Asian Legal Business (Northern Asia) Jun 2010

ISSUE 10.6

ALB Special Report: Malaysia 2010 Malaysian firms go global

Legal professional privilege What Akzo Nobel means for Asia’s in-house lawyers

Legal process outsourcing Why the industry should look Down Under

ALB’s leading IP law firms: Asia boutiques and specialists shake up the rankings

Lateral moves

Deals Roundup

Region-wide updates

debt & Equity market intelligence

www.legalbusinessonline.com

EDITORial >>

Creating an in-house underclass

I

n March this year, the Advocate General of the Court of Justice of the European Union, Juliane Kokott, handed down a judicial opinion in which she contends that legal professional privilege does not extend to communications between a company’s executive and its in-house lawyers. Needless to say, Kokott’s opinion has drawn the ire of corporate counsel the world over, with ‘regressive’ and ‘antiquated’ being just a few of the adjectives that have been used to describe it.

Kokott’s legal opinion may be all these things— it surely is regressive and may mean European corporates actually turn to their in-house legal departments sparingly — but one can’t help feeling there may be a grain of truth in her reasoning. In-house lawyers clearly do not enjoy the same degree of independence from their employers as an external lawyer. This is perhaps nowhere more apparent than in Asia, where the ideas around in-house legal departments and corporate counsel are still in their early stages of development.

The question of independence from one’s employer has always been a thorny issue for in-house lawyers in Asia. Calls for these lawyers to better demonstrate the value they add to their companies has seen them commercialise – moving closer to their businesses if for no other reason than to demonstrate that in-house teams are far more than just “business prevention units.” It is this hybrid role – one that straddles both law and business – that is fertile ground for Kokott-like arguments.

Yet the in-house profession in Asia has demonstrated that it is nothing if not ethical and professional; capable of handling these often conflicting roles while preserving their independence. Opinions which cast in-house lawyers as more predisposed to abusing privileges or the rights conferred on them as legal practitioners than their external counterparts are imprudent. This is especially so given that the instances of in-house lawyers being struck off or disbarred for such indiscretions are greatly outnumbered by the number of private practice lawyers in hot water for misfeasance.

If Kokott’s opinion is adopted by the ECJ — which many believe is the most likely outcome— it will cast in-house lawyers as an underclass in the European legal profession and thus validate erroneous stereotypes surrounding the in-house profession as a whole. While the decision may not be binding on Asian courts, if this question arises there is certainly a duty to ensure that Asia’s profession remains class-less.

IN THE FIRST PERSON “Many of the largest corporate departments in the world are embracing innovative solutions such as legal outsourcing to help increase internal efficiencies” David Perla, Pangea3 (p8)

“Prior to the recession,

construction companies were working through a period of prosperity and when the crisis hit, it was met with a controlled and calm response” Helen Yeo, Rodyk & Davidson (p35)

“We remain committed to

our relationships with local Hong Kong firms. In fact, we expect there will be more opportunities to work with local firms in the region as the result of our having a presence on the ground” David Fagan, Clayton Utz (p41)

In-house lawyers clearly do not enjoy the same degree of independence from their employers as an external lawyer

www.legalbusinessonline.com

1

News | deals>> >> CONTENTS

contents

34

24 COVER STORY ALB’s leading IP firms: Asia Now in its third year, ALB asks in-house lawyers, IP counsel and industry experts to single out Asia’s leading IP practices

NEWS ANALYSIS

FEATURES

8

34 Building & construction: Activity across Asia’s building and constructing sectors may have slowed considerably during 2009, but the innate resilience of the sector’s major players, coupled with government stimulus, has seen projects and deals rebound strongly in 1H 2010 40 ALB-ADERANT Managing Partner Series:

David Fagan, Clayton Utz Clayton Utz chief executive partner David Fagan has never been short of a well-turned phrase or two on what makes the industry tick. He speaks with ALB on what the future holds for the firm – and why Asia is key

9

Aussies provide alternative to legal process outsourcing Indian LPOs may have flagged their intention to enter the flourishing Australian legal services market, but as ALB finds, they would be illadvised to replicate their Indian model ‘Down Under’ No privilege: The Akzo Nobel opinion In an influential recent legal opinion, Advocate General Juliane Kokott of the Court of Justice of the European Union states that European in-house lawyers do not enjoy the same rights to legal professional privilege as their private practice counterparts. ALB looks at the decision and speculates as to what this may mean for in-house lawyers in Asia

Regulars 4

DEALS

12 NEWS • Foreign law firms allowed to open second office in Japan • Bermuda seals DTA with Bahrain, takes lead in offshore Islamic finance market • Former Thai PM hires law firm to help ‘restore democracy’ • Spanish firm Garrigues courts India’s Dua Assocs

Country editors The Regional Updates section of ALB is sponsored by the following firms:

Practice area and industry editors

China

Intellectual property

International tax

Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 500 lawyers worldwide. Paul Weiss is headquartered in New York and has offices in Hong Kong, Beijing, London, Tokyo and Washington, D.C.

ATMD Bird & Bird is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD Bird & Bird has been voted Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.

AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and International, tax advisory and trustee services your tax plan is comprehensively implemented. Our advice provides you with independent innovative and rigorous solutions which deliver results and long-term accountability. We are qualified UK, US, Hong Kong and PRC tax advisors and complete tax filings for UK, US and Hong Kong tax returns.

Philippines Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines.

Principally based in Makati City, the country’s financial and business centre, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organisations and governments. SyCip combines the traditions of professional integrity and excellence with a time-tested ability to break new ground.

Singapore Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work.

With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.

2

44 Malaysia 2010: outward bound With competition in Malaysia’s burgeoning legal services market reaching unprecedented levels, law firms are looking offshore for growth

52 In-house perspective: GCL-Poly Through a series of landmark transactions in recent years, GCL-Poly has become one of the largest players in the world’s solar power industry. ALB finds out how the in-house legal team has transformed itself into a vital, valueadding part of the business

The Industry Updates section is sponsored by the following firms:

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Junior journalists

40

Jessica Seah Rashida Yosufzai Alice Yan

44

Production editors

•

Volcanic ash circumvents anti-trust as EU considers state aid for airlines Changes to HKSE listing rules may see flurry of resource IPOs

•

12 UK Report 14 US Report

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22 REGIONAL UPDATES • China Paul Weiss • •

54 M&A deal update

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profiles 36 Rodyk & Davidson

China

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3

NEWS | deals >>

| Hong Kong/Singapore |

deals in brief

►► Prudential rights issue Value: US$21b

Firm: Herbert Smith Lead lawyer: Will Pearce and Alex Bafi Client: Underwriters Firm: Slaughter and May Client: Prudential (London and Hong Kong) Firm: Cleary Gottlieb Client: Prudential (US) Firm: Allen & Gledhill Client: Prudential (Singapore) Firm: Debevoise Client: AIG • Largest ever rights issue by a UK-listed company will be made on the basis of 11 new shares for every two existing shares at 104 pence per share

►► China Merchant Bank’s rights offering Value: US$3200m Firm: Commerce & Finance Client: Underwriters Firm: Davis Polk & Wardwell Lead lawyer: James C Lin Client: Issuer Firm: Freshfields Bruckahus Deringer Client: Underwriters Firm: Herbert Smith Lead lawyer: Tom Chau Client: Issuer Firm: Jun He Law Offices Client: Issuer

4

HEADLINE DEAL

• First global rights offering by a Chinese bank and the first rights offering by a Chinese company made available to US investors • UBS AG and CICC were the global coordinators of the global rights James Lin WongPartnership offering, BNP Paribas, JPMorgan, Merrill Lynch and UBS were the joint lead underwriters, Citi was the financial adviser of the H share rights offering • Davis Polk assisted the client in managing the entire US rights offering process, including direct involvement in the communications with its qualifying US shareholders and handling various enquires

• New Century Shipbuilding recently launched Raymond Tong WongPartnership its IPO on the Singapore Stock Exchange (SGX), aiming to raise approximately US$731m • Will be the biggest IPO by a Chinese company to be listed on the SGX and Singapore’s second-biggest listing since CapitaMalls Asia • Deal is being advised by Jingtian & Gongcheng, WongPartnership and O’Melveny & Myers; issuer has chosen to list in Singapore because it is a shipping hub used by many of its customers and as its closest competitor, Yangzijiang Shipbuilding Holdings, is listed there • Complexities arose from the issuer’s industry, as shipbuilding is classified as a restricted industry in the PRC where foreign ownership is restricted to a maximum of 49.0%.

Alex Bafi Herbert Smith

• Rights issue is subject to shareholder approval at a general meeting on 7 June 2010 and rights are expected to start trading on 8 June

| CHINA |

Firm: Allen & Overy Client: Underwriters

• Herbert Smith advised lead banks Credit Suisse, HSBC and JP Morgan Cazenove on all aspects of the transaction • Herbert Smith also advised the lead banks on the debt financing aspects and new regulatory capital facilities

| Singapore | ►► New Century Shipbuilding Singapore IPO Value: US$731m Firm: Jingtian & Gongcheng Client: Issuer Firm: WongPartnership Lead lawyers: Raymond Tong, Tok Boon Sheng Client: Issuer Firm: O’Melveny & Myers Client: Issuer Firm: Commerce & Finance Client: Underwriters

“To enable the company to control the financial and operating policies and enjoy full economic benefits of the entities, a series of contractual arrangements were entered into. However, the position of PRC authorities in respect of such contractual arrangements is unclear” Raymond Tong WongPartnership

| Korea | ►► Samsung Life Insurance IPO Value: US$4.4bn

Firm: Kimg & Chang Client: Samsung Life Firm: Cleary Gottlieb Client: Samsung Life Asian Legal Business ISSUE 10.6

NEWS | deals >>

►► your month at a glance

Firm: Shin & Kim Client: Bookrunners

Firm

Jurisdiction

Deal name

Firm: Simpson Thacher Client: Bookrunners

Ali Budiardjo, Nugroho, Reksodiputro

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

Allen & Gledhill

Hong Kong/Singapore

Prudential rights issue

• Samsung Life Insurance is largest life insurance company in Korea and provides coverage to 12.6 million individuals, roughly 26% of the Korean population

Allen & Overy

Hong Kong

SCA sale

200 M&A

Appleby

India

Quadrangle Capital Partners–Tower Vision investment

300 Equity market

Arendt & Medernach

Hong Kong

L'Occitane Hong Kong IPO

708 Equity market

Barun Law

Korea

GlaxoSmithKline equity investment

• With its debut, Samsung Life becomes the country’s fourthbiggest stock with a market capitalisation in excess of KRW23trn, this is behind only Samsung Electronics, POSCO and Hyundai Motor

Cleary Gottlieb

Hong Kong/Singapore

Prudential rights issue

Middle East

Qatar Telecom financing

Clifford Chance

Hong Kong

SCA sale

Hong Kong

COSCO Pacific Limited top up placement

China

China Merchant Bank’s rights offering

3200 Debt market

China

China Merchant Bank’s rights offering

3200 Debt market

• Samsung Life is the third life insurer to go public in Korea and the second to do so this year. In April Korea Life Insurance, the country’s second largest life insurer, raised US$1.6bn in what was at the time the largest offering in Korea since 2006

Davis Polk & Wardwell

India

Quadrangle Capital Partners–Tower Vision investment

300 Equity market

Indonesia

PT Cikarang Listrindo High-Yield note issuance

300 Debt market

Debevoise

Hong Kong/Singapore

Prudential rights issue

Desi & Dewanji

India

Quadrangle Capital Partners–Tower Vision investment

300 Equity market

Hong Kong/Korea

LG Display Co financing

600 Debt market

Hong Kong/US

Nasdaq equity offering of City Telecom

| Indonesia | ►► PT Cikarang Li-strindo High-Yield note issuance Value: $US300m

DLA Piper

Vietnam

Mong Duong II Power Project

Fangda Partners

Singapore

China Minzhong Food Corporation Ltd IPO

Freshfields Bruckahus Deringer

China

China Merchant Bank’s rights offering

Hong Kong

L'Occitane Hong Kong IPO

China

China Merchant Bank’s rights offering

Herbert Smith

Firm: Davis Polk & Wardwell Lead lawyer: William Barron Client: Underwriters Firm: Hiswara Bunjamin & Tandjung Client: Underwriters Firm: Makarim & Taira S. Client: Issuer

Commerce & Finance

Firm: Shearman & Sterling Client: Issuer

| Hong Kong | ►► PCCW financing Value: $US3.2b

Firm: White & Case Lead lawyer: John Hartley Client: PCCW Ltd • White & Case advised PCCW Lrd in its self-arranged senior threetranche term loan and revolving credit facility www.legalbusinessonline.com

850 Project finance 21,000 Debt market

125 Equity market 21,000 Debt market 2,000 Debt market 200 M&A 601 Equity market

21,000 Debt market

52 Equity market Project finance 169 Equity market 3200 Debt market 708 Equity market 3200 Debt market

Hong Kong/Singapore

Prudential rights issue

Hiswara Bunjamin & Tandjung

Indonesia

PT Cikarang Listrindo High-Yield note issuance

Jones Day

Hong Kong/US

Nasdaq equity offering of City Telecom

Jun He Law Offices

China

China Merchant Bank’s rights offering

Korea, Panama, Engla

Mitsubishi Corporation

Korea

GlaxoSmithKline equity investment

125 Equity market

Korea

KDB Consus Value PEF–Kumho Life Insurance acquisition

435 M&A

Korea

KDB Consus Value PEF–Kumho Life Insurance acquisition

435 M&A

Korea

Unitas Capital acquisition

236 M&A

Hong Kong/Korea

LG Display Co financing

600 Debt market

Hong Kong/Korea

LG Display Co financing

600 Debt market

Hong Kong

L'Occitane Hong Kong IPO

708 Equity market

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

850 Project finance

Indonesia

PT Cikarang Lstrindo High-Yield note issuance

300 Debt market

Milbank, Tweed, Hadley & McCloy

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

850 Project finance

Paul Hastings

Kim & Chang

William Barron Davis Polk & Wardwell

Value Deal type (US$m)

Lee & Ko Linklaters

Makarim & Taira S.

21,000 Debt market 300 Debt market 52 Equity market 3200 Debt market 20 Ship finance

Korea

GlaxoSmithKline equity investment

125 Equity market

Paul, Hastings, Janofsky & Walker LLP

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

850 Project finance

Rajah & Tann

Singapore

China Minzhong Food Corporation Ltd IPO

169 Equity market

Schinders Law

Hong Kong/US

Nasdaq equity offering of City Telecom

Shearman & Sterling

Indonesia

PT Cikarang Listrindo High-Yield note issuance

300 Debt market

Hong Kong/Korea

LG Display Co financing

600 Debt market

Korea

KDB Consus Value PEF–Kumho Life Insurance acquisition

435 M&A

Singapore

Yanlord Land Group Ltd notes issue

300 Debt market

Shin & Kim Shook Lin & Bok LLP

52 Equity market

5

NEWS | deals >>

CORRECTIONS

►► your month at a glance (CONT) Firm

Jurisdiction

Deal name

Slaughter and May

Hong Kong/Singapore

Prudential rights issue

Stamford Law

Singapore

China Minzhong Food Corporation Ltd IPO

Watson, Farley & Williams

India

Quippo Prakash joint venture financing

Hong Kong

PCCW financing

Hong Kong

Equinix financing

Hong Kong

Aegis Group–Charm Communications investment

Wong Partnership

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

850 Project finance

Yuantai Law Offices

Singapore

China Minzhong Food Corporation Ltd IPO

169 Equity market

Yulchon

Indonesia

Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project

850 Project finance

Zhong Lun

Hong Kong

L'Occitane Hong Kong IPO

708 Equity market

White & Case Winston & Strawn

Value Deal type (US$m) 21,000 Debt market 169 Equity market 97 Debt market 3,200 Debt market 200 Debt market 50 M&A

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

Please contact

| Hong Kong/Korea | ►► Display Co financing Value: $US600m

Firm: DLA Piper Lead lawyer: JC Lee Client: LG Display Co

• Financing was fully committed by 12 international financial institutions including ANZ Bank, Bank of America and BNP Paribas HOng Kong branch

►► Japan Bank for International Cooperation and Bank of Korea on Cirebon Power Project JC Lee DLA Piper

Firm: Linklaters Client: mandated lead arrangers • LGD is a world leader in the production of thin film transistorliquid crystal displays • Outlook is positive for the LCD industry which is experiencing a bounceback spurred by demand from China and the consumer TV sector

“Asian tech companies are looking upbeat.

Demand for electronics is forecasted to be strongthis year globally, but particularly in China” JC Lee, Dla Piper 6

61 2 8437 4700

| Indonesia |

Firm: Shin & Kim Client: LGD Firm: Lee & Ko Client: mandated lead arrangers

alb@keymedia.com.au

• Milbank, Tweed, Hadley & McCloy advised the lender group, which includes export credit agencies Japan Bank for International Cooperation (JBIC) and The ExportImport Bank of Korea (KEXIM), and commercial lenders Sumitomo Mitsui Banking Corporation, Mizuho Corporate Bank, Ltd, The Bank of Tokyo-Mitsubishi UFJ, Ltd and ING Bank NV

In the ‘Asia Legal Report 2010’, a special supplement to the April edition (10.4) of ALB Magazine, the following errors appeared: • On p 15 in the table captioned ‘Largest Taiwan Law Firms’ Tsar & Tsai is listed as having 35 lawyers including 14 partners.

This is incorrect. Tsar & Tsai has 44 lawyers and 15 partners and should have been listed at position 5 in this table • On p17 in the table captioned ‘Largest Thailand Domestic Law Firms’, Vickery & Worachai was listed as having 8 lawyers.

The firm’s managing partner was mentioned as Mr. Harold Vickery. This information is incorrect. The firm has 18 lawyers and its managing partner is Mr. Worachai Bhicharnchitr • On p18 ATMD Bird & Bird is incorrectly listed in the table captioned ‘Largest Singapore International Firms’. ATMD Bird & Bird is a Singapore law firm, not an international law firm and should have been listed in table captioned “Largest Singapore Domestic Law Firms’ • On p2 of the February edition (10.2) and on p35 of the April edition (10.4) of ALB Magazine, Peter Siembab is referred to as the general counsel of Nomura.

Both these references are incorrect. Peter Siembab’s correct title is head of IBD Transaction Legal Asia (Exc Japan) at Nomura.

ALB regrets these errors

Value: $US850m Firm: Milbank, Tweed, Hadley & McCloy Client: lenders Firm: Ali Budiardjo, Nugroho, Reksodiputro Client: lenders Firm: Yulchon Client: lenders Firm: Wong Partnership Client: lenders Firm: Paul, Hastings, Janofsky Client: borrowers Firm: Makarim & Taira S Client: borrowers • The Cirebon Power Project, involving the design and construction of a 660 MW coal-fired power plant, is first independent greenfield power project to be publicly tendered in Indonesia since 1997 Asian Legal Business ISSUE 10.6

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NEWS | analysis >>

Analysis >>

“Many of the largest corporate departments in the world are embracing innovative solutions such as legal outsourcing to help increase internal efficiencies” david perla, pangea3

Australia:

Next stop on the LPO train?

Indian legal process outsourcers (LPO) may have flagged their intention to enter the flourishing Australian legal services market, but they would be ill-advised to replicate their Indian model in Australia. ALB investigates.

L

ate last month Pangea3, one of India’s largest providers of legal process outsourcing services, became the first India-based LPO to enter the bustling Australian legal services market after announcing a tie-up with Australian law firm Advent Lawyers. The two companies will collaborate on the whole spectrum of ‘junior-end’ legal work, from contract drafting and revision to compliance and risk management work, as well as offering M&A due diligence, litigation and IP support services.

While the move itself is unique, this is also tipped to be a litmus test for other India-based LPOs seeking to grow away from their traditional markets in the subcontinent – the Philippines, the US and UK – and into Australia. David Perla co-CEO of Mumbai-based Pangea3, said

8

that clients’ willingness to explore cost-effective augmentations to the traditional in-house lawyer/ external counsel relationship in light of the financial crisis relationship makes Australia an obvious choice.

“For the past five years we have seen a transformation in the US and European legal industry,” said Perla. “Many of the largest corporate legal departments in the world are embracing innovative solutions such as legal outsourcing to help increase internal efficiencies … The Australian legal market is experiencing similar pressures to the US and European markets [and] corporations are demanding better value and cost containment.” Pangea3 said it is also assisting in-house legal departments at Australian companies integrate their legal technologies and offshore ‘legal

talent solutions’ in their own processes.

But despite Perla’s enthusiasm, other LPOs with much more on-the-ground experience in Australia have stated that cracking the domestic market is easier said than done. CPA Global is one such provider. The company, which has been in Australia and based in Sydney since 2002, had been handling mostly IP filings until it recently broadened its offering to incorporate transactional, contract and litigation support. Asia-Pacific senior manager Eve Johnson said that while LPO can deliver cost savings “of 80% when compared to hourly charge-out rates of large law firms,” the Eve Johnson broader domestic market, CPA Global including in-house legal departments, remain cautious on the idea of outsourcing their legal work.

She goes as far to say that “they are very head-in-the-sand about this sort of stuff in Australia”. For LPO to really take off here, Johnson said that corporates will need to force the hand of the larger law firms to be more flexible in their billing, stating that this attitudinal shift is the reason why the concept of LPO has taken off so rapidly in the UK. Yet even if corporate Australia does ‘force the hand’ of larger law firms in the country, there is no guarantee that they would look to LPOs as the solution.

The future

As the results of our recent ALB In-house survey show, the majority of respondent general counsel and inhouse lawyers in Australia and New Zealand expressed reservations about Asian Legal Business ISSUE 10.6

NEWS | analysis >>

Analysis >> either using LPO themselves or having their external legal advisors use them.

The risks to privacy, quality and confidentiality that so often accompany LPO-produced work were gambles that few are prepared to take.

While the success of any LPO venture ‘Down Under’ will turn on the extent to which compaies are able to allay fears vis-a-vis privacy, quality and confidentiality, finding a suitable model is perhaps just as important. Perhaps entering the country via an alliance (like in the case of Pangea3 and Advent Lawyers) is the answer here.

Under this arrangement Pangea3 is able to leverage its ability to offer access to a seemingly unlimited pool of workers in the subcontinent while leveraging Advent’s local contacts and knowledge of local conditions. LPOs would do well to look at the strategies already being employed by firms such as Advent and Perth-based Balance Legal.

Both of these firms have pioneered cost-effective alternatives to the traditional delivery of legal services through the use of secondments: the placement of lawyers of varying levels of seniority with clients for fixed periods of time to help them deal with increases in workload. Since opening for business, both Advent and Balance have built up impressive client lists that include some of Australia’s largest companies and a reputation in the local legal services market for efficiency, accuracy and excellence. The latter in particular is something that many LPOs crave – but few have obtained.

Perhaps the model espoused by Advent and Balance (soon to be quite a few more, according to a number of sources in Australia) is not ‘outsourcing’ in the sense that we have become accustomed to, but it demonstrates that the traditional LPO model is not necessarily the only answer to the various pressures that are being experienced by in-house legal departments and law firms. LPOs looking to penetrate into new markets in Asia-Pacific, whether they be in Australia, New Zealand, Mainland China or elsewhere, will need to think similarly broadly and creatively about how they package their services.

After all, discounting will only get you so far. ALB www.legalbusinessonline.com

No privilege: The Akzo Nobel opinion

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arlier this year Advocate General Juliane Kokott of the Court of Justice of the European Union issued her opinion in the case Akzo Nobel Chemicals Ltd v. EU, suggesting that legal professional privilege does not apply to communications between a company’s executive and its in-house lawyers.

The Advocate General contends that internal communications with in-house lawyers, even if they are enrolled members of a Bar or Law Society, do not enjoy the fundamental protection afforded in the European Union to communications between an independent lawyer and his client.

The controversial opinion holds 9

NEWS | analysis >>

►► Akzo Nobel: background

• Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd and European Commission developed out of an inquiry by the EC into suspected price-fixing by Akzo for additives used to make plastic products • In February 2003 the EC, with the assistance of the UK’s Office of Fair Trading, conducted a dawn raid at Akzo and Akcros’ premises in the UK • During the raid the EC seized a number of documents for which the applicants had claimed legal professional privilege - notably two printouts of emails exchanged between the general manager of Akcros and a member of Akzo’s in-house legal department, who was admitted as a lawyer to the Netherlands Bar • Akzo and Akcros challenged the Commission’s decision to seize and retain these documents before the general court, which ultimately dismissed the appeals on the grounds that only communications between companies and their external lawyers are privileged. The general court concluded that the Commission is therefore entitled to inspect communications with in-house counsel • By their appeal, Akzo and Akcros seek to have the judgment of the general court set aside

that in-house lawyers are not capable of independent judgment under EU professional standards. “A salaried in-house lawyer, notwithstanding any membership of a Bar of Law Society, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client,” the AG wrote in her opinion.

“Consequently, equal treatment of both professional groups in regard to legal professional privilege is not required as a matter of law. There is a structural risk that an enrolled in-house lawyer will encounter a conflict of interests between his professional obligations and the aims and wishes of his company, on which he is more economically Juliane Kokott dependent and with Court of Justice, which, as a rule, he European Union identifies more strongly than an external lawyer.”

It goes without saying that the opinion – and the subtext underlying it – has not been received well by 10

corporate counsel, not only in Europe but across the world - even though the opinion was expected. The Association of Corporate Counsel (ACC) has called the opinion “insulting”, saying that such decisions “reflect a fundamental misunderstanding of both the role and responsibilities of in-house counsel.”

The GC100, the group of general counsel at England’s 100 largest companies, was similarly unimpressed. John Davidson, GC100 chair and general counsel at SABMiller, said that the opinion will both hamper the ability of corporate counsel to do their jobs and possibly even diminish the role they play in corporate Europe.

“The seeking and giving of legal advice will be inhibited by concerns that written communications with in-house counsel will not be protected from disclosure,” he said. “Decisions need to be based on candid advice and unvarnished analysis of the facts on which such advice is sought.”

And while the opinion (which is still to be adopted by the Court, but it is worth noting that such opinions are extremely influential and almost always followed) is not binding on courts in Asia, in-house lawyers

lawyers in Asia, all of the lawyers contacted by ALB expressed concerns about the impact the decision will have on their company’s ability to receive effective legal advice from their in-house teams.

“The decision is very disappointing and not progressive,” said one in-house lawyer in Hong Kong who did not want to be named. “On a practical matter it may not apply so much John Davidson out here in Asia, but SABMiller there is no way that inhouse lawyers can effectively do their jobs without the protection of legal privilege. If lawyers in Europe can’t rely on this, then their companies are going to be placed in a difficult position when it comes to getting good legal advice.”

Just as worrying is what this decision means for Asia-based corporate counsels’ ability to communicate with their counterparts who are employed by the same company in Europe. Lawyers predicted there would be initial confusion over just what was covered by legal professional privilege. “When the

“The seeking and giving of legal advice will be inhibited by concerns that written communications with in-house counsel will not be protected by disclosure. Decisions need to be based on candid advice and unvarnished analysis of the facts on which such advice is sought” john davidson, sabmiller

here are viewing the decision just as skeptically. They say it will entrench the position of in-house lawyers as second-class citizens in the profession and further impair the ability of companies to receive proper legal advice, as well as impose restrictions on how corporate counsels in Asia deal with their EU and UK counterparts.

Akzo Nobel and Asia: implications

While the Akzo opinion may have a minimal practical impact on in-house

opinion was handed down, the first question we asked each other was ‘can we continue to give advice to our lawyers in Europe and the UK and be sure that it will be protected, and how will this affect the advice we get from the team in Europe?’” The same lawyer predicted that some in-house teams working in companies with operations both in Europe and Asia would need to move “more cautiously” and perhaps even more apprehensively, as a result of this opinion.

Asian Legal Business ISSUE 10.6

NEWS | analysis >>

But where the Akzo decision may have a tangible impact for corporate counsel in Asia is by sharpening attention on the protections they have closer to home. While the situation in the region may be better than in Europe, it is still unclear in many jurisdictions. For instance, the Evidence Acts that are in force in both Singapore and Malaysia could be looked at as theoretically conferring privilege on in-house lawyers - but this has never been tested and lawyers are doubtful that any court would, in practice, extend in-house lawyers such protections.

The situation is similar in India (where up until recently a lawyer was said to forfeit his or her license to practice upon going in-house) but decidedly more positive in Indonesia and Korea. In the latter country, lawyer-client communications – both by in-house and external lawyers – are considered a part of a lawyer’s professional duty of secrecy. In-house lawyers in Hong Kong enjoy the same protection of LPP as their private practice counterparts, but in Japan there is still confusion as to whether private practice lawyers, let alone their in-house counterparts, can claim privilege. This is not to mention other jurisdictions such as China, Taiwan and Vietnam where in-house lawyers comment that the position on LPP is “extremely ambiguous.”

Ambiguity around the extent of privilege means that in-house lawyers will have to monitor their internal communications even more closely than they have done in the past.

Many are already vigilant in this regard: most of the larger in-house teams avoid written communications

“When the opinion was handed down, the first question we asked each other was ‘can we continue to give advice to our lawyers in Europe and the UK and be sure that it will be protected, and how will this affect the advice we get from the team in Europe?’” in-house lawyer, hong kong

on actual or potential competition law infringements. And the approach of avoiding written, competitionsensitive internal communications is heavily ingrained into major corporations, with procedures existing from the CEO down that potentially damaging competition concerns should first be raised verbally. The policy for dealing with any written communications is then managed carefully, in conjunction with in-house counsel.

Commercialisation of corporate counsel

Perhaps a broader question that needs to be asked is what effect the increasing ‘commercialisation’ of corporate counsel is having on their ability to claim privilege. Is the Advocate General’s opinion correct in the assertion that as in-house lawyers becomes more integrated in the commercial hierarchies of employers, they become less able to discharge their duties as officers of the law in an independent fashion?

“To suppose that in-house lawyers are in a position to abuse privilege because of their corporate office, or that they are more predisposed to doing this than external counsel is a

very questionable assumption,” said one Japan-based in-house lawyer. It may be a questionable assumption, but it is one that many more are making, given the ever-increasing prerogatives of in-house lawyers across the region.

And this is where the real threats to LPP become most apparent. In most jurisdictions, privileges attach to a communication only if the communication was intended to be confidential and was made in the course of, and for the purpose of, the client obtaining or receiving legal services from the legal advisor.

For external counsel, these criteria are relatively easy to meet, yet it is more problematic for in-house counsel, whose presence within an organisation and constant communication with the client (the employer) makes it more difficult to determine which communications are properly treated as privileged.

The fact that many in-house counsel often simultaneously engage in both legal and commercial work, or provide advice to their clients beyond legal advice – for example, advice on negotiations, means they need to be vigilant in considering whether their communications meet the tests required for privilege to attach. ALB

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www.legalbusinessonline.com

SHANGHAI

HONG KONG

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PERTH

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NEWS >>

Japan >>

Foreign law firms

uk report

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Kennedys backtracks on bonus ban Kennedys told lawyers last year that they would no longer receive a bonus package, but the firm recently changed its mind and will now offer bonuses at the end of the financial year.

However, only those lawyers who have been with the firm for more than a year and have billed more than 110 % of their billing target will be considered for the bonus award.

offices in February last year, yet recruited in force within the same period – with its biggest hire of 20 staff in finance.

Similarly at A&O, around 400 staff were slashed from the firm by the end of April 2009.

It went on to welcome approximately 46 new recruits after raiding the offices of Clayton Utz earlier this year to set up its Australia practice, and also recruited eight partners in the UK.

Latham & Watkins and Allen & Overy top the tables for lateral hires Latham & Watkins and Allen & Overy (A&O) have made the most lateral hires during the past three years, according to a recent study. The Transatlantic Elite 2010 survey, which published a range of information on 16 top transatlantic firms, revealed that the two law firms above have been most active in the recruitment market.

They had made a total of 48 and 46 lateral hires respectively, from January 2008 to the present.

This is surprising, given that both firms are also likely to have made the most redundancies over the past two years. Latham announced plans to make 190 associates and 250 paralegal and support staff redundant across its global

Camerons seal deal to outsource all business support functions CMS Cameron McKenna will soon outsource its entire business support function, following the tie-up of a £600m deal with Integreon. The firm will be the first to have IT, HR, finance, business development, communications, knowledge management, facilities management and administration services outsourced.

Although Camerons will help Integreon develop its new service, the firm will not be putting any equity into the project. The two parties will undertake a three-month due diligence process, and Camerons will sublet a floor of its City HQ to Integreon, and transfer as many as 200 support staff into the newly created service centre.

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ROUNDUP • Two partners from Thomas Cooper’s Paris office recently left the firm to launch a five-lawyer shipping boutique which will advise on French and English law for shipping, international trade and insurance matters, as well as assisting clients in Francophone Africa • Clifford Chance has promoted 22 lawyers to partner from 14 jurisdictions –five more were made up than last year. Three of the new partners will be based in New York • Gary Senior has been re-elected for a third term as London managing partner at Baker & McKenzie.

Senior first took on the managing partner role in 2003 and is nearing the end of his second threeyear term. His third term will begin in September

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apan's Ministry of Justice has announced that it plans to ease restrictions on foreign law firms operating in the country by allowing them to establish corporate bodies and open multiple offices. It is believed that the proposed amendments will be submitted to the Diet in the fourth quarter of this year, and could come into effect from January 2012.

The news is being closely followed by a number of foreign law firms who are believed to ne looking into places like Osaka as possible locations for second offices. “Osaka is home to quite a few major Japanese companies like Toyota, Osaka Gas and Panasonic, but it is underserviced by foreign law firms,” said Mark Weeks, the managing middle east >>

Bermuda seals DTA finance market

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ermuda has taken a big step towards positioning itself as the offshore jurisdiction of choice for Islamic finance after entering into an avoidance of double taxation agreement (DTA) with Bahrain.

The DTA represents a reciprocal arrangement between Bahrain and Bermuda not to tax the repatriated income that an individual or corporate resident of one country has earned in the other country, and which has already been taxed.

Paula Cox, Bermuda's Deputy Premier, said that the DTA puts Bermuda in an ideal position to capitalise on Islamic finance's growing interest in using offshore locations to structure investments. “We are seeing an increase in local service providers expanding their offerings to Middle East and North African markets utilising the Kingdom of Bahrain as a gateway jurisdiction,” she said, “in addition to offering Middle Eastern clients convenient access to Bermuda.”

“Many local service providers have extensive experience of Islamic structured finance, including both conventional and Shari’ah investment Asian Legal Business ISSUE 10.6

NEWS >>

to be allowed to open second office partner of Orrick, Herrington & Sutcliffe in Tokyo.

“There are a lot of manufacturing clients in that [Western] region and it would therefore be an obvious place for foreign firms to consider Mark Weeks opening a second office, Orrick if and when the market opens up…but you really need to find the right people to make the endeavor worthwhile."

But a partner at a local Japanese law firm told ALB that finding the right people, once you get out of Tokyo, becomes a difficult proposition. “If you have a family, there are major quality of life [and] quality of education

differences between somewhere like Osaka and Tokyo,” the partner said. “This would make staffing an office out there very difficult for international law firms.”

Lawyers that ALB spoke to are just as unequivocal in their assessment of what impact these changes will have on the complexion of the Japanese legal services market. “I don't really understand why these changes are needed,” said one senior partner at a major Japanese law firm.

“Major matters for Osaka and clients from other cities are handled out of Tokyo and this won't undergo substantial changes – even if foreign law firms open in Osaka or elsewhere.” ALB

news in brief >> Former Thai PM hires law firm to 'help restore democracy' Former Thai Prime Minister Thaksin Shinawatra has engaged Canadian-based law firm Amsterdam & Peroff to assist in his crusade to restore democracy and the rule of law to the troubled Kingdom.

Robert Amsterdam, a founding partner of the firm said in a press release that "it is our intention to explore every legal avenue to assist this prodemocracy movement, and urge the international community not to tolerate the government's violent crackdown on peaceful protestors."

Amsterdam & Peroff, headquartered in Toronto and with offices in Washington and London, has made a name for itself handling complex multi-jurisdictional litigation, commercial arbitration and political advocacy in challenging emerging markets.

with Bahrain, takes lead in offshore Islamic funds. Moreover, it is likely that the global market for Islamic insurance, or takaful, will continue to grow, opening exciting possibilities for Bermuda Frances Woo reinsurers."

Appleby Cayman remains the leader in offshore Islamic finance transactions, having played a part in most offshore-structured

sukuks issued over the last 12 months.

Even so, those lawyers ALB spoke to agreed that market share is still up for grabs. “With BVI being such a popular jurisdiction for Asian clients, Cayman being a mecca for funds, and Bermuda and Jersey both having a strong regulatory environment and reputation, each of these are well placed to develop their Islamic finance market,” said Frances Woo, managing partner of Appleby in Hong Kong. ALB

gore challenges lawyers to change During an address at the Inter-Pacific Bar Association's Annual Conference held in Singapore, former US Vice President and climate change crusader Al Gore has challenged lawyers to exercise 'moral courage' in finding a solution to climate change problems.

Gore told delegates that lawyers have a role to play in the climate change debate because one of their key tasks was to implement political will. He noted that although addressing environmental concerns in the course of legal advice would be "inconvenient and complicated", it was something that nonetheless needed to be done.

However, Gore may have to some extent been preaching to the converted. Climate change is an area where some of Singapore's law firms have already taken a lead, but according to a number of lawyers, local clients are still somewhat reluctant to explore green issues; the majority of instructions, they say, come from their US and European clients.

Legislative Affairs Office appoints new director The Legislative Affairs Office of the State Council has promoted Song Dahan, the deputy director of the office, to the role of director as former incumbent Cao Kangtai retires.

The Legislative Affairs Office (LAO) is an administrative office within the State Council which assists the Premier in providing legal advice and administrative laws to govern the behavior of government departments. This includes litigation, legal reconsideration, compensation, punishment, license, administrative charges and execution.

www.legalbusinessonline.com

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NEWS >>

India >>

us report White & Case aim to invade Asia via Moscow White & Case has its sights set on Asia. The US firm plans to expand into the Asia region via Mosow, with plans set in motion to make Moscow a hub for an increased CIS operation.

The firm has already moved London banking and capital markets partners Sven Krogius and Carter Brod to the office and plans to relocate three associates to the office eventually.

SJ Berwin moves on to possible merger with Proskauer Rose Following the breakdown of merger talks with Orrick, SJ Berwin has moved on to Proskauer Rose with suggestions Rose’s funds team is acting as the driving force behind the potential new merger.

Whilst it has been reported that a delegation from SJ Berwin met Proskauer in New York late last month, sources suggest that discussions are still at ‘the very early stages’.

Survey reveals Clifford Chance floundering in the US A recent study providing a range of information on 16 top transatlantic firms has revealed that Clifford Chance’s US partnership has shrunk by 21% over the past five years, highlighting the firm’s struggle to build a successful US practice.

The Transatlantic Elite 2010 survey compiled information on all four of the UK’s largest firms and found that the total number of lawyers in the firm’s US practice (291) is now effectively the same as in 2006. In total, the number of partners has dropped from 75 to 59.

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Allen & Overy (A&O) is the only other firm of the four that has also experienced a decline – its total number of US partners fell by 12.5%, from 40 to 35, over the past year.

Conversely, Linklaters registered the largest increase in US partner numbers, recording an increase of almost 75% from 19 in 2006 to 33 currently. Freshfields Bruckhaus Deringer is also not faring too badly in the US, with lawyer count on the rise, up by 74% and with 62.5 % growth in its US partnership.

Schroeder, Skinner and Butler back for seconds at Hunton & Williams Three former Hunton & Williams partners recently returned to the firm from its US rival Paul Hastings.

Jeff Schroeder, Larry Skinner and Ellis Butler were partners at Hunton & Williams until 2003 when they left to join Paul Hastings. On returning to their former firm, they will join the global energy project finance team and be based in Washington DC. Another transatlantic merger on cards London-based Denton-Wilde Sapte and Chicagobased Sonnenschein Nath & Rosenthal are in advanced merger talks, with management of both firms recommending to their partners to support the move. Both firms will conduct partnership votes on the matter on 9 June.

The combined firm will be known as SNR Denton and will have over 1,400 lawyers across 18 countries, including Singapore. If approved, the merger will take effect from 30 September.

ROUNDUP • US firm Reed Smith has snared seven real estate lawyers from Pepper Hamilton. The new recruits – four partners and three associates – will join Reed Smith’s real estate practice in Pittsburgh, along with two paralegals and five support staff.

• SJ Berwin has been left with just one partner in its German EU and competition team following the loss of its German head of EU and competition (Alexander Rinne) to Milbank Tweed Hadley & McCloy. Rinne will assist Milbank Tweed Hadley & McCloy to launch its own European anti-trust practice.

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Leading Spanish firm Garrigues courts India's Dua Associates G

arrigues has become the first major Spanish law firm to outline its desire to capture its share of the Indian market, after entering into a non-exclusive cooperation agreement with Indian law firm Dua Associates.

Under the agreement, the two firms will work together to organise seminars, edit publications and develop secondment programs. “The agreement with Dua Associates gives expression to our longstanding close professional ties and will undoubtedly give added value to both firms,” said Sergio Sánchez Solé, the partner in charge of Garrigues' Indian desk.

Solé said he hopes the agreement will help other companies take their first steps into India. Garrigues’ India desk had already been active advising Fundación Consejo España-India, as well as other investors that turn to this institution to develop their corporate projects in the subcontinent. ALB china >>

Zhong Lun and T

he Shenzhen stock exchange has recently seen some stellar debuts made by domestic players – Shenzhen Hepalink’s US$868m IPO on the Shenzhen small and medium-sized enterprises board and Zhejiang Narada Power Source’s US$287m IPO on the Shenzhen Growth Enterprises Market board. According to Dealogic, since January 2010 there have been nine IPOs in Shanghai raising some US$7.7bn and 59 in Shenzhen raising US$7.3bn.

Shenzhen Hepalink, the world's largest maker of the blood thinner heparin, recently launched its IPO, becoming the record holder for the highest IPO share price in China’s A-share market. Zhong Lun partners Asian Legal Business ISSUE 10.6

NEWS >>

industry >>

New 2,500-lawyer firm storms onto world stage: Hogan Lovells O ne of the most talked-about law firm mergers in recent memory has finally been consummated. But the new firm's launch motto (“A new kind of international law firm...because the world is changing) is ringing true on a number of levels, not least for all those partners who have chosen to leave the new firm.

Robert Lewis, Lovells' former Beijing managing partner, quit the firm to join local outfit Allbright as a senior international legal consultant. Although the loss of a managing partner of the calibre of Lewis is most certainly a body-blow for the newly formed alliance, his departure was considered somewhat imminent. One source close to ALB noted, “it's a loss, but we could see that it was going to happen given Robert's missionary-like zeal to help develop the local legal market in China.”

The reasons behind two similar departures this week are perhaps as clear. In an e-mail to clients last week, Hogan & Hartson's former Hong Kong managing partner Gordon Ng announced that his eponymously named firm had terminated its alliance with Hogans and would instead be joining forces with O'Melveny & Myers.

“Effective 1st May 2010, Hogan & Hartson will change its name back to Gordon Ng & Co and we will commence an association with O'Melveny & Myers.

Our relationship with you remains unchanged,” the e-mail read.

Hogan & Hartson 'localised' its Hong Kong operations midway through last year (allowing it to practice Hong Kong law under the name Hogan & Hartson), suggesting perhaps that Gordon Ng & Co's days as Hogans' Hong Kong ally – regardless of the latter's merger with Lovells – were already numbered.

Connected to Hogans' Hong Kong localisation Steven Robinson was a reshuffling of its Hogan Lovells management on the mainland, that saw some high-profile partners frozen out of the firm's ruling cadre. One of these was Arthur Mok, who although installed as Hogans' Shanghai managing partner, was overlooked for the Greater China leadership role, which was jointly filled by long-serving lawyers Jun Wei and Steven Robinson. In this context, Mok's recent departure to Ropes & Gray is also not surprising. ALB

AllBright inject IPO expertise

Su Min, Xu Zhigang and Zou Xiaodong facilitated the listing. The firm has been the long-term legal advisor to the issuer for a decade. www.legalbusinessonline.com

Hepalink was founded in 1998 and primarily produces heparin, which is purified from pig intestines, then made into a shot used to prevent blood clots in patients with heart conditions.

The company is the only Chinese company accredited by the US Food and Drug Administration to export heparin.

Zhejiang Narada Power Source, which principally engages in the research, development, manufacturing and sale of chemical power sources and new energy products, is another company to have raised funds from listing on the Shenzhen board.

Advised by AllBright partner Zhang Xiaohong, the firm’s debut raised about US$287m. ALB

news in brief >> Brighter times ahead for in-house lawyers in Japan: Report In-house salaries in Japan remain flat in 2010 despite increased demand for corporate counsel, according to a report published by recruitment consultants Optia Partners. The report notes that, although hiring activity has possibly been at its lowest over the last 18 months, the legal services employment market seems to have bottomed out and better things can be expected from Q2 2010.

It also noted that several companies have opened up new roles in regulatory and compliance, banking and insurance. And in a trend that is identical to elsewhere in the region, foreign companies (gaishekei) continue to out-pay their local equivalents - in some cases by as much as 30%. But the jury is still out on whether foreign or local companies are better places to work for in-house lawyers.

Gaopeng sets up in Hangzhou Having recently set up an office in Nanjing, Gaopeng & Partners has furthered its national expansion plans by launching a Hangzhou branch. Two partners have already been relocated from Beijing and focus on corporate, international business and regulatory work.

“One of the impetuses for our decision is the increasing exportation business in the Zhejiang region," said Wang Lei, managing partner of Gaopeng. "The Hangzhou office will work closely with our headquarters – we are looking to integrate international business type work from both offices."

Last year, the firm launched in Nanjing via a merger with Jiangsu Hailang Law Firm. The latest Hangzhou branch is seen as the final piece in the firm's expansion plan for the Yangtze River Delta region. Gaopeng now has offices in Shanghai, Tianjin, Yangzhou, Taizhou, Nanjing and Hangzhou.

Zhonglun W&D becomes fourth Beijing firm in Taiyuan

►► Taiyuan legal market – the numbers • 116 law firms, 1,288 lawyers • 1 lawyer to 1,692 citizens in Shanghai • 1 lawyer to 2,650 citizens in Taiyuan

Zhonglun W&D has launched its second domestic office this year – after opening in Wuhan in January – this time in Taiyuan, Shaanxi province. The new office becomes the firm’s sixth domestic branch.

The Taiyuan office has five partners – Liu Yindong, Ji Yunfeng, Zhang Qiufeng, Deng Jiancheng and Hao Xiaoming – and 20 lawyers. All partners and lawyers have joined from Shaanxi Cheng Cheng law firm, based in Taiyuan with a solid track record advising on real estate and construction related issues and projects. Liu Yindong and Ji Yunfeng previously served as Cheng Cheng's managing partner and deputy managing partner respectively.

The Taiyuan branch is part of Zhonglun W&D’s national expansion plans, especially in the outer regions. It already has international offices in London, Paris, Riyadh and Lyon.

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NEWS >>

Update >>

europe >>

Intellectual Property Revoked Trade Mark not an earlier Trade Mark as defined by the Trade Marks Act – Campomar SL v Nike International Ltd

O

n 2 April 1986, Campomar S.L. (Campomar) filed to register, and subsequently obtained registration for, Nike in Class 3 for perfumery with essential oils (the 1986 Mark).

On 20 November 2001, Nike International Ltd (Nike) sought to register Nike (the Application Mark) in Class 3. Campomar opposed the application on the grounds that the Application Mark was identical to its 1986 Mark.

On 21 January 2002, Nike applied to revoke the 1986 Mark.

In Nike International Ltd v Campomar SL [2006], the Court of Appeal found in favour of Nike and ordered that Campomar’s rights to the 1986 Mark be deemed to have ceased from 21 January 2002 (date of Nike’s application for revocation).

Thereafter, the Application Mark was accepted and published on 14 June 2006.

On 14 August 2006, Campomar filed a Notice of Opposition against the Application Mark.

At the Trade Marks Registry, Campomar contended that:• As of the date of application for the Application Mark, the 1986 Mark was valid and subsisting was therefore an earlier trade mark as defined in Section 2(1) the Trade Marks Act (TMA).

• Given that the Application Mark was identical to the 1986 Mark and that the goods sought to be registered were identical to those protected by the 1986 Mark, pursuant to Section 8(1) of the TMA, the Application Mark should not be registered.

Volcanic ash circumvents antifor struggling airlines

T

he European Commission is considering allowing limited state aid to assist airlines struggling with the widespread closure of European air space following the Icelandic volcanic ash cloud. During a recent European Policy Centre breakfast policy briefing, EU Competition Commissioner Joaquin Almunia said that he was ‘ready to consider’ EU governments' requests to compensate airlines for losses amassing from the closures. This followed from the launch

by EU Commission President of an ad-hoc group to assess the impact of the volcanic ash on the air travel industry and the general economy.

“We are facing exceptional circumstances ... member states should demonstrate need for the aid and its proportionality” joaquin almunia, eu competition commissioner Government financial aid to selected national companies is generally prohibited as anti-competitive, because it may distort competition by favouring certain companies over others. However, an exception to the rule under Article 107 2(b) of the Treaty on the Functioning of the

The Principal Assistant Registrar of Trade Marks (PAR) found that since the 1986 Mark was no longer registered, it was not an earlier mark at the material time and Section 8(1) of the TMA did not apply. Campomar appealed against the PAR’s ruling on this issue.

The High Court found that although the TMA provided a definition for what constitutes an earlier trade mark, it does not indicate the relevant date for determining if such a mark existed. It was held that the more appropriate time to consider whether Section 8 (1) applied was the time of the opposition proceedings.

Since the 1986 Mark had already been revoked at the time of the opposition proceedings, it was not a registered trade mark, and therefore not an earlier trade mark. Accordingly, Section 8(1) of the TMA did not apply as a ground for refusal of registration of the Application Mark.

Campomar’s appeal was consequently dismissed Joyce Ang, Associate Intellectual Property and Technology Group ATMD Bird & Bird LLP Phone +65 6428 9422 Email: joyce.ang@twobirds.com ATMD Bird & Bird LLP is a Singapore law practice registered as a limited liability partnership in Singapore. The firm is associated with Bird & Bird, an international legal practice. It is solely a Singapore law practice and is not an affiliate, branch or subsidiary of Bird & Bird or Bird & Bird LLP.

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Joyce Ang

Asian Legal Business ISSUE 10.6

NEWS >>

trust as EU considers state aid European Union permits aids to make good the damage caused by natural disasters or exceptional circumstances.

Almunia said that “we are indeed facing exceptional circumstances”. The Commission is considering limited state aid measures modelled on those following the September 11 attacks in the US. State aid measures taken in the EU after September 11 included compensation for costs arising directly from the closure of American airspace and, for a limited period, the extra cost of insurance. The EU permitted the measures on the condition they were applied in a non-discriminatory manner to all airlines in the member state.

Alumina confirmed that volcanic ash aid will carry strict conditions to prevent discrimination in favour of a particular airline. “Member states should demonstrate need for the aid and its proportionality,” Alumina said.

The current aviation industry crisis may also affect the level of any financial penalty the Commission may impose in the pending case of alleged price fixing cartels in air freight forwarding. The decision, ordinarily involving substantial financial penalties on the participating airlines, is expected in the next few weeks. *extracted from Jones Day's Anti-trust Alert, authored by Jarleth M Burke and Natasha Hall in London ALB

Update >>

International Tax On October 10, 2010, the Netherlands Antilles as a jurisdiction within the Kingdom of the Netherlands will be dissolved. Instead, two separate new jurisdictions, Curaçao and Sint Maarten, will come into existence

T

he other three islands in the current Netherlands Antilles (Bonaire, Saint Eustatius and Saba, known collectively as the BES islands) will become overseas municipalities of the Netherlands. Curaçao and Sint Maarten will become autonomous parts of the Kingdom of the Netherlands, with a status comparable to that of Aruba. As a result, the Kingdom of the Netherlands, currently consisting of three jurisdictions (the Netherlands, the Netherlands Antilles and Aruba) will, after October 10, 2010, consist of four jurisdictions (the Netherlands, Aruba, Curaçao and Sint Maarten). However, there will be five fiscal regimes, because the BES islands, though part of the Netherlands, will have their own tax regime. This is part of a move by the Netherlands to make jurisdictions such as the Netherlands Antilles self funding.

Impact on Netherlands Antilles companies.

There will be no change to Netherlands Antilles entities, such as a Netherlands Antilles NVs, Netherlands Antilles BVs or Private Foundation (SPF), if their statutory seat is in Curaçao or Sint Maarten. This applies to both the “old regime offshore companies” and companies incorporated after 2001. The “grandfathering rules” for old regime offshore companies will remain in force, as guaranteed, until 2019. The other companies will remain subject to the profit tax ordinance.

The Netherlands Antilles do not levy withholding tax on dividends, interest, royalties and service fees paid to nonresident persons or entities. This will remain the case in Curaçao and Sint Maarten.

Both Curaçao and Sint Maarten will be the legal successors of the Netherlands Antilles once the Netherlands Antilles as a jurisdiction ceases to exist. The Civil Code of the Netherlands Antilles, including the provisions for legal persons (NV, BV, foundation, association) and the Netherlands Antilles corporate income tax law (profit tax ordinance) will be in force in the new jurisdictions, Curaçao and Sint Maarten.

Taxation

Companies in the BES islands, by operation of law will be deemed to be resident in the Netherlands, which means that they will be subject to Dutch corporate income tax and Dutch dividend tax. It seems reasonable to expect that companies in the BES islands that are subject to Dutch corporate income tax and Dutch dividend tax will be entitled to the benefits of the approximately eighty double taxation agreements (DTAs) the Netherlands has concluded.

However, this aspect has not yet been included in the bills regarding the BES islands or in the Dutch tax laws and tax treaties. If the Netherlands does choose to include the BES islands in the tax treaties, it would be necessary to conclude a protocol to the tax treaty with each tax treaty partner. In current tax treaties of the Netherlands explicitly exclude the Netherlands Antilles and Aruba.

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. www.legalbusinessonline.com

Debbie Annells

17

NEWS >>

Update >>

hong kong >>

Changes to listing rules may see

IT column

TM

Auditing and Investigating Corporate Information

T

here are four key areas that need to be addressed when reviewing, or protecting corporate information, or data.

1. Securing a corporations sensitive information 2. Understanding the threats to that information 3. Setting alerts or red flags of intrusions or misuse 4. Defining a clear plan to respond to incidents

Firstly, securing your corporations primary asset, its information (or sensitive data) which includes Personally Identifiable Information (PII) - means being able to find it easily, using targeted searches, collecting and or removing it, when not in protected environments, and running regular audits to ensure data leakage strategies are working.

In other words, knowing where your information is, and being able to get at it !

Secondly, understanding the potential threats to this information is numerous. The realization that the average perimeter network defense is never enough, coupled with the fact that, the majority of threats come from within an organization, added to the sophistication of hackers today, can leave IT professionals with sleepless nights.

The threats today are great, numerous, and growing along with technology defense.

Setting alerts to these threats must be done from a network wide view, instead of the old fashion “one machine at a time” auditing. This means you must have clear visibility to your network. You must run regular audits against file, and email servers, laptops, desktops, and set parameters or warnings that can be automatically flagged.

Lastly, it is critical to have a response plan, once a breach has occurred. This is often overlooked or misunderstood in large corporations. A simple overview plan could be1. Determine the exact scope of the incident (to limit cost damage) 2. Secure PII within that scope of damage 3. Locate the source of the breach 4. Remediate/erase the malicious files or processes 5. Run regular scans, to ensure the clean up has been effective 6. Preserve all actions (or audit) for any potential future legal actions.

The auditing and investigating of corporate information comes down to ensuring PII resides in authorized areas of the network, determining the scope of any breaches, and implementing proactive measures to minimize risk or exposure.

For more information, please contact: Carl Kimball, General Manager, Asia Pacific Guidance Software, Inc Phone: +65 6248 4527 Email: apac.sales@guidancesoftware.com

18

Carl Kimball

C

hanges to the listing rules for mining and petroleum companies may pave the way for a flurry of IPOs in Hong Kong and provide a lucrative avenue through which these companies can raise capital in Asia.

“The new rules, which take effect on 3 June [2010], ensure that investors are provided with material, relevant and reliable information that meets globally recognised standards,” said Fred Kinmonth, a partner with Minter

►► New listing rules – criteria

• To establish eligibility for initial listing under the new Chapter 18 rules, a company's main activity must be the exploration for and/or extraction of natural resources (including minerals and petroleum) and this must represent 25% or more of the total assets, revenue or operating expenses of the company and its subsidiaries • The company must also have a portfolio of resources identifiable under the applicable international reporting standard, the JORC Code, NI 43-101 or the SAMREC Code (Minerals) or PRMS (Petroleum). Companies that have only inferred or prospective resources will not qualify • The HKSE has also expanded its approved list of acceptable jurisdictions for listing applicants, and Australia and Canada (British Columbia and Ontario) are now included

china >>

In-house profession: a growing

E

ven amid difficult economic conditions, China's in-house legal profession has still matured above and beyond expectations. The increased complexity of the legal and regulatory environment, along with generally tighter control of costs, has provided a great opportunity for in-house lawyers to demonstrate their strategic value.

While the 2010 ALB China In-house Survey found that 68% of the polled in-house departments have less than 10 legal staff, nearly half said their departments have grown over the past 12 months. Sami Farhad, vice president & general counsel of eLong.com, has a good vantage point for the evolving profession in China as a US lawyer.

“Over time, as companies in China become larger, engage in more complex financial transactions and have more international exposure, businesses are becoming more sophisticated and recognising that a strong in-house legal team can support the healthy growth and development of the company, while avoiding costly risks and disputes,” he said.

“Now, many in-house legal departments have built up strong internal expertise in the areas of law which significantly impact their companies. The perception of inAsian Legal Business ISSUE 10.6

NEWS >>

flurry of resources IPOs Ellison in Hong Kong who advised the HKSE on the amendments. “Eligible companies may now apply for a primary or secondary listing on the HKSE under rules that are clear and comprehensive.”

The new rules set out disclosure obligations and standards for reporting resources and reserves, for valuing mineral and petroleum assets, and for the qualifications and experience of technical experts. The changes are expected to reinforce Hong Kong’s attractiveness as a listing location.

“Eligible companies may now apply for a primary or secondary listing on the HKSE under rules that are clear and comprehensive” Fred Kinmonth, Minter Ellison Kinmonth said that a number of mining and petroleum companies from resource-rich countries like Australia and Canada are already expressing interest in launching Hong Kong offerings. “Given the capital-intensive nature of mining, mineral and petroleum companies seeking capital to grow are increasingly looking to the HKSE and the HKSE now has a solid set of rules to encourage that interest.”

Despite the financial crisis, 2009 was something of a bull year for the HKSE: it led the world in terms of IPO funds raised (US$32bn) and ranked fourth in total funds raised behind the New York, Euronext, London and Australian stock exchanges. ALB

force to be reckoned with house lawyers as not doing interesting or challenging work is now largely outdated.”

In addition to the steady increase in numbers, many in-house departments now have more tiers of staff than in the past. Consequently, in-house counsel roles have expanded into new non-legal areas, such as compliance, risk management and company secretarial responsibilities. ALB

Update >>

Financial Where do most investors go wrong?

I

n my experience most investors who invest in a business venture start out by paying a premium for the anticipation of future earnings that may or may not materialize as expected.

However, there are already established businesses that have earnings and a history of consistent growth which can be freely purchased on internationally recognized exchanges.

First you need to place a reasonable value on the business based on actual earnings and the anticipated growth of those earnings in the future.

Then you should build in a margin of safety and only look to invest in a business when you can do so at 50% or more off its intrinsic book value.

For example, let’s assume ABC Computer Inc has the following financials:• Current share price: $200 • Valuation price: $475 (Based on our proprietary valuation model).

• Current earnings per share: $10.25 • Estimated earnings growth rate: 20% per year.

• Value of cumulative earnings per share in 8 years $202.93 In theory, if you owned the whole company you could choose to draw 100% of the company’s earnings out of the business, which in the above example would mean that the actual earnings would more than cover what you paid per share in 8 years. If you also invested at a 50% discount then the potential return on your investment would be significantly enhanced.

The above is an example of the type of proprietary research we do on individual investments for our private clients which we then combine with a technical analysis methodology to determine when to buy and when to sell.

For further information or to arrange an exploratory no obligation meeting please contact Brian Taylor.

Brian Taylor, Senior Investment Adviser Horwath Financial Services Ltd Tel: (852) 2511 8337 Email: brian.taylor@hfs.com.hk Website: www.hfs.com.hk

Brian Taylor

►► The size of your in-house team 1-10 11-20 21-50 51+

68% 12% 13% 7%

►► Over the past 12 months your in-house team has contracted by 1-20% contracted by 21-50% grown by 1-20% grown by 21-50% grown by 50+% remained the same size www.legalbusinessonline.com

13% 5% 27% 14% 7% 34%

19

NEWS >>

appointments ►► LATERAL HIRES Name

Leaving

Going to

Andrew Hutton

Paul Hastings

Kee Ming Chi

Dewey & LeBoeuf

O’Melveny & Myers LLP Corporate finance/ capital markets O'Melveny & Myers LLP Project development & real Eetate

John Fadely Clifford Chance Rupert Li

Weil, Gotshal & Manges Clifford Chance

Global funds King & Wood

Hong Kong capital markets/M&A

Steve Yu Lynn Yang Roger Peng Joe Sevack

Eversheds Allen & Overy Hogan & Hartson Paul Hastings

CMS Norton Rose Paul Hastings Troutman Sanders

Vincent Mulvey

Denton Wilde Sapte

Baker Botts

Steven Cui James Zhu Zoe Wang

Jones Day Perkins Coie Perkins Coie

Jun He Jun He Jun He

IP Corporate/ insurance M&A and corporate Securities, corporate governance projects, infrastructure, trade finance IP IP IP

►► Relocations

Location

Firm

Lawyer*

From

To

Clifford Chance Clifford Chance Clifford Chance Latham & Watkins White & Case

Tim Plews Crawford Brickley Julian Perlmutter Salman Al Sudairi Baldwin Cheng

London Singapore London New York Hong Kong

Riyadh Hong Kong Hong Kong Riyadh Beijing

►► Promotions Name

Firm

Promotion

Practice

Location

Robert Lonergan Liu Wei Sun Zuan Wang Hong Nguyen Thi Hong Anh Cameron Hassall

Robert Lonergan Salans Yongheng Partners Yongheng Partners Indochine Counsel Clifford Chance

Counsel Partner Partner Partner Partner Partner

Hong Kong Shanghai Nanjing Nanjing Vietnam Hong Kong

Leng- Fong Lai

Clifford Chance

Partner

Ho Han Ming James Abbott

Clifford Chance Clifford Chance

Partner Partner

Tim Wang Jem Li

Partner Partner

Clifford Borg-Marks Serge Fafalen Marc Harvey

Clifford Chance Cadwalader, Wickersham & Taft Lovells King & Wood Linklaters

Finance Corporate Dispute resolution Real estate IP & technology Arbitration & commercial litigation Capital markets, structured finance Funds & corporate Dispute resolution & litigation Corporate Corporate M&A IP

Beijing Hong Kong China

KC Lye Daniel Yong Guy Locke

Norton Rose Norton Rose Walkers

Carol Hall

Walkers

Sandip Beri

Citi

Counsel Partner Head of global litigation Partner Partner Head of Asia

Global litigation

Managing partner of HK Head of legal India

Salans

Salans to double number of partners in China Salans has made up its senior associate, Liu Wei, to partner as part of its ambitions to grow its China capabilities. Liu, who joined the firm in 2006, is based in the Salans' Shanghai office. He will focus on corporate, employment, real estate, tax,

20

Practice

Hong Kong/ Singapore Hong Kong

Hong Kong/ Beijing Shanghai Shanghai Beijng Hong Kong Abu Dhabi Silicon Valley Silicon Valley Silicon Valley

Tokyo

King & Wood

King & Wood lures Clifford Chance's Beijing chief Rupert Li, previously the Beijing chief representative and partner of Clifford Chance, has swapped his partnership at the Magic Circle firm for a senior management position as international managing partner with domestic powerhouse King & Wood. Li will split his time between Hong Kong and Beijing.

Apart from bringing additional technical expertise and market connectivity to King & Wood's capital markets and M&A practices, Li's previous experience as the sole representative for Asia on Clifford Chance's partnership council will also benefit King & Wood's management and governance.

For Li, the single most important motivation behind his decision to leave the top-tier international firm and join King & Wood is the opportunity to be at the centre of the firm's management and decision-making function.

Rupert Li “From my point of view, the most pronounced difference between my current and previous position is not 'local' versus 'international' but 'centre' versus 'outskirt'," he said.

Although a certain level of competition exists between leading international and domestic firms, Clifford Chance and King & Wood have fostered a collaborative relationship through co-counselling on a number of transactions for the same clients. Li noted that his appointment with King & Wood will increase the collaboration between the two firms, rather than reducing it.

Singapore Dubai Beijing Beijing

Dispute resolution Singapore Corporate/M&A Singapore Insolvency & restructuring Investment funds group Hong Kong In-house legal

Clifford Chance

India

restructuring and insolvency work.

"Wei's promotion is part of our ambitious growth plans for China. We intend to double the number of China based partner this year by internal promotion and lateral hiring. Wei is the first new partner who will be joined soon by others," said Bernd-Uwe Stucken, Salans' Greater China managing partner.

Allen & Overy

Norton Rose

One more for China in Norton Rose’s Asian spree Former Allen & Overy of counsel Lynn Yang has recently joined Norton Rose’s Shanghai office as corporate and insurance partner. She will commence her partnership in July 2010.

David Stannard, head of Norton Rose’s Asia practice, notes that Yang’s appointment is part of the firm’s aggressive business strategy for the AsiaPacific region. The firm launched its Asian hiring spree last month, offering up to five banking and corporate positions for its Beijing office.

Yang expects plenty of opportunities. “Financial sectors – both transactional and regulatory services – have huge potential to develop in the next few years in China,” she said.

“In-bound M&A activities will also start to pick up this year.

Notably, international firms will continue to play important roles Lynn Yang in major outbound investments by Asian Legal Business ISSUE 10.6

NEWS >>

both industrial and financial institutional investors.”

Yang’s appointment will bring the total number of partners across Norton Rose’s 13 Asian offices to 44.

O’Melveny & Myers

Paul Hastings

Paul Hastings loses another senior lawyer in Asia Andrew Hutton's departure to the Singapore office of O'Melveny & Myers constitutes the latest in a string of senior Paul Hastings defections. The firm has now lost four senior-level lawyers from its Asia practice over the past 12 months.

Earlier this month US securities expert Joe Sevack left the firm for Troutman Sanders; partners Maurice Hoo and Phoebus Chu both departed for Orrick; and Etsui Doi left to become co-head of Foley & Lardner's Tokyo office in June 2009.

Hutton, who was counsel at Paul Hastings, will assume the same position at O'Melveny and will be initially placed in Hong Kong, before relocating to Singapore in early June 2010. In addition to his time with Paul Hastings, Hutton also had stints with Latham & Watkins and as general counsel of a NASDAQ-listed resort development company.

The company has also appointed Munish Nagpal as its head of legal for its global capital markets business in India. Nagpal joins from the Singapore office of Clifford Chance, where he was part of the firm's India-focused capital markets team. Prior to his time at CC, Nagpal enjoyed stints with Skadden in Singapore, Fried Frank in New York and London, and Amarchand & Mangaldas in India.

Norton Rose

Partner promotions keeps Norton Rose's Asia focus on Singapore The only Asia-based lawyers to feature in Norton Rose's latest round of partner promotions are both based in Singapore: KC Lye (dispute resolution) and Daniel Yong (corporate/M&A).

As a qualifying foreign law practice (QFLP) license holder Norton Rose is able to practice Singapore law in certain areas, through the Singapore-qualified lawyers the firm employs. The promotions of Lye and Yong bring the number of partners in the firm's Singapore office to 14.

The Singapore office has also been the beneficiary of a number of transfers of Australian lawyers, following the merger of Norton Rose and Deacons Australia mid last year.

Linklaters

Greater China

Linklaters' Harvey promoted to global head of litigation Marc Harvey has been appointed as the head of Linklaters' global litigation practice. Harvey, who is currently the firm's co-head of Greater China, will replace Françoise Lefèvre, who returns to full-time client work.

Stuart Salt, the firm's Asia managing partner, said that Harvey's appointment underscores both the importance of Asia in the firm's global strategy and the growing profile of the region more generally.

Marc Harvey "The fact that the leadership of one of our major practice areas is to be based in this part of the world emphasises the importance of the region," he said.

Clifford Chance

Weil Gotshal

Weil Gotshal continues aggressive growth in Asia with CC partner hire John Fadely has joined Weil Gotshal & Manges as a partner in its Hong Kong office. Fadely, who will join the firm's global funds practice, comes from Clifford Chance where he was a corporate partner in the firm's funds group.

Fadely's appointment is further evidence of the firm's aggressive growth strategy in Hong Kong.

Late last year Weil Gotshal boosted its corporate practice with two lateral hires from Simmons & Simmons (Henry Ong and Jasson Han), in addition to entering into an alliance with Ong's firm, Henry Ong & Co. Through this alliance the firm is able to advise on Hong Kong laws.

Nguyen Thi Hong Anh Citi

Citi India appoints GE general counsel and Clifford Chance lawyer to top legal posts Citi India has appointed former GE Capital (India) general counsel Sandip Beri as its new country head of legal. Beri, who has over 25 years' experience in the institutional and consumer sectors of the financial services industry, has also had stints at Sidley Austin and a local Delhi-based firm. www.legalbusinessonline.com

Vietnam: Indochine welcomes first female partner ALB Fast 30 firm Indochine Counsel has made up its first female partner. Nguyen Thi Hong Anh, who as a senior associate has led the firm's IP & technology practice since its establishment in 2007, becomes the firm's fifth partner overall.

The firm's managing partner, Dang The Duc, said Nguyen's elevation is part of the firm's commitment

to growing its IP & technology practice. Meanwhile, the firm has also acted as Vietnam counsel to East Guardian Asset Management Fund (EGAM) on its acquisition of 15% of the shares in HiPT Group, a public company listed in Dang The Duc UPCOM and one of the country's largest private IT companies.

Duc, who was the firm's lead partner on the deal, said he expects that such transactions, although rare at the moment, will become more common in the year ahead as the country's IT infrastructure continues to develop.

Leading US firms

Jun He

Jun He's triple whammy prelude to new US office Jun He has secured the service of three IP partners from leading US firms, in preparation for opening a new office in Silicon Valley. Two of the new partners joining Jun He are James Zhu and Zoe Wang, who previously served as Beijing and Shanghai managing partners respectively of Seattlebased US firm Perkins Coie. They were among the key members establishing Perkins Coie's Shanghai office, which opened in 2006.

Both are US qualified lawyers and registered to practice before the James Zhu US Patent and Trademark Office, and both focus on patent-related issues, but Zhu primarily services the life sciences, medical device, chemical and material sciences sectors, whilst Wang prefers life sciences, nanotechnologies, data processing, and devices.

Steven Cui, the third new Zoe Wang partner in Jun He's IP practice group, is admitted to the California bar and also registered to practice before the US Patent and Trademark Office. He joins from Jones Day's Beijing office, where he was a counsel practising IP law with an Steven Cui emphasis on patent procurement, technology transfer, and portfolio management. Before joining Jones Day in 2008, he spent seven years as in-house at Genentech in San Francisco, where he was the lead IP counsel for the company's most promising drug products.

The firm, which established its New York office in 1993, is finalising its licence application for the Silicon Valley office and expects to complete the process within one month.

21

News | regional update >>

Regional updates

CHINA

22

CHINA

Paul Weiss

Philippines

SyCip Salazar Hernandez & Gatmaitan

SINGAPORE Loo & Partners

Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region

China’s Policy on Further Encouragement of Foreign Investment As a confirmation of China’s support of foreign investment, the State Council issued the “Opinions on Further Improving the Utilization of Foreign Investment” (the “Opinions”) on April 6, 2010.

With an objective to improving the quality of foreign investment, the Opinions suggest that “The Catalogue of Foreign Investment Industry Guide” would soon be amended to encourage foreign investment in the manufacturing of products utilizing advanced technology, and the development of the high-tech industry, modern service industry, outsourcing industry, environmental protection industry and alternative energy. Certain foreign-invested projects that fall under the encouraged category would also benefit from lower land prices.

Multinationals are also encouraged to establish regional headquarters, R&D centers, procurement centers, finance management centers, settlement centers and accounting centers in China.

In line with the macroeconomic policy, foreign investments are encouraged in the Central and Western regions.

Favorable policies will be introduced to encourage foreign investors to invest in the Central and Western China, in particular those labor intensive projects.

With an aim to diversify the types of foreign investment, the Opinions suggest that foreign investors are encouraged to invest in domestic A-stock listed companies; establish private equity funds and set up venture capital in China.

Financial institutions will be directed to provide more credit support to the foreign invested enterprises, and these enterprises are also encouraged to launch public offering of stocks, issue

corporate bonds or medium-term bills within China.

Lastly, measures will be taken to improve the efficiency of the approval and registration of foreign investment enterprises. For example, for foreigninvested projects that fall under the “Encouraged” or “Permitted” categories, the total investment threshold for these projects that require central level approval will be raised from US$100 million to US$300 million. Similarly, the formation of foreign-funded enterprises in the service sector (except financial and telecommunications services) will be examined and approved by the local government, and procedures for the settlement of foreign currency capital by foreign-invested enterprise will be simplified.

Although it may be awhile before the implementing regulations and rules are issued, the positive message of the State Council through the Opinions do boost the confidence of foreign investors to continue to invest in China.

Written by Jeanette Chan, partner May Chan, Hong Kong solicitor Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong Email: jchan@paulweiss.com Ph: (8610) 5828-6300 or (852) 2846-0300

Philippines

Protecting overseas filipino workers Republic Act No. 10022, which became law on March 8, 2010, amended several provisions of the Migrant Workers and Overseas Filipinos Act of 1995 (Republic Act No. 8042) to provide Asian Legal Business ISSUE 10.6

News | regional update >>

better protection for Filipino migrant and overseas workers. Among the significant amendments are the following: First, the definition of an “overseas Filipino worker” entitled to protection under the law now includes overseas Filipino workers who are legal residents (although not citizens) of a foreign country.

Second, the crime of “illegal recruitment” has been expanded to include the following prohibited acts: (i) letting an overseas Filipino worker acknowledge an amount greater than that actually received by him as a loan or advance; (ii) reprocessing workers through a job order that pertains to nonexistent work, or for work different from the actual overseas work, or work with a different employer; (iii) influencing or attempting to influence any person or entity not to employ a worker who has formed, joined or supported or has contracted or is supported by any union or workers’ organization; and (iv) allowing a nonFilipino citizen to head or manage a recruitment/manning agency.

Third, aside from illegal recruitment, the law declares other acts inimical to the interests of an overseas Filipino worker as unlawful, including, among others: (i) granting a loan with interest of more than eight percent (8%) per annum to an overseas Filipino worker, where the proceeds are used for payment of placement fees; and (ii) requiring overseas Filipino workers to exclusively avail of loans only from specifically designated institutions, entities or persons.

Fourth, the law prescribes higher penalties for illegal recruitment and other prohibited acts.

Fifth, the payment of any compromise/ amicable settlement or voluntary agreement on money claims, inclusive of damages, shall be made within thirty (30) days from the approval of the settlement by the appropriate authority, instead of four (4) months provided under the old law.

Sixth, remittances of the overseas Filipino workers are now exempted from the payment of documentary stamp tax.

Finally, the law provides for compulsory insurance coverage for agency-hired workers and optional insurance coverage for re-hires, name hires or direct hires. www.legalbusinessonline.com

Written By Ronald Mark C. Lleno, Senior Associate SyCip Salazar Hernandez & Gatmaitan 3rd Floor, SSHG Law Center 105 Paseo de Roxas 1226 Makati City, Philippines T: (632) 8179811 to 20 F: (632) 8173896; 8173567 E: rmclleno@syciplaw.com W www.syciplaw.com

SINGAPORE

Recent Changes to the Securities and Futures Act (Cap 289) (“the Act”) The Securities and Futures (Amendment) Act 2009 (“SF(A)A”)was passed by the Parliament on 19 February 2009. Since then, the SF(A)A had been implemented in stages. The following outlines several amendments which took effect on 29 March 2010:• Compulsory acquisition applies to Real Estate Investment Trust (“REIT”) and Business Trust (“BT”) Section 295A of the Act allows an offeror who has acquired not less than 90% of the units in REIT or BT to require dissenting unitholders to sell their respective units to the offeror. The offeror will be able to acquire the minority units by making a general offer to the dissenting unitholders.

The new provision operates in a similar way as that of a compulsory acquisition of shares under Section 215 of the Companies Act (Cap 50).

• New statutory avenue to protect the interests of REIT unitholders Section 295C of the Act provides a REIT unitholder with an opportunity to seek judicial redress when (i) the affairs of the trust has been carried out in a manner oppressive to one or more of REIT unitholders, or has been carried out in a manner which has disregarded the interests of one or more of the REIT unitholders; and (ii) an act of the

manager or trustee of the trust has been done or is threatened, or a resolution of the unitholders has been passed or is proposed, which unfairly discriminates against or is otherwise prejudicial to one or more REIT unitholders.

• New Prescribed Time Period for Prospectus Registration Pursuant to the Securities and Futures (Offers of Investments) (Prescribed Period and Prescribed Day for Registration of Prospectus and Profile Statement) Regulations 2010, Section 240 of the Act has been amended to enable the Monetary Authority of Singapore (“MAS”) to register prospectuses and profile statements from the seventh (7th) to twenty-first (21st) day from the date of lodgment with MAS. Prior to the amendment, MAS could only register prospectuses within the fourteenth (14th) to twenty-first (21st) day of the date of lodgment. This amendment is seen as a move to expedite the process of an initial public offering (“IPO”).

Apart from the reduction of the minimum public exposure period, a new IPO concurrent review process, known as the streamlined review process has been launched on 1 March 2010. The streamlined review process attempts to speed up the IPO in Singapore undertaken by companies, REITs and BTs. As compared to the current two-stage process, an issuer may submit a draft prospectus to MAS for a pre-lodgment review simultaneously with the filing of its listing application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The prospectus submitted for pre-lodgment review will not be subject to further review during the public exposure period unless there are new developments or public comments that have a material impact on the issuer.

Written by Ms Wong Joy Ling and Mr Nicholas Chang Ms Wong Joy Ling, Foreign Counsel Senior Legal Associate (Corporate Practice) Ph: (65) 6322-2234 Fax: (65) 6534-0833 E-mail: wongjoyling@loopartners.com.sg and Mr Nicholas Chang Corporate Finance Executive Ph: (65) 6322-2236 Fax: (65) 6534-0833 E-mail: nicholaschang@loopartners.com.sg

Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

23

Feature | IP rankings >>

ALB’s leading IP firms: Asia

“To be able to instruct someone who is a lawyer as well as an electronic engineer, scientist or biochemist is important. It means we are on the same page and it saves me money − I don’t have to send my engineers to train them up” IP counsel

Singapore

24

Asian Legal Business ISSUE 10.6

Feature | IP rankings >>

►► Asia’s leading IP Law firms Patent slowdown? What patent slowdown? Filing numbers in Asia buck the global downturn International applications filed through the PCT system may have fallen by nearly 5% in 2009 but applications from China increased by more than 30%, according to figures released by the WIPO. Elsewhere in Asia, filings from Korea, Japan and Taiwan also increased. SIPO received more than 976,000 applications for patents last year, an increase of nearly 18% on 2008 figures.

There were 877,611 Chinese applicants for patents, representing a 22% increase on 2008 numbers.

SIPO granted more than 580,000 patents in 2009.

firm featured DONALDSON & BURKINSHAW Established 1874

►► China Full service practices

Specialist IP firms

Boss & Young

Beijing Sanyou

Fangda

CCPIT

Hylands

Jeekai & Partners

King & Wood

Kangxin & Partners

Zhongzi Law Office

Liu, Shen & Associates

►► Hong Kong

DONALDSON & BURKINSHAW has one of the longest established and leading practices in Singapore in the field of Intellectual Property.

Our Intellectual Property Practice comprises highly qualified patent and trademark specialists, technical experts and professionals with impeccable academic credentials. With several decades of experience in providing a full range of IP services to multinational corporations and businesses, our professionals handle trade and service marks, patents and designs protection and enforcement litigation as well as complete management of IP portfolios, commercialisation and licensing of IP and technology rights.

Our key specialists:

Full service practices

Specialist IP firms

Deacons

Eccles & Lee

ONC Lawyers

Rebecca Lo & Co

Tan Bok Hoay, Senior Partner e: bh.tan@donburk.com.sg

Robin Bridge & John Liu Solicitors Vivien Chan & Co Wilkinson & Grist

Chiam E-Laine, Equity Partner e: elaine.chiam@donburk.com.sg

►► GREATER CHINA – INTERNATIONAL FIRMS Baker & McKenzie Bird & Bird Jones Day

Michael Kraal, Equity Partner e: m.kraal@donburk.com.sg

Lovells Rouse

I

n a recent paper entitled ‘The Death of Big Law’, Professor Larry Ribstein from the University of Illinois argued that the business model on which large law firms have for so long built their fortunes is teetering on the brink of collapse. With specific reference to large US law firms, Ribstein says that by increasing the leveraging of offices and lawyers and through diversification into new practice areas, large firms are creating a rod for their own backs. The more a firm leverages its reputation, the harder it becomes to ensure that the value of that reputation is maintained and enhanced.

For Ribstein, the future of the profession turns on a number of factors with boutique law firms or firms that specialise in only one area of practice. These firms, Ribstein contends, are in the best position to deal with the immense changes awaiting the legal profession. And while Ribstein predicts the rise of boutique Larry Ribstein law firms to take place somewhere in the Uni of Illinois future, a look at Asia’s IP legal services market demonstrates that these firms are already making their presence felt − challenging the full-service firms for market

www.legalbusinessonline.com

Lee Shy Tsong, Equity Partner e: shytsong.lee@donburk.com.sg

Koay Min Pin, Equity Partner e: minpin.koay@donburk.com.sg

Michelle Ng, Equity Partner e: michelle.ng@donburk.com.sg

Gooi Chi Duan, Equity Partner e: chiduan.gooi@donburk.com.sg

Tai Choon Fai, Partner e: choonfai@donburk.com.sg 24 Raffles Place, #15-00 Clifford Centre, Singapore 048621 Tel: (65) 6533-9422 Fax: (65) 6533-7806, 6533-3590, 6534-3905, 6535-0809 Intellectual Property Practice Email: ip@donburk.com.sg

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►► India Full service practices

Specialist IP firms

Amarchand & Mangaldas

Anand & Anand

FoxMandal Little

Chandrakant M. Joshi Patent and Trademark

Remfry & Sagar

DePenning & DePenning DP Ahuja & Co Groser & Groser K&S Partners

►► Indonesia Full service practices

Specialist IP firms

Amroos & partners

Am Badar & partners

Biro Oktroi & Rooseno

George Widjojo & partners

Hadiputranto, Hadinoto & Partners

Rouse/Suryomurcito & Co

Lubis Santosa & Maulana

A specialist’s market?

►► Japan Full service practices

Specialist IP firms

International firms

Abe, Ikubo & Katayama

Abe, Wada & Watanabe

Finnegan Henderson

Anderson Mori & Tomotsune

Nakamura & Partners

Lovells

Mori Hamada & Matsumoto

Ohno & Partners

Morgan Lewis

TMI Associates

share, the biggest clients and the most lucrative of work.

Unsurprisingly, boutique law firms figure prominently in our annual Guide to Asia’s leading IP law firms, now in their third year. Where inhouse lawyers, IP counsel and industry professionals once entrusted the management of their company’s IP portfolio to full-service law firms, they are now more willing than ever to look to firms who have chosen this practice area to be their sole focus.

In a warning shot towards larger firms in Asia, our respondents indicate that this predilection will become more prevalent in the years ahead. ALB analyses why Asia’s specialist IP firms are leading the pack and what fullservice law firms must do to catch up.

Morrison & Foerster

A more commercial approach, greater industry knowledge and quicker turnaround were the most frequent reasons cited by respondents, for the use of specialist IP law firms over their full-service counterparts. “These are areas where smaller IP firms continue to excel,” said one Singapore-based IP counsel. “To be able to instruct someone who is a lawyer as well as an electronic engineer, scientist or biochemist is important. It means we are on the same page and it saves me money − I don’t have to send my engineers to train them up.”

Similarly, fee flexibility was noted as a strength, and one which has become more important than ever over the last

12 months. Specialist IP firms were, according to a number of respondents, more willing to look at capped fees, delayed or deferred payments and “provide advice that nine times out of ten would appear on the bills of larger law firms,“ in the words of one in-house lawyer.

For some respondents, boutique and specialists were preferred to bigger firms because of their better attitudes.

Here, respondents suggested that the relatively smaller fees generated

by IP-related work meant that there was a tendency for some lawyers to invest less time in maintaining and cultivating relationships with clients.

“In my experience, smaller firms will never think twice about giving 110% in even the smallest or routine matters we give them,” says one Taiwan-based IP counsel.

“This is certainly not the case with larger law firms I have used. Work will go through a hundred pairs of hands before someone even reads the brief.”

Another in-house lawyer notes, “when general counsel are looking for outside counsel the first thing they should do is forget about giving big firms patent prosecution − or anything else where the fees are thin.”

Creative use of legal technology was an area where boutique law firms were noted as having made “strong progress” over the last 12 months. Boutique firms are embracing internal software such as annuity agents, patent searching, docketing and proofreading tools more and “it’s showing in the calibre of

台北市中山北路三段27號13樓 13th Fl., 27 Sec. 3, Chung San N. Rd., Taipei 104, Taiwan, R.O.C. : 886-2-25856688 : 886-2-25989900/25978989 Email: email@deepnfar.com.tw www.deepnfar.com.tw 業務涵括智慧財產權之申請、侵權及訴訟

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►► Korea Full service practices

Specialist law firms

Bae Kim & Lee

Cho & Partners

Kim & Chang

Kims & Lees

Lee & Ko

YP Lee Mock & Partners

►► Malaysia Full service practices

Specialist law firms

Raja, Darryl & Loh

Bustaman

RamRais & Partners

Miranda & Samuel

Shearn Delamore

Wong Jin Nee & Teo

Skrine

►► Philippines Full service practices

Specialist law firms

ACCRA Law

Bengzon Negre Untalan

Castillo Laman Tan Pantaleon & San Jose

Buyco Poblador & Associates

Romulo Mabanta Buenaventura Sayoc & de los Angeles SyCip Salazar Hernandez & Gatmaitan

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their advice,” according to one patent counsel. They are also more willing to use technology as a tool to communicate with their clients more effectively and efficiently. “Our external firm provides us with access to an intranet through which I can access the status of a matter whenever I, or a member, of my department wants,” said a general counsel in Hong Kong. “It also reduces my legal costs and saves time.”

Big firms battle for relevancy Despite the inroads being made by Asia’s growing cache of specialist IP firms, to suggest that they have completely eclipsed their full-service counterparts in all jurisdictions across Asia would be incorrect. In countries like Japan, China, Taiwan and Hong Kong, respondents located in bigger firms report they are holding their own, despite fierce competition. The reason is their ability to handle contentious work and the sheer size of their IP teams.

In-house lawyers and IP counsel in Japan and Taiwan suggested that larger domestic and international law

firms were better placed to handle not only the litigation but also the day-today management of their IP portfolios than specialist law firms. In Hong Kong, respondents expressed the same views, although for them it was the larger firms’ ability to just “black and white IP issues” that put them on top.

“Firms that can handle more than just vanilla work is what we look for,” says one respondent. “We look for an ability to handle multi-jurisdictional work and a firm that has the resources to deal with the heavy-duty work, things like discovery in litigation and the IP issues that arise in the context of acquisitions, joint ventures and other big transactions.”

With the levels of IP litigation increasing among once litigation-shy Asian companies, larger IP practices are well positioned − especially given that many already act for the more litigious companies in Asia.

These include Korean companies like Samsung and LG, Japanese heavyweights like Panasonic and Sony as well as Taiwan’s biggest − BenQ

Asian Legal Business ISSUE 10.6

Cho & Partners

Feature | IP rankings >>

Intellectual Property Attorneys Cho & Partners 6th and 13th Floors Ann Jay Tower 718-2 Yeoksam-dong, Kangnam-ku Seoul 135-080 South Korea Tel: +82 2 6207 6800 Fax: +82 2 6207 6801 Email: ihseo@cholaw.com Website: www.cholaw.com

Areas of practice Trade mark and patent prosecution, Trade mark and patent disputes - legal and administrative, Domain name mediation and litigation, internet issues, Anticounterfeiting and enforcement, intellectual property, litigation, Technology counselling and management, Copyrights, Design rights, Unfair competition, Licensing and distribution.

Firm overview The firm was established in 2002 by two senior members who decided to leave a large firm environment to create a more focused, efficient and responsive practice. Based on the reputation and capabilities of the founding members, as well as the established trust and loyalty with their clients, the firm was immediately active representing multi-national clients. The firm’s clients are among the most recognized names and leaders in various business sectors, such as software and technology, retailing, luxury goods and fashion, energy, etc.

Since its establishment, the firm has continued to grow, a result of the firm’s uncompromising emphasis on maintaining its reputation for the highest level of service, professionalism and integrity. This philosophy and commitment has been essential in developing and servicing the firm’s prestigious list of clients, whose needs are sophisticated and whose matters have global impact.

The firm is proud of its approach and reputation for nurturing very close and personal relationships with its clients, the foundation of the firm’s ability to know its clients and thereby serve their needs more effectively and efficiently.

Intellectual property practice The firm has a strong and diverse practice in all aspects of intellectual property. It is very active with both domestic and international prosecution practice in both trademarks and patents, as well as related disputes and administrative proceedings. Aside from prosecution matters, the firm and its members have become particularly well-known for its capabilities in the areas of litigation, anti-counterfeiting and internet related matters.

In the area of anti-counterfeiting and enforcement, the firm has developed a very strong reputation for its effective and creative programs in combating many difficult problems in Korea. The firm represents many brand owners and manages among the most active and effective anticounterfeiting and enforcement programs in the country.

The firm is also very active with domain name disputes, successfully reclaiming domain name registrations from cyber-squatters for trademark owners. Tae-Yeon Cho serves as outside counsel for the Internet Address Domain Name Dispute Resolution Committee, the government body that administers Korean domain name disputes. Another member of the firm, Ik Hyun Seo, serves as a panelist for WIPO. The firm’s litigation practice is particularly active. The firm has successfully obtained several landmark decisions for its clients and is at the forefront of new developments in Korea.

Languages spoken: Korean, English and Japanese Number of lawyers: 12 Contacts: Tae-Yeon Cho, Ik-Hyun Seo www.legalbusinessonline.com

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►► Singapore Full service practices

Specialist law firms

Allen & Gledhill

Amica Law

ATMD Bird & Bird

Donaldson & Burkinshaw

Baker & McKenzie. Wong & Leow

Ravindran Associates

Drew & Napier Lee & Lee Rodyk & Davidson

►► Taiwan Full service practices

Specialist law firms

Formosa Transnational

Deep & Far

Lee and Li

Saint Island International Patent & Law Office

Tsar & Tsai

TIPLO Tsai, Lee & Chen

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and Quanta. “With the amount of income that Asian companies derive from patent royalties increasing, there will be more patent litigation happening around Asia. To date it has been Japanese, Korean and Taiwanese companies that have been the most active, but Chinese and Indian companies will become larger players here over the next year or so,” said a Hong Kong-based general counsel, adding that many companies have shown a preference for setting a US venue, giving US-based international firms with an Asian presence an advantage.

Here, the selection of the largest firms is considered the safest option.

Another respondent says “in-house lawyers are now playing a more direct role in managing IP litigation. They have shown in the past that they prefer working with the most high-profile litigators in the region. At the moment, most of these are working for the largest law firms.”

The same respondent, a general counsel at a US electronics company

based in Singapore, adds that in choosing a full-service law firm in this area, many general counsel are erring on the side of caution. “Some specialist and boutique practices do have the personalities and capacity to do this type of work, but many are still untested at this level.”

But just as in other areas of practice, while the largest companies will invariably hire the largest law firms smaller companies, some of whom are engaged in just as complex and highvalue IP litigation, are increasingly looking to smaller law firms. Their rationale here is that they would rather have the same firm deal with their patent prosecutions and any ensuing litigation. “It provides good continuity of service and it saves time and costs to use lawyers who know our portfolio inside out,” said one respondent.

Two-tier IP market?

So is Asia’s IP legal services market a two-tier one, where specialist firms handle run-of-the mill work such as filings, patent prosecution and portfolio

Asian Legal Business ISSUE 10.6

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www.legalbusinessonline.com

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►► Thailand Full service practices

Specialist law firms

Baker & McKenzie

Rouse

Tilleke & Gibbins

Satyapon & Partners

►► vietnam Full service practices

Specialist law firms

Bizconsult

Gintasset IP Law firm

Pham & Associates

Le & Le

Tilleke & Gibbins

Winco

management and with bigger firms handling large IP litigation and the more commercial work in the area?

While respondents to our survey agreed that Asia’s IP legal services market is more segmented than it ever has been, they also note that a coalescence of factors − including the impact of the financial crisis − have made the industry more competitive.

But there is still widespread recognition that all firms, whether specialist or full-service, must improve their levels of service if they are to increase their market share. For larger firms, areas for improvement include leveraging the commercial nous from elsewhere in the firm − something mentioned often by respondents from mid-sized companies in the region.

“When we hire a corporate firm, we want them to act less like our ‘external’ counsel and more like our internal IP counsel, “said one respondent.

Respondents note that this was a particular strength of specialist law firms, but the challenge for smaller firms was to increase their bandwidth.

Here, in-house lawyers and IP counsel − while cognizant of the fact that “smaller firms generate smaller fees” − were nonetheless looking for them to invest in increasing their manpower. “We would use smaller firms across the board if we were convinced that they had the resources at hand to do everything,” said the legal head of an Indian IT company.

Just as the IP legal services market has undergone changes over the last 12 months, so too has the complexion of many in-house legal teams changed.

While many of Asia’s companies have bolstered their legal resources at the disposal of their IP departments, many of those are still headed by nonlawyers. The role that full-service and specialist law firms alike have to play here is critically important.

While having lawyers who have an intimate knowledge of the industry will remain a mainstay for delivery of legal services in the area, law firms that are able to demystify legal issues for clients will be best placed to increase their share of an area of practice that is growing exponentially. ALB

HYLANDS LAW FIRM – CHINA 浩天信和律师事务所 ipr@hylandslaw.com

Leading large law firm and patent & trademark agency of more than 300 people of which 120 IP people 2008 Asia Top 30 Largest IP Firm – MIP 2008 – 2010 China’s Leading IP Firm – MIP 2008 – 2009 China’s Leading IP Firm – Legal 500 2008 – 2010 China’s Leading IP Firm – Chambers Asia 2008 – 2010 China’s Leading IP Firm – Asian Legal Business 2009 – 2010 China’s Leading IP Firm – Asia IP 2008 China’s Leading IP Firm – Asia Law 2010 China’s Leading IP Firm – China Business Law Journal 2010 China’s Leading IP Firm – China Law & Practice

|BEIJING|SHANGHAI|NANJING|GUANGZHOU|SHENZHEN|CHENGDU| 32

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Activity across Asia’s building and constructing sectors may have slowed considerably during 2009, but the innate resilience of the sector’s major players coupled with government stimulus has seen projects and deals rebound strongly in 1H 2010

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uilding and construction activity may have stalled, or in some cases come to a complete halt as a result of the financial crisis, but government stimulus coupled with the innate resilience of many of the sector’s major players ensured that the ‘GFC-effect’ was relatively short-lived, for those involved in this sector in Asia. The number of highvalue, high-profile projects completed, commenced or re-commenced over the last 12 months has reinforced the region’s status as one of the industry’s hottest destinations. It is this work on offer, plus the promise of much more to come over the next decade, that has building and construction lawyers already planning for the growth of their practices.

The GFC-effect

The Middle East:

Next battleground for Asia’s building companies 34

At the height of the financial crisis, many in the industry predicted the inevitable downfall of major industry players. But for a variety of reasons, this has not occurred. Financing was, of course, still hard to come by – evidenced by the number of projects put on hold or stalled last year. Yet when compared to this sector in the US and Europe, Asia has much to look forward to. Paul Wong, a partner with Rodyk & Davidson in Singapore, says that the low levels of attrition in the industry are indicative of the innate strength of the building and construction sector in Asia. This is a strength which in no small part it owes to the troubles encountered during the Asian financial crisis, which decimated the region at the turn of the last century.

“The real turning point for the building and construction industry and for contractors in particular was the Asian financial crisis. [The sector] underwent drastic changes which Asian Legal Business ISSUE 10.6

Feature | building & construction >>

saw the weaker players weeded out,” he says.

“Only those with the financial stamina to weather the economic storm remained and came into the most Helen Yeo recent crisis in a very Rodyk & Davidson healthy state.”

Helen Yeo, managing partner of Rodyk & Davidson, adds that the ‘healthy state’ of the industry coming out of the Asian financial crisis has insulated it somewhat from the harshest impacts of the recent downturn. “Prior to the recession, construction companies were working through a period of prosperity and when the crisis hit, it was met with a controlled and calm response… the fact that it did not last as long as people had expected also helped,” she said.

If the strength of Asia’s building and construction sector going into the crisis has assisted in keeping projects going during the GFC, then regulatory changes and governmentbacked stimulus have undoubtedly also played a role. In regard to the latter, governments across the region moved to stave off domestic economic crises by pumping a collective total of US$40bn into, inter alia, infrastructure, energy and natural resources projects over the past 12 months.

Similarly, legislative changes in jurisdictions such as Singapore have made it easier for contractors arguably the most exposed to economic downturns, to collect payment. “In Hong Kong we are now in the early stages of a decade of government stimulus and procurement,” says Vincent Connor Vincent Connor, the Pinsent Masons Asia managing partner www.legalbusinessonline.com

of Pinsent Masons. “Private sector infrastructure work definitely slowed down during the very worst of the financial crisis. For example, Macau casino projects were put on hold but things never came to a complete halt.

Now we have started to see projects in Hong Kong and Macau, both in the private and public sector, come on stream. We have at least four or five years of solid work still ahead of us,” he adds.

But even though the impact of the financial crisis on Asia’s building and construction industry has been minimal when compared to the US, Western Europe and even the Middle East, the complexion of the industry, client demands and its major actors have changed drastically.

“Prior to the recession, construction companies were working through a period of prosperity and when the crisis hit, it was met with a controlled and calm response” Helen Yeo

Rodyk & Davidson

What clients want What clients in the building and construction industry are demanding of their external lawyers is not inherently different from what clients in other sectors want: greater flexibility in fees, faster turnaround time in advice and more commercially savvy counsel.

But while these constants remain unchanged as a result of the financial crisis, just how lawyers are being expected to prove their value has changed.

The crisis has put the onus on the region’s building and construction lawyers to take a more specialised approach. Here, lawyers note the increasing importance of understanding procurement routes and the technical demands of projects, and having knowledge of the scope of negotiations with local regulators on deals are key. The fact that most of the region’s projects are still being put out to tender seems to suggest that few law firms have been able to develop this suite of

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Breaking new ground in Singapore:

Rodyk & Davidson’s Building &

(L-R) Rodney Keong, Paul Wong, Philip Jeyaratnam SC, Lawrence Teh, Ling Tien Wah

W

ith the global financial crisis (GFC) well and truly behind it, Singapore’s building & construction industry has seen impressive levels of activity in the first half of this year and the outlook for the remainder of 2010 is just as rosy. Rodyk & Davidson’s construction group has been heavily involved in the industry’s post-financial crisis renaissance and is ideally placed to assist developers, construction companies; government bodies, contractors and sub contractors manage their projects in the Lion City and across the Asia pacific region.

All-round expertise Boasting a dedicated team of 15 lawyers and five partners, Rodyk & Davidson’s construction practice is not only one of the largest in Singapore, but also one of the most experienced. The firm’s construction group which advises on the full-spectrum of work has been a core area of the firm since 2002, when the historic merger with HelenYeo & Partners, led by Rodyk’s current Managing Partner brought in among other

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strengths, strong, highly acclaimed real estate development and construction practices. At the front end, the firm advises on and reviews tender documents as well as the drafting of pre-bid and joint venture agreements. Rodyk & Davidson’s lawyers are often called on to assist construction professionals to adapt and change standard forms such as the SIA and CIBD standard form contracts to deal with the latest developments in the law, as well as advising on drafting or reviewing agreements for consultants and project managers. At the contract administration stage, the firm advises on issues arising in the course of construction such as the issuance of payment certificates, liquidated damages for delay and extension of time, construction-related insurance issues and issues arising from insolvency of contractors and owners.

“Our group’s experience is extremely wideranging and one of the most comprehensive in Singapore,” said Paul Wong, a partner in Rodyk & Davidson’s Construction Group. “The five partners bring their extensive experience to bear on each of the matters we work on and are ably assisted by other lawyers from

within the group and across our firm.”

But if Rodyk & Davidson’s experience at the front-end of the construction process is impressive, then its credentials at the backend are just as notable. Here, the firm’s construction group, which boasts a collection of renowned commercial litigators and Senior Counsel Philip Jeyaretnam, regularly acts on commercial litigation, arbitrations, mediations and other dispute resolution proceedings that arise in the construction industry. The firm has acted on disputes arising from international construction projects including joint ventures and investment issues, dispute s between main contractors and subcontractors and also disputes involving specialist engineering and architectural issues such as soil mechanics, soil settlement and complex industrial structures.

Strong back-end credentials Wong, who acted with Philip Jeyaretnam for Nishimatsu Construction on one of Singapore’s most high-profile construction disputes— the collapse of Nicoll Highway—said the construction team’s grounding in commercial litigation and contentious work gives them a Asian Legal Business ISSUE 10.6

Firm Profile

Rodyk & Davidson LLP

Construction practice unique understanding of the industry and sets them apart from others in Singapore.

“What Rodyk & Davidson’s construction group offers is unique. Our five partners are all experienced commercial litigators who know the industry,” Wong said. “When our clients go into a project they know they will get expert advice on the entire range of issues, not just pure construction advice. Our commercial litigators are experts in insolvency, banking, and insurance and regulatory issues in addition to being very knowledgeable about construction.”

And having partners who are just as wellversed in contentious matters present at the start of projects couldn’t be more important in the construction industry where there is also a high chance of projects falling into dispute.

“Our team works hard with clients at the commencement of projects not just to accurately reflect the terms required to manage the construction process efficiently but also to ensure effective dispute avoidance,” said Wong. “Of course, one can’t always guarantee that disputes will not occur in the construction industry, but if disputes do occur clients can rest assured knowing that we have the skills and experience to be able to handle them.”

Industry focus While being able to assist clients at the front and back end are essential skills in the repertoire of every construction lawyer, it is their level of commercial savvy, technical knowledge and industry experience that separates the ‘good’ practices from the ‘leading’ ones. Rodyk & Davidson’s construction group most certainly falls into the latter category-something perfectly evidenced by the team’s impressive deal list which includes mandates on some of the Lion City’s most complex and high-profile deals.

For instance, the firm was counsel to the Singapore Ministry of Education in its ‘Five Schools’ PPP project. It is advising on the construction of the new Khoo Teck Puat Private Hospital as well as the building of the Republic Polytechnic Campus in addition to advising numerous construction companies and contractors on the extension of Singapore’s Mass Rapid Transit (MRT) system.

“We don’t just have a practice that does construction,” said Wong. “We are an www.legalbusinessonline.com

industry-focused practice. Our lawyers are able to unpick and handle the most complex of issues in the construction industry quickly and effectively and having acted for some of the largest private and government-linked stakeholders in the sector means we have a very close and detailed understanding of the commercial, strategic and economic issues affecting the industry.”

Building for the future Not content with its already high-profile in the construction space, Rodyk & Davidson plans to deepen the breadth and expertise of its practice in the immediate future. Paul Wong says this involves further aligning the firm’s construction practice more closely with its award-winning Real Estate practice as well as better leveraging the firm’s international arbitration experience. As Wong points out, “With Singapore fast becoming a hub for international arbitration, construction is fertile ground for arbitration work. In addition we have a very strong project finance practice and we are able to offer this expertise throughout the ASEAN region to help clients.”

Training is always a priority at Rodyk, and Wong says part of strengthening the depth of its practice, is the firm’s continuous investment in its young lawyers to enable them to specialize in the front and backend work: “This will ensure that we continue to have the resources to work on the largest projects both in Singapore and internationally,” Wong said. It is no wonder that Rodyk, Singapore’s oldest law firm and one of the largest with 150 lawyers is excited about celebrating its 150th year in 2011.

Rodyk, a leading Singapore law firm with an active regional practice and an office in Shanghai, celebrates its 150th anniversary in 2011, a century and a half of practical advice and effective representation at the commercial crossroads of Asia.

Rodyk & Davidson LLP 80 Raffles Place #33-00 UOB Plaza 1 Singapore 048624 Telephone +65 6225 2626 Facsimile +65 6225 1838 Email mail@rodyk.com

►► All round expertise: Rodyk & Davidson’s Construction credentials PPP: • Acted as the Singapore legal counsel for the Singapore Ministry of Education, which launched a PPP project for the construction, operation and maintenance of five schools using the PPP procurement method • Acted as Singapore legal counsel for the Singapore Management University in respect of a PPP project for the construction, operation and maintenance of student accommodation using PPP procurement method • Acted as Singapore legal counsel for bidders in respect of the Singapore Sports Hub PPP project

Projects & Project Management: • Advising on the building of the new Khoo Teck Puat Hospital (est. project value S$450m), from project inception, including documentation for selection of project managers, consultants, contractors and subcontractors, and management of project risks • Advising on the building of the Republic Polytechnic campus (est. project value S$350m), from project inception, including documentation for selection of project managers, consultants, contractors and subcontractors, and management of project risks.

• Advising major Singapore shipyard-contractor on the development of an oil rig (central processing platform, Living quarters platform, Wellhead platform) under Engineering, Procurement, Construction (EPC) type contract in an offshore area developed jointly by 2 foreign governments.

Disputes: • Acted for Boustead as developer and main contractor in relation to long-term sand supply agreements affected by the Indonesian sand export ban, achieving a successful outcome by mediation after issue of proceedings.

• Acted for Nishimatsu Construction in the collapse of Nicoll Highway, resulting from tunnelling works for the construction of the Circle Line mass rapid transit. This remains the largest construction accident in Singapore’s history.

• Acted for owner in arbitration against designer and builder of a cement silo in Singapore which suffered catastrophic damage arising from design and building errors • Acted for a major US chemical industry MNC in a claim against its Japanese contractor for process defects in its Singapore plant • Acted in a Singapore arbitration between bored piling contractor and main contractor of one of the contracts for the construction of the Singapore MRT Circle Line; • Acted in an arbitration between specialist subcontractor and main contractor on sand compaction for land reclamation.

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Feature | building & construction >>

skills to most clients’ satisfaction.

But these developments run parallel with clients’ demands that lawyers be more involved in projects. The lawyers interviewed said they are now more likely to be engaged as ‘project counsel’ rather than just brought in to advise on one part of a deal.

“The demands we see clients making now are not necessarily a direct result of the financial crisis, but more about clients focusing more closely on risk management for the entire duration of their projects,” says Wong. “They are looking to ensure that legal issues are dealt with at each stage of projects, rather than have things end with long, protracted and costly disputes.”

Asia’s construction heavyweights go international One of the most salient trends seen in Asia’s building and construction industry over the past 12 months has been the increasing international activity of Chinese construction companies. Not simply satisfied with handling mega-projects on the mainland, companies like China

top ten international contractors − has seen 128% growth in its overseas revenues for the first half of 2009 (US$1bn). Some of the bids it won last year included building roads in Fiji, Ethiopia, Ghana and Gabon, and railway restoration projects in Venezuela.

“Chinese construction Richard Lee Bae Kim & Lee companies are fastbecoming a force to be reckoned with internationally,” says Connor. “They are bidding against and winning projects from companies with deeper roots in the industry and this is a trend which will only continue in the years ahead.” But Connor does concede that Chinese companies face stern tests from East and South Asian rivals. This battle is perhaps most evident in the Middle East, where Korean contractors are currently ahead. Here, companies like SK Engineering & Construction have cast a conspicuous shadow over the region’s construction and contracting markets, by winning rights to build oil refineries, petrochemical

“This is a very good time for firms to build up their practices in this area. With all of the planned development in the pipeline, you can clearly see the prospects of growth for at least the next five years”

Paul Wong

Rodyk & Davidson Railway Group, China Railway Construction Corporation and China State Construction Engineering Corporation have significantly expanded their global credentials by beating their more experienced and established European counterparts to mandates, on some of the world’s largest construction projects.

A quick glance at the latest statistics from the Engineering News-Record (ENR) shows 50 Chinese companies made it into the 2009 Top 225 International Contractors ranking.

Their total revenue from overseas markets reached US$43.2bn in 2008 – a stunning 90% year-on-year growth rate. For example, China Railway Group −the world’s second-largest construction contractor by total contracting revenue and one of China’s

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plants and nuclear power stations.

“The current Korean success in the GCC is the result of more than 30 years of effort,” says Richard Lee, who specialises in Middle East work for Bae Kim & Lee. “Korean contractors have been working towards this moment since the 1970s when they first started to win major civil engineering projects in the region.” And even though Lee admits Chinese companies are catching up, he says that “the Chinese will take a lot less time to do the same thing.”

Others suggest that the fact that Chinese companies are yet to prove their credentials in the region means this may not happen either as quickly or in the form that many are expecting.

Woo Sang-Ryong, the president of GS Engineering & Construction in the Gulf, explains further. “The Asian Legal Business ISSUE 10.6

Feature | building & construction >>

►► Top 10 Chinese contractors – total contracting revenue ENR rank 2 4 6 7 9 29 31 32 48 55

Company

Headquarters

2008 revenue (US$m) total 34,548 32,417 27,659

New contracts in 2008 (US$m) 62,731 54,111 57,104

China Railway Group China Railway Construction Corporation China State Construction Engineering Corporation China Communications Construction Group China Metallurgical Group Corporation Shanghai Construction (Group) General Corporation Sinohydro Corporation Zhonghao Overseas Construction Engineering Co Dongfang Electric Corporation China National Chemical Engineering Group Corporation

Beijing Beijing Beijing Beijing Beijing Shanghai

25,966 23,314 10,062

40,707 30,973 10,024

Beijing Beijing Chengdu Beijing

8,923 7,671 5,111 4,399

14,141 21,094 11,142 7,810

Source: ENR’s 2009 Top 225 Global Contractors

17 25 28 51 56 59 61 62 72

Company

Headquarters

Zhonghao Overseas Construction Engineering Co. China Communications Construction Group China State Construction Engineering Corporation China National Machinery Industry Corporation China Railway Construction Corporation Sinohydro Corporation CITIC Construction China Metallurgical Group Corporation China Railway Group China Civil Engineering Construction Corporation

Vincent Connor

Pinsent Masons

►► Top 10 Chinese contractor – international contracting revenue ENR rank 14

“Chinese construction companies are fast-becoming a force to be reckoned with internationally.

They are bidding against and winning projects from companies with deeper roots in the industry and this is a trend which will only continue in the years ahead”

Beijing

2008 revenue (US$m) international 7,671

2008 revenue (US$m) total 7,671

Beijing

5,859

25,966

Beijing

3,523

27,659

Beijing

3,081

3,858

Beijing

1,957

32,417

Beijing Beijing Beijing

1,804 1,621 1,373

8,923 1,672 23,314

Beijing Beijing

1,338 1,083

34,548 1,233

Source: ENR’s 2009 Top 225 International contractors

problem [with Chinese and Indian EPC contractors] at the moment is with quality and project management capabilities,” he says. “You need to understand that with Middle Eastern clients it is not just about money, it is about value for money.”

Woo says that in their eagerness to catch up with more established players in the Gulf, Chinese EPC contractors may well partner with Japanese, US and European EPC contractors, who have the core technology and prequalifications for things such as process plant contracts.

Hong Kong provides an interesting contrast Paul Wong Rodyk & to the situation above Davidson where here, lawyers observe that the reverse is occurring; international contractors are entering the domestic market with a frequency www.legalbusinessonline.com

never seen before. “International contractors are winning rather large packages in Hong Kong and this is very significant,” says Connor. “If we take a step back 12 months, these jobs would have been snapped up by old local players so it is definitely interesting to see new blood in the sector. It is a win-win situation: it creates local jobs and also fills capacity gaps in terms of what local contractors could do and the requirements of projects.”

These seemingly contrasting trends underline the dynamism of Asia’s building and construction markets and highlight the opportunities on offer for law firms. As Rodyk’s Paul Wong points out, “this is a very good time for firms to build up their practices in this area.

With all of the planned development in the pipeline, you can clearly see the prospects of growth for at least the next five years.” ALB

39

profile | managing partner >>

40

Asian Legal Business ISSUE 10.6

profile | managing partner >>

alb/Aderant 2010 managing partnerS series

David Fagan, Clayton Utz

Frankly speaking…

Clayton Utz chief executive partner David Fagan has never been short of a well-turned phrase or two on what makes the industry tick. He speaks with ALB’s Renu Prasad on what the future holds for the firm

I

t might just be a touch of that fabled Clayton Utz self-assurance, but David Fagan is feeling quietly optimistic. “We are very confident about the firm. What we’ve seen is that the partner group has been very energised by what’s happened and is very focused on making sure the firm powers ahead,” he declares.

Confidence, of course, has always been key to the Clayton Utz persona.

That is precisely why February’s raid

by Allen & Overy created such a stir, prompting ironic suggestions that perhaps the hunter had finally become the hunted. But hearing Fagan’s relaxed commentary on the matter, one gets the impression that he is not feeling particularly vulnerable. “We wish the partners that have left all the best – they made a choice about the direction they want to pursue,” he says.

“Frankly we’re not overly concerned by the way in which the resignations happened – better for it to happen quickly rather than to be drip-fed over weeks.”

Clayton Utz grew revenues by about 5% in 2009 to A$490m, but it has budgeted for a small decline for FY2010 to A$470m – a budget which has thus far remained largely on track. “The litigation and major projects group had a stellar year in FY2009,” says Fagan.

“Litigation has been quieter over the last eight months but we predict that the group will be very busy over the

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next six to eight months.” He says that the signs are also positive for transactional activity, although it is still too early to assess the true state of the market.

Hong Kong

March has brought the surprising announcement that Clayton Utz will be opening its first offshore office in Hong Kong. The two-partner office will be led by Glenn Haley, who most recently headed up Deacons’ Hong Kong construction practice, and Clayton Utz partner Colin Dodd, who has been based in Hong Kong for a number of years. The office will focus on construction and major projects and international dispute resolution, although expansion into other areas is not being ruled out.

The situation is not unlike the way Mallesons first entered the Asia market with the recruitment of local construction lawyers David Bateson and Paul Starr, who brought across their teams from Hong Kong firm Denton Hall & Burgin. Mallesons, however, arrived in Hong Kong in 1989, which raises the question of why Clayton Utz has waited 20 years to follow suit. Could this be a shift away from the traditional relationshipsbased strategy employed thus far?

Fagan says that it isn’t. “This move doesn’t derogate from what we’ve done with Lex Mundi or PRAC – it’s a logical

extension of the construction and major projects work we’ve done in Asia,” he says. “We remain committed to our relationships with local Hong Kong firms. In fact, we expect there will be more opportunities to work with local firms in the region, as the result of our having a presence on the ground in Hong Kong.”

The firm signed off on the Hong Kong office last October after the opportunity presented itself to form an association with Glenn Haley.

The decision was driven in part by the growing international focus of the construction and major projects practice. “No doubt in certain sectors clients are globalising and looking for more global solutions,” says Fagan.

“Construction and major projects is an area where we do a lot of work internationally and it made sense to take that next step.”

Running a tight ship

Clayton Utz has traditionally had a highly profitable practice, with a margin which is understood to be about 47%. Fagan prefers not to comment directly on this figure, but says that an efficiently run firm should be able to maintain a margin of at least 45% in ordinary circumstances.

Clayton Utz has been able to maintain its margins by generating strong revenue growth and reducing its fixedcost base.

41

profile | managing partner >>

“We have not allowed the fostering of any culture of entitlement within the partner group – partners are expected to perform and contribute like everyone else. Our partners understand that over time, how they are rewarded must reflect what they put into the firm, not simply in dollar terms but in a holistic sense ” David Fagan

Clayton Utz

42

Some of the steps the firm has taken should prove instructive for others. Recent reforms to systems for collecting information on disbursement recovery are a case in point. “We realised our system to track disbursement recovery cost more than the amount actually recovered – so we negotiated the cancellation of different [software] licences to ensure that we didn’t incur that cost and we were able to pass that saving on to clients by not charging for certain disbursements,” says Fagan. Other measures including moving staff performance reviews and some training online, and the firm is always keeping an eye out for new ways to “re-engineer” processes.

“We have huge infrastructure in relation to email and document storage systems – should we move to more external Clayton Utz-hosted service providers such as Google mail?” asks Fagan hypothetically. “Obviously there are confidentiality and privilege issues, but over time you expect to see cheaper solutions and firms need to be looking constantly at these kinds of issues.”

As well as ensuring the firm runs efficiently, one of the biggest challenges of the CEP role is effective partner management. Fagan says the firm’s success and ability to remain competitive depends on it. “We have not allowed the fostering of any culture of entitlement within the partner group – partners are expected to perform and contribute like everyone else,” he says. “Our partners understand that over time, how they are rewarded must reflect what they put into the firm, not simply in dollar terms but in a holistic sense.”

And the rewards are there for partners who do perform. Despite a strong increase in revenue, the number of equity points on offer has remained steady in recent years and the firm is a supporter of the lock-step principle of sharing profit equally. “We like the concept of a lock-step and the teamwork between partners that this involves,” says Fagan. Half of the partnership is structured into what is referred to as “black box” teams, which report financially as a single group ranging from two to 15 partners in size.

“The partners in each group have a significant degree of autonomy as to how they manage their practice and

allocate responsibility. We’ve found that’s been a motivator for a more team-oriented behaviour,” says Fagan.

Show me the money

Given increased revenues last financial year, some suggest that the firm’s salary freeze was an inappropriate response to the financial crisis.

However, Fagan points out that the decision to implement the freeze was taken at a time when dire economic predictions were being made for FY2010.

“Obviously we know in hindsight that the outcome was far more benign than anticipated,” he says. “But if you were looking at it in March 2009 there was a high degree of concern as to where the economy was going. We were budgeting for lower revenue and increased competition, and the general view was that it was going to be a rocky road.

I would defy anyone to look at that March 2009 period and say that they were prepared to predict the outcomes that did actually materialise.”

The point was driven home when he visited the US in February 2009. “A number of firms were talking about taking their cash account balances out of the major banks because they feared a collapse,” Fagan recalls. “Now if you’re in an environment like that, common sense dictates you take a prudent approach.”

Fagan says that the firm is conscious of the loyalty and support shown by its lawyers and staff and has announced a thawing of the salary freeze. “Our intention was always that salary freeze would only last for a year and in fact it will have lasted for less – a full three months head of the time we would normally do those reviews.” ALB

►► Time of transition

• After nine years in the CEP role, Fagan will hand over the reins to CEP-elect Darryl McDonough in July.

• Fagan will remain part of Clayton Utz after the handover, focussing on his banking and financial services practice.

• McDonough, currently a partner specialising in corporate and M&A, has been with the firm since 1993.

• The appointment to the CEP role will be for an initial term of three years.

Asian Legal Business ISSUE 10.6

ALB special report | Malaysia 2010 >>

Malaysia 2010 44

Asian Legal Business ISSUE 10.6

ALB special report | Malaysia 2010 >>

Outward bound

With competition in Malaysia’s burgeoning legal services market reaching unprecedented levels, law firms are looking offshore for growth. ALB reports.

A

s Malaysia enters the second half of 2010, the situation facing its burgeoning legal services market is not dissimilar to that facing lawyers in other parts of the region. 2009 was a slow year by almost every measure.

Capital markets activity was deflated, corporate transactions were few and far between and finding financing for those deals that did go ahead was likened to ‘finding a needle in a haystack.”

But the New Year brought with it new opportunities. Impressive 2009 gains saw the country cement its position as the region hub for Islamic finance, and the deals pipeline is once again flowing freely. So much so that a number of law firms ALB interviewed for this special report expect to register improved revenue and headcount growth. Yet while their short-term growth is assured

by Malaysia’s domestic economic renaissance, law firms realise that in the long term they must look beyond the expansive Malay peninsula.

Exporting Islamic finance: a growth path for Malaysian law firms Islamic finance, a staple of the Malaysian economy for much of the last decade, continues to keep law

firms busy. The last decade may, in the long run, be looked upon as the year when the country came into its own and truly cemented its position as the region’s hub of Islamic finance. It is the next decade – and the very real possibility that Malaysia may become the focal point of Islamic finance globally – that has lawyers in the country enthused.

Here, it is worth highlighting that in the first quarter of this year, Malaysia’s companies far outstripped their Gulf counterparts in sukuk issues claiming a market share of close to 60% (see box, p46).

Volume is of course important. But where Malaysia is really making inroads is in the complexity of deals that are coming out of the country. For example, last year, low-cost carrier AirAsia launched a US$336m Islamic French-Malaysian lease to finance eight new aircraft; a year earlier it issued US$158.5m in sukuk to finance its capital expenditures. Both deals are widely considered to be “ahead of their time” for Islamic finance industry.

This is not to mention two other deals that were also headline grabbers: Maxis US$3.3bn IPO and Safeena’s Shariah shipping investment – the latter being the first purchase and forward lease structure used by a

►► Malaysia: Number of legal Practitioners Year 2006 2007 2008 2009

Total practitioners 12,443 12,916 12,906 13,196

►► Malaysia: largest law firms Rank 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Firm Zaid Ibrahim & Co SKRINE Shook Lin & Bok* Shearn Delamore & Co Zul Rafique & partners Lee Hishammuddin Allen & Gledhill Raja, Darryl & Loh Kadir Andri & Partners Wong & Partners*** Azmi & Associates

No. lawyers & partners 117 93 87 86 76 71 52 48 42 41

“Exporting knowledge and know-how is an area where Malaysian law firms can – and have to do better” Andri Aidham

Kadir Andri & Associates

shipping fund. As Andri Aidham, a partner at Kadir Andri & Partners says, “if you look at the Islamic finance deals being done in the Malaysian market at the moment, you will see that the instruments and structures we are using are more dynamic and complex than anywhere in the world.”

Mohamed Rizda, founding partner of Mohamed Rizda & Co concurs with Andri when he says “Malaysia has the most advanced regulations in Islamic capital markets worldwide,” but Rizda, and others, do note that as far as the country has come over the last decade it still has much further to go. If it is to attain the status as an international hub for Islamic finance, it must first fulfill its obligations in its own backyard and play more of a leadership role regionally.

►► Comparison of Size of Law Practices Year

2006 2007 2008 2009

Sole proprietors 2,896 2,891 2,804 2,867

Managing partner(s) Chew Seng Kok Lee Tatt Boon Too Hing Yeap Wong Sai Fong Dato' Zulkifly Rafique Muthanna Abdullah Dato’ Rajasekaran Murugaiah Kadir Kassim Brian Chia Azmi Mohd Ali

Type of practice and number of lawyers 2 to 5 6 to 10 11 to 20 21 to 30 2372 190 53 6 2432 217 55 4 2397 228 56 11 2412 246 52 7

Total lawyers 77 54 60 46 38 49 35 35 32 33

Total partners 40 39 27 40 38 22 17 13 10 8

>31 18 20 16 17

Offices 12 1 1 2 2 3 1 1 1 3

***Baker & McKenzie affiliate | *approx

www.legalbusinessonline.com

45

ALB special report | Malaysia 2010 >>

According to Azmi Mohd Ali, managing partner of Azmi & Associates, this involves “widen[ing] the acceptability of Islamic finance internationally;” a process in which Azmi Modh Ali Azmi & Associates Malaysian lawyers, and their peers in the financial services industry, will need to play an important role.

Speaking to ALB earlier this year, Amir Fazael Zakaria, a senior counsel for AirAsia, said that Malaysian lawyers help push products in nascent Islamic finance markets, singling out Indonesia as the most obvious example. “Indonesia is a country with a population of almost 300 million, and is also untapped for Islamic finance.

It is not just in terms of the aviation industry but for consumer banking. It’s why Malaysia continues to place itself as a hub. We have a head-start since we started taking baby-steps almost three decades ago.”

Some are looking even further south than the world’s most populous Muslin nation. Zaid Ibrahim’s recent announcement that it would enter Australia to service the country’s hitherto non-existent Islamic finance market – while seen by many as yet another futile attempt to revive its flagging domestic fortunes – is evidence of the opportunities on offer for Malaysian law firms involved with the propagation of Islamic finance across the region. ►► Top 10 global Islamic bond issuer rankings: 2010 Q1 Pos.

Issuer

Deal value (US$m)

%share

1

Danga Capital Bhd

612

34.7

2

Dar Al-Arkan Real Estate Development Co

446

25.3

3

Khazanah Nasional Bhd

228

12.9

4

Saudi Hollandi Bank

193

11.0

5

Gamuda Bhd

97

5.5

6

Cagamas Bhd

94

5.3

7

PT Perusahaan Listrik Negara-PLN

32

1.8

8

Sunrise Bhd

29

1.7

9

Tradewinds Corp Bhd

15

0.9

10

Aeon Co Ltd

9

0.5

Source: Dealogic

46

“Exporting knowledge and know-how is an area where Malaysian law firms can – and have – to do better,” says Andri. “Indonesia and other countries in South-East Asia could benefit from our knowledge of how to structure Islamic finance deals, as well as from our knowledge of how to handle debt structuring and restructuring exercises.”

But the export of knowledge and know-how is not the only nexus through which Malaysian law firms can broaden their international horizons. The increasingly global outlook being adopted by the country’s corporate sector is also pushing the nation’s law firms into new areas of practice and jurisdictions.

Malaysian firms go international

Just as the last 12 months have seen the country’s economy become more cosmopolitan and international in outlook, so too has Malaysia’s legal services market started to look offshore for growth. In fact, it can justifiably be stated that 2009 was a year like no other in this regard, with a number of law firms opening offices overseas, striking alliances or joining international legal associations.

Naqiz and Partners, for example, set up a Mohamed Rizda two-partner/two-lawyer Mohamed Rizda & Co practice in Jakarta under the moniker Bastaman Enrico; Mohamed Rizda & Co embraced its membership of LawWorld, an independent international network of international law firms of which it is the exclusive Malaysian member; while Zaid Ibrahim announced that it would enter Australia in 2010.

Azmi was perhaps the most active on the international expansion front.

Over the past 12 months the firm has launched a China desk, entered into a strategic alliance with PRC firm ZhongYin, will soon announce a similar arrange with a yet-to-be named Indonesian firm and is in the process of achieving regulatory approvals to open an office in Singapore. The firm has also brought two new foreign legal consultants on board: Michael Doyle (US-qualified) and Suhaimi Laziri

“Indonesia is a country with a population of almost 300 million, and is also untapped for Islamic finance. It is not just in terms of the aviation industry but for consumer banking. It’s why Malaysia continues to place itself as a hub” Amir Fazael Zakaria

AirAsia

(Singapore). “Even from ancient times of international trade, going global will always catapult the economy towards greater prosperity. For law firms an international strategy is not only a matter of new sources of revenue, but also a matter of mutual learning of new skills and ways of thinking.”

For Syed Naqiz Shahabuddin, founding partner of Naqiz & Partners, an overseas office has allowed his firm to get a headstart on more established players in the cross-border market, while Rizda believes that his firm’s membership of WorldLaw allows it to handle work they might not otherwise have had. This is not to mention the firms that have international presences through different means, namely alliances and tie-ups with global law firms.

A new breed of Malaysian law firm

Despite the international expansion of a number of players last year, those firms with a meaningful presence outside of the country remain firmly in the minority. While this has a lot to do with investment flows (Malaysian clients have been slower to go outbound than their counterparts in Singapore, PRC or Hong Kong), for others it is a function of an over-regulated legal services market.

“Until recently Malaysian law firms faced restrictions in terms of selfpromotion and publicity. This cultivated a very old-fashioned approach to law and took things like international offices out of the picture,” says Andri. “This will change now, Cont p50 Asian Legal Business ISSUE 10.6

Firm Profile ALB special report | Malaysia 2010 >>

Kadir Andri & Partners

Preventing The Transhipment Of Strategic Items: The Malaysian Strategic Trade Bill 2010

M

alaysia, straddled by the Straits of Malacca and the South China Sea, has an undeserved reputation for being a transhipment point for networks smuggling materials for the proliferation of Weapons of Mass Destruction (“WMD”). The accusation against the country is that its lack of export control legislation encourages rogue networks to transit illicit materials through its ports.

The Malaysian Government recently tabled the Strategic Trade Bill 2010 (“the STB”) at the Dewan Rakyat, the Malaysian equivalent of the House of Representatives, where the STB was passed on 5.4.2010 after its third reading. The STB was passed by the Senate on 26.4.2010 and is expected to be gazetted into law by this year.

The proposed legislation provides controls for the export and transhipment of strategic items from and through Malaysia. Provisions in the STB seek to prohibit (1) the export, transhipment or bringing in transit through Malaysia of strategic items; (2) the providing of technical assistance (which includes instructions, skills, training, the provision of working knowledge and consulting services, and the transfer of blueprints, plans, diagrams, models, formulae, tables, designs, specifications, and manuals) by any person from within or outside Malaysia for use in connection with any activity that supports the development, production, handling, usage, maintenance, storage or proliferation of any WMD; and (3) the brokering by any person of strategic items unless the person is registered and holds a valid permit for the brokering of such strategic items.

‘Strategic Items’ are defined by the STB as items published in the Government Gazette and prescribed by the Minister for International Trade and Industry (“the Minister”) as strategic items for purposes of the STB. Thus at this juncture, prior to the gazetting of the STB, it is not as yet known what items and or goods will qualify as ‘Strategic Items’ within the STB. The punishment on conviction of an offence under the STB is severe. Any act done by an individual with the intention of

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unlawfully exporting and or transhipping strategic items is punishable by death or life imprisonment, if the said act results in the death of others. An act by a body corporate is punishable with a minimum fine of RM 30 million. There is no maximum fine provided in the STB. A Strategic Trade Controller (“the Controller”) will be appointed by the Minister to oversee the implementation of the provisions of the STB, and whose functions will include dealing with the regulation of strategic items, issuing permits, issuing guidelines for dealing with applications for permits, registering brokers, and issuing directives on the implementation of export screening processes. This is unlike the system currently in place in the US, where the control system is administered by a myriad of departments, licensing agencies and enforcement agencies with overlapping and duplicative powers, rather than a single administrative body. A relic of the cold war, the US control system is currently undergoing reform and streamlining.

The STB confers wide ranging powers to amongst others customs officers, police officers and officers of the maritime enforcement agency to enforce its provisions (“Authorised Officers”). Authorised Officers have the power to stop, enter, board, inspect and search any place, premise, structure, vessel, train, vehicle and aircraft; the power to recall any vessel, train, vehicle and aircraft that departs from any port or place in Malaysia; to search without warrant any place, premise, vessel, train, vehicle and aircraft and seize any container, package, vessel, train, vehicle, aircraft, document and computerized data; to arrest without warrant those suspected of committing or having committed an offence under the STB; and to intercept communications and transmissions.

The STB however does limit the said broad powers to situations where the peace, good order or national security of Malaysia is being compromised.

There are also provisions in the STB that allow the Minister to designate an end-user as a restricted end-user or a prohibited enduser. No strategic items may be exported

or transhipped to a designated restricted end-user unless a special permit has been issued for such purpose. No strategic items may be exported or transhipped at all to a designated prohibited end-user. The list of countries, organizations and or individuals who will be designated as restricted endusers or prohibited end-users has not yet been published by the Minister in the Government Gazette.

Interestingly, it is stipulated in the STB that it shall have extra territorial effect and that the courts of Malaysia would have extra territorial jurisdiction in respect of offences committed under the STB by any person in any place outside Malaysia. It however remains to be seen how this will be given effect to in practice.

Nahendran Navaratnam E: nn@kaaplaw.com

Amir Salleh E: amir@kaaplaw.com

Messrs Kadir, Andri & Partners 8th floor Menara Safuan, 80 Jalan Ampang, 50450 Kuala Lumpur, MALAYSIA. G: +603 2078 2888 F: +603 2078 8431 W: www.kaaplaw.com

47

Jurisdiction Profile ALB special report | Malaysia 2010 >>

Labuan IBFC

Labuan Trusts Act compared to provisions in other jurisdictions

T

he jurisdiction of Labuan, Malaysia’s International Business and Financial Centre located in Sabah, has set its sights on becoming a leading wealth management centre for Asian investors. To serve the burgeoning needs of the private banking sectors in Asia Pacific, Labuan has re-drafted its trust laws which were enacted on 11 February 2010.

In this article, Mark Lea (Partner of Lea & White and Managing Director of Lea & White International Advisers Limited) provides some highlights on the new Labuan trust laws.

These laws were drafted with the assistance of Lea & White, a leading trust law specialist in the region.

CONTROL: Retention of control by a Settlor or Protector is one of the most sought after features in trust law, particularly in Asia. The Labuan Trusts Act (“LTA”) offers reserved powers to a Settlor, similar to Jersey.

Also, similar to the British Virgin Islands Special Trusts Act (‘VISTA’), LTA includes the ‘Labuan Special Trust’ (LST) to ‘enable a trust of company shares’ to be established under which (a) the shares may be retained indefinitely; (b) the management of the company may be carried out without power of intervention by the trustees.

Compared to VISTA, LST is more contemporary as the trustee is not liable for losses from speculative or imprudent activities of the company, and despite the trust to retain the designated shares, the trustee has power to sell them as well as protection when exercising the power.

DURATION OF TRUST: Another sought after feature is for the trust to exist in perpetuity.

Bermuda, Guernsey, Jersey, Dubai and now Labuan allows perpetual trusts as a default provision. There is flexibility for a fixed term trust to be converted to a perpetual trust and vice versa; shorten or extend the duration; and making this retrospective for existing trusts.

UNENFORCEABLE FOREIGN CLAIM: Protection against a foreign law claim or enforcement of a foreign law judgement is provided for in Labuan, which compares favourably with Dubai, Bahamas, Bermuda, BVI, Guernsey and Jersey and to a limited extent, Singapore.

48 48

TYPES OF TRUSTS: Labuan has introduced Purpose Trusts thus comparing favourably with Cayman’s STAR Trusts, Guernsey, Dubai, BVI, Jersey, Bermuda and Mauritius.

It has included the promotion of art, science, religion and unique to Labuan, ‘the advancement of human rights and fundamental freedom’.

TRUSTEES’ POWERS AND DUTIES: In place of the ‘statutory duty of care’, Labuan has the common law standard of ‘the prudent man’ test. It has also introduced specific provisions relating to Trustees’ powers in investment, delegation and insurance while Labuan’s modern statement of Trustees’ duties compares well with Dubai.

CONFIDENTIALITY: Labuan has provision ensuring confidentiality balanced against provisions requiring Trustees to provide information.

PROTECTORS AND BENEFICIARIES: Good modern trust law provides for a Protector as a watchdog for the Beneficiaries and Labuan covers these matters.

Labuan compares favourably with Guernsey and Dubai with its provisions identifying Beneficiaries; powers of addition and removal or exclusion of Beneficiaries; disclaimer by a Beneficiary of his interest in whole or part; class closing rules; and determining the nature of a Beneficiary’s interest and whether or not the Beneficiary can deal with that interest.

RIGHT TO INFORMATION: Labuan’s guidelines covering the right for Beneficiaries, a Settlor, Protector, enforcer and for the Court to receive information, position Labuan at the same level as Dubai and Mauritius.

NATURE AND EXISTENCE OF A LABUAN TRUST: LTA describes the Settlor as either a “qualified person” (a non- Malaysian resident) at the time the trust is created, or “resident” at that time provided the trust property does not include any Malaysian property.

Beneficiaries have to be “qualified persons” at the time the trust is created or at a time they become entitled to be beneficiaries.

Unlike Guernsey which permits trusts to be created orally or by conduct, a Labuan Trust must be in writing and can be by unilateral Declaration of Trust which need not name the

Settlor. Thus, Labuan provides the clearest and most user friendly provisions in trust laws.

THE PROPER LAW OF A LABUAN TRUST: The law governing a Labuan trust is that chosen by the Settlor or implied in the trust.

In this respect, Labuan compares suitably with Dubai, the Cayman Islands, Bermuda, Guernsey, Isle of Man and Jersey.

MIGRATION OF A LABUAN TRUST: Labuan, like Dubai, has provided for the redomiciling of trusts into and from the original territory with a consequent change of proper law.

LETTER OF WISHES: An unusual provision that puts Labuan in a positive light concerns the letters or memoranda of wishes given by the Settlor, a Beneficiary or a member of a class of Beneficiaries.

Marketing Office Labuan IBFC Inc. Sdn. Bhd. (817593D) Suite 2B-11-3, Level 11 Block 2B Plaza Sentral, Jalan Stesen Sentral, KL Sentral 50470 Kuala Lumpur, Malaysia.

Tel: +6 03 2773 8977 Fax : +6 03 2780 2077 Email: info@LabuanIBFC.my www.LabuanIBFC.my Written by MARK LEA Lea & White International Advisers Limited 12/F HK Diamond Exchange Building 8-10 Duddell Street Central, Hong Kong Tel: 00 852 2528 2097 Fax: 00 852 2840 0480 email: mark.lea@leawintl.com

Asian Asian Legal Legal Business Business ISSUE ISSUE 10.6 10.6

ALB special report | Malaysia 2010 >> www.LabuanIBFC.my

Our innovative Trusts Act will

store up your wealth more wisely

PYGMY FLYING SQUIRREL this squirrel, the smallest flying squirrel species, is found in the jungles of Borneo and Peninsular Malaysia, where they gather fruits, nuts and bird’s eggs.

Today’s uncertain times demand more efficient strategies to safeguard your assets and grow your wealth. Small wonder then that international companies and high net worth individuals are making tracks to Labuan International Business and Financial Centre.

•

In barely 20 years, a multitude of companies, insurance entities and banks have been established here to enjoy our generous tax incentives, comparatively low costs of operations and one of the largest double taxation treaty networks in the region.

•

Our clear laws provide superior protection and certainty, while new ones provide greater flexibility in the way you do business.

For example, the types of trusts offered under our Trusts Act are as modern as they are ground-breaking:

•

•

The Labuan Special Trust is ideal for succession planning among high net worth individuals and families as the trustee cannot interfere in the day to day running of the company.

www.legalbusinessonline.com

ConneCted Convenient Cost-effiCient

•

•

Non-residents may place their Malaysian assets into a Labuan trust while residents can set up a trust for their international or Malaysian assets on approval of the regulator, Labuan FSA The types of trusts range from purpose trusts to charitable ones.

Assets and roles of trust protectors are legally protected and clearly safeguarded by legislation.

As an alternative, civil law-based Labuan Foundations permit private estate planning and the establishment of charitable foundations.

A trust need not be registered with the regulator but a foundation must do so.

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49

ALB special report | Malaysia 2010 >>

From p46



but it will still require a big change in mindset… a more business-like approach.”

That the change in mindset that Andri speaks of is already occurring is evident not only in the recent outbound expansion by Malaysian law firms, but also in the success that smaller and less-established firms have had in reshaping the complexion of the country’s legal services market.

“There is a new breed of firm coming through in Malaysia at the moment,” observes Naqiz. “These firms are smaller and usually spin-offs from larger law firms, but what they lack in tradition they make up for in hard work and value-for-money.” Naqiz himself started his firm after stints at Skrine and Wong & Partners.

“Smaller players are more aggressive and you won’t find us relying on the strength of our brand like some of the larger players do… ” The success that less-established law firms have had is perfectly evidenced by looking at

No discounts

M

alaysian lawyers have voted against a free-market system to regulate legal fees, choosing to keep current rules dictating how much they can charge for legal services. This is despite continuing client demand for discounted legal fees, and the fact that lawyers could face disciplinary action for discounting or undercutting scale.

Malaysian lawyers are required to abide by the Solicitors Remuneration Order, which came into effect in 2006 to regulate the cost of non-contentious legal work. A proposal to abolish scale fees in preference for a freemarket system was voted down at the Malaysian Bar Council’s annual

50

which firms landed mandates on the largest deals of the last 12 months.

For instance, the Petronas Jumbo sukuk (Kadir Andir, Zul Rafique); Safeena First Investment (Azmi & Associates); Maxis IPO (Zul Rafique, Kadir Andri); Citigroup RM1bn Asset Securitisation (Mohamed Rizda & Co), are all conspicuous because of the lack of involvement by some of the country’s oldest and largest law firms.

And while the power and influence of some of Malaysia’s largest law firms has noticeably declined over the last decade, this should not detract from the feats of mid-tier firms in this period— a process which lawyers ALB interviewed noted will only deepen in the years ahead as the Malaysian legal services market continues to mature.

Even though the Malaysian legal services market is already witnessing unprecedented levels of competitiveness, recently introduced

socio-political changes are also likely to increase the competition between law firms. Earlier this year, the country’s Prime Minister Datuk Seri Najib Razak announced that the affirmative action policies which had hitherto informed almost all aspects of life in Malaysia would be augmented to become “more market friendly.”

Datuk Seri Najib Razak Under these plans, Malaysia PM the government will liberalise 27 service sub-sectors and dilute the requirement that the country’s indigenous people, bumiputra, hold at least a 30% share in corporate equity. And although the twin raison d’etre of the reforms are to encourage foreign investment into Malaysia’s tourism, legal and financial services sectors and wean the country off its dependence on royalties accrued from its oil reserves, it is also expected to change the way government – and government-linked companies –

general meeting in March, with an overwhelming 121 votes against, 10 for.

Managing partner of Lee Swee Seng & Co Lee Swee Seng proposed the motion, and said he was disappointed at the outcome but remains hopeful for change. “Lawyers by and large would like to tell the world that the SRO is being followed, while at the same time knowing that there is no way to enforce it. They have the liberty and the luxury to give discounts while there is no fire [on them], and they want to have the best of both worlds.”

The motion argued that the SRO was difficult to enforce because the pressure on firms to discount was too widespread; lawyers that don’t cut fees for clients are also likely to lose work to those that do; and clients will continue to demand discounts as they are not held accountable by the SRO. It suggested that instead, scale fees should be used only as a guideline, and that lawyers should not be accused of “unprofessional and improper conduct” by a disciplinary board for discounting by market demand.

According to a representative from the Malaysian Bar, the motion was voted down because lawyers feel that scale

fees are necessary for sufficient compensation.

Lee, however, said that the meeting was overrepresented by litigation lawyers who aren’t affected by the SRO as Lee Swee Seng Lee Swee Seng much as others, such as & Co conveyancing lawyers.

“Conveyancing lawyers aren’t likely to attend these meetings,” he said.

Former Bar Council president Ambiga Sreenevasan said that there is no way to monitor lawyers that undercut scale fees. “It’s down to the individual lawyer and some of them are spoiling [the system] for others [by discounting], so we should have a whistle-blowing system to report on those that do,” she said.

“There is a public interest element here – if lawyers are prepared to undercut we’re concerned that the quality of legal services will suffer.”

Discounting is not exclusive to the Malaysian experience – Asian firms are widely known for their competitive fees. But Lee said it should be the market dictating how much lawyers are paid. “I think in all fairness that it’s the public that needs protection from overcharging,” he said. ALB

Dilution of affirmative action: the great leveler for legal services?

Asian Legal Business ISSUE 10.6

ALB special report | Malaysia 2010 >>

procure legal services.

Azmi believes that while the Malaysian legal services market remains a “know-who” one, the dilution of affirmative action may contribute to a more equal playing field. He says that it will “dispel complacency and encourage fair competition in the legal services market.”

Where these changes will have the most salient short-term impact may be in relation to panel legal work.

At present, many of the country’s largest users of legal services have strict requirements regarding the composition of their panel firms in place, with a high number insisting that bumiputra lawyers hold upwards of 35% equity in their respective firms. Here, dilution of affirmative action could see firms without a large bumiputra contingent benefit.

But lawyers that ALB spoke to still question whether there will be any tangible gain here. They said that having bumiputra firms on the panel was mere “window dressing”,

questioning the extent to which bumiputra firms benefited under these policies in the first place.

“My firm has been placed on the panel of many banks as we are 100% Bumiputra. But we do not get the work we ask for,” said one lawyer, who did not want to be named.

“It is, in fact, even more depressing that once the firm has been placed on the panel, we are never to act against them, in other words, we can’t represent another party. So, it is better for most firms to stay [off] the bank panel. For instance, if we did their debt collection cases, they squeeze the legal fees until we would only survive if we did bulk work.”

Sentiments like this, which are quite widespread, indicate that it may take some time before the full effects of the dilution and affirmative action begin to manifest. In addition, as Azmi points out, it may take even longer to before politically connected law firms no longer enjoy favoritism and compete on a pure merit basis. ALB

The Malaysian competition act 2010: changed or be changed

T

he Malaysian Competition Act 2010 was passed by Parliament on 6 May 2010, a month after it was first tabled at the House of Representatives.

The speed at which it was passed surprised many since it took the Bill 17 long years to reach Parliament, but reflects the Malaysian government’s concern in providing more protection to consumers. The Act seeks to promote and protect the process of competition by changing the behaviour of businesses. The government has announced that the Act is likely to be implemented by mid-2011.

It prohibits anti-competitive agreements between enterprises and abuse of dominance.

Any entity that carries on commercial activities relating to goods or services will be caught. Agreements between enterprises are prohibited if they have the object or effect of significantly preventing, restricting or distorting competition in any market.

Enterprises which are in a dominant position are prohibited from engaging in conduct amounting to abuse of that dominance.

Unlike many other jurisdictions, the Act does

www.legalbusinessonline.com

not have merger control provisions.

The Act has extraterritorial effect.

Commercial activities transacted outside Malaysia will be caught if they have an effect on competition in Malaysia. Enterprises which are found to have infringed any of the prohibitions may be liable to a maximum financial penalty of 10% of their worldwide turnover for the period of infringement.

The Malaysian Competition Commission will be established to enforce the Act. The Commission is given considerable powers of investigation and enforcement. It may also provide individual and block exemptions for certain types of agreements. Interference with the Commission’s powers is an offence. Noncompliance with the Act will affect not only enterprises but their directors, management and employees too. Directors, CEOs, managers and company secretaries may be personally liable for their companies’ offences.

Enterprises are also exposed to civil liability as members of the public who suffered loss or damage as a result of an infringement have a right of private action in court.

“There is a new breed of firm coming through in Malaysia at the moment. These firms are smaller and usually spin-offs from larger law firms, but what they lack in tradition they make up in hard work and value for money” Syed Naqiz Shahabuddin

Naqiz & Partners

Firm Profile

SKRINE

A leniency program and stepped-reduction in penalties are also provided in the Act. Whistle blowing is encouraged - threats and reprisals against whistle blowers are an offence.

Malaysia’s new competition law brings us in tandem with our ASEAN neighbours and other developed nations. It is “gamechanging”. There will be no turning back once the Act is implemented. It will no longer be business as usual for Malaysian enterprises. They will either have to change or be changed.

Faizah Jamaludin, Head of Competition Law Practice Group SKRINE Unit No.50-8-1, 8th Floor, Wisma UOA Damansara 50 Jalan Dungun, 50490 Kuala Lumpu.

Tel: +603 2081 2999 ext 749 Email : fj@skrine.com

51

Feature | interview >>

In-house perspective

GCL-Poly:

Powerful advice Through a series of landmark transactions in recent years, GCL-Poly has become one of the largest players in the world’s solar power industry. ALB finds out how the in-house legal team has transformed itself into a vital, value-adding part of the business

A

s China leads the world in developing and investing in clean-energy technologies to curb carbon emissions, Hong Kong-listed GCL-Poly Energy Holdings has established itself as one of the top green energy operators in the country.

It is one of the leading polysilicon and wafer suppliers in the world, and consequently the company’s in-house legal department has expanded and evolved as the company has grown.

Starting with one person in 2001, the in-house team now consists of 15 lawyers located across the Shanghai, Suzhou and Hong Kong offices, handling the legal affairs and managing risks for a company that owns 21 subsidiaries and associated power plants, a solar farm and several polysilicon and wafer facilities. The legal team was selected as a finalist for the Foreign Company In-House Team of the Year Award at the recent ALB China Law Awards, recognised for being a first-class advisor to its company and the significant progress the team has made over recent years.

Susan Wu, the company’s chief legal officer for the power sector, is the founding member of GCL-Poly’s in-house team. Previously with a Shanghai law firm, she joined as the company’s first in-house lawyer in 2001 and helped build the in-house team to its current capacity. Wu sees a correlation between her team’s success and the senior management’s respect for the rule of law.

“The CEO and senior management team’s commitment to integrity and legal compliance forms a foundation for the in-house legal team to excel,” says Wu. “The team’s legal understanding,

52

business acumen and depth and strength of technical expertise, in turn, are the key factors determining success.”

Many obstacles and challenges exist on the road to success. Wu believes her team’s main challenge lies in achieving the right balance between safeguarding the company’s legal compliance measures and proactively supporting business growth. “For a dynamic company like GCL-Poly, we are constantly seizing exciting opportunities for growth. Naturally one must be alert [to the fact] every potentially rewarding project comes with commensurate risks,” she says. “We work closely with our company’s management, and other functional departments to formulate appropriate business strategy, and assist them in achieving and executing new business goals.”

To reach the right balance, Wu believes in-house counsel must strive to be value-adding members of the management team, as opposed to constantly raising obstacles. “Inhouse counsel, with their particular knowledge of the industry in which their company is engaged in, must be more innovative than external counsel.

They should be more able to devise viable solutions for potential projects to move ahead and become successful business units,” she says.

Landmark transactions

Since its inception, GCL-Poly’s in-house team has been involved in a diverse range of projects and investments, supporting the company to expand its green energy portfolio across cogeneration, biomass, incineration, wind and solar power sectors. “The

►► GCL-Poly deal highlights Date 11/2007

7/2009

8/2009 12/2009 3/2010

Deal IPO and listing on HKEx

Value US$152m

Firms involved Grandall (Beijing), Coudert Brothers (in association with Orrick, Herrington & Sutcliffe), Conyers Dill & Pearman, Clifford Chance and Commerce & Finance Law Offices Acquisition of US$3.4bn Allen & Overy, Conyers Dill 100% equity & Pearman, Freshfields, interest Grandall (Beijing), Hogan in Jiangsu & Hartson, Milbank Zhongneng Tweed, Paul Hastings and Ropes & Gray Placement US$471m undisc. of 1.3 billion new shares CIC US$709m Freshfields, Richard Butler investment in in association with Reed GCL-Poly Smith Acquisition US$125m Freshfields, Grandall of controlling (Beijing), Jingtian & stake in Gongcheng Konca Solar

in-house team has always had a strong and close working relationship with the investment department, and has developed a wealth of expertise in legal issues relating to all aspects of the company’s business,” says Wu. The past four years, in particular, have seen the team playing an instrumental role in the company’s milestone developments. These include its IPO on the HKSE in November 2007, and the US$3.4bn acquisition of Jiangsu Zhongneng Polysilicon Technology Development in July 2009. “The 2007 IPO marked a significant milestone in the life of GCL-Poly, and it served as a passage for the in-house legal team to reach a higher level of maturity,” says Wu. “The IPO process has really tested our team’s abilities, but we’ve gained a tremendous amount of first-hand knowledge and experience on a wide array of issues and listing-related matters through working on the deal from the very beginning.”

Asian Legal Business ISSUE 10.6

Feature | interview >>

In the 20 months leading up to the IPO launch the in-house team was extremely busy, working closely with the internal IPO execution team and 15 external advisors and intermediate institutions. These included the PRC, Cayman Islands, Hong Kong and international legal counsel, financial advisors and underwriters, all finding solutions for many complicated issues during the preparation process. The inhouse team played an important role in managing the data room, coordinating due diligence, restructuring, obtaining regulatory approvals, drafting the IPO's legal structure, negotiating listing plans and timetable, preIPO financing, as well as answering questions raised by all concerned parties and regulators and reviewing and finalising the prospectus.

“It’s a transformational process.

Having been through the challenges and pressures during the IPO process, most of the projects and matters now seem easy to us,” says Wu. “In addition, as the company becomes a public company, it is paying increasing attention to related-party transactions, corporate governance, procedure and compliance, and disclosure issues. As a result, the in-house legal function’s importance within the company has been further elevated.”

Last July, GCL-Poly’s US$3.4bn acquisition of Jiangsu Zhongneng opened another exciting chapter for the company’s growth. Upon completion, GCL-Poly became China’s largest – and one of the world’s leading –polysilicon producers. It was the in-house team which coordinated a large number of law firms and ensured the successful completion of this highly complex deal involving 30 parties. It was also the largest M&A deal seen in Asia in 2009, and was awarded “M&A Deal of the Year” at the ALB China Law Awards 2010 held recently.

Other major transactions that the in-house team assisted the company to complete have included the US$760m investment by China Investment Corporation at the end of 2009 and GCL-Poly’s acquisition of a controlling stake in Konca Solar this year.

Strong team leadership

GCL-Poly’s flotation and strategic shift towards the solar power business means the in-house legal support www.legalbusinessonline.com

must be strong and diverse. Thus, immediately after the 2009 acquisition, the company appointed Tong Kay Tak Tom as its vice president and general counsel in Hong Kong.

Tong, a practising solicitor in Hong Kong, was director and vice president in charge of legal affairs of Jiangsu Zongneng before he joined GCL-Poly.

He brings extensive experience of international corporate and capital markets practice to the in-house legal department, and is joined by another in-house counsel in Hong Kong.

As the solar power unit becomes a dominant part of the company’s business, GCL-Poly recently also named longstanding in-house counsel Dai Mengyang as director of the legal department. Dai, who joined in 2003, will oversee all legal matters for this new but rapidly expanding business unit. Currently he leads eight in-house legal staff working in Suzhou, while Wu and three other members of the in-house department in Shanghai focus on the provision of legal advice and services to the company’s power sector.

While continuing to provide excellent support for the power sector, GCL-Poly’s newly expanded in-house legal team can also now provide full support and advice on the company’s new projects and investments in photovoltaic material production and other solar energy projects, both at home and abroad.

team’s responsibility. Wu says that the department enlists the services of external counsel in three main instances: for transactions in which legal opinions issued by law firms are required, to handle issues and matters that are outside of the in-house team’s expertise, and for complex projects and transactions that require extra resources and manpower.

In addition, the department calls on a large number of regional and local firms across the country for subsidiaryrelated work. In the past year, the type of work for which GCL-Poly’s in-house team mostly used external counsel was M&A transactions. The team has worked with Jun He’s Shanghai office, Grandall (Beijing), Zhejiang Sunshine, Hong Kong’s Gordon Ng & Co, international firms Milbank Tweed, Hogan & Hartson and Freshfields and offshore firm Conyers Dill & Pearman.

When choosing which firm to engage as external counsel, “expertise in

“The team's legal understanding, business acumen and depth and strength of technical expertise, in turn, are the key factors determining success" Wu anticipates continued growth and new challenges in the legal department in the coming years. “Our legal function will have to keep pace with the growth of our company and changing regulatory requirements.

As the company expands its business globally, we’ll need to gain knowledge of the relevant law and regulations in overseas jurisdictions in which our company operates,” she says.

Leveraging external expertise

Like most other in-house departments, GCL-Poly’s legal department needs to use outside firms for support in certain circumstances, and managing external counsels naturally forms part of the

Susan Wu

GCL-Poly

specific areas” is the top criteria cited

by Wu. “For most day-to-day legal matters, external lawyers cannot match the in-house team in terms of understanding of the issues and speed of response,” she explains. “However, we do value external counsels’ extensive expertise and knowledge in many other areas of the law. Their logistics, know-how, precedents and experience in solving similar legal issues are invaluable to us. The in-house counsels are there to identify and leverage these advantages and design innovative structures and solutions. Fee levels are of a lesser concern when we select external counsel. What we value most is expertise, expertise and expertise.” ALB 53

MARKETdata DATA| M&A | M&A market >>>>

In association with

M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Asia-Pacific (May 01, 2010 - May 21, 2010) Announcement Date

Target Company

Target/Seller Legal Advisor

Bidder Company

Bidder Legal Advisor

4-May-10

Lihir Gold Limited

Blake Dawson

Newcrest Mining Limited

Allens Arthur Robinson; Sidley Austin

21-May-10

Piramal Healthcare Solutions business

Advising seller: Crawford Bayley; Stephenson Harwood

Abbott Laboratories

Baker & McKenzie; Luthra & Luthra

6-May-10

Hua Xia Bank Company Limited (27.15% stake)

Concord & Partners

Freshfields Bruckhaus Deringer

3,042

18-May-10

Denway Motors Limited

Deutsche Bank SA; Shougang Group Corporation; and State Grid Corporation of China Guangzhou Automobile Group Company Limited

Beijing Tianyin; Woo Kwan Lee & Lo

2,466

21-May-10

Agricultural Bank of China (Undisclosed stake)

National Council for Social Security Fund

18-May-10

Plena Transmissoras SA (Seven Brazilian transmission companies)

State Grid Corporation of China

21-May-10

KBL European Private Bankers SA

10-May-10

Nippon Commercial Investment Corporation

United Urban Investment Corporation

1,663

21-May-10

EON Capital Berhad

Hong Leong Bank Berhad

1,560

10-May-10

Anglo American Zinc

Notes:

Advising seller: Allen & Overy

Seller Company

Deal Value (USDm) 8,286

3,720

Piramal Healthcare Limited

2,198

The Hinduja Group

Loyens & Loeff

Advising seller: A&L Goodbody; Linklaters

Corpus Legal Practitioners; Dewey & LeBoeuf

Plena Transmissoras SA

1,721

KBC Group NV

1,697

Anglo American Plc

1,338

Top deals table includes lapsed and withdrawn bids, and is based on geography of either target, bidder or seller company being Asia-Pacific•Quarterly trend graph excludes lapsed and withdrawn bids, and is based on dominant geography of target only being Asia-Pacific•League tables are based on geography of either target, bidder or seller company being Asia-Pacific. League tables of legal advisors include lapsed and withdrawn bids, while league tables of financial advisors exclude lapsed and withdrawn bids. League tables are ranked by value • Statistics includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from statistics include property transactions and restructurings where the ultimate shareholders’ interests are not changed.

League Table of Legal Advisors to Asia-Pacific (ex-Japan) M&A (Jan 01, 2010 - May 21, 2010) Rank

House

League Table of Financial Advisors to Asia-Pacific (ex-Japan) M&A (Jan 01, 2010 - May 21, 2010)

Value (USDm)

Deal Count

Rank

Value (USDm)

Deal Count

14,262

23

1

House Goldman Sachs

51,844

19

3,099

18

2

JPMorgan

28,915

19

13,436

16

3

UBS Investment Bank

27,136

19

1

AZB & Partners

2

Jones Day

3

Freehills

4

Freshfields Bruckhaus Deringer

4,963

15

4

Deutsche Bank

57,618

17

5

WongPartnership

2,374

15

5

Morgan Stanley

45,553

17

6

Allen & Overy

15,698

14

6

Credit Suisse

46,984

14

7

Mallesons Stephen Jaques

14,140

14

7

Macquarie Group

21,513

14

8

Clayton Utz

3,516

14

8

Citigroup

43,771

13

9

Baker & McKenzie

10,079

13

9

PricewaterhouseCoopers

1,652

13

10

Clifford Chance

3,169

13

10

KPMG

3,076

12

Based on announced deals, including lapsed and withdrawn bids, from 1 January 2010 to 21 May 2010

Based on announced deals, excluding lapsed and withdrawn bids, from 1 January 2010 to 21 May 2010

Asia-Pacific M&A Activity - Quarterly Trends 900

200,000 180,000

800

Value (USDm) Volume

140,000

700 600

120,000

500

100,000

400

80,000

300

60,000

200

40,000

100

20,000 0

54

Number of deals

Value (USDm)

160,000

Q1 03

Q2 03

Q3 03

Q4 03

Q1 04

Q2 04

Q3 04

Q4 04

Q1 05

Q2 05

Q3 05

Q4 05

Q1 06

Q2 06

Q3 06

Q4 06

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10*

0

AsianLegal LegalBusiness BusinessISSUE ISSUE 10.4 Asian 10.5

MARKET DATA | |M&A M&A>> >> market data

In association with

Notes:

League tables are based on geography of either target, bidder or seller company. League tables of legal advisors include lapsed and withdrawn bids, while league tables of financial advisors exclude lapsed and withdrawn bids.

League tables are ranked by value•Statistics includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from statistics include property transactions and restructurings where the ultimate shareholders’ interests are not changed.•Q2 10* = 1 April 2010 to 21 May 2010

League Table of Legal Advisors to Greater China M&A (Jan 01, 2010 - May 21, 2010) Rank

House

League Table of Financial Advisors to Greater China M&A (Jan 01, 2010 - May 21, 2010)

Value (USDm)

Deal Count

Rank

Value (USDm)

Deal Count

1

Jones Day

2,490

13

1

Deutsche Bank

House

42,435

9

2

Freshfields Bruckhaus Deringer

4,646

12

2

Morgan Stanley

34,147

9

3

Grandall Legal Group

630

7

3

China International Capital

10,630

7

4

Allen & Overy

2,702

6

4

JPMorgan

9,804

7

5

King & Wood

1,198

6

5

Credit Suisse

42,145

6

6

Clifford Chance

1,235

5

6

Citigroup

37,492

6

7

DLA Piper

79

5

7

Goldman Sachs

44,560

5

8

Slaughter and May

38,683

4

8

Optima Capital

523

5

9

Simpson Thacher & Bartlett

37,232

4

9

Somerley

2,881

4

10

Linklaters

7,740

4

10

KPMG

1,864

4

Based on geography of either target, bidder or seller company being China, Hong Kong, Macau or Taiwan

League Table of Legal Advisors to Japanese M&A (Jan 01, 2010 - May 21, 2010) Rank

House

League Table of Financial Advisors to Japanese M&A (Jan 01, 2010 - May 21, 2010)

Value (USDm)

Deal Count

Rank

Value (USDm)

Deal Count

1

Mori Hamada & Matsumoto

7,581

15

1

House Nomura Holdings

7,600

22

2

Nishimura & Asahi

5,819

11

2

Mizuho Financial Group

1,408

15

3

Nagashima Ohno & Tsunematsu

3,487

11

3

Sumitomo Mitsui Financial Group

1,229

10

4

Anderson Mori & Tomotsune

4,187

10

4

Daiwa Securities Group

466

9

5

TMI Associates

1,671

6

5

JPMorgan

7,434

7

6

Morrison & Foerster

3,502

5

6

GCA Savvian

622

7

7

Skadden Arps Slate Meagher & Flom

7,433

4

7

Morgan Stanley

2,544

5

8

Baker & McKenzie

278

4

8

Mitsubishi UFJ Securities

1,025

5

9

Kitamura & Hiraga

139

4

9

KPMG

678

5

10

Sato & Partners

118

4

10

Goldman Sachs

3,671

4

Value (USDm)

Deal Count

Rank

House

Value (USDm)

Deal Count

14,262

23

1

HSBC

12,005

5

Based on geography of either target, bidder or seller company being Japan

League Table of Legal Advisors to Indian M&A (Jan 01, 2010 - May 21, 2010) Rank

House

League Table of Financial Advisors to Indian M&A (Jan 01, 2010 - May 21, 2010)

1

AZB & Partners

2

Desai & Diwanji

303

8

2

ICICI Bank

681

5

3

Amarchand & Mangaldas & Suresh A Shroff & Co 3,505

7

3

ENAM Securities

265

5

4

Allen & Overy

12,578

5

4

Kotak Investment Banking

250

5

5

Trilegal

403

4

5

Barclays Capital

13,311

4

6

Khaitan & Co

24

4

6

Standard Chartered

13,097

4

7

Linklaters

12,038

2

7

UBS Investment Bank

12,453

4

8

Crawford Bayley & Company

4,904

2

8

Morgan Stanley

5,625

4

9

Baker & McKenzie

3,720

2

9

JM Financial

1,056

4

10

Shearman & Sterling

664

2

10

Deloitte

197

4

Based on geography of either target, bidder or seller company being India

League Table of Legal Advisors to Southeast Asian M&A (Jan 01, 2010 - May 21, 2010)

League Table of Financial Advisors to Southeast Asian M&A (Jan 01, 2010 - May 21, 2010) Value (USDm)

Deal Count

1

WongPartnership

2,374

15

1

CIMB Group

4,962

9

2

Allen & Gledhill

2,109

9

2

Credit Suisse

4,291

5

3

Clifford Chance

1,654

4

3

Goldman Sachs

3,107

4

4

Allen & Overy

562

4

4

Deutsche Bank

2,746

4

5=

Stamford Law Corporation

236

4

5

Morgan Stanley

2,604

4

5=

AZB & Partners

944

3

6

AmInvestment Bank

221

4

7

Linklaters

628

3

7

UBS Investment Bank

4,002

3

8

Rajah & Tann

454

3

8

Public Investment Bank

3,393

3

9

Weerawong, Chinnavat & Peangpanor

3,367

2

9

RHB Investment Bank

2,798

3

10

Skadden Arps Slate Meagher & Flom

853

2

10

Bank of America Merrill Lynch

1,653

3

Rank

House

Value (USDm)

Deal Count

Rank

House

Based on geography of either target, bidder or seller company being Southeast Asia

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55

market data | capital markets >>

Equity Capital Markets TRANSACTIONS List

Asia, inc Japan, ex Australia & New Zealand 2 May – 29 May Issuer Proceeds Issue date (USDm)

HONGKONG Doxen Energy Group Ltd United Power Investment Ltd Neo Telemedia Ltd Midland Holdings Ltd Jia Sheng Holdings Ltd OP Financial Investments Ltd INDIA Jaypee Infratech Ltd SJVN Ltd Fortis Healthcare Ltd Nitesh Estates Ltd INDONESIA Alam Sutera Realty Tbk PT JAPAN Fanuc Ltd Mori Trust Sogo Reit Inc DIC Corp MALAYSIA Masterskill Education Group SOUTH KOREA Hynix Semiconductor Inc

Mando Corp Celltrion Inc Huchems Fine Chemical Corp Siliconworks Co Ltd TAIWAN Formosa Epitaxy Inc

Currency

Bookrunner(s)

Sector

128.5 60.1 52.7 45.5 40.8 38.4

05/18/10 05/20/10 05/14/10 05/28/10 05/26/10 05/04/10

HKD HKD HKD HKD HKD HKD

Taifook Securities Group Ltd Sun Hung Kai Investment Svcs; Get Nice Capital Ltd Kingston Securities Limited CLSA Guotai Junan Securities (HK) Kingston Securities Limited

Retail Retail Media and Entertainment Real Estate Financials Financials

503.4

05/07/10

INR

05/11/10 05/10/10 05/13/10

INR USD INR

Morgan Stanley; Bank of America Merrill Lynch; Axis Bank Ltd; Enam Securities; ICICI Securities & Finance Co; IDFC-SSKI Ltd; JM Financial & Investment; Kotak Mahindra Capital Co; SBI Capital Markets Ltd JM Financial & Investment; IDFC-SSKI Ltd; IDBI Capital Markets Services; SBI Capital Markets Ltd Religare Capital Markets Ltd; RBS ICICI Securities & Finance Co; Enam Securities; Kotak Mahindra Capital Co; JM Financial & Investment

Industrials

239.4 100.0 89.9

Energy and Power Healthcare Real Estate

96.1

05/05/10

IDR

Macquarie Securities Ltd

Real Estate

999.0 483.5 201.7

05/10/10 05/24/10 05/25/10

JPY JPY JPY

Mizuho Securities Co Ltd Mizuho Securities Co Ltd; Nikko Cordial Securities Inc; GSJCL Mizuho Securities Co Ltd

Industrials Real Estate Materials

238.8

05/05/10

MYR

CIMB Investment Bank Bhd; Goldman Sachs & Co

Consumer Products and Services

500.0

05/11/10

USD

High Technology

431.3 214.3 77.4 55.2

05/07/10 05/11/10 05/07/10 05/24/10

KRW KRW KRW KRW

NH Investment & Sec Co Ltd; KEB (Asia) Finance (Hong Kong); Credit Suisse; Royal Bank of Scotland AG; Korea Development Bank Intl; Woori Invest & Sec Co Ltd; Shinhan Investment Corp Citi; JP Morgan Securities Inc; Woori Invest & Sec Co Ltd; HMC Investment Securities Co Goldman Sachs & Co; KB Invest & Sec Korea Investment & Securities Korea Investment & Securities

74.7

05/11/10

TWD

SinoPac Securities

High Technology

Industrials Healthcare Materials High Technology

DEBT CAPITAL MARKETS TRANSACTIONS LIST

Asia, inc Japan, ex Australia & New Zealand 2 May – 29 May Issuer Proceeds Issue date (USDm)

HONGKONG MCE Finance Ltd

56

Currency

592.0

05/12/10

USD

Li & Fung Ltd Kowloon Canton Railway Corp HK Land Treasury Services Hongkong Electric Finance Ltd INDIA IRFC

399.4 102.8 72.1 60.5

05/06/10 05/07/10 05/14/10 05/03/10

USD HKD SGD HKD

348.6

05/04/10

INR

IRFC Tata Teleservices Ltd Essar Power Ltd IDFC IDFC

243.1 198.5 178.5 149.4 110.9

05/14/10 05/25/10 05/05/10 05/04/10 05/13/10

INR INR INR INR INR

HDFC Punjab National Bank IDFC

106.8 106.5 85.2

05/21/10 05/24/10 05/24/10

INR INR INR

IDFC

77.6

05/10/10

INR

Larsen & Toubro Ltd Larsen & Toubro Ltd National Housing Bank Harsil Projects Pvt Ltd IDFC Tata Motors Ltd Reliance Capital Ltd INDONESIA OTO Multiartha Bonds VII Sigma Capital Pte Ltd JAPAN Japan Housing Finance Agency HAROT 2010-2 Nissan Auto Lease Trust 2010-A JFE Holdings Inc NEC Corp NEC Corp JRTT JFM Tohoku Electric Power Co Inc Tokyo Electric Power Co Inc Kyushu Electric Power Co Inc Toyota Finance Australia SoftBank Corp SoftBank Corp NTT Finance Corp Mitsubishi UFJ Lease & Finance JFM Tokyo Electric Power Co Inc East Nippon Expressway Co Ltd West Nippon Expressway Co Ltd Kintetsu Corp Kintetsu Corp JFE Holdings Inc Japan Housing Finance Agency NEC Corp ITOCHU Corp Chugoku Electric Power Co Inc JFM Ricoh Leasing Co Ltd Saitama Prefecture City of Yokohama Osaka Prefecture Electric Power Dvlp Co Ltd Japan Housing Finance Agency Daibiru Corp Marubeni Corp Tokyo Metro Housing Supply Bank of Tokyo-Mitsubishi UFJ Nankai Electric Railway Co Ltd Hiroshima Prefecture Sojitz Corp Hyogo Prefecture

66.6 63.7 55.5 42.1 33.7 33.7 33.6

05/11/10 05/26/10 05/13/10 05/25/10 05/03/10 05/03/10 05/04/10

140.4 81.7 1219.0 863.7 749.9 666.7 439.6 439.6 432.6 324.5 324.5 324.5 323.9 278.4 278.3 278.3 278.3 276.8 271.9 270.4 269.9 269.9 222.7 222.7 222.2 220.6 219.8 217.5 216.3 216.3 216.3 216.3 216.2 216.0 215.9 211.9 166.7 163.1 162.2 146.5 111.1 111.0 110.7 108.9

Bookrunner(s)

Sector

Deutsche Bank Securities Corp; Bank of America Merrill Lynch; RBS; ANZ Banking Group; Citi; Commerzbank AG; Credit Agricole; National Australia Bank; UBS Investment Bank Citi; HSBC Holdings PLC; JP Morgan RBS DBS Bank Ltd HSBC Holdings PLC

Financials Consumer Products and Services Industrials Financials Financials Financials

INR INR INR INR INR INR INR

AK Capital Services Ltd; Almondz Global Securities Ltd; Axis Bank Ltd; Barclays Bank PLC; Deutsche Bank (India); ICICI Bank Ltd; ICICI Sec Primary Dealership; ING Vysya Bank; Kotak Mahindra Bank Ltd; Sec Trading Corp of India; Trust Investment Advisors Barclays Bank PLC; AK Capital Services Ltd; Trust Capital Services; ICICI Sec Primary Dealership Standard Chartered Bk (India); Citibank NA (India) Axis Bank Ltd Barclays Bank PLC AK Capital Services Ltd; LKP Shares & Securities Ltd; Kotak Mahindra Finance Ltd; ICICI Sec Primary Dealership; Trust Investment Advisors Barclays Bank PLC ICICI Sec Primary Dealership; PNB Capital & Investment Corp; AK Capital Services Ltd ICICI Bank Ltd; ICICI Sec Primary Dealership; ING Vysya Bank; Sec Trading Corp of India; Trust Investment Advisors; Deutsche Bank (India); Kotak Mahindra Finance Ltd AK Capital Services Ltd; ICICI Sec Primary Dealership; LKP Shares & Securities Ltd; Kotak Mahindra Finance Ltd; Trust Investment Advisors Barclays Bank PLC Barclays Bank PLC Standard Chartered Bk (India) Standard Chartered Bk (India) Deutsche Bank (India) Standard Chartered Bk (India) Trust Investment Advisors

05/27/10 05/06/10

IDR USD

Standard Chartered Indonesia; HSBC Securities Indonesia; DBS Securities Indonesia PT Citi; Deutsche Bank AG

Financials Financials

05/25/10 05/12/10 05/19/10 05/21/10 05/27/10 05/27/10 05/14/10 05/14/10 05/14/10 05/14/10 05/13/10 05/27/10 05/26/10 05/26/10 05/26/10 05/25/10 05/18/10 05/14/10 05/13/10 05/13/10 05/26/10 05/26/10 05/21/10 05/14/10 05/27/10 05/18/10 05/14/10 05/14/10 05/14/10 05/14/10 05/14/10 05/18/10 05/13/10 05/14/10 05/21/10 05/18/10 05/14/10 05/20/10 05/21/10 05/21/10 05/25/10 05/19/10

JPY USD USD JPY JPY JPY JPY JPY JPY JPY JPY NZD JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY CNY JPY JPY JPY JPY

Mitsubishi UFJ Morgan Stanley Barclays Capital; Citi JP Morgan; Citi; Deutsche Bank Securities Corp Mitsubishi UFJ Morgan Stanley; Mizuho Securities Co Ltd; Nikko Cordial Securities Inc Daiwa Sec Capital Markets Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley; Nikko Cordial Securities Inc Nikko Cordial Securities Inc Mizuho Securities Co Ltd Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Daiwa Securities SMBC Europe Mizuho Securities Co Ltd Mizuho Securities Co Ltd Mizuho Securities Co Ltd; Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley; Nomura Securities Mitsubishi UFJ Morgan Stanley; Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley Nomura Securities Mitsubishi UFJ Morgan Stanley; Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley; Nomura Securities; GSJCL Daiwa Sec Capital Markets Nomura Securities Nikko Cordial Securities Inc Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley; GSJCL Mitsubishi UFJ Morgan Stanley; GSJCL GSJCL; Mizuho Securities Co Ltd Mizuho Securities Co Ltd Mitsubishi UFJ Morgan Stanley; Nomura Securities; GSJCL Daiwa Sec Capital Markets Nikko Cordial Securities Inc Mizuho Securities Co Ltd; Nomura Securities Bank of China Ltd Nomura Securities Mitsubishi UFJ Morgan Stanley; Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley Daiwa Sec Capital Markets; Mitsubishi UFJ Morgan Stanley

Government and Agencies Financials Financials Materials High Technology High Technology Industrials Government and Agencies Energy and Power Energy and Power Energy and Power Financials High Technology High Technology Financials Consumer Products and Services Government and Agencies Energy and Power Industrials Industrials Industrials Industrials Materials Government and Agencies High Technology Consumer Products and Services Energy and Power Government and Agencies Consumer Products and Services Government and Agencies Government and Agencies Government and Agencies Energy and Power Government and Agencies Real Estate Energy and Power Government and Agencies Financials Industrials Government and Agencies Industrials Government and Agencies

Financials Telecommunications Energy and Power Financials Financials Financials Financials Financials Financials Industrials Industrials Financials Real Estate Financials Industrials Financials

Asian Legal Business ISSUE 10.6

market data | capital markets >>

ITOCHU Corp Sumitomo Corp Tohoku Electric Power Co Inc City of Kawasaki City of Yokohama Shikoku Electric Power Co Inc Top REIT Inc Japan Housing Finance Agency Japan Prime Realty Investment Mori Hills REIT Investment Mori Hills REIT Investment Daibiru Corp Takara Holdings Inc Takara Holdings Inc Sankei Shimbun Co Ltd Japan Housing Finance Agency Malaysia 1Malaysia Sukuk Global Cagamas Berhad Aircel Ltd Cagamas Berhad Genting Utilities Sdn Bhd PHILIPPINES ADB ADB SM Development Corp Intl Container Terminal Svcs ADB Aboitiz Transp Sys(ATSC)Corp SINGAPORE Land Transport Authority DBS Bank Ltd Wing Tai Holdings Ltd Oversea-Chinese Banking HK Oversea-Chinese Banking HK Ezra Holdings Ltd F&N Treasury Pte Ltd SOUth KOREA HART 2010-A KDB Blue Ocean Securitization Korea Resources Corp Hanjin Shipping Hldg Co Ltd Export-Import Bank of Korea Daewoo Securities Co Ltd STX Offshore & Shipbuilding S-Oil Corp K-Five 1st Securitization Woori Bank Hyundai Steel Co Korea Hydro & Nuclear Power Co STX Corp Woori Fin Hldgs Co Ltd Korea Hydro & Nuclear Power Co Korea Securities Finance Corp Shinhan Bank Kookmin Bank Kookmin Bank Korea Water Resources Corp Hanwha Corp North A-Hyun Securitization POSCO Engineering & Constr Doosan Cons & Eng Co Ltd Busan Bank Hyundai Capital Services Inc Hana Bank Kyongnam Bank Hana Bank SK C&C Co Ltd Daesung Industrial Corp Shinhan Bank Hanwha Securities Co Ltd Hyundai Capital Services Inc Shinhan Bank Samsung Card Co Ltd Dongbu Steel Co Ltd Kookmin Bank Kookmin Bank Hyundai Card Co Ltd Hyundai Capital Services Inc Hyundai Card Co Ltd Shinhan Card Export-Import Bank of Korea Shinhan Capital Co Ltd Hyundai Capital Services Inc Hana Bank Lotte Card Co Ltd AJU Autorental Co Ltd Korea Petrochem Industial Co Shinhan Card Daelim Corp Han Kook Capital Co Ltd Joong-Ang Ilbo Hana Bank Kookmin Bank Hyundai Card Co Ltd Jeonbuk Bank Korea Development Bank KDB Capital Corp Ssangyong Cement Indl Co Ltd Dymos Inc Shinhan Card Aju Capital Co Ltd Hyundai Commercial Shinhan Card Hyundai Commercial Korea Advanced Materials Corp TAIWAN First Finl Hldg Co Ltd Formosa Petrochemical Corp Yuanta Commercial Bank Co Ltd E Sun Bank FEIB THAILAND Minor International PCL Sansiri PCL Quality Houses PCL Krungthai Card PCL Government Housing Bank Vincom JSC

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108.8 108.8 108.2 108.1 108.1 107.2 93.4 87.6 75.7 56.1 56.1 55.6 54.5 54.5 54.1 30.3

05/18/10 05/18/10 05/14/10 05/14/10 05/14/10 05/10/10 05/28/10 05/14/10 05/14/10 05/20/10 05/20/10 05/21/10 05/19/10 05/19/10 05/14/10 05/14/10

JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY

Nomura Securities Daiwa Sec Capital Markets Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley; GSJCL; Daiwa Sec Capital Markets Daiwa Sec Capital Markets; Mizuho Securities Co Ltd Nomura Securities Daiwa Sec Capital Markets Mitsubishi UFJ Morgan Stanley; Nomura Securities; GSJCL Mizuho Securities Co Ltd Mizuho Securities Co Ltd Mizuho Securities Co Ltd Nikko Cordial Securities Inc Mizuho Securities Co Ltd Nomura Securities UBS Securities Japan Ltd Mitsubishi UFJ Morgan Stanley; Nomura Securities; GSJCL

Consumer Products and Services Industrials Energy and Power Government and Agencies Government and Agencies Energy and Power Real Estate Government and Agencies Real Estate Real Estate Real Estate Real Estate Consumer Staples Consumer Staples Media and Entertainment Government and Agencies

1250.0 324.4 282.1 93.8 46.8

05/27/10 05/07/10 05/24/10 05/14/10 05/03/10

USD MYR INR MYR MYR

CIMB Investment Bank Bhd; Barclays Capital; HSBC Holdings PLC AmInvestment Bank Bhd Standard Chartered Bk (India) AmInvestment Bank Bhd CIMB Investment Bank Bhd; HSBC Bank Malaysia Bhd

Financials Financials Telecommunications Financials Media and Entertainment

2988.8 326.6 211.6 205.3 84.5 44.4

05/26/10 05/26/10 05/25/10 05/05/10 05/12/10 05/12/10

USD ZAR PHP USD BRL PHP

Daiwa Capital Markets America; Goldman Sachs & Co; Morgan Stanley; UBS Investment Bank Daiwa Securities SB Cap Mkt SG BDO Capital Investment Corp HSBC Holdings PLC; UBS AG RBC Capital Markets SB Capital Investment Corp; BPI Capital

Government and Agencies Government and Agencies Real Estate Industrials Government and Agencies Industrials

357.0 133.3 85.1 64.1 49.3 36.2 35.7

05/27/10 05/25/10 05/20/10 05/25/10 05/20/10 05/13/10 05/27/10

SGD HKD SGD HKD HKD SGD SGD

DBS Bank Ltd; Hong Kong & Shanghai Bank (SG) Standard Chartered Bank (HK) Oversea-Chinese Banking Standard Chartered Bank (HK) Standard Chartered Bank (HK) DBS Bank Ltd; Hong Kong & Shanghai Bank (SG) CIMB Investment Bank Bhd

Government and Agencies Financials Real Estate Financials Financials Industrials Consumer Staples

960.8 593.3

05/05/10 05/20/10

USD KRW

Financials Financials

298.5 293.3 270.0 260.4 259.8 259.6 248.0 245.4 239.4 229.8 220.5 214.8 200.0 167.6 167.6 158.8 135.7 130.0 129.9 125.6 122.7 112.6 103.7 100.0 98.2 89.4 88.2 86.6 83.8 79.8 74.2 70.0 65.4 58.7 52.9 51.4 51.1 50.3 50.0 49.4 49.4 48.7 44.3 44.2 44.1 44.1 44.1 43.9 43.7 43.3 41.2 40.9 40.0 40.0 39.9 39.9 38.4 38.2 35.3 34.6 33.5 33.5 32.7 32.7 31.9 30.0

05/13/10 05/24/10 05/28/10 05/17/10 05/07/10 05/26/10 05/25/10 05/27/10 05/26/10 05/10/10 05/14/10 05/20/10 05/20/10 05/20/10 05/20/10 05/12/10 05/26/10 05/06/10 05/07/10 05/04/10 05/28/10 05/07/10 05/26/10 05/28/10 05/27/10 05/03/10 05/12/10 05/07/10 05/20/10 05/26/10 05/19/10 05/12/10 05/27/10 05/20/10 05/13/10 05/10/10 05/06/10 05/20/10 05/03/10 05/24/10 05/24/10 05/20/10 05/13/10 05/10/10 05/11/10 05/11/10 05/12/10 05/06/10 05/18/10 05/07/10 05/24/10 05/27/10 05/25/10 05/25/10 05/26/10 05/26/10 05/12/10 05/27/10 05/12/10 05/07/10 05/20/10 05/28/10 05/27/10 05/27/10 05/26/10 05/25/10

USD KRW USD KRW KRW KRW KRW KRW KRW KRW KRW KRW USD KRW KRW KRW KRW USD KRW KRW KRW KRW KRW USD KRW KRW KRW KRW KRW KRW KRW USD KRW KRW KRW KRW KRW KRW USD KRW KRW HKD KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW SGD USD KRW KRW KRW KRW KRW KRW KRW USD

JP Morgan Daewoo Securities Co Ltd; Korea Investment & Securities; Shinhan Investment Corp; SC Securities Korea Ltd; Korea Development Bank HSBC Holdings PLC; Korea Development Bank; Morgan Stanley; Standard Chartered PLC NH Investment & Sec Co Ltd; SC Securities Korea Ltd; Korea Development Bank Deutsche Bank AG SK Securities Co Ltd; Samsung Securities; Hyundai Securities Co Ltd Tong Yang Securities Shinhan Investment Corp; Hana Daetoo Securities Co Ltd Korea Development Bank; Daewoo Securities Co Ltd Leading Invest & Securities Co HI Investment & Securities Co Samsung Securities Korea Investment & Securities; Tong Yang Securities; Kumho Investment Bank SK Securities Co Ltd Daewoo Securities Co Ltd Korea Investment & Securities Woori Invest & Sec Co Ltd Hana Daetoo Securities Co Ltd E Trade Korea Co Ltd SC Securities Korea Ltd; Woori Invest & Sec Co Ltd SK Securities Co Ltd Shinyoung Securities Co, Ltd; Korea Investment & Securities; NH Investment & Sec Co Ltd KB Invest & Sec; Woori Invest & Sec Co Ltd KB Invest & Sec Korea Investment & Securities Korea Investment & Securities Woori Invest & Sec Co Ltd Hyundai Securities Co Ltd KB Invest & Sec Hanwha Securities Co; SC Securities Korea Ltd SC Securities Korea Ltd; Tong Yang Securities KTB Securities Co Ltd HMC Investment Securities Co Korea Investment & Securities Hanwha Securities Co SC Securities Korea Ltd Leading Invest & Securities Co Hana Daetoo Securities Co Ltd Tong Yang Securities HI Investment & Securities Co KB Invest & Sec Bookook Securities Co Ltd Samsung Securities RBS Samsung Securities SC Securities Korea Ltd; KB Invest & Sec KB Invest & Sec Korea Investment & Securities Hyundai Securities Co Ltd Woori Invest & Sec Co Ltd NH Investment & Sec Co Ltd KB Invest & Sec Daewoo Securities Co Ltd HMC Investment Securities Co Kiwoom Securities Co E Trade Korea Co Ltd Woori Invest & Sec Co Ltd KTB Securities Co Ltd Standard Chartered Bank PLC HI Investment & Securities Co; Samsung Securities Tong Yang Securities KB Invest & Sec; Woori Invest & Sec Co Ltd Korea Investment & Securities Woori Invest & Sec Co Ltd Hyundai Securities Co Ltd Samsung Securities SK Securities Co Ltd Woori Invest & Sec Co Ltd

Materials Financials Financials Financials Industrials Energy and Power Financials Financials Materials Energy and Power Financials Financials Energy and Power Financials Financials Financials Financials Energy and Power Materials Financials Industrials Industrials Financials Financials Financials Financials Financials High Technology Financials Financials Financials Financials Financials Financials Materials Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials Consumer Products and Services Materials Financials Energy and Power Consumer Products and Services Media and Entertainment Financials Financials Financials Financials Financials Financials Materials Industrials Financials Financials Financials Financials Financials Materials

283.3 188.9 157.2 93.3 63.3

05/07/10 05/14/10 05/17/10 05/21/10 05/05/10

TWD TWD TWD TWD TWD

Masterlink Securities Co; Yuanta Securities Co Ltd; Fubon Securities Co Ltd KGI Securities (Taiwan) Yuanta Securities Co Ltd HSBC Taipei KGI Securities (Taiwan)

Financials Energy and Power Financials Financials Financials

77.2 61.9 61.8 30.9 30.7 53.0

05/24/10 05/18/10 05/17/10 05/17/10 05/27/10 05/11/10

THB THB THB THB THB VND

Kasikornbank PCL; Bank of Ayudhya Plc Siam Commercial Bank PLC Kasikornbank PCL Kasikornbank PCL Standard Chartered Bank(Thai) Ind'l and Comm'l Bank of Viet

Media and Entertainment Real Estate Real Estate Financials Financials Real Estate

57

“Asian Legal Business has done a great job covering local news, deals, and general trends in the legal market in Asia” Partner Minter Ellison Asian Legal Business is Asia’s leading legal magazine. Published from three regional centres, each issue is packed with news, hard hitting analysis and investigative journalism. Regional editors provide up to the minute legal and regulatory updates, while a team of dedicated journalists provide in-depth analysis of all the issues facing lawyers and in-house counsel throughout the region.

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LEGAL

AS I A PACI F I C | EU R O P E | N O R T H A M ER I C A

CHIEF COUNSEL FOR ASIA Global Emerging Markets Private Equity Fund Manager Primary In-house Counsel for APAC Complex Secured Debt Financings of Long-Term Investments Leading global emerging markets private equity fund manager is seeking an experienced transactional lawyer to act as primary In-house Counsel with responsibility for the firm’s Asian operations.

Candidates will be prepared to move to Hong Kong, and will have at least 8 – 10 years of experience in complex corporate transactions, including meaningful experience in a first-rate US or London-based law firm; experience in complex secured debt financings of long-term investment, such as leveraged acquisition finance or project finance; general corporate and securities experience in an area such as mergers and acquisitions, private equity or venture capital; and experience in cross-border transactions in emerging markets.

Employer is prepared to offer a competitive compensation package, including an annual base salary, an annual performance-based discretionary bonus, participation in a carried interest program, and eligibility in all corporate employee benefit programs currently provided to similarly situated employees.

To apply please enter 18776/SDAK in the ‘Job Ref Number/Keyword’ section of jobs.hk.hudson.com or contact Sam Dakin on +852 2919 6115 for a confidential discussion. Alternatively, email your resume to hkresume@hudson.com quoting ASLB/18776/SDAK. Your interest will be treated in strict confidence and only shortlisted candidates will be notified.

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