magnolia Plaza No.1 Da Pu Road Shanghai 200023 P. R. China Telephone: (86 21) 53961065 Facsimile: (86 21) 53961204 Website: http://:www.skrlf.com

45

FEATURE | insurance >>

“There will inevitably be more improvisations to the insurance law in the future, these most current amendments have allowed for great imagination and is undoubtedly great news for the legal industry” Wang Jianzhao, King & Wood

46

“The revision more stringently protects the rights of the insured and requires the insurance companies make the compensation more effectively. More and more insurance companies are seeking help from lawyers to review the clauses in their contracts and provide relevant legal opinions as well as act as their agent in the litigation and arbitration cases,” says Grandall’s Duan.

King & Wood, whose long-term clients include top-tier PRC insurance companies like China Pacific Insurance Company (CPIC), China Life and People’s Insurance Company of China (PICC), has now placed significant focus on its insurance practice. The firm says it is confident that the workflow deriving from the industry will continue to increase.

“Given the large amount of available funds for investments, insurance lawyers should prep themselves for an influx of work,” says King & Wood’s Wang. “Despite the fact that specific regulations have not yet been announced, even if the funds allowed for investments in ‘immovable assets’ is tiered at a mere 5% of total capital, this would still generate a huge amount of work. Chinese lawyers specialising in insurance law and practices are insufficient due to the previously under-developed insurance market,” says Grandall’s partner.

However, lawyers admit that it is no easy feat going into insurance practices. Being capable of practising professionally within the many different specifications of insurance law is one criterion that must be met. There are set principles, rules, doctrines and terminologies that are difficult to link with other practices.

“Every industry comprises its own set of challenges, but the stringent regulations of the Insurance Law, that are drafted ultimately to protect consumers, are complex because it is coupled with a need to be flexible.

This makes it very difficult compared to other practices,” says Wang. “The insurance law is being modified according the changing economic climates, clauses that govern the establishment of an insurance business, sales and development of products, operational rules,

restructuring of business operations and even claims for compensation.

These regulations change all the time.”

Mallesons’ Valentine agrees that insurance law revolves around what government regulations specify. “The difference in the legal work tendered to an insurance company – compared to other businesses – is essentially the government and regulatory approvals.

There are limitations in different ventures and these sometimes cause problems,” he says.

Take on the heat

As an adviser on insurance clients’ listings on the sharemarket, such as China Life’s H+A-shares listings and PICC H-shares listing, King & Wood is excited about undertaking new responsibilities. The firm is already clear on its role should it take the first step to acquire assets on clients’ behalf.

“If an insurance company is investing in an immovable asset, the first step for us is to assess the regulations for legal compliance. Following that, we will assess the transaction as an investment, conduct due diligence and consider the pros and cons of it, negotiate the terms and finally draft up a contract,” says Wang.

Maintaining one of the leading international firm insurance practices in China, Mallesons is confident about taking on the challenge. “Most of our work before the revised law was to provide legal advice regarding business restructuring, opening of new branches, transfers, sales, mergers, operation and cross-border regulatory work,” says Valentine.

Clearly, China’s revised laws now opens the door for insurance companies to be more competitive and professional. And for insurance companies already operating in the country, the biggest impact is undoubtedly going to be having more flexibility for investing funds.

The impending flood of investor interest has insurance practitioners perched on the edge of their seats. “There will inevitably be more improvisations to the Insurance Law in the future. The current amendments have allowed for great imagination and will undoubtedly be great news for the legal industry,” says King & Wood’s Wang. ALB ISSUE 6.11

Market Data | M&A >>

www.legalbusinessonline.com

47

Market Data | capital markets >>

Equity Capital Markets TRANSACTIONS List China, Hong Kong Oct 7 - Nov 3 Issuer

Proceeds (USDm)

Issue Date

Currency

Bookrunner(s)

Sector

Evergrande Real Estate Group

729.3

10/29/2009

HKD

Credit Suisse, BOC International,Bank of America Merrill Lynch, Goldman Sachs

Real Estate

Jiangsu Yanghe Brewery

395.4

10/23/2009

CNY

Huatai Securities

Retail

China RE Info Corp

216.0

10/15/2009

USD

Credit Suisse, UBS

Real Estate

Yuzhou Properties Co Ltd

209.0

10/27/2009

HKD

Morgan Stanley

Real Estate

Shenguan Holdings Ltd

184.0

10/7/2009

HKD

Macquarie Equities, China Merchants Bank HongKong

Consumer Staples

Huayi Brothers Media Corp

175.8

10/13/2009

CNY

China Securities

Telecommunications

Shenzhen MYS Environmental Co

167.2

10/16/2009

CNY

Guosen Securities

Materials

Zhejiang Hisun Pharma Co Ltd

142.3

10/27/2009

CNY

Dongxing Securities

Healthcare

Aier Eye Hospital Group Co Ltd

137.4

10/9/2009

CNY

Ping An Ins(Grp)Co of China

Healthcare

ANTA Sports Products Ltd

103.2

10/23/2009

HKD

Morgan Stanley

Consumer Staples

Siasun Robot & Automation Co

90.4

10/13/2009

CNY

China Intl Trust & Investment

Consumer Products and Services

Wuhan Langold Real Estate Co

86.5

10/23/2009

CNY

Pingan Securities

Real Estate

Shanghai Wangsu Sci and Tech

80.9

10/9/2009

CNY

Guosen Securities

Healthcare

Centre Testing International

79.3

10/9/2009

CNY

Ping An Ins(Grp)Co of China

Consumer Products and Services

Wuhan Zhongyuan Huadian Co Ltd

77.1

10/9/2009

CNY

Haitong Securities

Healthcare

Xinjiang West-Construction Co

76.9

10/16/2009

CNY

Orient Securities

Industrials

Beijing Dinghan Technology Co

70.5

10/9/2009

CNY

Industrial Securities

Consumer Products and Services

Comtec Solar Technology

67.7

10/23/2009

HKD

Industrial Comm Bank of China, Macquarie Bank

High Technology

Greens Holdings Ltd

62.7

10/30/2009

HKD

Morgan Stanley

Energy and Power

Chengdu Geeya Tech Co Ltd

61.2

10/13/2009

CNY

United Securities

Media and Entertainment

Zhongpin Inc

61.0

10/9/2009

USD

Piper Jaffray Inc

Consumer Staples

Zhejiang Enjoyor Electronics

58.6

10/13/2009

CNY

Haitong Securities

Consumer Products and Services

Sichuan Jifeng Agricultural

58.2

10/13/2009

CNY

Hong Yuen Securities

Industrials

1105.2

10/12/2009

SGD

DBS Bank, CIMB-GK Securities, JP Morgan Securities, ABN Amro, CLSA ECM, Deutsche Bank, HSBC, UBS

Media and Entertainment

Poly(Hong Kong)Investments Ltd

397.2

10/14/2009

HKD

BOC International, Citi

Real Estate

Huabao Intl Hldg Ltd

150.0

10/7/2009

HKD

JP Morgan

Consumer Staples

Grandtop Intl Hldg Ltd

101.3

10/16/2009

HKD

Kingston Securities Limited

Consumer Staples

Trinity Ltd

96.2

10/27/2009

HKD

Citigroup Global Markets, JP Morgan Securities

Consumer Staples

Sinolink Worldwide Hldgs Ltd

70.0

10/9/2009

HKD

UBS

Real Estate

Tianneng Power Intl Ltd

50.0

10/8/2009

HKD

Bank of America Merrill Lynch

Energy and Power

VODone Ltd

17.0

10/12/2009

HKD

BOC International

Media and Entertainment

China

HONG KONG Genting Singapore PLC

DEBT CAPITAL MARKETS TRANSACTIONS LIST China, Hong Kong Oct 7 - Nov 3 Issuer

Proceeds (USDm)

Issue Date

Currency

Bookrunner(s)

Sector

Ministry of Railways(China)

2929.5

10/21/2009

CNY

China Galaxy Securities, China Merchant Securities, Guosen Securities, Hongyuan Securities, Pingan Securities, Southwestern Securities "

Government and Agencies

AVIC I

1464.6

10/23/2009

CNY

China International Capital, CITIC Securities, China Securities

Industrials

293.0

10/20/2009

CNY

Qilu Securities, Guojin Securities

Financials

China

Nanshan Group Corp Zhuhai Huafa Industrial Co Ltd

263.7

10/16/2009

CNY

Guojin Securities

Real Estate

Lumena Resources Corp

247.7

10/21/2009

USD

BOC International, Credit Suisse, Deutsche Bank Securities Corp

Materials

Shanxi Coking Coal Grp Co Ltd

219.7

10/14/2009

CNY

Guodu Securities

Materials

Shanghai Tunnel Engineering Co

205.1

10/20/2009

CNY

China Securities

Industrials

Haier Group Finance Co Ltd

175.8

10/19/2009

CNY

Bank Communications

Financials

Beijing Vanton RE Co Ltd

146.5

10/14/2009

CNY

China International Capital

Real Estate

Zhejiang Energy Group Co Ltd

146.5

10/20/2009

CNY

Industrial Bank

Energy and Power

Hunan Nonferrous Metals Corp

146.4

10/22/2009

CNY

Bank of China

Materials

hong kong Noble Group Ltd HK Land Treasury Services

48

842.4

10/22/2009

USD

Goldman Sachs, Hongkong & Shanghai Bank, JP Morgan, RBS

Consumer Staples

38.7

10/16/2009

HKD

Standard Chartered Bank

Financials

Sun Hung Kai Prop Cap Mkt Ltd

38.7

10/20/2009

HKD

HSBC

Financials

Hysan (MTN) Ltd

25.8

10/7/2009

HKD

Deutsche Bank

Real Estate

ISSUE 6.11

LONDON • PARIS • HONG KONG • BEIJING • SHANGHAI • SINGAPORE • BRISBANE • MELBOURNE • PERTH • SYDNEY • AUCKLAND • WELLINGTON

伦敦

•

巴黎

•

香港

•

北京

•

上海

•

新加坡

•

布里斯本

•

墨尔本

•

柏斯

•

悉尼

•

奧克兰

•

威灵顿

You can’t just wish for a new job.

In-house General Counsel (8-12 yrs pqe) Shanghai Coming from a top MNC or

international law firm, the incumbent will have prior real estate lease and development experience. This premier luxury brand will give priority to those applicants with high-end fashion retailing experience. Solid China experience is needed and a proven record in successful negotiations. Must be very polished and well presented with superb English and native Mandarin. Ref: 8179/CB

Associate General Legal Counsel (7-10 yrs pqe) Shenzhen Seeking a

lawyer to assume the number two position in a large legal team for a huge and influential US company. Applicants need to have China qualification or common law jurisdiction and proven PRC experience. Complete fluency in English and Mandarin Chinese is mandatory, including the ability to draft in both languages.

This is a true generalist role, handling a wide remit including operations, HR, M&A, corporate compliance and adequate corporate governance for the business. The incumbent will have excellent communication skills and the confidence to work in a global company with a multicultural environment. An excellent package awaits the right person. Ref: 8399/CB

Legal Counsel (6-10 yrs pqe) Beijing A Fortune 500 company seeks a legal

counsel/senior legal counsel to join its Beijing office. Working closely with the General Counsel, this is a senior role with tremendous growth, and excellent performers can look forward to interesting opportunities within the legal department. Must have proven expertise in corporate finance, project finance, handling financial leasing matters and experience dealing with government authorities such as CBRC, PBOC, etc. University graduate with a major in law from one of China’s top universities and a qualification from an overseas law school are necessary. Native Mandarin with excellent written and spoken English are required. Ref: 8405/CB

VP Global Risk & Compliance (6 yrs exp) Hong Kong A leading bank seeks a Risk & Compliance professional to join their team in Hong Kong. The VP role will be responsible for developing, implementing and monitoring compliance programs in the region, including Greater China. At least 6 years banking compliance experience is required. Ref: 8410/CB Compliance Counsel (5+ yrs pqe) Hong Kong Exciting opening at a major investment bank for a HK qualified lawyer with at least 5 years of relevant experience in legal and compliance in the financial or securities services sector to join the compliance team of this prestigious bank. You should be very familiar with listing rules and security dealings in HK (including sales & trading, capital markets and IPOs). Fluent Mandarin is required, and some overseas training/ education is preferred. The role is a newly created one and will join a team of 3 professionals in Hong Kong and reports directly to the Head of Compliance in headquarters. Ref: 8419/CB

VP Legal - US Qualified (5+ yrs pqe) New York For the New York office of a prestigious emerging market investment bank, this role is stand alone and supports their start-up operation in the US. The bank seeks a US qualified lawyer with investment bank and security house working experience gained in-house or at a major US law firm providing legal advice to such institutions. Experience in cash equity brokerage and dealing and interacting with US regulatory bodies is highly preferred along with experience in investment management. Native level Mandarin and a minimum of 5 years relevant experience are required. The role will require an initial period of time working in the Hong Kong office. Report to the GC who is based in Hong Kong and Beijing. Ref: 8418/CB Legal Counsel (4-6 yrs pqe) Hong Kong Provide legal support for the Asia-Pacific region for a US based financial institution. Familiarity with securities finance, derivatives and capital markets is a must. The role requires sophisticated negotiation ability and needs contract drafting experience. You should be able to interact with multiple levels in an organization and in multiple jurisdictions. Native level English is sought, and Mandarin or PRC exposure is an added advantage. Ref: 8413/CB

Private Practice Senior Associate (8+ yrs pqe) Hong Kong A Hong Kong qualified lawyer is being recruited to handle commercial litigation for a well known firm. The work will primarily focus on the regulatory side. Ideally, you are fluent in English with native level Cantonese/Mandarin. Work within a well respected team at this international firm with a strong Asia presence. Ref: 8393/CB Banking & Finance Associate (4+ yrs pqe) Hong Kong Are you looking for a law firm with top clients, good hours and accessible partners? We are working with an outstanding firm with a strong and growing banking practice who is now seeking talented lawyers with experience in capital markets, securities, structured finance, derivatives, energy and debt. The incumbent will have Hong Kong qualification and fluent written and spoken Mandarin. You should be enthusiastic and have client facing experience. Ref: 8394/CB Corporate Associate (2+ yrs pqe) Hong Kong Magic Circle firm desires an

outstanding corporate lawyer. Candidates must have solid general commercial/ corporate experience preferably with both HK & PRC related matters. Extremely bright and analytical lawyers with top academic backgrounds who have trained with international or city firms are encouraged to apply. Fluent/business level Mandarin language skills, both written and spoken are required; Cantonese will be an asset. Ref: 8372/CB

HONG KONG Tel: (852) 2520 1168 Fax: (852) 2865 0925 Email: hughes@hughes-castell.com.hk SINGAPORE Tel: (65) 6220 2722 Fax: (65) 6220 7112 Email: hughes@hughes-castell.com.sg BEIJING Tel: (86) 10 6581 1781 Fax: (86) 10 6581 1773 Email: beijing@hughes-castell.com.hk SHANGHAI Tel: (86) 132 2996 6550 Email: shanghai@hughes-castell.com.hk

www.hughescastell.com

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