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ISSUE 9.7

ALB Special Report: Malaysia 09 International firms wanted

Gulf project finance Downturn opens Islamic window

International legal associations An alternative to branch offices in the financial crisis?

A sia’s l argest l aw firms

GFC shakes up the rankings : PLUS

All the winners from the BMW Asia ALB SE Asia Law Awards 2009

n LATERAL MOVES n DEALS ROUNDUP n REGION-WIDE UPDATES n MARKET DATA n SIGN OFF

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Malaysia Tay & Partners is a Malaysian law firm established in 1989 with offices in Kuala Lumpur and Johor Bahru. It is a full-service commercial law firm, advising a varied portfolio of clients across a broad spectrum of industry sectors. The firm’s vision is to be the law firm of choice to businesses investing or operating in Malaysia.

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Regional managing 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. The firm has been regularly noted for its IPO, M&A and general corporate work.

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Indonesia BT Partnership is a dynamic and result oriented law firm specialized in corporate-financial restructuring and litigation practices with full-length and great detailed of experiences in safeguarding multinational clients from complex legal issues including for their M&A, FDI, Funds and Structured Finance transactions. In 2007, the firm has been awarded as Dispute Resolution Firm of the Year and further, Employer’s of Choice for Indonesia jurisdiction while its Partner has been inaugurated as one of the Asia Hot Lawyers of the Year 2008.

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EDITORial >>

Green-fingered firms look ahead

E

conomic crises spawn many things. From government intervention and regulatory overhauls to a profound reshaping of business and societal attitudes – the list goes on. Just as interesting are the countless expressions, idioms, catchphrases and aphorisms created in an attempt to explain and rationalise the changes occurring before our eyes. One such expression is ‘green shoots’, those nascent signs of economic recovery which are emerging ever so slowly from the parched wasteland that is the global economy. Whatever one may think of the phrase itself (it is neither aphoristic nor clever and in fact was voted the most annoying and meaningless market catchphrase of the month by a prominent US business publication), the question being asked at the moment is just how green are these shoots that are appearing? If one extends the agricultural metaphor, don’t green shoots only appear if someone has first tilled the earth, plucked the weeds and sowed the seeds? In essence, one cannot control the emergence of these green shoots, but what lawyers across the region are recognising is that they can position themselves to harvest their commercial potential. After all, if we extend the agricultural metaphor even further, one realises that these green shoots, or more accurately, the potential for them, has always been there – lying dormant waiting for the Aristotelian confluence of events we have seen over the past 12 months to act as a stimulus. This is evident from the increase in litigation, insolvencies and restructurings, corporate compliance, and antitrust advice being dispensed by practitioners. All of which, it should be noted, lawyers express as a function of the counter-cyclical nature of the business of law. Of course, some are benefiting more than others. For while the activity in these areas may be a cause for celebration in some firms, for others it represents a lost opportunity. Whether through a lack of forward planning, inept strategic positioning or internal difficulties, some firms have missed the green shoots altogether and lost out on the opportunities for further growth that they provide. This is not to say that the entire business model of a law firm should be constructed around identifying and capitalising on these signs of economic growth, such a model would be fraught with dangers. But at least some part of it should. In a market where one’s competitive advantage is the ability to identify opportunities, looking to green shoots is crucial. Those that have mistaken them for weeds this time around may have a long wait until the next saplings appear.

IN THE FIRST PERSON “Association membership is an invaluable business development resource for the mid-sized firm that is looking to increase its regional and international client base” James Mendelssohn, MSI Network (p42)

“Australia is a developed country with a robust, stable economy and this is a good counter-balance to what we have elsewhere in the region. Things are a little slow at the moment, but Australia’s a slow-burning market” John Chrisman, Dorsey & Whitney (p46)

“There is no way that any foreign law firm would want to enter Malaysia under the model being advocated” Azmi Mohammed Ali, Azmi & Associates (p50)

In essence, one cannot control the emergence of these green shoots, but what lawyers across the region are recognising is that they can position themselves to harvest their commercial potential

2

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News | deals>> >> CONTENTS

contents

ALB issue 9.7

50

36 COVER STORY 36 ALB 50 ALB ranks the largest law firms in Asia in a comprehensive annual report that reveals the biggest players across the region

ANALYSIS 10 Bernie Madoff: Madness has just begun The disgraced financier has been sentenced to 150 years in prison, but who could be next in line in the litany of litigation that is set to follow? 11 Partner move: Call of the east As partners move from London and New York to Asia, ALB asks whether the recent movements are a push or a pull 13 Gulf project finance: Where to now? The GFC has seen levels of project financing in the Gulf plummet, but when will the market bounce back and how will it look when it does?

FEATURES 42 Legal associations As firms reassess their expansion plans, law firm networks offer a viable alternative for those looking overseas

4

42

58 BMW ASIA ALB SE Asia Law Awards 2009 All the winners from this year’s ceremony 70 Global M&A data Thomson Reuters and JP Morgan monitor the sector’s trends over the past two decades 72 ALB In-house Legal Summit: Shanghai 09 What China’s highest profile in-house lawyers said about the current legal services market

Regulars 6

DEALS

16 • • • • • • •

NEWS UK legal industry eyes Qatar Former Ashurst head to launch K&L Gates’ Dubai office Restructuring keeps real estate afloat BLG Asia unaffected by layoffs Duo drive Hummer to China Maher heads Greenberg’s London debut Bond issue increase may have lasting effect on practice in China Failed Rio Tinto deal forces Chinese companies to reassess foreign investments Zhonglun W & D enters Riyadh market

46 ALB Managing Partner Series Dorsey & Whitney’s John Chrisman talks about where the Sydney office fits into his firm’s Asia strategy

50 ALB Special Report: Malaysia 09 As the legal market prepares for liberalisation, domestic firms have the perfect opportunity to push on with plans for regional expansion

16 UK report

18 US report 28 Mergermarket M&A update 80 Sign off

46 INDUSTRY UPDATES 20 International tax Azure 21 Intellectual property ATMD Bird & Bird 30 REGIONAL UPDATES • China Paul Weiss • Malaysia Tay & Partners • Singapore Loo & Partners • Indonesia BTPartnership

PROFILES 15 Equity Trust 53 Tay & Partners

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Asian Legal Business can accept no responsibility for loss.

Asian Legal Business ISSUE 9.7


In-House Positions – Hong Kong,

Shanghai, Beijing, Shenzhen, Taiwan

General Counsel – Hong Kong - 15 PQE (or more) with at least 10 years of in-house experience. A reputable Manufacturing company is looking for a General Counsel to

individual should have prior management experience as well as being versed in all aspects of corporate, commercial, IP and regulatory matters. Ref: L-CHK-219 Compliance Controller - Banking - Hong Kong - 5 years exp. An international corporate and investment bank is looking for individuals with investment banking compliance backgrounds to join their company. Experience in trading knowledge of investment bank products. Ref: L-0109-3305 Legal Counsel – Hong Kong – 6-8 PQE. A well-known international conglomerate is seeking a lawyer with 6-8 PQE. practice experience and be versed in corporate and commercial matters, negotiations and employment matters. Ref: BL-0509-4000 Patent Attorney – Taiwan – 6-15 PQE. A well-known international conglomerate is seeking a patent attorney to in electrical engineering and have gained experience in L-CHK-221 Japanese IP Lawyer (Bengoshi) – Shanghai – 5-8 PQE. A to lead a fast growing team. Candidates should have experience in commercial and litigious IP. Some knowledge of patents would be a bonus. Ref: L-CHK-220 Legal counsel - Shanghai – 5PQE. A leading Medical group is seeking a legal counsel with general corporate and commercial experience. Candidates with a proactive personality and strong English language skills are required. L-CHK-206 Deputy AML Compliance Manager - Shanghai - 8-10 years of banking working experience A leading foreign bank is

looking for a Deputy AML Compliance Manager with extensive experience in AML to join their compliance team. Fluency in Mandarin and English is required (verbal and written). Ref: L-CHK-217 Legal Director - Beijing - at least 8 years of working A foreign real estate company is looking for a Legal Director to lead a team. Candidates with extensive experience in real estate, retail or hotel management is preferred. Must be L-CHK-215 Legal Counsel – Shanghai - 6+ years of general corporate experience A leading USA based manufacturing company is looking for a Legal Counsel. Candidates can either be from in-house or private practice. PRC Bar is a must. Strong English & Mandarin language skills required. Ref: L – CHK -210 Compliance Manager – Shenzhen - 8+ years of experience in social (ethics) compliance with 2 years in a managerial role. A leading USA based company is looking for a compliance manager to join their team. Solid presentation skills is highly preferred. Strong English & Mandarin language skills are required. Ref: L – CHK -218 Group Legal Head - Shanghai – 18 years of relevant corporate and commercial experience in areas such as M&A, direct investments, private equity, real estate, government multi-national corporations environment. Ref: L-CHK-208

with

a

commercial

Senior Legal Manager - Shanghai - 8yrs. A leading French Company in FMCG industry is looking for a senior legal counsel to join their team. Candidates should have solid M&A practice and strong English language skills required. Ref: L-CHK-212 International Financing Lawyer – ShenZhen - 6+ yrs A Leading IT company is looking for a Senior International Financing Lawyer. Candidates from the Banking industry or preferred. Foreigners who understand Mandarin are welcome to apply. Ref: L-CHK-57

Interested? Please contact us at +852 2169 0868 or mail to hongkong@recruit-legal.com Please visit www.recruit-legal.com for a full list of our positions Recruit Legal Suite 3103-4, 31/F, Tower 6 Kowloon, Hong Kong

Tel: (852) 2169 0868 Fax: (852) 2169 0201 Website: www.recruit-legal.com Email: hongkong@recruit-legal.com


NEWS | deals >>

deals in brief deal of the month HEADLINE DEAL

eBay - Gmarket acquisition

eBay has closed a historic transaction – the first acquisition of a Korean company listed solely in the US. As Orrick partners explain, its implications for future cross-border transactions in Korea are profound

I

n late April 2009, Gmarket, South Korea’s largest e-commerce provider, embarked on a complex business combination transaction that was structured to allow eBay to acquire a controlling interest in it. The deal would also combine eBay’s Korean subsidiary with Gmarket. Tender offers for Korean companies are not common and this represents only the second tender offer made by a US company to acquire an unrelated Korean company. The transaction consists of multiple steps, the first of which is an all-cash tender offer made by an eBay subsidiary for all outstanding Gmarket shares at a price of US$24 per share (for a total acquisition price of approximately US$1.2bn if the offer is fully subscribed). Even though Gmarket is a foreign private issuer (as defined under US securities laws), since Gmarket’s shares (in the form of American Depository Receipts) are listed and traded exclusively in the US on the NASDAQ Global Select market, eBay’s tender offer and Gmarket’s related legal responsibilities and disclosure documents are governed by the same tender offer rules that apply to US issuers. The transaction was complicated by the fact that, as a result of there being US and Korean holders, a simultaneous tender offer in the US and Korea was required, which needed coordination on securities laws, timing and language. In addition, since

6

Gmarket shares do not trade in Korea, tender offer procedures typically employed in US tender offers were tailored significantly in the Korea offer in order to allow Korean residents to participate. As part of the transaction, eBay’s subsidiary has entered into tender agreements with the holders of more than 50% of Gmarket’s outstanding shares. The parties to the tender agreements include Gmarket’s largest shareholders (such as Interpark Corporation, Gmarket’s Chairman of the Board and Yahoo!) and certain senior executives. eBay has also agreed to purchase an additional block of newly issued shares at a per-share purchase price equal to the tender price (approximately US$555m in the aggregate which is designated for use in the purchase of eBay’s subsidiary in Korea) from Gmarket. This step in the transaction structure will allow the Korea subsidiary to become a subsidiary of Gmarket without triggering pre-

emptive rights otherwise available to Gmarket shareholders under its articles of incorporation. Since cash-out merger transactions (including “squeeze outs”) are generally not recognised under Korean corporate laws, following the tender offer eBay will not be able to force the remaining shareholders to sell their Gmarket shares to the US company. As tender offers typically are not fully subscribed, it is likely that Gmarket will have a number of minority shareholders following closing. Lastly, because directors of Korean corporations may be appointed only at meetings of shareholders, prior to the closing of the tender offer, Gmarket will hold an extraordinary meeting of shareholders in order to elect eBay’s designees to Gmarket’s board of directors. Due to the voting provisions in the tender agreements eBay entered into with certain Gmarket shareholders, eBay will have the votes necessary to elect its designees. This article was written by Hong Kong partner Mark Lee, M&A co-chair; San Francisco-based partner Richard Vernon Smith; and Hong Kong partner David Cho of Orrick Herrington & Sutcliffe.

►► Firms involved Firm: Hwang Mok Park Client: Gmarket Lead lawyers: Bredon Carr, Doil Son Firm: Orrick, Herrington & Sutcliffe Client: Gmarket Lead lawyers: Richard Vernon Smith, Mark Lee, David Cho Firm: Pillsbury Winthrop Shaw Pittman Client: Gmarket Firm: Cooley Godward Kronish Client: eBay

Asian Legal Business ISSUE 9.7


NEWS | deals >>

►► your month at a glance Firm

Jurisdiction

Deal name

Allen & Gledhill

Singapore

Singapore Airlines proposed dividend

Singapore

WBL Corporation underwritten rights issue

Singapore

PetroChina - Singapore Petroleum Company proposed acquisition

Singapore

Temasek - Olam stake acquisition

Singapore

Hongkong Land Treasury Services Medium Term Note Program

3,000

Equity market

UAE

Qatar Telecom global medium term note program

5,000

Debt market

Australia/Thailand

Commonwealth Bank Thai debt markets bond issuance

117

Debt market

Allens Arthur Robinson

Australia/Thailand

Commonwealth Bank Thai debt markets bond issuance

117

Debt market

Ali Budiardjo Nugroho Reksodiputro

Indonesia

Bank Pan Indonesia loan financing

30

Debt market

Indonesia

Bank Pan Indonesia loan financing

30

Debt market

Appleby

China

Sino-Forest Corporation share offer

347

AZB & Partners

India

Prolec-GE Internacional - Indo Tech Transformers stake acquisition

Baker & McKenzie

Australia/Taiwan Australia/China

| singapore | ►► PetroChina - Singapore Petroleum Company proposed acquisition Value: US$1bn Firm: Drew & Napier Client: PetroChina Lead lawyers: Sin Boon Ann, Sandy Foo Firm: Allen & Gledhill Client: Singapore Petroleum Company Lead lawyers: Andrew Lim, Steven Lo

Sin Boon Ann Drew & Napier

• PetroChina International proposed 45.5% acquisition Sandy Foo Drew & Napier of Singapore Petroleum Company from Keppel Corporation subsidiary at S$6.25 per share valuing SPC at S$3.2bn in entirety • PetroChina will be required to make general offer to acquire remaining shares in SPC • Deal will be largest public takeover in Singapore since 2001 and first public takeover by Chinese company of Asian target

| UAE | ►► Qatar Telecom global medium term note program Value: US$5bn Firm: Allen & Overy Client: Dealer consortium Firm: Simmons & Simmons Client: Dealer consortium Lead lawyers: Andrew Wingfield, Samer Eido Firm: Clifford Chance Client: Qtel Lead lawyers: Debashis Dey • Qatar Telecom (Qtel) US$5bn global medium term notes program, funds to finance general corporate activities • First program in Qatar not issued by bank www.legalbusinessonline.com

Allen & Overy

Undisc 109

Deal type Corporate Equity market

1,000

M&A

303

M&A

Equity market

Undisc

M&A

Prime View International - E Ink Corp acquisition

214

M&A

Guangdong Rising Assets Management - PanAust Limited stake acquisition

141

M&A

214

M&A

7,300

M&A

Bingham McCutchen

Australia/Taiwan

Prime View International - E Ink Corp acquisition

Cleary Gottlieb Steen & Hamilton

Hong Kong

China Construction Bank H share sale

Clifford Chance

Malaysia

Lim Family - Genting Singapore stake sale

UAE

Qatar Telecom global medium term note program

Commerce & Finance

China

Sino-Forest Corporation share offer

Cooley Godward Kronish

Korea

eBay - Gmarket acquisition

Davis Polk & Wardwell

China/Hong Kong

Greentown China Holdings cash tender offer

China/Hong Kong

Shanda Interactive Entertainment - Hurray! Holding stake acquisition

China

Sino-Forest Corporation share offer

Hong Kong

Exceed - Windrace International Company acquisition

Hong Kong Drew & Napier

Deacons

Value (US$m)

425 5,000 347 1,200 400 42 347

Corporate Debt market Equity market M&A Debt market M&A Equity market

Undisc

M&A

China Construction Bank H share sale

7,300

M&A

Singapore

PetroChina - Singapore Petroleum Company proposed acquisition

1,000

M&A

Freshfields

Japan

Sompo Japan Insurance - Marítima Seguros S.A stake acquisition

165

M&A

Gide Loyrette Nouel

China

L’Avenue Shanghai project development

Hadiputranto, Hadinoto & Partners

Indonesia

British American Tobacco - PT Bentoel Internasional Investama stake acquisition

326

M&A

Herbert Smith

Indonesia

British American Tobacco - PT Bentoel Internasional Investama stake acquisition

326

M&A

Hiswara Bunjamin & Tandjung

Indonesia

British American Tobacco - PT Bentoel Internasional Investama stake acquisition

326

M&A

Huen Wong & Co. with Fried Frank

China

Xinyi Glass Holdings share placement

125

Finance

Hwang Mok Park

Korea

eBay - Gmarket acquisition

J Sagar Associates

India

Prolec-GE Internacional - Indo Tech Transformers stake acquisition

Jingtian & Gongcheng

China

Sino-Forest Corporation share offer

Jun He

China/US

Sichuan Tengzhong Heavy Industrial Machinery - Hummer acquisition

Undisc

M&A

Kim & Chang

Korea

KT Corporation - KT Freetel merger

1,800

M&A

Linklaters

China

Sino-Forest Corporation share offer

347

Equity market

Mallesons Stephen Jaques

China

Lumena Resources IPO

149

Equity market

Australia/China

Guangdong Rising Assets Management - PanAust Limited stake acquisition

141

M&A

Australia/China

Guangdong Rising Assets Management - PanAust Limited stake acquisition

141

M&A

Minter Ellison

Australia/Japan

Sekisui House-Payce joint venture

148

M&A

Morrison & Foerster

China/Hong Kong

Shanda Interactive Entertainment - Hurray! Holding stake acquisition

42

M&A

Orrick, Herrington & Sutcliffe

Korea

eBay - Gmarket acquisition

1,200

M&A

McCullough Robertson

Undisc

1,200 Undisc 347

Construction

M&A M&A Equity market

7


NEWS | deals >>

• Sixth largest debt program on record in Middle East • First MTN programme by telecommunications company in Middle East

| hong kong | ►► China Construction Bank H-share sale Value: US$7.3bn Firm: Cleary Gottlieb Steen & Hamilton Client: Bank of America Firm: Deacons Client: Bank of America Lead lawyers: Alexander Que, Rhoda Yung • Private sale of China Construction Bank H-shares by Bank of America to investor group led by Hopu Investment Management • Sale reduces BoA's stake in CCB from 16.7% to 10.6%.

| china/hong kong | ►► Greentown China Holdings cash tender offer Value: US$400m Firm: T&C Law Firm Client: Greentown China Holdings

bond offering, led by Taiwanese securities firm KGI • Transaction strengthens PVI workforce and develop IP assets

| china/hong kong | ►► Shanda Interactive Entertainment - Hurray! Holding stake acquisition Value: US$42m Firm: Morrison & Foerster Client: Hurray! Holding Firm: Weil, Gotshal & Manges Client: Nomura International Lead lawyer: Akiko Mikumo

| china/US | ►► Sichuan Tengzhong Hummer acquisition Value: Undisclosed Firm: Jun He Client: Sichuan Tengzhong Firm: Shearman & Sterling Client: Sichuan Tengzhong Lead Lawyers: Paul Strecker, Lee Edwards • Sichuan Tengzhong Heavy Industrial Machinery has proposed to acquire Hummer from General Motors (GM) • Tengzhong will acquire rights to Hummer brand, along with senior management and operational team

Akiko Mikumo Weil, Gotshal & Manges

Firm: Davis Polk & Wardwell Client: Shanda Interactive Entertainment Lead lawyers: James Lin, Mark Lehmkuler

• Tengzhong will assume existing Hummer dealer agreements and is expected to sign long-term contract assembly, and component and material supply agreement with GM

• Shanda Interactive Entertainment to acquire controlling interest in Hurray! Holding

| singapore | ►► Temasek - Olam stake acquisition Value: US$303m Firm: Stamford Law Corporation Client: Temasek Holdings Lead lawyers: Lee Suet Fern, Ng Joo Khin, Soh Chun Bin • Temasek acquisition of 13.76% stake makes it Olam’s second-largest shareholder after Singaporebased Kewalram Chanrai Group

Soh Chun Bin Stamford Law

Ng Joo Khin Stamford Law

• Temasek to pay S$1.60 per share for a total of 273.5 million new ordinary shares • Deal considered largest equity placement by Singapore-listed company to single investor since beginning of year

• Shanda to acquire 51% shares of Hurray! via all-cash tender offer

Firm: Davis Polk & Wardwell Client: Deutsche Bank AG Lead lawyer: William Barron Firm: White & Case Client: Greentown China Holdings • Property developers Greentown China cash tender offer to purchase outstanding US$400m senior notes due 2013 • Deutsche Bank AG, London branch, was exclusive deal manager

| australia/taiwan | ►► Prime View International E Ink Corp acquisition Value: US$214m Firm: Baker & McKenzie Client: Prime View International Firm: Bingham McCutchen Client: E Ink Corporation • Prime View International to acquire E Ink a US-based provider of electronic paper display technologies for US$214m • PVI to finance acquisition with equity placement and convertible

8

“The market is certainly likely to see more China-outbound M&A deals in general and it would probably be fair to expect that a part of that increase will be investments in the Asian countries. We are starting to see momentum again in terms of China outbound transactions compared to the relative quiet of the past year” Sandy Foo, Drew & Napier Asian Legal Business ISSUE 9.7


NEWS | deals >>

“Many mid-tier companies that have done well domestically in China are now looking to expand abroad. With strong buying power and a vision to go global, mid-tier acquirors represent a source of opportunities for international firms advising on crossborder transactions” Paul Strecker, Shearman & Sterling

►► your month at a glance (Cont) Firm

Jurisdiction

Deal name

Paul Weiss Rifkind Wharton & Garrison

Hong Kong

Asia Satellite Telecommunications Company - EchoStar Asia Holdings Corporation JV

Pillsbury Winthrop Shaw Pittman

Korea

eBay - Gmarket acquisition

1,200

M&A

Shearman & Sterling

UAE

International Petroleum Investment Company - Barclays assets disposal

2,500

Corporate

Value: US$117m Firm: Allens Arthur Robinson Client: Commonwealth Bank of Australia Lead lawyers: David Clifford, Jeffrey Sok, Marcus Clark

Sichuan Tengzhong Heavy Industrial Machinery - Hummer acquisition

Undisc

M&A

Japan

ITOCHU Corporation - Solar Net LLC stake acquisition

Undisc

Corporate

Simmons & Simmons

UAE

Qatar Telecom global medium term note program

5,000

Debt market

Stamford Law Corporation

Singapore

Neptune Orient Lines rights issue

1,000

Equity market

Singapore

Temasek - Olam stake acquisition

303

M&A

Singapore

Temasek - Olam stake acquisition

303

M&A

Watson, Farley & Williams

Malaysia

ITS Tubular Services - Scomi Group JV

Weil, Gotshal & Manges

China/Hong Kong

Shanda Interactive Entertainment - Hurray! Holding stake acquisition

White & Case

China/Hong Kong

Greentown China Holdings cash tender offer

400

Debt market

Indonesia

British American Tobacco - PT Bentoel Internasional Investama stake acquisition

326

M&A

Please contact

Firm: Jingtian & Gongcheng Client: Sino-Forest

Firm: Davis Polk & Wardwell Client: Underwriters Lead lawyer: William Barron

Firm: Allen & Overy Client: Siam Commercial Bank Public Company Lead lawyer: Stephen Jaggs • Australia-Thai cross-border deal involved Commonwealth Bank’s first issuance of bonds into Thai debt market • Transaction has two trenches of senior bonds: one with four-year maturity and the other with sevenyear maturity

| china | ►► Sino-Forest Corporation share offer Value: US$347m Firm: Appleby Client: Sino-Forest www.legalbusinessonline.com

Undisc 42

Corporate M&A

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

Firm: Commerce & Finance Client: Underwriters

Firm: Allen & Overy Client: HSBC Lead lawyer: Stephen Jaggs

Corporate

China/US

Firm: Linklaters Client: Sino-Forest

Stephen Jaggs Allen & Overy

18

Deal type

Sheppard Mullin

| australia/thailand | ►► Commonwealth Bank Thai debt markets bond issuance

Value (US$m)

• PRC commercial tree plantation operator, Sino-Forest Corporation secondary, offering of 34.5 million common shares

alb@keymedia.com.au

61 2 8437 4700

Firm: Hadiputranto, Hadinoto & Partners Client: Rajawali Group • British American Tobacco purcashed 56% stake in PT Bentoel Internasional Investama, Indonesian cigarette maker for US$326m • Deal enables BAT to enter Indonesian market for kreteks – cigarettes made from tobacco and cloves

| indonesia | ►► British American Tobacco - PT Bentoel Internasional Investama stake acquisition Value: US$326m Firm: Hiswara Bunjamin & Tandjung Client: British American Tobacco Lead lawyers: Brian Scott, David Dawborn, Iril Hiswara Firm: Herbert Smith Client: British American Tobacco Lead lawyers: Andrew Radford, Austin Sweeney Firm: White & Case Client: Rajawali Group Lead lawyers: Barrye Wall, Jeremy Leifer, William Kirschner

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NEWS | analysis >>

Analysis >>

Madoff madness has just begun Think the Madoff scandal is nearly over? Think again. Next stop for the Madoff train is litigation… and lots of it, according to Harney Westwood & Riegels partner Phillip Kite

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hrough his company, Bernard L Madoff Investment Securities (BMIS), Bernie Madoff perpetrated arguably the largest fraud of all time. The fraud has huge repercussions across the world and has affected thousands of people, including a significant number of investment funds in Cayman and the British Virgin Islands (BVI). Of course, these offshore vehicles are popular across Asia, in particular BVI funds. The figures are truly enormous and funds which investors thought were worth billions in November 2008 were found to be worth only a tiny fraction of that sum by as early as December that same year. As with most frauds of this size, there is normally an avalanche of claims by disgruntled investors. The highest value claims have already started in the US, the latest one being a US$3bn claim relating to one of the largest Madoff-affected BVI funds, Kingate. Many more are sure to follow and set out below are just some of the litigation options in this target-rich environment.

Investors claims

Funds should look out for a number of potential claims. Investors as creditors – numerous investors submitted redemption claims but were not paid or provided funds that were never invested. Great care will need to be taken to decide if they are investors or creditors – if there are sufficient numbers of creditors the fund may be insolvent. Shareholders actions – investors are starting action groups which might give them more of a say in Madoffaffected funds. Investors in the BVI’s Fairfield fund, where losses are said to be US$7.5bn, have now started liquidation proceedings against the fund and a large derivative action has now started in the US against another Madoff-affected fund. 10

Directors

As Madoff created a club-like atmosphere, investing into BMIS may have seemed like a privilege before December 2008 – but it does not look so good now. As well as potential derivative actions and mis-selling claims, directors need to consider carefully whether normally solvent structures are now insolvent. This is highly relevant if those structures subsequently go into liquidation, as directors can be personally liable for the debts of a company if, for example in the BVI, they knew or ought to have known that there was no reasonable prospect of the company avoiding insolvent liquidation and thereafter failed to take every step reasonably open to minimise the loss to the creditors.

Investment managers

Managers are clearly in the firing line for claims and much will depend on what due diligence was done and what the investment manager knew about BMIS. Managers should be particularly concerned with actions in the US where, not only are discovery rules extensive, but damages are generally higher. Given the current climate, it is also doubtful that a BVI or Cayman management company will receive a very welcome reception in the US courts.

Auditors and banks

Because of the wide reach of this fraud, most of the major banks face potential exposure. Some banks commonly promoted funds to their clients and while in the good years this is the sort of in-house banking product which was popular with customers, the banks face real issues with their customers now. Some of the big accountancy firms provided audit services to Madoffaffected funds, although they will

no doubt fight back very hard against claims. Importantly, most audit engagements may not be under US law although if audit teams visited BMIS in the course of their duties then this might lead to allegations of ‘Nelsonian’ blindness.

US claims

As well as investor actions, the bankruptcy trustee of BMIS has powers to claw back payments made by BMIS, including against those funds which received otherwise standard redemption payments in the run up to Madoff’s arrest. For example, the trustee may demand back payments made by BMIS in the 90 days before the date of liquidation and also previous transactions going back years which the trustee regards as “fictitious profits”. These actions have already started against at least four offshore funds, some of which are claims in excess of US$100m, and could tip these companies into liquidation. In several large claims against offshore funds, the trustee has joined the custodian bank as a second defendant, sometimes on dubious jurisdictional grounds. However, the trustee’s tactics are to draw as many deep pockets as he can into the New York courts and Asian Legal Business ISSUE 9.7


NEWS | analysis >>

Analysis >>

The call of the east Are partners fleeing the economic struggles of London and New York? ALB asks whether the recent partner movements to Asia are a push or a pull

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banks with significant US assets may have no alternative but to defend in the US. So far, the trustee’s tactics are not to follow the remaining money, which is often held offshore, but to try to keep the litigation there. This strategy may have more teeth given the New York Court of Appeals opinion on 4 June 2009 in the case of Koehler v The Bank of Bermuda, which provides that a New York court can order a bank over which it has personal jurisdiction to turn over to a creditor assets owned by a judgment debtor, even when those assets are located outside of New York. This could be a significant extension to the US court’s view of its ‘long arm’ jurisdiction. Bernie Madoff was sentenced top 150 years in prison at the end of June and will now spend the rest of his life behind bars. He will certainly have a long time to think about his crimes and the courts will now spend years trying to sort of the mess he has left in his wake. A promised enquiry into the Securities and Exchange Commission’s conduct is still to be published and it is of course unfortunate, although perhaps not surprising, that the regulators who seemingly failed to do their jobs, may get away with their failure to detect the largest Ponzi scheme we have ever seen. ALB www.legalbusinessonline.com

he recent exodus of UK and US based partners to Asia could be attributed to the sluggishness of harder-hit western economies. But China and Hong Kong were welcoming partners long before the global financial crisis, and it is likely that their attraction will outlive the current economic situation Paul Mitchard QC of Skadden recently moved from London to Hong Kong. “There definitely isn’t a contracting market in the UK, we’re absolutely inundated with work at the moment in the litigation group,” he says. “That isn’t the reason for coming here; it is to do with the pull of the Asian market.” Skadden had previously undertaken its international arbitration work in China and Hong Kong through teams located in the European and US offices. Mitchard explained that the time had come to centre the practice in Hong Kong. “This is about client needs,” he says. “Particularly in arbitration, they need people here – you know what Hong Kong is like, they don’t want people in transit. You are much more credible in the market if you have a presence in the region.” This echoes the attitude of other

international firms. “It is very important to have an office on the ground, and we are strongly in favour of having a proper presence and service capability [in Shanghai],” says Seamus Cornelius, a partner at Allens Arthur Robinson. “It gives us much better ability to service our clients, helps us understand the real issues that concern our clients, and provides us with a valuable picture of what’s going on in this market.” The focus upon growth in China and relocation of partners can hardly is not a new phenomenon, but there has been a recent shift in the practice areas targeted by international firms. The Beijing office of Salans is shifting its business model from advising on FDI, M&A and investment in real estate to restructuring and arbitration. This is “driven by changing client demand”, according to managing partner, Bernd Stucken. The Salans Beijing office is also hiring and relocating lawyers from other offices to China. Growth of restructuring practices is expected in the current economic climate, but international arbitration and dispute resolution has also received significant attention in Asia. Mitchard explains that the

►► Partner Spotlight: Paul Mitchard QC, Skadden “I had set up the London practice seven years ago, and that has now reached 28 people, so moving to Hong Kong to set up Skadden’s arbitration practice was the next logical development. Somebody had to lead this initiative and I am head of the European and Asian litigation and arbitration group. I am Hong Kong-qualified, therefore I am the natural person to lead this development. The personal reason is that I actually love Asia and have always wanted to come back. I became a QC in London and, hopefully, that will give me an additional pull out here with clients. There were strong synergies with me being the person to set the practice up. This is a question of Skadden ramping up its presence in the region.”

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NEWS | analysis >>

Nicholas French Firm: Freshfields Relocation: London to Beijing Practice area: Antitrust, competition and trade

Jon Gray Firm: Linklaters Relocation: New York to Hong Kong Practice area: Capital markets

development of an international arbitration hub for Skadden in Hong Kong was planned over a year ago, prior to the credit crunch. “[Our move] has coincided with the downturn, which brings more dispute resolution, arbitration, litigation and investigation work,” he says. “The time we started to do this was fortunate; since dispute resolution is countercyclical to the economy.” A similar incentive may have prompted the recent growth of Fulbright & Jaworski’s Hong Kong office, to which international dispute partners Richard Hill and Stefan Ricketts relocated from London last year. “As Asian markets have matured, attracted vast amounts of foreign capital and otherwise become more integrated into the global economy, we have seen a predicable increase in complex disputes,” says Jeffrey Blount, head of the Asia-Pacific practice. The restructuring and dispute resolution practice areas may have received significant attention, but the traditional growth sectors within China have not been ignored. Freshfields recently sent Nicholas French to its Beijing office to exercise his expertise in antitrust, competition and trade. Clifford Chance and Linklaters have similarly boosted

“I think, relatively speaking, Asia is in a better position than say London or New York, but it is still a part of the global economic crisis” Emily Lewis, Lewis Sanders Legal Recruitment 12

their private equity and capital markets teams in Hong Kong respectively. Corporate and securities will receive additional attention in the Beijing office of Reed Smith with the relocation of Zack Dong from Chicago. The Chinese market may have more promise for growth than the struggling UK and US economies, but the legal services industry is still being forced to tighten its operations. “The firms here [in Hong Kong] have still been cutting back,” says Emily Lewis, managing director of Lewis Sander Legal Recruitment. Large-scale restructuring in firms such as DLA Piper and Allen & Overy has resulted in multiple redundancies. Simmons & Simmons has also bucked the partner relocation trend, sending partners from both Hong Kong and Shanghai back to London. The fiercely competitive nature of the Chinese market was cited by Hannes Snellman – the Swedishbased international law firm – as the reason for recently closing its Beijing and Shanghai operations. The push towards China and Hong Kong is still understandable, since economic stagnation is anticipated to continue in the West. “I think relatively speaking Asia is in a better position than say London or New York, but it is still a part of the global economic crisis,” Lewis explains. “There isn’t really anywhere in the world that isn’t downsizing.” Are lawyers jumping ship from the Western economic struggles? They aren’t admitting it – apparently Asia has always been the game plan. Either  way, we recommend advance bookings for business class flights to Hong Kong. ALB

Kate Allchurch Firm: White & Case Relocation: London to Singapore Practice area: Finance and restructuring

Richard Hill Firm: Fulbright & Jaworski Relocation: London to Hong Kong Practice area: International disputes

Simon Cooke Firm: Clifford Chance Relocation: London to Hong Kong Practice area: Private equity

Tom Lidstrom Firm: Linklaters Relocation: London to Hong Kong Practice area: Litigation

Sebastian Buss Firm: White & Case Relocation: London to Singapore Practice area: Aviation; energy; infrastructure; project; asset finance

Stefan Ricketts Firm: Fulbright & Jaworski Relocation: London to Hong Kong Practice area: International disputes

David Ludwick Firm: Linklaters Relocation: London to Hong Kong Practice area: Capital markets Asian Legal Business ISSUE 9.7


NEWS | analysis >>

Analysis >>

Gulf project finance: where to now? Levels of project financing in the Gulf have substantially tailed off since the onset of the financial crisis. ALB asks industry experts when they think the market is likely to bounce back and how different it will look when it does

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he number of banks actively lending has declined. Domestic banks have run scared. Liquidity is scarce, as is foreign currency, and the once strong real estate market is in the throes of correcting itself. Not the type of indicators you are looking for if you are a project finance banker, sponsor or lawyer. And the message coming out of the Gulf is that things will get worse before they get better – but this doesn’t mean that people are sitting idly by. The way projects are proceeding is markedly different from the past. Increased attention is being paid to not only the structure of projects, but also their underlying economics. From shorter tenors and maturity terms to tighter loan structures, major players say these changes are here to say and that’s not necessarily a bad thing as they could open the way for greater involvement of Islamic banks in the project finance sector. “There is a strong need for infrastructure funding in this region – be it transport, waste water or power – which has been pretty much developed with project finance,” says David Wadham, managing partner at Ashurst’s Abu Dhabi office. “But if the availability of liquidity remains low, alternative structures have to be used. We have seen people tweak the model and bring in banks; we have seen some drop their tenors – people are doing things differently to source as much liquidity to get projects done.” However, Wadham says that while

“Is it the right time to develop energy projects? The short-term outlook does not support that proposition” rajesh ramanathan, Apicorp gcc business group www.legalbusinessonline.com

there are those who are looking to commence new projects, very few are actually getting off the ground. He estimates that “nearly 80%” of the projects at market currently are legacy deals, which were commenced or committed to before the onset of the global financial crisis. Hence, as much as new deals depend on finding new funding sources, they also depend on just how these legacy deals progress. “It will be interesting to see how the legacy deals of 2008 get done in the next six months and on what terms the new deals are brought to market,” he says. “Dolphin’s refinancing is critical, as is the Zayed University. Then we have the Shuweihat S2, which is one of the deals from last year, which had a US$900m bridge facility and they are in the final stages of securing long-term financing for that.” The way deals are done has well and truly changed. “People are beginning to look forward again – beginning to lend again – but I don’t think that we will return to the same terms we used to have. Definitely this time, pricing and tenor are going to be different in order to attract the bond market and Islamic products. Sponsors are witnessing tough days,” he says.

Don’t rely on banks

Greg Fewer, an advisor to one of Abu Dhabi’s largest investment companies, Mubadala, says that despite the need for project financing, the tough times are here to stay. But, he says, borrowers shouldn’t necessarily only be looking to banks. “Banks are shrinking and, for now, they cannot be relied on to provide balance-sheet capital,” he says. “The important next step is to enable regional currency issuance by encouraging and developing the appetite of insurance and pension funds to be involved in project finance.” But just how this is achieved is the

million-dollar question, according to Thomas Waterhouse, joint general manager and head of energy and natural resources at Sumitomo Mitsui Banking Corporation (Europe). “Dolphin, Aldur and the S2 financings have sent a strong signal to the market in terms of recovery, but how will the market interpret this information? Underwriting is unlikely to return to the market for the foreseeable future and the self-arrange model will continue to be the norm. Book-running strategies will need to adapt to attract commitments,” he says. The result, Waterhouse says, will be a flight to quality where only the top projects make it at market. “The Middle East will remain a key region for energy project finance given the high credit quality of transactions and low regulatory risk but banks will need to identify both shorter- and longer►► Gulf project finance: major trends Project selection • Strong sponsors/core clients only • Avoid market risk/price/volume • Host government support and rationale project • Increased use of club deals and co-financing Project structure • Shorter tenors • Refinancing risks to sponsors / hosts Economics • Rebalance risk/reward between equity and debt • Banks will require full economic return on PF activities to equal/exceed return on capital • Cost of funds to be recalibrated Funding trends • Increase in local currency financing, but mismatch between local currency funding and credit capacity • Increase in central bank/monetary authority support for PF market • Development of local capital markets • Increased co-operation between sponsors and host/government authorities

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NEWS | analysis >>

►► Key Islamic GGC Project Financings 2001–07 Project

Country

Marafiq

Saudi Arabia

Shuqaiq

Saudi Arabia

1.28

0.11

Yansab

Saudi Arabia

3.50

0.85

PetroRabigh

Saudi Arabia

5.80

0.60

Al-Waha

Saudi Arabia

0.63

0.52

Kayan

Saudi Arabia

6.00

0.90

Shuaiba

Saudi Arabia

1.20

0.20

UAE

0.54

0.15

Bahrain

1.01

0.33

Sohar Ali

Oman

1.46

0.24

Dolphin

Qatar

3.45

1.00

Qatargas 2

Qatar

4.50

0.53

Umn Al Nar

UAE

1.77

0.25

Bahrain

0.26

0.05

Taweelah* Bapco

Al Hidd Shuweihat Equate

Total financing (US$bn) 3.31

Islamic tranche (US$bn) 0.60

UAE

1.30

0.25

Kuwait

0.90

0.20

Source : HSBC, MEES * A2 Refinancing.

term solutions to keep themselves in the market,” he says.

Energy: not such a sure thing

Rajesh Ramanathan, vice-president of Apicorp’s GCC Business Group, says financing strategies will have to undergo a dramatic shift and the hype surrounding the short-term viability of energy projects may well be 14

unfounded, with access to gas proving the biggest hurdle. “Is it the right time to develop energy projects? The short-term outlook does not support that proposition. From a medium- to long-term perspective, viability exists but it will depend on the availability of feedstock, level of capital costs and medium- to long-term supply and demand outlook,” he says, noting that gas shortages are already hampering Gulf multi-billion-dollar energy projects and developers have made it clear that they would rather hold off on projects until their so-called “fuel of choice” becomes available rather than use liquid feedstocks such as naphtha. But apart from fuel concerns, the more fundamental question is just where funding will come from. In this regard, Ramanathan is adamant that a strategic shift is needed – one which will require their funding net to be cast much wider. “It is clear that a strategic shift is needed. These projects will now need to access all potential sources of financing, including international, regional and local bank markets, export credit agencies, international capital markets and Islamic financial institutions,” he says.

Are Islamic banks the answer?

Indeed, it is the latter which is being held up as the panacea to the Gulf’s liquidity ills. Islamic bank assets have been experiencing annual growth of 15% and deposits and financial assets

are expected to double in 2010. Saudi Arabia, for example, has seen the ranks of its Shari’a compliant banks expand – with the latest, Al-Inma, established last year – and a number of conventional banks in the Kingdom and wider Gulf have had Islamic makeovers. These banks could represent a growing source of liquidity for GCC sponsors that are currently facing delays in implementing projects due to difficulties in securing conventional financing. However, up until now Islamic tranches have been dominated by Islamic ‘windows’ of commercial banks because they have been the main source of liquidity. The result is that Islamic tranches have not really generated much extra liquidity – only 15% of total Shari’a compliance demand is supplied by Islamic financial institutions. But as HSBC’s head of project finance execution (MENA), Jonathan Robinson says, this is not necessarily the fault of Islamic financial institutions, but has more to do with project finance structures, which have tended to be reactive rather than proactive, and a focus on conventional banks as the “largest providers of liquidity”. The retreat of conventional lenders means that now is as good a time as any for Islamic institutions to play more of an active role in project financing. Robinson says this process must start with revisiting the basic principles that are supposed to underpin Islamic financing. This means revamping structures “so we end up with truer Islamic financing and the recognition that there is different risk and compensation for that”, he explains. Whether the region’s Islamic financial institutions are ready and able to deal with long-term financing schemes is another question. For while many have begun to get involved in some large deals, they still lack the long-tenor mega-deal experience that traditional lenders have. The key, according to industry experts, will be whether the shorter-tenor structure experiments being pioneered in other jurisdictions across the AsiaPacific kick off in the Gulf. If they do, Robinson says, this could be Islamic finances’ own window through which it can play a greater role in the region’s project financing sector. ALB Asian Legal Business ISSUE 9.7


Firm Profile

NEWS | analysis >>

Equity Trust

Doing business in Asia? Equity Trust takes care of the complications

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sia is a hotbed of economic growth and in the current economic climate, arguably the most fruitful region for doing business. In the World Bank Doing Business Survey 2009, seven Asian countries – Singapore, Hong Kong, Japan, Thailand, Malaysia, Korea and Taiwan – were ranked highly for their regulatory structures simplifying the process of doing business there. As with any region however, certain requirements need to be met in new business and wealth management projects. In Hong Kong, it takes 5 procedures, 11 days, and costs 1.98 % gross national income per capita to start a business. These figures however, vary from country to country in Asia, where other issues may present themselves. As the world’s leading trust and fiduciary service provider, Equity Trust guides you – whether a business or private client – every step of the way – from setting up, to managing and administering companies, trusts, foundations and partnerships. Equity Trust provides a comprehensive range of services to manage the process of your business and wealth management needs in Asia. From trustee services, estate planning, private and commercial vessel registration, to corporate management, structuring, investor support and fund services, Equity Trust takes care of the issues.

To be the best Equity Trust’s vision is to be the world’s leading independent provider of trust and fiduciary services and to ensure this focus is placed on delivering services and solutions that match clients’ requirements. With experts now located in more than 30 jurisdictions, spanning all corners of the globe, Equity Trust is on the pulse when it comes to financial planning. “Our knowledge crosses borders, time zones and cultures and, as clients become increasingly global and sophisticated, these attributes add real value,” says Nigel Rivers, Head of Private Clients at Equity Trust. Equity Trust clients benefit from a range of key benefits, unmatched by any other in the region. These include: • a global network of talented local and international experts • a platform that leverages resources and expertise across the group www.legalbusinessonline.com

• ability to transcend borders and implement complex structures • skills to develop solutions to clients’ needs • knowledge to anticipate challenges and maximise opportunities

Cross border opportunities In today’s global economy, many private clients and businesses are looking at the best way to protect, manage and develop their assets – many of the solutions cross borders. If structured effectively these can be advantageous, so long as the various worldwide jurisdictions are considered carefully, says Rivers.

According to Rivers: “We have vast experience in identifying the right jurisdiction to interpose between investor and investee jurisdiction. As a result, the solutions and products we suggest will vary from case to case, depending on the client’s objectives. We can prescribe the framework and work with their tax/legal advisors to achieve the right results. As a result, we can assist our clients in the setup, management and administration of their companies in Hong Kong and beyond.” To find out how Equity Trust can help you, or your clients’ business needs in Asia, contact the list of dedicated specialists below.

Robin Harris, Managing Director T: +852 2822 0109 | E: robin.harris@asia.equitytrust.com Robin Harris is the Managing Director of Equity Trust‘s Hong Kong office and has extensive experience in the financial services industry, both as a private banker with Insinger de Beaufort in Amsterdam, and as global head of Investor Services within Equity Trust. Robin is a CFA charter holder and holds an honours degree in finance.

Nigel Rivers, Head of Private Clients T: +852 2822 0186 | E: nigel.rivers@asia.equitytrust.com A qualified and experienced international lawyer, Nigel joined Equity Trust in August 2008 as the Head of Private Clients in Hong Kong. He is responsible for high-networth individuals with multiple assets and wealth management needs. Experienced in managing complex and multi-jurisdictional structures, Nigel and his team support international companies and trusts, personal banking and investment solutions, as well as trust and nominee services.

Michel Bots, Head of Corporate Services T: +852 2822 0104 | E: michel.bots@asia.equitytrust.com Michel Bots is the Head of Corporate Services in Hong Kong. Offering a broad range of corporate services to clients, Michel works closely with his colleagues in Equity Trust’s worldwide locations to help clients explore opportunities both into, and out of, China and the rest of Asia. With 10 years’ experience, Michel joined Equity Trust from a financial service provider in The Netherlands where he was responsible for delivering solutions to key corporate clients. Michel holds a Master of Law degree from the University of Leiden in The Netherlands and worked as an international tax lawyer for several years.

Philip Shu, Investor Services Director T: +852 2822 0183 | E: philip.shu@asia.equitytrust.com Philip Shu is a Director at Equity Trust Hong Kong and also heads up our Global Investor Services team. Before joining Equity Trust in 2002, Philip spent seven years in various analyst and investment counselling positions in North America. His team specialises in helping clients to find suitable investment managers and banks to manage their assets, and provides detailed performance reviews on performance. Philip is also a CFA charter holder.

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NEWS | news >>

Middle East >>

uk report US firms hold their ground US firms seem to be staying afloat despite the pressures of the downturn. Skadden recently extended employment to 100% of its newly-qualified trainee lawyers in London, while Weil Gotshal & Manges gave 85% of its trainees in jobs, keeping on 11 out of 13. Shearman & Sterling is said to be retaining 64% of its London trainees, who are due to qualify in September, and Latham & Watkins, which only launched its trainee programme in the City in 2007, has kept on 78% of newlyqualified practitioners. UK firm layoffs continue The worst of the economic crisis seems far from over for UK firms, as a new wave of redundancy consultations hits the market. Berwin Leighton Paisner recently completed its redundancy consultation, with 85 members of staff affected across the firm’s corporate, finance and real estate practices as well as support functions including IT, accounts, marketing and human resources. Meanwhile, Barlow Lyde & Gilbert also recently laid off 49 staff, along with an undisclosed number of fee-earners – despite the firm’s plans to open an office in Manchester. Hammonds desperate to cut costs In a bid to cut costs, Hammonds has introduced mandatory sabbaticals for all associates in its corporate department. Earlier this year, the firm cut 77 staff in a

redundancy consultation and reports indicate that other cost-reduction measures, including a fourday week for some departments, are also being considered. Hammonds’ partnership also recently completed the multi-million-pound sell-off of debt litigation practice Drydens to insolvency practitioner Philip Holden. Quintet depart DLA DLA Piper has seen another five partners exit the partnership as the firm continues to reshape its practice. The exits follow the recent redundancy consultation that left 124 staff members, including 24 lawyers, jobless. Three earn CR top spot DLA Piper, Eversheds and Linklaters all recently enjoyed a silver rating in the Business in the Community 2008 CR index for their commitment to corporate responsibility (CR). The firms were granted the award despite all three launching major cost-cutting drives in the past six months. UK firms look at mergers Wragge & Co is the latest UK firm to suggest a merger could be on the cards should the opportunity present itself. Although Wragges stressed it is not actively pursuing a merger, the firm confirmed that it would consider a union to boost its presence in London. Denton Wilde Sapte also recently held discussions with US practice Squire Sanders & Dempsey about the possibility of a merger.

K&L Gates hires former Ashurst head to launch Dubai office

K

&L Gates has launched in the Middle East by opening an office in Dubai and appointing Ashurst’s former Dubai managing partner. The new office will be the firm’s 33rd and follows the recent opening in Singapore. It will be headed by Pittsburgh-based dispute resolution partner Neal Brendel and supported by former Ashurst Dubai managing partner Paul de Cordova, the man credited for spearheading Ashurst’s openings in Dubai and Abu Dhabi. The office will advise on construction, corporate and disputes matters and work alongside the Islamic finance group in other offices. Brendel and De Cordova will be assisted by secondees from other offices, the most recent of which is London corporate associate Richard Dollimore. Despite a slowdown in work and a higher market concentration of firms in Dubai, the firm remains persistent and expects work to pick up soon. “The Gulf region is, has been and will continue to be of

“The Gulf region is, has been, and will continue to be of strategic importance to the global economy” peter kallis, k&l gates

 ROUNDUP

• Pinsent Masons may be the next firm to launch redundancy talks after reporting a turnover rise of only 1% in the last financial year • City firm Macfarlanes has launched a second redundancy consultation, putting 14 support staff and one professional support lawyer under review. It says market conditions are to blame • Herbert Smith has won a place alongside regular advisors on Rio Tinto’s joint venture with rival BHP Billiton and its related US$15.2bn rights issue • Peter Hogstrom, Linklaters’ Sweden managing partner, has denied the office’s future is under threat despite a wave of departures in the past year. However, he admits the firm is undergoing a restructure and will now focus mainly on core practice areas including M&A, banking, capital markets and tax • Lovells and De Brauw Blackstone Westbroek have been axed from the global panel of financial group ING. Following a review of its legal roster, ING appointed Baker & McKenzie and Norton Rose alongside existing members Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters and Sullivan & Cromwell

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strategic importance to the global economy,” said Peter Kalis, K&L Gates’ chairman. De Cordova added that the firm’s broader range of services will set it apart from competitors. “We accept that it’s a competitive market but we’re confident that our fresh attitude, no nonsense style of working, business focus and depth of resources will be attractive to clients,” he said. “We already have a number of active deals and the enquiries are flowing in.” ALB Asian Legal Business ISSUE 9.7


NEWS | news >>

news in brief >> duo act on first foreign IPO in Taiwan Array Networks’ recent IPO on Taiwan’s GreTai Securities Market has marked the beginning of a new era of cooperation between mainland law firms and their Taiwan counterparts. Array Networks’ US$79m IPO on Taiwan’s emerging stock market is the first ever launched by a company based outside the island. “This IPO is a reflection of the strengthening political and economic relationship between Mainland China and Taiwan, which may in turn serve as a further catalyst for Taiwan listings” said Scott Guan, managing partner of Jade & Fountain. Led by partner Scott Guan and Steven Huang, Shanghai-based Jade & Fountain acted as PRC legal counsel to the issuer, while the Taiwan office of K&L Gates advised the issuer on both international and Taiwan law.

middle east >>

UK legal industry eyes Qatar T

he UK Law Society led a trade mission to Qatar on 1 June as part of a broader plan to secure its lawyers and law firms a slice of the gas-rich country’s booming legal market. The visit comes as analysts forecast that Qatar will achieve double-digit growth this year, and as attention shifts from Dubai, which has been more adversely affected by the financial crisis. As yet, only eight international firms have established an office in Doha (see table below). ►► International firms in Qatar Law firm

Office head

Clyde & Co

David Salt

Denton Wilde Sapte

Leigh Hall

2007

Dewey & LeBoeuf

Unannounced

2008

DLA Piper

Jeffrey Bailey

2008

Eversheds

Christopher Jobson

2007

Latham & Watkins

N/A

2008

Patton Boggs

Robert Hager

2003

Simmons & Simmons

N/A

2003

www.legalbusinessonline.com

Date of opening 2007

Alison Hook, head of the Law Society’s international group, said the visit would draw attention to new opportunities in other Gulf countries. “In recent years, law firms have tended to focus all their efforts in the Gulf on Dubai,” she said. “The global financial crisis has not dented Qatar’s economic growth. Revenue from its natural gas reserves, the third largest in the world, is funding major infrastructure projects and Qatar is… in search of new investment opportunities around the world. There are opportunities for lawyers in energy, construction, maritime law, education, tourism and telecommunications to name a few, so firms looking to increase international activity in Qatar and develop Middle Eastern contacts will benefit from this visit.” The trade delegation will meet with key Qatari business and legal groups this week and follows the conclusion of the Qatar Law Forum on 30 May, which saw prominant leaders in law from over 15 countries convene to discuss issues affecting the legal industry today. ALB

GLN launches Hong Kong law service Gide Loyrette Nouel is celebrating its approval to provide Hong Kong and English law advice, following the opening the Hong Kong office in 2006. “The addition of Hong Kong and English law capability was a logical next step for the firm as it provides our international clients with a seamless platform from which to do business in Asia,” said senior partner Pierre Raoul-Duval. The firm has appointed finance lawyers Colin Mercer and Balbir Bindra to lead its Asia banking & finance practice. Bindra joins the firm from Sidley Austin, and Mercer will move between Gide’s London and Hong Kong offices. The firm said that the Asia banking & finance practice will also be adding New York-qualified lawyers.

Phoenix co-founder denies lovells tie-up Abhishek Saxena, the co-founding partner of Phoenix Legal, has dismissed reports suggesting UK firm Lovells had entered into a formal tie-up with the boutique commercial Indian firm. Saxena is adamant that his firm’s relationship with Lovells is no closer than that with any other international law firm. “We do work closely with Lovells and have been doing so for a number of months,” he said. “Some of the Phoenix partners either know or have worked with Lovells in the past and vice versa. It was natural that when Phoenix Legal was set up that this would continue. This does not mean that we have an exclusive relationship. Phoenix Legal works with a number of other law firms around the world. Anything else is market speculation.”

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NEWS | news >>

us report Davis Polk to close Frankfurt base Davis Polk & Wardwell will close its 18-year-old Frankfurt office on August 31 following the imminent retirement of the office’s longtime resident partner, Patrick Kenadjian. News of Kenadjian’s plans to retire coincided with the departure of the office’s designated successor, London-based partner Harald Halbhuber – who decided to leave the firm for personal reasons. The Frankfurt office, which was launched in 1991, has long focused on cross-border securities and M&A work. The firm has offered alternative positions to the two associates and a counsel who are based at the Frankfurt office. Credit crunch continues to bite US firms are still floundering as a result of the economic crisis, with both McDermott, Will & Emery and Weil Gotshal & Manges the latest arrivals to the ever-increasing firm layoff list. McDermott is cutting 25 lawyers and 47 staff members, while Weil Gotshal is laying off 79 support staff across its US offices. Weil Gotshal has not yet made cuts in the international offices, but firm management have reportedly suggested that another redundancy consultation could be under consideration. McDermott has said it will offer a “comprehensive” severance package covering benefits, career counseling and the establishment of a fund to help those who face economic

ROUNDUP

hardships after they leave the firm. Kilpatrick Stockton also recently announced that the firm will cut associate salaries by 10%. Cleary looks for London expansion US firm Cleary Gottlieb Steen & Hamilton has its sights set on London growth, particularly in regards to the firm’s City dispute resolution ­practice. Having recently relocated New York partner Jon Blackman to the City office to build up the litigation practice, Cleary hopes to expand its new office through a combination of lateral hiring and organic growth. Cleary confirmed that the new focus on London was partly due to client demand and follows in the footsteps of another US firm, Milbank Tweed Hadley & McCloy, which also recently boosted its commercial ­litigation ­practice in London. Squire Sanders and Dentons mull alliance Squire, Sanders & Dempsey recently entered merger discussions with Denton Wilde Sapte, cementing its desire for a transatlantic tie-up. Although the proposed union has not yet been discussed at partner level within Dentons, the two firms have held discussions regarding a merger at management level with hopes a deal could be put together this autumn if the talks proceed well. The merger would see Dentons broaden its coverage in emerging markets while Squire Sanders would be able to widen its UK and European capabilities.

• Gibson Dunn & Crutcher is set to launch an office in Sao Paulo. The firm will relocate New York corporate partner Lisa Alfaro to Brazil, along with one associate, but the move is yet to gain approval from the Brazilian Bar • Philadelphia-based employment partner John DiNome has decided he will no longer run against Reed Smith’s veteran chief, Greg Jordan, for the position of global managing partner and chairman of its executive team. This leaves Jordan free of competition to continue his nine-year run at the helm of the top-25 US firm • Baker & McKenzie has appointed Mark Carter (formerly of Allen & Overy) as the firm’s new chief financial office. Carter will join Bakers in September and takes over from Arthur Ferry, who is leaving the firm after two years in the role

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china >>

Shearman and Jun He drive Hummer to China

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hile the world reels in shock at the bankruptcy of General Motors (GM) in the US, China’s Sichuan Tengzhong Heavy Industrial Machinery has seized an opportunity to buy the Hummer brand and its management team from the troubled automaker. Shearman & Sterling is acting as Tengzhong’s international legal counsel, while Jun He is acting as the company’s PRC counsel on the proposed acquisition. “There have been many opportunities and will continue to be opportunities in the US for foreign acquirors that have cash to buy relatively good assets at good valuations,” said Paul Strecker, a partner at Shearman & Sterling in Hong Kong who is working on the transaction with other partners in the firm’s Beijing and New York offices. Under the agreement, Tengzhong will acquire the rights to the Hummer brand, along with a senior management and operational team. As part of the deal, Tengzhong will assume existing Hummer dealer agreements and is expected to sign a long-term contract assembly and component, and material supply agreement with GM. If the deal is successful, GM expects it to save more than 3,000 jobs, but the terms of the deal are subject to final negotiations. As ALB went to press, local media reported that the deal may be rejected by China’s planning agency, the National Development and Reform Commission, on the grounds of potential environmental damage caused by the Hummer model. ALB Asian Legal Business ISSUE 9.7


NEWS | news >>

news in brief >>

china >>

Restructuring and refinancing work helps keep real estate practices afloat

L

aw firms in China have reported a decline in demand for real estate finance legal services, but have said there are still opportunities to help clients deal with the current dire economic conditions. Firms believe that in the next six to 12 months restructuring and refinancing of existing real estate projects will be a growth area. “About 60% of the deals we have worked on in the last three to four years have had to have some kind of adjustments or modifications in the last six to 10 months,” said Joel Rothstein, head of the China real estate practice group at Paul Hastings. The main matters the group are now working on include pre-IPO finance deals, non-recourse cross-border dual currency real estate loans and assisting various clients in exiting some investments. The group has also been involved in representing certain US Lehman Brothers entities

in the sale and liquidation of Lehman Brothers’ Asia real estate assets. “The financing on many deals that we worked on a few years ago will start becoming due in 2010, and structures and strategies for dealing with the maturing debt will need to be addressed,” Rothstein said. Like many other practitioners, he expects there to be increasing amounts of bond issuances, share placements and follow-on financings of both listed and private real estate developers in China. Other international firms, such as Skadden, have also noticed a change. “The focus of our real estate practice has shifted in line with our clients’ business needs,” said Ed Sheremeta, a Skadden partner in Shanghai. “Instead of advising on real estate finance work, we are increasingly focusing on debt and equity restructuring, and alternative funding arrangements to finance our clients’ investments.” ALB

asia >>

BLG’s Asia offices unaffected by redundancies

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one of Barlow Lyde & Gilbert’s Asian offices will be affected as part of the firm’s redundancy consultation, according to the firm’s head of Asia. Lisa Foley, the firm’s Asia chief operating officer, told ALB the redundancies – under review pending staff consultations – will not be in any of the Asia offices. The firm has five offices in total – three in Asia (Hong Kong, Shanghai, Singapore) and two in the UK. The redundancies will, however, affect around 49 staff from the firm’s London and Oxford offices. The retrenched staff include both fee-earners and other support staff, and were attributed to increasing expenses and declining profits. “There are fundamental changes in the legal sector and all firms must adapt. One consequence is that, despite a rise in turnover, our profitability has fallen, partly due to increased

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overheads,” CEO Clint Evans said. “This is not only a response to current market conditions in which many of our clients are themselves facing costs pressures, but also part of a wider project of modernisation intended to safeguard the firm’s future prosperity as an employer.” The news comes as the number of law firm layoffs since the beginning of the year reached 10,000 as of late May, according to layoff tracker Law Shucks. ALB

“This is not only a response to current market conditions in which many of our clients are themselves facing cost pressures, but also part of a wider project of modernisation” clint evans, Barlow lyde & gilbert

dacheng ventures into los angeles Dacheng has opened a branch office in Los Angeles and entered into a strategic alliance with Matthews Wilson and Hunter (MWH), a boutique California law firm. Dacheng aims to make legal services more accessible to mainland clients in the US market through the alliance. “MWH’s mission and market development plans align with ours and they have the resources and standing to meet Dacheng’s requirements,” said Xiao Jinquan, senior partner of Dacheng. “Setting up an office in the US makes our legal services more accessible to Chinese locals living in LA.” Dacheng’s LA office, the firm’s first US branch, is headed by partner Xiao Ling. The firm now has 22 domestic branches and four overseas, as well as alliances in over 12 countries. firm wants to feast on McDonald’s A local Indonesian firm is taking on fast-food giant McDonald’s in a lawsuit seeking US$105m in damages on behalf of a local franchisee. Jakarta-based firm Adhyaksa & Co is representing franchisee Bambang Rachmadi, who owns 10% in Bina Nusa Rama, a joint venture company with McDonald’s. Rachmadi is seeking US$5.5m in “material losses” and US$100m for “immaterial losses” from McDonald’s for selling the rights to local retail chains to Rekso Nasional Food. The complaint alleges that the deal is in breach of company law and Rachmadi’s shareholder rights. Lawyers Tri Adhyaksa, Rachman Bakary and Hamzah Fanshuri will try the case, which the firm says it is confident it will win in August.

Chinese duo make shandong inroads King & Wood and Dacheng will soon become the first two Beijing firms to have an office in both Jinan and Qingdao – Shandong’s two major commercial cities. “Companies in Shandong have plenty of demand for legal services, especially for high-end and sophisticated services,” says Huang Tao, a partner with King & Wood. “Having a strong service capacity on the ground enables us to work more efficiently and helps save costs for our clients.” The two offices in Shandong will work as an integrated team to service clients throughout Shandong. Dacheng’s Qingdao office will have an emphasis on foreign investment, international trade and shipping.

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NEWS | news >>

Update >>

china >>

International Tax OECD publishes report on building transparent tax compliance with Banks

I

n January 2008 the OECD Forum on Tax Administration published a report, Tax Intermediaries, setting out the way in which tax administrations could better organise their relationships with tax advisers and taxpayers. It left for further study two taxpayer groups which it felt posed a significant risk to tax systems: High Net Worth Individuals and Banks. OECD has now, June 2009, published its further reports on these two groups of taxpayers following the 5th meeting of the Forum on Tax Administration which took place in Paris on 28 and 29 May 2009. The purpose of the banking study is to deepen understanding of banks’ involvement (direct or indirect) in aggressive tax planning, and to identify the benefits to both revenue authorities and banks from an ‘enhanced relationship’. The report examines complex structured finance transactions and how they are developed by banks, the controls that are in place as they are developed and how they are then used by both banks and their clients. By having a better understanding of these products the report believes revenue bodies will be better able to distinguish those products that pose a tax risk. The report explores ways in which revenue authorities can develop a better understanding of the way that banks operate, recognising the difficulties posed not least because banks operate across borders whereas revenue authorities are national organisations. The report looks at ways in which revenue authorities can obtain real time information about what banks are doing through disclosure regimes and the availability of rulings or clearances on actual or proposed transactions. The report comes up with a long list of recommendations for both revenue authorities and for banks themselves. The report also sets out a number of ‘good practice’ recommendations for the banks. These include: • the bank’s internal tax departments decision not to proceed with a transaction should not be overridden without escalation of a decision to the CEO or board; • banks’ internal tax departments are encouraged to provide a greater degree of transparency in the governance of complex structured finance transactions (CSFT) implemented both for clients and on the bank’s own account; • all banks should ensure that they have appropriately skilled and trained staff to review CSFTs for clients; • in setting their business strategy, banks should consider the benefits of an enhanced relationship with revenue bodies including early certainty, reduced compliance costs and reduced reputational risk. As part of this relationship, banks should share their views with revenue bodies on tax risk assessment for products or services where there is potential for uncertainty.

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.

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Debbie Annells

Bond issue increase may have lasting effect on practice in China

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he nine-month hiatus on A-share initial public offerings may have taken away an obvious source of income for Chinese corporate law practices. But things are not all bad – companies still need to raise capital and have increasingly been turning their attention to bonds. Chinese businesses issued RMB384.5bn of corporate bonds (and bills of one year and above) for the first four months of 2009, compared to just RMB67.7bn a year earlier, according to Reuters. One lawyer who has benefited “Commercial banks make from the surge in bonds issuance up the majority of bond is Ye Beicheng, investors in China and they a Beijing-based are prohibited from investing partner at Zhong Lun. Ye says there in the stock market. So I think have traditionally that… a resumption in A-share been five key IPOs will not be drastic” bond products in China – enterprise ye beicheng, Zhong Lun bonds, corporate bonds, financial bonds, mid-term notes and commercial paper. However, because the China Securities Regulatory Commission (CSRC) suspended corporate bond issuance in the third quarter of 2008, there has been no corporate bond-related work this year. Instead, it has been mid-term notes and enterprise bonds which have had clients beating a path to his door. “The number of bond issuances certainly will decrease,” he said. “However, commercial banks make up the majority of bond investors in China and they are prohibited from investing in the stock market. So I think that the impact of a resumption in A-share IPOs will not be drastic. To my understanding, issuing mid-term notes and commercial paper has become a viable alternative to mid-term and short-term bank borrowing.” The spike in bond-related work has also seen White & Case recently advise Greentown China Holdings as issuer’s counsel in connection with the cash tender offer and consent solicitation for its US$400m (RMB2.73bn) of senior notes due in 2013. Greentown, which develops luxury residential properties in PRC, offered noteholders who tendered and consented by the consent date a total consideration of US$850 for every US$1,000 of principal amount outstanding of its notes. The partner who led the deal for White & Case, AnnaMarie Slot, sees the deal as a benchmark for future work, should the GFC continue. “This tender offer and exit consent demonstrates that Chinese companies can successfully use such transactions to help restructure their capital structures and potentially increase financial flexibility during the current credit crisis,” she said. ALB Asian Legal Business ISSUE 9.7


NEWS | news >>

Update >>

Intellectual Property Patent prosecution highway pilot program launched

T UK >>

Ex-Mayer Brown chief leads Greenberg’s London debut

F

ormer Mayer Brown co-vice chairman Paul Maher has moved on to head Greenberg Traurig’s new London office, exactly one month after his departure from his old firm in a controversial management reshuffle. Maher, who spearheaded Mayer Brown’s launch in Asia through the merger with JSM, is now a founding member and chairman of Greenberg’s new London office, which will be called Greenberg Traurig Maher. He brings fellow London-based Mayer Brown colleagues, Cate Sharp and Fiona Adams, as the office’s other managing partners. Greenberg president Richard Rosenbaum said that the firm had been “patiently waiting for the right leader” for the London debut. “In Paul, we have found that person, as well as adding a top-tier M&A team to our global capabilities, and we are very pleased that he, Cate and Fiona chose Greenberg Traurig as their new home,” he said. Maher resigned as co-vice chairman of Mayer Brown on 15 May after a brief sabbatical from the firm, during which he said he was considering “several interesting opportunities”. The sabbatical followed the firm’s controversial management revamp, which voted Herbert Krueger as the new chairman and Kenneth Geller as firm-wide managing partner. The revamp was considered to be the tipping point for Maher’s resignation. “I was fortunate to have had a number of exciting options and gave each of them considerable thought,” Maher said. “I chose Greenberg Traurig because of the firm’s global ambition, quality, balance in its practices and locations, sound financial management, strategic vision and culture. I am pleased to be a founder of Greenberg Traurig Maher in the UK, a firm prepared to deliver and focus on what our clients need today and in the future.” ALB

www.legalbusinessonline.com

he Intellectual Property Office of Singapore (IPOS) and the United States Patent and Trademark Office (USPTO) have launched a Patent Prosecution Highway pilot program. The purpose of the program is to share search and examination results between the offices to allow applicants in both countries to obtain corresponding patents faster and more efficiently. The pilot period commences on 2 February 2009, for a period of one year, with a one year extension if needed. Where the USPTO is the Office of First Filing and the final results of the search and examination or the patent grant of the US application are available, the applicant may request accelerated prosecution of the corresponding application filed with IPOS as the Office of Second Filing by furnishing certain prescribed information of the US application. Where IPOS is the Office of First Filing and the Singapore application contains claims that are determined by IPOS to be allowable/patentable in a substantive examination carried out in the name of IPOS (and not based on examination results adopted by IPOS from another office), the applicant may request accelerated examination at the USPTO for the corresponding US application filed with the USPTO as the Office of Second Filing. However, the US application must be pending and that examination has not yet begun. If the Singapore office action does not explicitly state that a particular claim is allowable or patentable, the applicant must declare that no rejection has been made in the Singapore Office Action regarding that claim, and therefore, the claim is deemed allowable or patentable by IPOS. However, a word of caution, all claims in a US application relying on a corresponding Singapore application must sufficiently correspond or be amended to be of the same or similar scope to the claims in the Singapore application deemed allowable by IPOS. A strategic advantage of the program is that it provides applicants with an opportunity to expedite prosecution in the USPTO, thus obtaining an issued US patent faster. The program may be of interest to companies in fast moving technologies, such as the computer and electronics industries where an issued patent may be critical to obtaining a greater market share or in dealing with competition. Notwithstanding the benefits outlined above, applicants may choose to file the first application in the US instead of Singapore for commercial reasons. However, to take advantage of the program, applicants should at least consider the benefits of first filing in Singapore when deciding which jurisdictions to seek patent protection. Heng Liling Patent Engineer Intellectual Property and Technology Group ATMD Bird & Bird LLP 39 Robinson Road #07-01, Robinson Point, Singapore 068911 Direct +65 6428 9813 | Fax +65 6223 8762 Email liling.heng@twobirds.com

Heng Liling

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NEWS | news >>

news in brief >> Redundancies roll on at DLA DLA Piper has announced that it is making a further 22 positions redundant in its Middle East offices having already axed eight Dubai-based associates in early April. In this current round of layoffs, one partner and eight fee-earners are being shown the door in addition to a number of support staff. The layoffs are once again Dubai-heavy, with more thana third of them happening in the now decimated office. The firm did not comment on which practice areas were affected. “Unfortunately, staffing adjustments across the Middle East are unavoidable as the market is still impacted by the global downturn,” said David Church, the firm’s regional managing partner. “We have conducted a review to realign resources with current demand and have reduced our staff levels across the region by 9%.”

Appleby and Dickinson join forces Offshore firms Appleby and Dickinson Cruickshank have merged, creating the largest offshore firm measured by number of partners. The new merged firm will begin operating by October under the Appleby name, with 73 partners and 200 lawyers across nine offices, extending both firms’ jurisdictional reach and resources. Peter Bubenzer will maintain his position as Appleby group managing partner in the merged firm. Appebly Hong Kong managing partner Frances Woo said the Asia operation will be an integral part of the merger. “The Isle of Man will provide another operation to our clients from Africa, India to North Asia. We’re actually bringing all of those [offshore] jurisdictions to Asia via our Hong Kong office, which is a positive message to our clients, and in a way it strengthens our position,” she said. IPO market looks set to perk up Capital markets lawyers in China may find themselves getting busier again soon. Just a month after Zhongwang’s US$1.26bn IPO, Lumena Resources debuted in Hong Kong and its IPO is the second largest this year, raising US$149m. Regional lawyers are optimistic about the IPO market. “There are definitely more IPOs to pitch for as the market expects a recovery in the first half of 2010. Now is the right time to start preparing for the IPO,” said DLA Piper Hong Kong partner Esther Leung.

22

region >>

Will failed Rio Tinto deal T

he sentiment that best describes the response of Chinese investors and their legal advisors to the rejection of Chinalco’s US$19.5bn investment in Rio Tinto is discouragement – huge discouragement. “Chinalco is very disappointed with the outcome and so are we,” says Peter Cook, a partner at Mallesons Stephen Jaques who led the team that acted as Chinalco’s Australian legal advisor on this transaction. “Rio Tinto had the option to do what they did and they’ve done what they’ve done.” According to industry observers, the transaction was fully documented and had already entered the condition precedence phase prior to the cancellation. Each of the legal advisors involved have already done a significant amount of legal work and had endless dealings with the main regulator – the Foreign Investment Review Board (FIRB). So the fact the deal ended the way it did makes it hard to swallow, particularly for the acquiror and its legal advisors – Mallesons, Clifford Chance and Haiwen & Partners. “There would have been a very significant burden on the law firms involved up until now,” said Barry Irwin, a partner at Clayton Utz, which has been increasingly busy working on crossborder energy & resources transactions involving Chinese acquirors. “It’s not good news for a firm to be associated with any deal that didn’t succeed for whatever reasons, but PRC investors will value the firms’ experience, as it had extensive and direct exposure to all of the issues related to a major investment like this one, which was a multi-billion-dollar deal that involved iconic assets.” Like any failed deal, the cancellation of the Rio-Chinalco deal will inevitably have a negative impact on Chinese sentiment towards investment in Australia. However, it could have been a lot worse. “The deal has fallen over due to commercial reasons and market-driven forces. But it is going to take away the

shine of the attractiveness of Australia, because it represents another failed Australian deal,” Irwin said. Its been far from plain sailing for PRC investors this year – in March, the FIRB rejected the original proposal by China Minmetals to take over OZ Minerals and only approved its revised proposal recently, which excluded OZ Minerals’ flagship assets in Prominent Hill. “In some way, it is not a bad result,” Irwin said. “We haven’t got to the point where the Treasurer has said ‘no’, which would have a very adverse impact on Chinese investment into Australia.” Many other Australian lawyers who have represented Chinese companies investing in Australia agree that this disappointing outcome may have some

“We haven’t got to the point where the Treasurer has said ‘no’, which then would have a very adverse impact on Chinese investment” Barry irwin, clayton utz positive implications for future Chinese investment in Australia. As Ian McCubbin, leader of China business for Deacons, said, although this deal was the single largest deal that had been seen for some time, it doesn’t represent the sum total of Chinese investment prospects in Australia. “The commercial forces driving Chinese companies’ interest in Australia and the potential benefits to this country from that investment still apply, regardless of the outcome of any individual deal,” he said. The real impact of this event on Chinese outbound investment into Australia remains to be seen. “This development will strengthen views among Chinese corporates that it may take more than their cash to open the doors to deals for them overseas,” said Freshfields Bruckhaus Deringer partner Antony Dapiran. ALB Asian Legal Business ISSUE 9.7


NEWS | news >>

take away Australia’s shine? ►► outsourcing to cut costs

In what may be a sign of things to come, mining giant Rio Tinto is outsourcing legal work to India in a bid to slash its annual legal costs by 20% In a deal with outsourcing firm CPA Global, Rio Tinto has formed a 12-person team of low-cost lawyers in India to work on tasks such as contract and document review, drafting and legal research. The outsourcing deal was signed in May – before the cancellation of the Chinalco deal. Rio’s external legal advisors, Allens Arthur Robinson and Linklaters, will be required to pass on low-end work to these lawyers. Allens declined to comment on the move, but earlier in May, the firm’s chief executive Michael Rose said the downturn had meant that clients were now shifting Michael Rose Allens Arthur focus from “absolute dollars Robinson to value” in legal fees. Rio Tinto's London-based managing attorney, Leah Cooper, said the deal will amount to “tremendous savings” for the company. "We took a long hard look at our internal costs and the amount we were spending with outside counsel and saw an opportunity to make significant changes to the way we deliver legal services to the group,” she said. “Our internal team will be freed up to get involved in

►► termination proves lucrative

After Rio Tinto announced Chinalco’s offer of a US$19.5bn cash injection “will no longer be pursued”, the company’s rising share price and feedback from its shareholders were cited as the reasons for the deal’s collapse. The share price was helped by the announcement of a US$15bn rights issue and a JV with BHP Billiton, worth about US$10bn And this round of new deals looks set to keep some law firms busy this year. Allens Arthur Robinson’s Richard Spurio and Wendy Rae are acting on the US$15bn rights issue as Australian counsel to Rio, alongside Linklaters as UK and US counsel, while Freehills partner Philippa Stone, assisted by senior associate Amy Goble, is representing the underwriters. Herbert Smith’s Will Pearce and James Palmer, and Davis Polk & Wardwell’s Nigel Wilson are acting as underwriters’ UK counsel and US counsel respectively. The proposed capital raising will be the world’s largest non-financial rights issue this year and one of the most notable deals of the year for Allens.

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“Given the dual listed company structure of the issuers and the cross jurisdictional issues, it’s safe to say this is one of the most complex [the firm has] undertaken,” Rae said. “We have had a team in place in Australia and internationally to ensure this matter is managed on a 24/7 basis given its global nature.” The joint venture between Rio and BHP Billiton will Wendy Rae combine the two mining Allens Arthur giants’ iron ore operations in Robinson Western Australia’s Pilbarra region and is valued in excess of US$10bn. Blake Dawson’s partners Leigh Warnick and David Williamson are leading the team for BHP, with Rio represented by Allens partners Nic Tole and Scott Langford. It is understood that binding documentation for the JV is being drafted. BHP Billiton will pay Rio Tinto US$5.8bn to raise its interest in the JV, which is expected to be completed by mid-2010, to 50%.

“We took a long hard look at our internal costs and the amount we were spending with outside counsel and saw an opportunity to make significant changes” leah cooper, rio tinto some of the more complex and challenging legal matters, which in the past might have been sent to outside counsel at significant cost.” Rio chief counsel Phil Edmands earlier in May had also hinted at the company's plans. “We haven't been pushing for fixed quotes, but have been focusing on cutting out legal costs to suit our requirements,” he said. “You don't always need a perfect product or something that has been engineered to the nth degree. You don’t always need a Rolls-Royce when a bicycle will do.”

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NEWS | news >>

china >>

Middle East >>

Authorities take their time to get REITs right

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t seemed only a matter of time before China got its first homegrown real estate investment trust (REIT). After all, in Hong Kong property investment is something of an obsession and last May word was out that the China Securities Regulatory Commission (CSRC) had sent a delegation to Australia to study property trusts, and was working with other authorities including the central bank to draw up legislation regulating PRC-based REITs. But the Chinese authorities have still not introduced the legislation needed to make REITs a reality on the mainland and two proposed REIT pilot schemes formulated by the People’s Bank of China (PBC) are not yet off the ground.

“REITs have already been endorsed at the highest level by the State Council” Vivian lam, paul hastings However, Vivian Lam, a Hong Kongbased partner with international firm Paul Hastings, says it is only a matter of time before China gets its first REIT. “REITs have already been endorsed at the highest level by the State Council,” she said. “PBC and CSRC have spent a lot of time studying various proposals, so we are definitely going down that route. There was strong expectation that the pilot programs will be announced by second quarter this year, but the authorities may be spending more time fine-tuning the rules because they are keen to get this right and have something that works for the local market.” But Hayden Flinn, a Hong Kongbased partner at Mallesons Stephen Jaques, said it is still difficult to judge exactly when REIT will become a reality. “They’ve been talking about it for several years now and nothing has come to market yet,” he says. ALB 24

Zhonglun W & D unveils plans for Riyadh office C

oinciding with the Middle East visit of Wu Sike, China’s new special envoy to the Middle East, Chinese firm Zhonglun W & D has announced its plan to launch a branch office in Riyadh, the capital city of Saudi Arabia. The plan to gain a foothold in the region’s nascent legal market came just one year after the firm established its Middle East practice group in Beijing. The new Riyadh office will be led by the director of the firm’s Middle East group, Ahmad Kusayer, and initially will be staffed by local lawyers only. It will provide legal services to both Chinese clients doing business in the Middle East and clients from the Middle East investing in China. “We find special need for our commercial connections and our market understanding in opening doors for our Chinese clients to penetrate the Middle East market efficiently without wasting much time, energy, and resources,” Kusayer said. “Development projects are among our hottest issues so far. Most of our clients are keen about the vastly growing construction market, mining market, and cement market in

addition to oil and oil products, projects and purchases.” However, penetrating the Middle East market is challenging to both clients and firms. “Having an office in Middle East in itself is a very expensive investment that may not be feasible at this stage since there are many Arabic countries in the Middle East each with their own legal bodies, procedures, and key figures. Knowing who to deal with and how to deal with them is key,” he said. As China is expected to be among the first to recover from the effects of the global financial crisis, Zhonglun W & D sees plenty of opportunity ahead in the region for its Chinese clients. “As the main global supplier of oil, gas and petrochemicals, the Middle East is rich in opportunities and projects. But for a very long time, the region has been exclusively manipulated by Western mega-companies, who tried hard to ensure that entering this market is difficult for others,” Kusayer said. “Due to the ongoing political and financial hard times in the West, we feel it is a great time for our Chinese partners to establish themselves.” ALB Asian Legal Business ISSUE 9.7


NEWS | appointments >>

Freshfields

appointments ►► LATERAL HIRES Name

Leaving

Going to

Practice

Location

John Epp

Office of Complaints Commissioner

Conyers Dill & Pearman

Litigation

Cayman

Monique Peters

NA

Conyers Dill & Pearman

Litigation

BVI

Vinay Dwarkadas Khaitan & Co

FoxMandal Little

IP

Delhi

Bart Kasteleijn.

Van Mens & Wisselink

Holthuis International Lawyers

China

Shanghai

York You

Brilliance

Yao Liang

Corporate, Japan

Shanghai

Balbir Bindra

Sidley Austin

Gide Loyrette Nouel

Banking & finance

Hong Kong

Camille Jojo

Barlow Lyde & Gilbert

Norton Rose

Dispute resolution

Hong Kong

Tao Xinliang

Shanghai University

Dacheng

IP

Shanghai

Etsuo Doi

Paul Hastings

Foley & Lardner

IP

Tokyo

Rindala Beydoun Latham & Watkins

Vinson & Elkins

Corporate

Dubai

Scott Zhang

Kangxin

DeHeng

IP

Beijing

Grace Li

Kangxin

DeHeng

IP

Beijing

Sun Zheng

Zhenghe

DeHeng

IP

Beijing

Mao Guowei

Jinmao Kaide

AllBright

Real estate

Shanghai

Gu Jinqi

Jinmao Kaide

AllBright

Real estate

Shanghai

Qiu Weixin

Jinmao Kaide

AllBright

Real estate

Shanghai

York You

Brilliance

Yao Liang

Corporate, Japan

Shanghai

Cao Yinshi

Clifford Chance

Han Kun

Corporate

Shanghai

Hwang Leikang

Clifford Chance

Han Kun

Corporate

Shanghai

Wang Jingliang,

Baker & McKenzie

Han Kun

IP

Beijing

Paul de Cordova

Ashurst

K&L Gates

Corporate

Dubai

►► Promotions Name

Firm

Promotion

Location

Delano Furtado

Trilegal

Partner

Mumbai

Ameya Khandge

Trilegal

Partner

Mumbai

Ajay Raghavan

Trilegal

Partner

Bengaluru

Charandeep Kaur

Trilegal

Partner

New Delhi

Partner

Firm

From

To

Alex Potter

Freshfields

Beijing

London

Nicholas French

Freshfields

London

Beijing

►► relocations

www.legalbusinessonline.com

Freshfields swaps Potter for French Beijing-based Freshfields partner Alex Potter is heading back to London next month and will be replaced by Nicholas French. Potter, who relocated from Nicholas French London in 2007 was involved in building up the office’s antitrust, competition and trade (ACT) practice. French, who is relocating from London, will cohead the firm’s China ACT practice with newly-elected partner Michael Han in Beijing and Hong Kong-based partner Connie Carnabuci. Recent work by the firm’s ACT practice in China includes its representation of Huiyuan in Coca-Cola’s failed US$2.5bn takeover bid – the first transaction blocked under the Anti-Monopoly Law.

various

Conyers

Conyers boosts litigation service Conyers Dill & Pearman has boosted its Cayman and BVI litigation practices in anticipation of a rise in litigation work. The offshore firm has appointed the first complaints commissioner in the Cayman Islands, Dr John Epp, and lawyer Monique Peters, in the Cayman and BVI offices respectively. The addition of Epp is a strategic enhancement to the firm’s offering and the appointment of Peters will raise the number of BVI-based litigators to four. However, the firm is seeking to increase that number. “We anticipate the number of complex and substantive disputes to continue to grow, particularly in light of the newly established BVI commercial court,” said Mark Fort, head of BVI litigation. “We plan to double our BVI team by the end of this year, building on the successes we’ve achieved in our already prominent commercial litigation practice.”

Khaitan

FoxMandal

Khaitan IP lawyer switches to rival Indian firm Khaitan & Co has lost a Mumbai IP lawyer to rivals FoxMandal Little (FML). Patent and trademark specialist Vinay Dwarkadas – credited as a founding member of Khaitan & Co’s Mumbai IP practice – joins FML as a partner in the firm’s Delhi IP practice. Dwarkadas said he would ensure that his new firm’s mission statement is put into practice. “Visions and ambition statements are fine on paper but they need to be executed to finality or else they continue to remain in fine print,” he said. “I want to see FML’s vision and ambition statement to be translated into a success story – I have miles to go before I sleep.” Indian law firms may also be gearing up for changes to the country’s IP regime in the coming years, as major brands – most recently including

25


NEWS | appointments >>

retail giant Wal Mart – eye the relatively buoyant Indian economy, and as familiarity with global IP regulations and standards grows. “India is now more than well placed to afford protection to proprietors of intellectual property rights world over,” Dwarkadas said. “With the support of the World Intellectual Property Organisation, [India’s] various offices overseeing the regulation and enforcement of IP laws will very soon fall in line and conformity with… IPR regimes in jurisdictions the world over.”

Van Mens & Wesselink

Holthuis

Sole Dutch firm in China grows with new hires The only Dutch law firm in China – Holthuis International Lawyers (HIL) – has expanded its China practice with the addition of a four-member team led by partner Bart Kasteleijn. The team joined from rival Van Mens & Wisselink (VMW) in Amsterdam, where Kasteleijn served as head of the China desk prior to his departure. He adds both his China desk and his extensive international commercial practice to HIL. He also brings to the firm his contacts from De Industrieele Groote Club in Amsterdam (the leading Dutch business club), where he chairs the China Table. “HIL’s small size makes us the ideal partner for foreign law firms without a legal presence in China,” founding partner Jan Holthuis said, adding that foreign firms can enlist HIL’s support instead of that of a large firm that might be a competitor in their own country.

various

Barlow

Norton Rose grows disputes with Barlow hires Camille Jojo, the former Hong Kong managing partner of Barlow Lyde & Gilbert, has moved to Norton Rose with a six-strong team of Barlow associates. Jojo will be appointed to the newly-created position of head of Asian disputes. Norton Rose expects the disputes practice to grow further within the global business. Barlow has since replaced Jojo with litigation partner David Smyth. The firm recently announced that it is currently undergoing a redundancy consultation which will see around 49 staff cut.

Brilliance

Yao Liang

Dacheng recruits top IP scholar in Shanghai Experienced corporate partner York You has joined Shanghai Yao Liang from Shanghai Brilliance law firm. You has built a reputation for servicing Japanese and Taiwan companies investing in China. His practice focuses on commercial and corporate law, IP, and dispute resolution. “You’s expertise in Japan practice will be a valuable asset to the firm,” said Gu Yaoliang, founder and managing partner of Yao Liang. “As we are handling an increasing amount of cross-border legal work and international matters, You’s appointment is fitting for the firm’s development.” You also serves as a part-time professor with the School of Law at Shanghai University of Finance and Economics.

GLN Paul Hastings

GLN adds partners, launches HK law service Gide Loyrette Nouel has appointed finance lawyers Colin Mercer and Balbir Bindra to lead its Asia banking & finance practice. Bindra joins the firm Balbir Bindra from Sidley Austin and Mercer will move between Gide’s London and Hong Kong offices. The firm said the Asia banking & finance practice will also be adding New York-qualified lawyers. The new appointments come at the same time as the firm obtained approval to provide Hong Kong and English advice, three years after opening the Hong Kong office.

26

Norton Rose

Foley & Lardner

Paul Hastings IP lawyer heads for Foley Former Paul Hastings IP lawyer Etsuo Doi has signed up to co-head Foley & Lardner’s Tokyo office. Doi will work across the firm’s Etsuo Doi New York and Tokyo offices, advising local and international clients on corporate cross-border, IP, e-commerce, joint venture, and licensing matters. He will co-manage the Tokyo office alongside its current managing partner, Michael Kaminski. The former Paul Hastings lawyer has also held in-house positions, most notably as chief legal counsel for eBay’s Japan branch. Following eBay, Doi moved to Orrick and co-authored a paper on his former company, What Japanese Companies Need to Know About eBay.

Trilegal

Trilegal boosts partnership Allen & Overy’s Indian ally, Trilegal, has increased associate starting salaries by almost 30% and made up four new lawyers to partnership. In a bid to capture more of the graduate market, the firm has Delano Furtardo raised associate starting annual salaries from around US$17,000 to as much as US$23,000. The firm also raised its partnership numbers to 14 with the promotion of four lawyers – Delano Furtado, Ameya Khandge, Ajay Raghavan, and the firm’s first female partner, Charandeep Kaur, Charandeep Kaur who said that becoming a partner was “a great accomplishment given that everything here is based on meritocracy”. While most firms are reducing pay rates, Trilegal co-founder Anand Prasad said the raises were due to a number of factors. “[It’s] partly attributable to a resilient market [in India] and partly to the firm’s expanding practice and strong desire to be, sooner rather than later, the best paymaster in the Indian market,” he said. “We are hoping to add a few more [lawyers] in the course of this year.”

Latham

Vinson & Elkins

Former Latham Middle East head moves back to old firm Rindala Beydoun has returned to Vinson & Elkins’ Dubai office following a brief stint as the managing partner of Latham & Watkins’ trio of Middle East offices. Rindala Beydoun Beydoun left Vinson in February last year to take up the high-profile post as Latham’s managing partner in Dubai, Abu Dhabi and Doha, for the launch of the three offices. However, as early as September, Latham replaced Beydoun with London-based partner Bryant Edwards. According to Edwards, Beydoun left the firm on her own terms. He wished Beydoun well on her reappointment to Vinson, and said he was “glad it all worked out well”. Beydoun offered a similar response. “As Bryant confirmed, I left Latham [on my own] because I missed my old firm and missed the many friends I had there,” she said.

Asian Legal Business ISSUE 9.7


NEWS | appointments >>

DeHeng

various

Scott Zhang

Sun Zheng

Grace Li

DeHeng adds to international IP practice Chinese firm DeHeng has expanded its IP practice with the addition of three senior partners to its head office in Beijing. The new partners include Scott Zhang and Grace Li, who join from leading IP law firm Kangxin, and Sun Zheng, who was previously with China Zhenghe Intellectual Property Agency. “DeHeng already has a sizable IP practice. The next step is to significantly grow its resources and capabilities in handling IP matters for international companies in China and Chinese clients expanding overseas,” Zhang said. “An increasing number of DeHeng’s existing domestic clients will have the need to file patents and trademarks in foreign countries, and to commercialise their IP assets and protect their rights there.”

Hong Kong Law Society

Fried Frank HK MP to head Hong Kong Law Society Fried Frank Hong Kong managing partner, Huen Wong, has been appointed president of the Law Society of Hong Kong. He will lead the 20-member Council which is Huen Wong a professional body of solicitors in Hong Kong vested with the statutory powers to regulate the professional conduct of solicitors. The vocal Wong succeeds Lester Huang and takes up his position as president with immediate effect. Prior to becoming president, Huen Wong served in the Council of the Law Society of Hong Kong as a member for nine years, five were as vice president. He has been managing partner of Fried Frank’s Hong Kong office since it opened at the end of 2006 and will continue to serve in this role alongside his presidency.

Jinmao Kaide

AllBright

Jinmao Kaide founding trio join AllBright Less than two years after establishing Jinmao Kaide, three founding partners have left to join AllBright as senior partners. Mao Guowei, Gu Jinqi and Qiu Weixin were among nine partners from Shanghai Jin Mao who splintered off to set up Jinmao Kaide in 2007. They all focus on the real estate and construction sector. www.legalbusinessonline.com

Cadwaladar

MKK

Mochtar Karuwin Komar boosts local practice Indonesian firm MKK has hired former Cadwalader associate Justin Patrick as a foreign legal advisor. Patrick will assist the firm on various financing and loan Justin Patrick transactions, having built up experience in drafting and negotiating agreements for clients such as Deutsche Bank, Morgan Stanley, DVB Bank and CIT Group on various structured financing agreements over the years. “Justin’s arrival signals the firm’s commitment to building its finance and capital markets practice areas,” said Ariani Nugraha, MKK’s co-managing partner. Brilliance

Yao Liang

Legal scholar joins Yao Liang from Shanghai rival Corporate partner York You has joined Shanghai Yao Liang from Shanghai Brilliance law firm. You focuses his practice in the areas of commercial and corporate law, York You IP and dispute resolution. “You’s expertise in Japan practice will be a valuable asset to the firm,” said Gu Yaoliang, founding and managing partner of Yao Liang. “As we are handling an increasing amount of cross-border legal work and international matters, You’s appointment is fitting for the firm’s development.” You also serves as a part-time professor at the School of Law in Shanghai University of Finance and Economics.

various

Han Kun expands with quadruple hire Beijing-headquartered Han Kun has opened branch offices in Shanghai and Shenzhen, and appointed three new partners from Clifford Chance (CC) and Baker & McKenzie to head its expansion. In Shanghai, CC partners Cao Yinshi and Hwang Leikang both joined from the firm’s corporate group. Wang Jingliang, previously with Baker & McKenzie’s IP group, will be based in Han Kun’s Beijing head office. Before joining Baker & McKenzie, he worked for Huawei Technology as a senior IP counsel for years. Han Kun has also added Wang Zhe as a counsel to its new Shenzhen office to head up the business there. Wang has solid experience in FDI, M&A, project finance and banking during the years with Gide Loyrette Nouel and King & Wood.

news in brief >> china readies itself for GEB After more than 10 years of waiting, thousands of private-sector Chinese companies and organisations are preparing to welcome the soonto-be launched Growth Enterprises Board of the Shenzhen Stock Exchange. The launch of NASDAQ-style secondary market (GEB) is expected to boost demand for corporate legal services and will provide an opportunity for Chinese firms to establish a long-term relationship with the fast-growing start-ups that may become industry leaders. “If a law firm has acted for the issuer on its IPO on the GEB, it will usually have a better chance of being sought out by the company again for future transactions,” said Zhang Jiong, partner of Shenzhen Shu Jin. Although other details of the launch of GEB haven’t yet been finalised, a large number of companies are already queuing up for GEB listing approval, according to Shenzhen Stock Exchange Director Chen Dongzheng.

>> Office vacancies in China, as of the end of the first quarter of 2009, are 14.2%, up 9.1% since the peak. Pudong has 23.6% of its premium space empty and rents across Shanghai are down by nearly a quarter SOURCE: Jones Lang LaSalle fujian to welcome taiwanese firms Taiwanese firms are to be allowed to set up offices in the wealthy southern Chinese province of Fujian for the first time. “This new development marks the beginning of a new era for the Taiwan legal market,” said CT Chang, a partner of Taiwanese firm Lee and Li. The prospects of mainland investment into Taiwan are widely regarded as a growth centre for Taiwanese firms in the coming years. “We expect an important part of our revenue growth in the next a few years to be driven by mainland companies investing in Taiwan,” Chang said. “If the mainland branch offices of Taiwan law firms are allowed to advise on Taiwan law and provide legal services, the new initiative will be very attractive to Taiwan firms.”

27


News | deals update >>

mergermarket M&A deals update

28

Asian Legal Business ISSUE 9.7


News | deals update >>

www.legalbusinessonline.com

29


News | regional update >>

Regional updates

CHINA

30

CHINA

Paul Weiss

MALAYSIA

Tay & Partners

SINGAPORE Loo & Partners

INDonesia

BT Partnership

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

Supreme Court Interpretation Brings Major Changes to China’s Contract Law On April 24, 2009, ten years after the PRC Contract Law was adopted, the Supreme People’s Court of China issued the Interpretation of Several Issues Concerning the Application of the “PRC Contract Law” (2) (“Interpretation”). Some of the clarifications brought by the Supreme Court have a major impact on business contracts. The regulation of standard form clauses is one such area. Under Article 39 of the Contract Law, a party that provides standard form clauses has the obligation to draw the other party’s attention to limitations and exclusions of liability and explain them on request. The Interpretation clarifies how this obligation may be satisfied: if the drafting party uses language, signs, script or other means that sufficiently draw the other party’s attention to the relevant clauses, and gives explanations requested by the other party, the requirement of Article 39 is deemed satisfied. Companies that conduct business in the PRC should review their standard form contracts and highlight relevant clauses accordingly. To reduce the risk of disputes, companies should consider including an explicit acknowledgement by the other party that it has received all explanations it requested in their standard forms. Liquidated damages clauses are another potential source of disputes. The PRC Contract Law does not recognize the concept of liquidated damages, but treats them as penalties, which courts may increase if they are lower than the actual loss or reduce if they are “excessively” higher than the actual loss. The Interpretation determines how courts may exercise

this power: (1) liquidated damages may only be increased up to the amount of the actual loss, and no further claim for losses may be allowed; (2) the Court may deem liquidated damages “excessively high” if they exceed the actual loss by 30%; and (3) when reducing excessively high liquidated damages, the Court must take the actual loss as its starting point, but must also consider other factors such as performance of the contract, the degree of each party’s fault and expected profits, and make a decision “weighing the principles of equity and good faith.” This provision makes the outcome of disputes over liquidated damages clauses somewhat more predictable than before. When the effectiveness of a contract is subject to government approval, the contract party in charge of the approval process can often prevent the contract from becoming effective, if it no longer wishes to be bound by it. The Interpretation now allows PRC courts to authorize the other party to carry out government approval procedures when one party fails in its obligation to do so. When faced with obstructive tactics by their counterparty, companies should consider applying for this remedy. Written by Hans-Günther Herrmann, counsel Tian Tian, summer associate Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong Email: hherrmann@paulweiss.com Ph: (852) 2536-9933

Asian Legal Business ISSUE 9.7


News | regional update >>

MALAYSIA

An Overview Of The Main Market On 9 May 2009, the Securities Commission (“SC”) and the Bursa Malaysia Securities Berhad (“Bursa”) announced that the Main Board and the Second Board of the Malaysian stock exchange will be merged into one and with effect from 3 August 2009, it will be known as the Main Market. They also announced, SC’s and Bursa’s roles will be revamped and newly released SC’s equity guidelines for fund raising will be applicable. Effectively, the SC’s approval will only be required for initial public listings, acquisitions resulting in significant change in business direction or policy of a listed issuer, secondary listings, transfer of listings and Bursa will be the approving authority for all secondary equity fund raising such as rights issues, placements and issuance of securities for acquisition of assets that do not change the core business of listed issuers. SC will focus on the compliances whilst Bursa will evaluate the corporate proposals. Based on the new SC’s equity guidelines, a company that wish to list on the Main Market is now required to have an aggregate after tax profit of at least RM20 million (as opposed to RM30 million previously) for the past 3 to 5 years; with at least, RM6 million after tax profit for the latest financial year. There is no longer the requirement of a minimum issued and paid up capital but the requirement of market capitalization on listing of at least RM500 million remains. Under the revamped Main Market, the listings of special acquisition companies (“SPACs”) are permitted. SPACs are shell companies without operations but goes public with the aim of using the initial public offering (“IPO”) proceeds to merge with or to acquire operating companies or www.legalbusinessonline.com

businesses. The idea here is to promote private equity, encourage mergers and acquisitions, and spur corporate transformation. Notwithstanding the above, SPACs have to raise at least RM150 million and at least 90% of the proceeds is placed in a trust account. They are also required to ensure that all acquisitions are completed within 36 months of the close of the IPO. Also any attempts for “back door listing” or “reverse take-over”, will be deemed as new listing proposals and the company will have to comply with the requirements under the relevant tests under the equity guidelines. It is hoped; the changes will bring new life, spur merger and acquisition activities on our Malaysian shores, raise investors’ confidence in the system as well as give better protection to investors. The industry believes it will, taking into consideration of the listing of a foreign shoe company and a few more which had been reported being in the works by a leading investment bank. Written by Geraldine Chan Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Phone: +603-2050 1888 DID: +603 20501918 Fax: +603-2031 8618 Email: geraldine.chan@taypartners. com.my

SINGAPORE

MAS Issues Consultation Paper Proposing Changes To The Securities And Futures Regulations For Restricted Investment Scheme In May 2009, Monetary Authority of Singapore (“MAS”) had released a consultation paper to make amendments to the Securities and Futures (Offers of Investments) (Collective Investment Scheme) (Amendment) Regulations 2009 (“Amended Regulations”). This is to effect changes to strengthen the regulatory regime for restricted collective investment schemes. Restricted collective investment schemes cover a multitude of schemes that business entities employ to raise money from sophisticated investors. Restricted collective investment schemes cannot be offered to the public but only to relevant persons. A “relevant person” includes (1) an accredited investor; (2) a corporation the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; and (3) a trustee of a trust the sole purpose of which is to hold investments and each beneficiary of which is an individual who is an accredited investor. The conditions for authorising restricted collective investment schemes where units are only offered to relevant persons are less stringent than the conditions for authorising collective investment schemes where units are offered to retail investors. This is because relevant persons are expected to be more sufficiently informed with respect to the information of the schemes than public retail investors.

31


News | regional update >>

The only condition for the authorisation of restricted collective investment scheme is that the manager of the restricted collective investment scheme must be a holder of a capital market services licence under the Securities and Futures Act (‘”SFA”) and if applicable, the trustees of the schemes must be an approved trustee under the SFA. To strengthen the regulatory regime for the restricted collective investment schemes, the Amended Regulations will allow the authority to more thoroughly regulate and manage the restricted collective investments schemes and allow investors in these schemes to be better informed of the status of their investments. The new regime will comprise a notification framework implemented through an online platform called CISNet. A significant change from the current regime is that offerors will be required to make an annual declaration that information on the scheme offered remains true and correct. Offerors who do not make the annual declaration would have to stop offering the scheme in Singapore. In addition, CISNet will also enable offerors to amend the annual declaration dates. This allows those offerors managing more than one scheme to consolidate their annual declaration dates which will provide offerors more convenience and to a large extent more control over their schemes. The new framework continues to allow offerors the option of appointing agents to make submissions on their behalf. The consultation paper published by MAS on the 29th May 2009 invites interested parties to forward their views and comments on the draft Amendment Regulations and requests for all comments and feedback to be submitted by 29 June 2009. More information on the consultation paper can be found on the MAS website. Written by Ms Eileen Ng and Ms Wong Joy Ling By Ms Eileen Ng Legal Associate (Corporate Practice) Ph: (65) 6322-2283 Fax: (65) 6534-0833 E-mail: eileenng@loopartners.com.sg Ms Wong Joy Ling Foreign Counsel Legal Associate (Corporate Practice) Ph: (65) 6322-2234 Fax: (65) 6534-0833 E-mail: wongjoyling@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

32

INDonesia

Enforcement Of Foreign Arbitral Award In Indonesia (Part 3 – the end) The proceeding of execution of foreign arbitral awards in Indonesia occurred in a dispute between Bankers Trust Company and Bankers Trust International PLC (together “BT”) vs. PT Mayora Indah Tbk. (“Mayora”). This case is pertaining to the currency and interest rate swap transactions based on the International Swaps and Derivatives Association (ISDA) Master Agreement dated 25 April 1997. The dispute was adjudicated by arbitrators from London in 1999 according to the Rules of the London Court of International Arbitration (LCIA). In this dispute, the award rules in favor of BT and further obliges Mayora to pay some amount of money to BT. Subsequently, Mayora brought this dispute to the District Court of South Jakarta. The judgment of the District Court of South Jakarta No. 46/Pdt.G/1999/PN.Jkt.Sel dated 9 December 1999 further rules in favor of Mayora. In the meantime, BT had also requested an exequatur for the award. Nonetheless, the Chief of the District Court of Central Jakarta refuses to issue an exequatur (Decree No. 001 and 002/Pdt/Arb.Int/1999/ PN.JKT.PST jo 02/Pdt.P/2000/PNJKT. PST, dated 3 February 2000). The reason was since both BT and Mayora has an ongoing process of similar dispute in the District Court of South Jakarta. The Chief stated that in court proceeding, the execution of an award (in this vein, foreign arbitral award) must be postponed until the judgment by the District Court of South Jakarta is considered as final and binding. Otherwise, it will be in violation with civil procedural law. After this judgment, BT then submitted the refusal of the Chief of

the District Court of Central Jakarta to the Supreme Court for Cassation. In this level, the Supreme Court further strengthens the refusal by the District Court of Central Jakarta to execution of the award (The Decision of Supreme Court No. 02K/Ex’r/Arb.Int/ Pdt/2000 dated 5 September 2000). The rationale for this refusal is basically similar with the reason declared by the Chief of the District Court of Central Jakarta that the enforcement of foreign arbitral awards must be postponed until the judgment by the District Court of South Jakarta is considered as final and binding. The Supreme Court stated that if otherwise, it will be in violation with civil procedural law and therefore it also violates public order. If the award violates the public order, thus an exequatur must not be issued (Article 66 (c) Law No 30/1999). Following the decision of the Supreme Court, which is final and binding, BT has no further legal action that can be brought against this refusal. Written by Tyana Asri Martianti BT PARTNERSHIP BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210, Indonesia Tel. 62 21 5700 777 Fax. 62 21 5700 877 Email: martianti@btplawfirm.com Web: http//www.btpartnership.com

Asian Legal Business ISSUE 9.7


CHINA SE ASIA AUSTRALASIA JAPAN Hong Kong

18 September 2009, Conrad Hong Kong

The most high-profile legal event of the year Join the who’s who of in-house counsel, business and law at the 8th annual ALB Hong Kong Law Awards 2009 for the biggest celebration of the year. Secure your place at the industry night of the year where senior in-house counsel, their CEO’s and private practice lawyers come together to enjoy a gourmet dinner, fine wines, world-class entertainment and invaluable networking opportunities as the winners for 2009 are announced.


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FEATURE | alb 50 >>

THE

ALB Philippines

Hong Kong

Singapore

Asi a’s la rgest law fi r ms Japan The world is calling for change to the global legal industry. Whether or not as a direct impact of the financial crisis, the industry has been increasingly forced to rethink the nature of legal practice and how it can return to the growth that once seemed almost a given. India

Korea

F

or law firms around the world, it is been a tumultuous and transformative year – one in which growth and decline have come hand in hand. On one hand, the global legal services industry has experienced what has been considered the worst financial crisis since the depression, forcing law firms to downsize and scrap growth plans. On the other, some firms have ploughed on and opened new offices, continued at normal recruitment levels or forged alliances. Meanwhile, a broader debate circulates in the industry – whether law firms must drastically change the way they operate. Whether firms that have adopted alternative business models will be able to continue their growth as the downturn really bites is yet to be seen. More certain is that an impressive

36

►► The ALB50: Methodology

UK/US • Firms were contacted in early June 2009 and asked to supply partner and lawyer numbers across their operations in Asia • The term 'lawyers' refers to legal practitioners China practicing at the level of solicitor or associate • Where firms were unable to supply figures, information may have been taken from their websites • In the case of international firms, only lawyers and partners based in Asia were counted • In the case of Baker & McKenzie, lawyer and partner numbers working for affiliate firms are listed in jurisdictional tables eg Quisumbing Torres in the Philippines; for the purposes of the main table on p37, numbers of lawyers and partners working for both affiliates or Baker &McKenziebranded firms were aggregated • In the case of international firms existing under full JV structures in Japan, total numbers of lawyers and partners are listed • Unlike in 2008, Australia and New Zealand were wholly excluded from this year's rankings

►► The ALB50 - geographical spread Korea – 6 firms

Japan – 4 firms India – 5 firms

UK/US – 12 firms

Philippines – 1 firm Hong Kong – 2 firms Singapore – 4 firms

Philippines

India

Hong Kong

Korea

China – 16 firms Singapore

UK/US

Japan

China Asian Legal Business ISSUE 9.7


FEATURE | ALB 50 >>

►► alb 50: asia’s largest firms Rank

Firm

1.

Dacheng

2.

Baker & McKenzie

3. 4.

Total lawyers & partners

Country of origin

Asia managing partner/chairman(s)

Lawyers (Asia)

Partners (Asia)

Offices in Asia

835

China

821

US

Wang Zhongde

503

332

28

Poh Lee Tan

574

247

14

King & Wood

800

China

DeHeng

675

China

Wang Ling, Wang Junfeng

610

190

16

Wang Li

590

85

5.

FoxMandal Little

450

14

India

Som Mandal

400

50

6.

Nishimura & Asahi

14

440

Japan

Akira Kosugi

358

82

7.

Kim & Chang

1

430

Korea

Young Moo Kim

310

120

1

8. 9.

Grandall

419

China

Multiple

317

102

10

Amarchand & Mangaldas

410

India

Shardul S Shroff, Cyril S Shroff

374

36

5

10.

Jun He

338

China

Xiao Wei

260

78

7

11.

JSM (operates in association with Mayer Brown and Mayer Brown International)

336

Hong Kong/ US

Elaine Lo

257

79

7

12.

Nagashima Ohno & Tsunematsu

332

Japan

Kenichi Fujinawa

265

67

1

13.

Allen & Overy

315

UK

Thomas Brown

249

66

9

13.

AllBright

315

China

Multiple

244

71

5

15.

Lee & Ko

312

Korea

Yong Suk Yoon

211

101

2

16.

Allen & Gledhill

310

Singapore

Lucien Wong

196

114

1

17.

Linklaters

300

UK

Zili Shao

249

51

6

17.

Longan

300

China

Xu Jiali

250

50

5

19.

Zhong Lun

296

China

Zhang XueBing

208

88

5

20.

Clifford Chance

292

UK

Peter Charlton

236

56

6

21.

Mori Hamada & Matsumoto

286

Japan

Multiple

205

81

3

22.

Yoon Yang Kim Shin & Yu

282

Korea

Dong-Geul Byun

204

78

3

22.

Kangda

282

China

Fu Yang

227

55

11

24.

Anderson Mori & Tomotsune

263

Japan

Multiple

197

66

2

25.

Zhongyin

262

China

Zhao Zenghai

226

36

16

26.

DLA Piper

255

UK

Alastair Da Costa

205

50

6

27.

Drew & Napier

250

Singapore

Davinder Singh

167

83

1

28.

Guanghe

248

China

Tong Xin

166

82

3

29.

Rajah & Tann

243

Singapore

Steven Chong

126

117

2

30.

Bae, Kim & Lee

242

Korea

Y. S. Oh

242

73

3

31.

WongPartnership

241

Singapore

Dilhan Pillay Sandrasegara

170

71

2

32.

Freshfields Bruckhaus Deringer

234

UK & Germany

Simon Marchant

206

28

6

33.

Jones Day

223

US

Multiple

169

54

7

34.

Shin & Kim

215

Korea

Doo-Sik Kim

155

60

2

34.

Zhonglun W & D

215

China

Zhang Derong

180

35

11

36.

AZB & Partners

200

India

Multiple

185

19

4

37.

Guantao

199

China

Cui Liguo

156

43

10

38.

Herbert Smith

195

UK

Multiple

151

44

6

39.

White & Case

195

US

Barrye Wall

150

45

7

40.

Lovells

189

UK

Crispin Rapinet

157

32

7

41.

Luthra & Luthra

186

India

Rajiv Luthra

160

26

3

41.

Morrison & Foerster

186

US

Multiple

135

51

5

43.

Deacons

180

Hong Kong

Lindsay Esler

133

47

4

44.

Khaitan & Co

178

India

Haigreve Khaitan

144

34

4

44.

Jincheng Tongda & Neal

178

China

Tian Yu

123

55

7

46.

Yulchon

167

Korea

Woo, Chang Rok

125

42

2

47.

Paul Hastings Janofsky & Walker

157

US

Multiple

118

39

4

48.

Global Law Offices

150

China

Liu Jinrong

110

40

2

47.

Tian Yuan

150

China

Wang Lihua

114

36

2

50.

SyCip Salazar Hernandez & Gatmaitan

148

Philippines

Llewellyn Llanillo

104

44

4

www.legalbusinessonline.com

37


FEATURE | alb 50 >>

►► China domestic

Rank 1. 2. 3. 4. 5. 6. 7. 8 9. 10.

Firm Dacheng King & Wood DeHeng Grandall Jun He AllBright Longan Zhong Lun Kangda Zhongyin

►► China International

Rank 1. 2. 3. 4. 4. 6. 7. 7. 9. 10.

Firm Baker & McKenzie Freshfields Gide Loyrette Nouel DLA Piper Jones Day Lovells Linklaters Paul Hastings JSM (operates in association with Mayer Brown and Mayer Brown International) Herbert Smith

number of firms, especially domestic firms just outside the very top tier, have managed an equally impressive rate of growth over the past 12 months.

Supply & demand

As the effects of the financial crisis began to be felt in the latter half of 2008, many predicted the big international firms would be reanalysing their level of investment in the Asian region. Some firms saw dramatic about-turns from high recruitment levels, and those with lower leverage ratios were hit by declining PEPs. Associates were shed at unprecedented levels. The redundancies began as early as October, and for some firms extended into second rounds of cuts. Redundancy payouts further contributed to profit downgrades. Clifford Chance, for example, with 292 lawyers based in Asia, recorded a 37% drop in firm-wide PEP and lost its world number-one revenue rank; the firm’s high exposure to the financial services sector, along with redundancy costs, was blamed. But in much the same way that Clifford Chance sought out more offsetting growth opportunities with its AZB Indian alliance, other firms have been busy jockeying for position for when the good times return. A range 38

Total lawyers & partners 835 800 675 419 338 315 300 296 282 262

Managing partner(s) Wang Zhongde Wang Ling/Wang Junfeng Wang Li Multiple Xiao Wei Multiple Xu Jiali Zhang XueBing Fu Yang Zhao Zenghai

Total lawyers 503 610 590 317 260 244 250 208 227 226

Total lawyers & partners 98 60 55 54 54 51 49 49 47

Managing partner(s) David Fleming Teresa Ko Han Qimeng, Yan Lan Roy Chan/Liu Wei Winston Zhao; Peter Wang Doug Clark; Robert Lewis Marc Harvey, Celia Lam Neil Torpey, David Livdahl Elaine Lo

Total lawyers 81 52 46 45 41 44 44 36 39

44

Andrew Tortoishell

of firms have announced mergers, alliances, and office openings. Deacons Australia have merged with Norton Rose, Appleby with Dickinson Cruikshank, and J Sagar with M&C Partners, while Clyde & Co have formed an alliance with ALMT Legal, Salans with Pinsent Masons, and Eversheds with Hani Qurashi. Some of the focus has shifted recruitment drives to business consolidation, it seems. The merger between Norton Rose and Deacons, for example, was born in response to what Deacons’ chief, Don Boyd terms “an evolution of sorts” occurring in the legal industry. “Our [Norton Rose and Deacons] joint vision is that there will inevitably be a limited number of true international firms, as the cost of establishing, operating and maintaining offices and good knowledge systems is getting higher and higher,” said Boyd. “So our view is that in 10 or 15 years’ time, there may be only 20 or 25 major international firms.” Asia is probably the key battle in that war, and as the door opens for foreign firms in the previously closed legal services markets of Korea, Malaysia and, at some point, India (witness the high-profile alliance also between Clyde & Co and ALMT Legal), international firms will

Total partners 332 190 85 102 78 71 50 88 55 36

37

Offices 28 16 14 10 7 5 5 5 11 16

Total partners 17 8 9 9 13 7 5 13 8 7

►►ALB50 - the highlights

• Korean firms, sensing impending liberalisation, have bulked up rapidly. Lee & Ko went from 237 to 312 lawyers, Yoon Yang Kim Shin & Yu from 181 to 282, and Kim & Chang from 380 to 430 • China’s mega-firms continued to expand office networks and numbers. Dacheng rocketed from 552 to 835 lawyers (overtaking the growing King & Wood in the process) and DeHeng from 406 to 675 • FoxMandal Little was reinstated as India’s leading firm by lawyer numbers, growing from 366 to around 450; meanwhile the aspiring AZB & Partners grew significantly to appear in third place • The Magic Circle firms experienced mixed fortunes–Freshfields, for example, shrunk by about 40 lawyers–but all four maintained their places inside the top 30; the biggest American firm in Asia, without the special business models run by Baker & McKenzie and Mayer Brown, was Jones Day with 223 lawyers

Asian Legal Business ISSUE 9.7


FEATURE | ALB 50 >>

►► Hong Kong domestic Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 9. 9.

Firm Deacons Woo Kwon Lee & Lo Gallant YT Ho & Co Wilkinson & Grist ONC Lawyers Hastings & Co Robertsons Sit, Fung, Kwong & Shim Arculli Fong & Ng Tanner De Witt Haldanes

►► Hong Kong International

Rank 1. 2. 3. 4. 5. 6. 7. 8 9. 10.

Firm JSM (operates in association with Mayer Brown and Mayer Brown International) Baker & McKenzie Linklaters DLA Piper Clifford Chance Herbert Smith Mallesons Stephen Jaques Richards Butler in Association with Reed Smith Allen & Overy Freshfields Bruckhaus Deringer

►► India

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm FoxMandal Little* Amarchand & Mangaldas AZB & Partners* Luthra & Luthra Khaitan & Co J Sagar Associates Trilegal* ALMT Legal Thakker & Thakker Titus & Co Advocates

►► Indonesia Rank 1. 2. 3. 4. 4. 6. 7. 8. 9. 10.

Firm Hadiputranto, Hadinoto & Partners* Lubis Ganie Surowidjojo Ali Budiardjo, Nugroho, Reksodiputro Makarim & Taira S Soewito Suhardiman Eddymurthy Kardono Soemadipradja & Taher Soebagjo Jatim Djarot Hiswara Bunjamin & Tandjung Hanafiah Ponggawa & Partners Melli Darsa & Co

►► Japan domestic Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm Nishimura & Asahi Nagashima Ohno & Tsunematsu Mori Hamada & Matsumoto Anderson Mori & Tomotsune Nakamura & Partners Oh Ebashi LPC & Partners Atsumi & Partners Kitahama Partners Abe, Ikubo & Katayama Hayabusa Asuka

►► Japan International Rank 1. 1. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Firm Baker & McKenzie GJBJ Tokyo Aoyama Aoki Koma * Morrison & Foerster* White & Case Bingham McCutchen Murase* Linklaters Jones Day Clifford Chance Herbert Smith Allen & Overy Gaikokuho Kyodo Jigyo Horitsu Jimusho* Paul Hastings Skadden*

www.legalbusinessonline.com

Total lawyers & partners 166 79 59 51 30 26 25 23 22 22 22

Managing partner(s) Lindsay Esler William C Y Kwan Amanda Lin Michael Wah-Tip Chan N/A Helen Yuen-Hoong Kong Multiple N/A Ronald Arculli N/A N/A

Total lawyers 119 47 41 40 21 24 13 12 13 15 12

Total partners 47 32 18 11 9 12 12 11 9 7 10

Total lawyers & partners 196

Managing partner(s) Elaine Lo

Total lawyers 140

Total partners 56

183 130 124 119 96 95 91 88 85 Total lawyers & partners 450 436 204 186 178 160 104 95 60 49

David Fleming Marc Harvey, Celia Lam Christopher Clarke Peter Charlton Andrew Tortoishell Nicola Wakefield Evans N/A Thomas Brown Clive Rough

140 102 100 98 81 76 62 68 73

43 28 24 21 15 19 29 20 12

Managing partner(s) Som Mandal Shardul Shroff, Cyril Shroff Zia Mody, Ajay Bahl, Bahram Vakil Rajiv Luthra Haigreve Khaitan Jyoti Sagar, Berjis Desai Management by committee Sakate Khaitan, Aliff Fazelbhoy Bijesh Thakker Diljeet Titus

Total lawyers 400 394 185 160 144 123 90 80 53 40

Total partners 50 42 19 26 34 37 14 15 7 9

Offices 17 5 4 3 4 5 4 3 3 9

Total lawyers & partners 64 60 54 47 47 46 41 40 33 28

Managing partner(s) Timur Sukirno Mohamed Idwan Ganie Nugroho Wisnumurti Rahayuningsih Hoed Multiple Multiple Noor Maurling Santi Darmawan Fabian Buddy Pascoal Melli Darsa

Total lawyers 49 55 38 40 35 41 33 33 26 23

Total partners 15 5 16 7 12 5 8 7 7 5

Offices 1 1 2 1 1 1 1 1 2 1

Total lawyers & partners 440 332 286 263 99 92 84 63 51 45

Managing partner(s) Akira Kosugi Kenichi Fujinawa Multiple Multiple Yoshio Kumakura Multiple Hiroo Atsumi Terumichi Saeki Multiple Multiple

Total lawyers 358 265 205 197 79 62 63 47 48 27

Total partners 82 67 81 66 20 30 21 16 3 18

Offices 1 1 3 2 1 2 1 3 1 1

Total lawyers & partners 157 110 84 79 71 60 54 48 46 36 35

Managing partner(s) Paul Davis, Yoshiaki Muto Ken Siegel N/A Mitsue Aizawa Paul McNicholl / Akihiro Wani Nobutoshi Yamanouchi Peter Kilner Steve Lewis Aled Davies Ted Johnson Audrey Sokoloff

Total lawyers 110 74 68 60 62 44 43 41 38 24 29

*approx

*Baker & McKenzie affiliate.

Total partners 47 36 22 19 9 16 11 7 8 12 6

* Associated/JV firms

39


FEATURE | alb 50 >> ►► Korea Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm Kim & Chang* Lee & Ko Yoon Yang Kim Shin & Yu Bae, Kim & Lee Shin & Kim Yulchon Jisung Horizon YP Lee, Mock & Partners Barun Law Hwang Mok Park

Total lawyers & partners 430 312 282 242 215 167 130 113 113 111

Managing partner(s) Young Moo Kim Yong Suk Yoon Dong-Geul Byun Y S Oh Doo-Sik Kim Woo Chang Rok Multiple Multiple Dong Gun Kim, Hoon Kang Multiple

Total lawyers 310 211 204 169 155 125 85 88 76 65

Total partners 120 101 78 73 60 42 45 25 37 46

Offices 1 2 3 3 2 2 5 1 1 2 *approx

►► Malaysia Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 10.

Firm Zaid Ibrahim & Co SKRINE Shook Lin & Bok* Shearn Delamore & Co Zul Rafique & partners Lee Hishammuddin Allen & Gledhill Wong & Partners*** Azmi & Associates Zain & Co Albar & Partners Tay & Partners

Total lawyers & partners 117 93 87 86 76 71 42 41 33 29 29

Managing partner(s) Chew Seng Kok Lee Tatt Boon Too Hing Yeap Wong Sai Fong Dato' Zulkifly Rafique Muthanna Abdullah Brian Chia Azmi Mohd Ali Encik Zain Azahari bin Zainal Abidin Syed Zaid Albar Tay Beng Chai

Total lawyers 77 54 60 46 38 49 32 33 19 19 17

Total partners 40 39 27 40 38 22 10 8 14 10 12

Offices 12 1 1 2 2 3 1 3 1 1 2

***Baker & McKenzie affiliate | *approx

►► PHILIPPINES

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm SyCip Salazar Hernandez & Gatmaitan ACCRA Law Puno & Puno Law Offices Romulo Mabanta Buenaventura Sayoc & De los Angeles Castillo Laman Tan Pantaleon & San Jose Picazo Buyco Tan Fider & Santos Villaraza Cruz Marcelo & Angangco Quisumbing Torres* Siguion Reyna, Montecillo & Ongsiako Puyat Jacinto & Santos Law Offices

Total lawyers & partners 148 110 87 84 82 80 70 50 43 32

Managing partner(s) Llewellyn Llanillo Multiple Rosella Puno Mapa Multiple Gregorio Castillo Antonio Picazo Arthur Villaraza, Raoul Angangco Ricardo Castro Jr Multiple Multiple

Total lawyers 104 71 75 36 57 60 48 30 16 23

Total partners 44 39 12 45 25 20 22 20 27 9

Offices 4 3 1 2 1 1 1 1 1 1

*Baker & McKenzie affiliate.

intensify their gazes eastwards. This trend, in fact, provoked president of the Society of Indian Law Firms, Lalit Bhasin, to say: “The demand for opening legal services sector in India does not come from Indian businesses or professionals or even foreign multinational companies,” he said. “Strangely, the demand comes from foreign lawyers and particularly those from the UK. It is obvious that the UK is witnessing a negative growth so far as legal profession is concerned.”

Growing, but for how long?

Domestic Asian firms, with their broader and often more anti-cyclical bases of work and clients, have either held on to their rankings or have registered impressive growth – sometimes through acquisitions of smaller firms and boutiques (in Korea, Hwang Mok Park recently merged with Hanseung), 40

sometimes through aggressive programs of office openings (such as in the case of new top-ranked firm Dacheng in China). The performance of Korea’s chasing pack of firms has been particularly impressive. But with the GFC comes the spectre of slashed external legal spending by clients strapped for cash. As these companies search for efficiencies, one wonders whether more will follow the lead of mining giant Rio Tinto, which recently chose to outsource low-end work to 12 lawyers in India through the partnership with outsourcing firm CPA Global. “We’ve seen a number of different shifts in work around the world,” says Joanne Hon, CPA’s Hong Kong manager. “A lot of clients have been very receptive to moving work to lower cost centres with good human resources such as India, so the next trend will definitely be LPO.” The

deal is said to save Rio Tinto around 20% in its estimated external legal spend of around US$100m. What we’re seeing here is shrinkage in the pie itself, not just how big each firms’ slice is. However, no-one can argue with the numbers. And nowehere are the numbers bigger than in China. As China’s prominence in the global economy grows, so too it seem, its law firms have followed. This year, the ALB 50 list includes as many as 16 firms from the PRC. Chinese firms have shown that they are emerging as serious contenders against the longerestablished industry heavyweights, and some are even launching offices in regions more often targeted by international firms: Zhonglun W & D has just announced plans to launch a branch office in Riyadh, making it the first PRC firm in the Middle East. ALB Asian Legal Business ISSUE 9.7


FEATURE | ALB 50 >> ►► Singapore Domestic

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm Allen & Gledhill Drew & Napier Rajah & Tann WongPartnership KhattarWong Shook Lin & Bok Baker & McKenzie.Wong & Leow Lee & Lee Colin Ng & Partners Stamford Law Corporation

►► Singapore International Rank 1. 1. 3. 3. 5. 6. 7. 7. 7. 10.

Firm Clifford Chance Norton Rose Linklaters Allen & Overy ATMD Bird & Bird Herbert Smith Latham & Watkins White & Case Watson Farley & Williams DLA Piper

►► Taiwan

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm Lee and Li Formosa Transnational Baker & McKenzie LCS & Partners Deep & Far Attorneys-at-law Tsar & Tsai Jones Day K&L Gates Huang & Partners Eiger Law

►► Thailand domestic

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Firm Tilleke & Gibbins Siam Premier International Weerawong, Chinnavat & Peangpanor Chavalit & Associates Chandler & Thong-ek Law Offices Kanung & Partners International Legal Counsellors Thailand Domnern Somgiat & Boonma Vickery & Worachai Satyapon & Partners

►► Thailand International Rank 1. 2. 3. 4. 5. 6. 7. 7. 9. 10.

Firm Baker & McKenzie JSM (operates in association with Mayer Brown and Mayer Brown International) DLA Piper Deacons Allen & Overy Hunton & Williams Herbert Smith Linklaters Clifford Chance Norton Rose

►► Vietnam Rank 1. 2. 3. 4. 4. 6. 7. 8. 9. 10.

Firm YKVN JSM (operates in association with Mayer Brown and Mayer Brown International) Baker & McKenzie Bizlink Lawyers & Consultants Thang & Associates Phuoc & Partners Russin & Vecchi Luat Viet Legal Consultants DC Law Indochine Counsel

www.legalbusinessonline.com

Total lawyers & partners 306 250 243 241 125 75 74 72 60 51

Managing partner(s) Lucien Wong Davinder Singh Steven Chong Dilhan Pillay Sandrasegara Tan Chong Huat Phillip Pillai Wong Kien Keong Kwa Kim Li Colin Ng Lee Suet Fern

Total lawyers 193 167 126 170 102 45 52 33 44 22

Total lawyers & partners 46 46 32 32 30 29 26 26 26 23

Managing partner(s) Philip Rapp Jeff Smith Kevin Wong Thomas Brown Alban Kang Austin Sweeney Joseph A. Bevash, Mark A. Nelson Barrye L. Wall Christopher Lowe Martin David

Total lawyers 36 36 25 23 20 23 7 20 17 15

Total partners 10 10 7 9 10 6 19 6 9 8

Total lawyers & partners 140 90 72 45 38 35 34 29 12 11

Managing partner(s) C V Chen John C Chen H. Henry Chang Rich Lin C F Tsai Paul Tsai Jack Huang David K Y Tang T C Huang, Jamie Huang John Eastwood, Nathan Kaiser

Total lawyers 112 72 41 34 4 21 27 23 10 9

Total partners 28 18 31 11 34 14 7 6 2 2

Total lawyers & partners 85 60 59 36 35 35 32 21 14 10

Managing partner(s) Multiple Phisud Dejakaisaya N/A Chavalit Uttasart Niwef Phanchorenworkul Monanan Raungchaius Jayavadh Bunnag Mutliple Harold Vickery Satyapon Sachdecha

Total lawyers 72 44 50 27 27 28 23 15 8 9

Total partners 13 16 9 9 8 7 9 6 6 1

Total lawyers & partners 56 48

Managing partner(s) Siripong Silpakul Elaine Lo

Total lawyers 18 37

Total partners 38 11

32 30 28 23 18 18 16 14 Total lawyers & partners 56 45 30 25 25 20 24 21 21 16

Peter Shelford NA Thomas Brown Edward Koehler Alastair Henderson Wilailuk Okanurak Fergus Evans Phillip John Managing partner(s) Truong Nhat Quang Elaine Lo David Fleming Do Truong Hai Vinh Tran Nguyen Huu Phuoc Sesto Vecchi Tran Duy Canh Nguyen Ngoc Bich, Duy Minh Ngo Dang The Duc

Total partners 113 83 117 71 48 30 22 39 16 13

26 22 23 17 16 16 13 12

Offices 1 1 2 4 4 1 1 1 1 1

6 8 5 6 2 2 3 2

Total lawyers 50 41

Total partners 6 4

Offices 2 2

25 21 20 15 20 14 18 12

5 4 5 5 4 7 3 4

2 1 1 3 2 2 1 2

41


FEATURE | legal networks >>

Joining the alliance As the GFC continues to take hold in Asia, many law firms are reaping the benefits of being part of something bigger 42

Asian Legal Business ISSUE 9.7


FEATURE | legal networks >>

I

t’s no secret that legal markets across the Asia-Pacific region are among the fastest growing in the world. The legal presses are continually thrown into overdrive reporting on the birth of new law firms, en masse partner moves, alliances, mergers and joint ventures. But despite this growth, legal sectors in the region are still viewed in some quarters as the most underdeveloped, isolated and least capable of dealing with the increasingly complex demands of multi-national clients. All are problems with one clear solution, according to some. A policy of expansion is needed, premised on planting one’s flag in each corner of the globe by establishing branch offices – something that has worked well for some firms in the Asia-Pacific region. From Australia to Singapore and China, there are countless domestic firms who have followed the lead of their clients into new jurisdictions. But in the face of rising operational costs, a worsening global financial crisis and general economic uncertainty, expansion plans have been put on ice, shelved for more favourable or at least more stable markets. Enter international legal associations. These networks of law firms (and other professional services providers in some cases) offer law firms a viable alternative.

More than just referrals

Ask most lawyers about the benefits of being a member of an international legal association and there is a good chance they will tell you it’s all about increasing the amount of inbound referrals. Richard Hetke, CEO of ALFA International, goes as far to say that “first and foremost”, his association serves as a referral network. “Our members expect to receive, and do receive, business referrals from the other 135 member law firms,” he says. But even Hetke concedes there is much more to international legal associations than just this. Today, they represent a vital part of the rapidly developing Asian legal services market. In many respects they act as a gateway between the East and the West, a means by which knowledge, know-how and business development skills can be transferred between developed and developing markets. International legal associations provide member firms with a wealth www.legalbusinessonline.com

of shared resources, the costs of which would normally be prohibitively expensive for smaller firms to bear. “We serve as a resource pooling channel whereby members can tap into the resources of other members,” Hetke says. “We combine to shoulder the cost of large-scale seminars and marketing efforts that would be beyond the financial wherewithal of most individual members.”

Making connections

While cost minimisation is always a major factor for smaller firms, generating revenues is just as important. Here, international legal association members support each other by offering guidance on optimising organisational structures as well as making the all-important introductions to potential clients. “Our network helps member firms manage their own legal businesses,” Hetke says. “We have working groups of managing partners, marketing directors, event planners and business managers from many of the firms, and they exchange advice, data and experiences on a wide variety of subjects.” “Association membership is an invaluable business development resource for the mid-sized firm that is looking to increase its regional and international client base,” says James Mendelssohn, chief executive of MSI Network. In his experience, international legal associations also give that extra edge to law firms’ pitches. “Access to global resources provided by an international association opens the door to new business opportunities that would previously have been out of the firm’s reach and enables firms to project a stronger marketing proposition when pitching for work from new clients and when trying to win more business from existing clients,” he says. They also provide firms, many of which are in a nascent stage of development, with a ready-made set of contacts who are only a phone call away. “The benefit for Asian firms – many of whom are newer and have less developed contacts than their counterparts in Europe – is that association membership will provide a network of ‘guaranteed’ contacts where none existed in the past. [This is different from the] US or Europe, where many professionals have some

►► International law firm networks: quick facts on the major players Lex Mundi • Established 1989 • 160 firms in 99 countries • Members are prominent local law firms recognised for breadth and depth of legal expertise and reputations in jurisdictions • All members are full-service commercial law firms Meritas • Established 1990 • 170 firms in 60 countries • Firms practise in all business areas, both transactional and litigation MSI Global Alliance • Established 1990 • 250 firms in 100 countries • Membership includes accounting firms • Caters for full service, commercial firms which are independent and medium-sized in their market and focused on one specific geographic region TerraLex • 158 firms in 100 countries • Members are full-service law firms • Typically has single member in each market, however, some jurisdictions have multiple distinct markets ALFA International • 132 firms in 37 countries • Members are full-service corporate law firms • Each metropolitan area, state, or country served by one member

historic contacts and simply use a network or association to supplement them,” Mendelssohn says. Azmi Modh Ali, the founding and managing partner of Malaysian firm Azmi & Associates, says his firm’s membership of Terralex has been pivotal to practice development, allowing him to learn from the business development strategies employed by US and European firms. “International legal associations are a consequence of the globalisation of business and the globalisation of law,” he says. “Naturally, some legal sectors are less developed and this is the case in Malaysia, where we have very little information to call on when it comes to how to grow practices. But I have found that through our membership we have gained invaluable skills here and it has allowed us to grow our firm, get new work, hold on to the valued clients we have and establish lasting 43


FEATURE | legal networks >>

►► legal associations and their members Country

Lex Mundi

Bangladesh

Amir & Amir Law Associates

China

Jun He Law Office Grandfield Law Offices

Lehman Lee & Xu

King & Wood

Hylands Law Firm; Liu, Shen & Associates; AllBright Law Offices; Wang Jing & Co

Hong Kong

Deacons

Gallant YT Ho & Co.

ONC Lawyers

Lovells

Boughton Peterson Yang Anderson

India

Amarchand & Mangaldas

Khaitan & Co

Chandan Associates; Rajinder Narain & Co

Kochhar & Co; Mulla & Mulla & Craigie Blunt & Caroe

Singhania & Partners

Indonesia

Ali Budiardjo, Nugroho, Reksodiputro

Hanafiah Ponggawa & Partners

Lubis, Santosa & Maulana

Ali Budiardjo, Nugroho, Reksodiputro

Kartini Muljadi & Rekan

Japan

Nishimura & Asahi

Kojima Law Offices

Kojima Law Offices

Nishimura & Asahi

Yuasa and Hara; Kikkawa Law Offices

Jordan

Ali Sharif Zu’bi, Advocates & Legal Consultants

Korea

Hwang Mok Park, PC

Kim, Chang & Lee

Yoon Yang Kim Shin & Yu

Kuwait

Abdullah Kh Al-Ayoub & Associates

Malaysia

Skrine

Skrine

Azmi & Associates

Pakistan

Rizvi, Isa, Afridi & Angell

Philippines

Romulo Mabanta Buenaventura Sayoc & De Los Angeles

Sycip Salazar Hernandez & Gatmaitan

Accra Law

Singapore

Meritas

Lee & Ko

Zain & Co

Chooi & Company

Accra Law

Joyce A Tan & Partners F. J. & G. De Saram

Terralex

Taiwan

Tsar & Tsai Law Firm

Russin & Vecchi

Thailand

Tilleke & Gibbins

Russin & Vecchi

Low Yeap Toh & Rodyk & Goon Davidson

Kelvin Chia Partnership

John Wilson Partners

Russin & Vecchi

* This table does not purport to be exhaustive

44

Pacific Rim Advisory Council

Amir & Amir Law Associates

Sri Lanka

Vietnam

MSI Global Alliance

Hutter & Dhira

Lee and Li

Pamir Law Group

Tilleke & Gibbins International

Seri Manop & Doyle

and close ties with other member firms across the world, while all the time maintaining our independence.”

No time like the present

For those firms considering joining an international legal association all lawyers interviewed by ALB believe there is no time like the present. Whether a firm is actively seeking out alternative streams of instructions, looking to bolster its regional and international profile in a depressed market or for avenues of growth that do not come with the costly overheads associated with opening branch offices, legal associations may hold the solution. “Opening offices everywhere was never in our business model,” Azmi says. “The costs of doing this are unsustainable for a firm of our size and we really need something which cancels these costs out but gives us access to local law advice. We have this now and it’s just as good as having a branch office for our clients who want to do business outside of Malaysia.” Having some form of presence outside one’s home market is a necessity for all law firms at the moment, regardless of size. “Membership in an international legal network is becoming more of a necessity for firms that want to compete for the major work of global companies,” Hetke says. “These companies want seamless legal coverage or at least want access to local firms in distant countries without the risks attendant to selecting lawyers in unfamiliar jurisdictions… network membership provides a prudent alternative to the problematic opening of offices in far-flung places.” The growing importance of legal association membership in serving these needs runs parallel to a number of attitudinal shifts in legal sectors across the region, shifts which Mendelssohn believes will benefit firms that are part of global legal networks. “We are seeing two interesting trends emerge. Firstly, in-house counsel are under huge pressure to control costs and are looking at the role that can be played by mid-sized firms that offer not only more competitive and flexible rates, but also better services,” he says. “Secondly, good opportunities for midsized firms to make lateral hires from larger firms are emerging as partners running successful practices at ‘big’ law firms become disillusioned with Asian Legal Business ISSUE 9.7


FEATURE | legal networks >>

the overheads inherent in the larger firm structure. They are attracted by the opportunities offered by the smaller firms, particularly those that are members of international associations, and are in a strong position to capitalise on both of these exciting growth opportunities,” he says.

The global financial crisis and Asia

Despite the worsening global economic crisis, international legal associations remain optimistic about the future and are only too well aware that the Asia-Pacific region has a huge role to play in ensuring stability returns to world markets. It should come as no surprise then, that each of the legal associations interviewed by ALB are redoubling their efforts to attract new Asia-Pacific members, particularly from emerging markets. “There are a number of emerging markets in the Asian region whose firms will benefit greatly from improved access to quality firms [and their clients] overseas. For example, Vietnam, Cambodia and Laos,” Mendelssohn

www.legalbusinessonline.com

“Good opportunities for mid-sized firms to make lateral hires from larger firms are emerging as partners running successful practices at ‘big’ law firms become disillusioned with the overheads inherent in the larger firm structure” James Mendelssohn, MSI Network says. And while he notes that MSI continues to receive a steady stream of enquiries or recommendations from existing law firm members in the region, he says that the flow of these has certainly slowed. Nonetheless, Mendelssohn says that MSI is looking to fill vacancies in a number of key jurisdictions. “We anticipate a surge of enquiries later this year and throughout 2010 and are advising firms that are pondering association membership to come forward sooner rather than later as territorial vacancies with the larger, more prestigious associations are limited.

We are currently seeking members in Brunei, Cambodia, Fiji, Laos, New Zealand, South Korea, Taiwan and Vietnam,” he says. Hetke’s ALFA International is also actively looking for members. It recently welcomed New Zealand firm Anthony Harper, Beijing-based Gaopeng & Partners and Vietnamese firm DFDL Mekong into its fold, but is still keen for more firms in the region. “Our recruiting efforts in the Pacific Rim are focused on Japan, South Korea, Indonesia and Malaysia,” he says. “We are also looking for a second Chinese firm due to the size and importance of that country.” ALB

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Photo: Thilo Pulch, www.pulchphotography.com

profile | managing partner >>

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Australasian Asian Legal Business ISSUE 9.7


profile | managing partner >>

alb 2009 managing partnerS series

John Chrisman, Dorsey & Whitney

Aussie advantage

Asia via Australia? What may seem odd to some makes perfect sense to John Chrisman

U

S-based law firms have been using Australian offices as a hub from which to service American clients interested in accessing the lucrative market Down Under for some time. They are also used to working with Australian companies who need help navigating the thorny issue of US securities law. Dorsey & Whitney chose to open its Australian office in Sydney earlier this year – becoming the sixth US firm to do so. Few were surprised – the firm had raised the possibility two years ago – but while the opening may not have come as a shock, the role that Dorsey’s Sydney office was to play in its global operations was certainly a break from the norm.

Regional outlook

Head of the firm’s Australia and India practices, John Chrisman, is clear about the role that Dorsey’s new Sydney office will play in the firm’s global strategy, although he concedes it’s not what one would expect of an office in Australia. “The Sydney office will serve as a base for the Asian market, with a specific focus on India and Greater China and, of course, Australia, where we will be looking to further develop our US capital markets, corporate, www.legalbusinessonline.com

M&A and litigation practices. I guess some may say this is a little unusual, but for us it’s natural and makes sense,” he says. Sydney “makes sense” for Chrisman because, alongside the firm’s offices in Shanghai and Hong Kong, Australia adds balance to the firm’s regional offering. “Australia is a developed country with a robust, stable economy and this is a good counter-balance to what we have elsewhere in the region. Things are a little slow at the moment, but Australia’s a slow-burning market: growth may slow from time-to-time but it will rarely cease,” he says. Dorsey is aided by what Chrisman feels is one of the most developed and sophisticated legal services markets in the world. “For a relatively small country, the legal market in Australia is amazingly complex and this only

helps international firms. I have said before, we will not be practising, nor do we have plans to practise, local law and to have firms of the calibre of some of those here to call on is of immense benefit to clients,” he says. “Lawyers here don’t follow so much as innovate in their advice, particularly in relation to capital markets work. Things have often been done here before we do them in the US and that underlies the sophistication of the market we are in.” This sophistication is something that Chrisman is keen to tap into as he goes about building Dorsey’s Sydney-based Asia practice. It also makes opening in the downturn worth the risk. “It has certainly been challenging to open an office when we did but the benefits are clear. Not only are business overheads, on average,

“Australia is a developed country with a robust, stable economy and this is a good counter-balance to what we have elsewhere in the region. Things are a little slow at the moment, but Australia’s a slow-burning market” 47


profile | managing partner >>

substantially cheaper than in Hong Kong or Singapore but the talent pool here is also a very exciting prospect,” he says. “Australian lawyers enjoy an excellent reputation for skill, technical knowledge and training around the world, and as the employment market returns to normal – where supply comes back to levels of demand – we will be looking locally to build our Asia practice.” But just what separates Dorsey from other US-based firms operating in Australia? After all, any US firm can provide Rule 144A advice or counsel clients on the intricacies of New York law. This is true, Chrisman concedes, but Dorsey differs in its approach in that it focuses on the mid-tier. “Most of the US-firms in Australia target the top-end of town and nothing else,” Chrisman says. “Our bread and butter work is with mid-market, midcap companies. This is not to say we don’t have top-end-of-town clients and we aren’t looking to pick more of their work up, but most of our focus is on this segment of the market and we won’t be abandoning that focus.”

Indian expertise

Photo: Thilo Pulch, www.pulchphotography.com

►► Dorsey & Whitney: Quick facts

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Offices International • Hong Kong • London • Shanghai US • Anchorage • Delaware • Denver • Des Moines • Fargo • Minneapolis • Missoula

• Sydney • Toronto • Vancouver • New York • Palo Alto • Salt Lake City • Seattle • Southern California • Washington DC

2008 Gross revenue: US$367m 2008 Profits per partner: US$661,000

Chrisman is considered something of an expert on the Subcontinent. In his stints at Jones Day, Freshfields and the ill-fated Coudert Brothers he was said to be the man to seek out for advice on India’s capital markets. And, by all accounts, it is a reputation that has followed him to Dorsey. In 2007 and 2008, the firm worked on nearly 20% of all equity share offerings in India, helping Indian companies raise an aggregate of nearly US$2bn. And despite the economic slowdown, Chrisman is confident about the amount of work on offer both on the country’s capital markets and elsewhere. “The Indian markets are coming back very strongly. It’s probably one of only a few places in the world where the capital markets are still going,” he says, adding he expects this to continue in the coming months. “The election results were immensely positive for business in India and [they are] a big reason behind why the market has soared of late and some deals are back on track.”

Chrisman also believes that liberalisation is likely to have a similar effect – when, and if, it happens. “Liberalisation will no doubt change the fabric of the legal market – it has in markets elsewhere and India will be no different. It will prove to be the spark for the further development of India’s corporate and business sectors,” he says. But just what effect will this have on law firms? Will international players rush to establish Indian offices and will Dorsey be one of them? Chrisman is reticent about laying out a definitive timetable for Dorsey’s entry into India, believing it is more likely UK firms will enter the market first. “Entering India as soon as the legal sector liberalises may not fit in the standard US law firm’s model of expansion, which is to set up offices in financial hubs across the globe,” he says. “This is different from the UK approach, which often seeks out more synergies and which would be geared, either over the mid- or longterm towards practising local law, thus meaning they would need to enter sooner rather than later. The type of work that US law firms tend to do for Indian clients or international clients entering India involves advice primarily on capital markets and cross-border transactions, among other things, and can be done just as effectively from Hong Kong, Singapore, London or Sydney.” However, Chrisman doesn’t rule out the possibility of opening in India if client demand compels Dorsey to do so or its biggest rivals for work in the country – the likes of Jones Day, Gibson Dunn & Crutcher and Baker & McKenzie – all venture down the Indian office path. “If one US law firm enters India will that open the floodgates for others? It’s too early to tell, but many firms already have relationships, exclusive or otherwise, with domestic firms there,” he says. “We do not have an exclusive relationship in India but chose to work with the top domestic firms. Any decision to open an office in India will depend on what clients are saying we should do. I’d be lying if I said the movements of other law firms would have no effect though.” ALB Asian Legal Business ISSUE 9.7


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ALB ALB special special report report || Malaysia Malaysia 09 09 >> >>

Malaysia 2009 Broadening horizons

The impending opening of the Malaysian market may not be a high priority for international law firms, but for their domestic counterparts it presents a perfect opportunity to broaden their horizons and push plans for regional expansion into overdrive

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n the cusp of change, the Malaysian legal market is at something of an impasse. Liberalisation has stalled and intrigue between the country’s Central Bank, the Bar Council and the Attorney General’s Chambers, not to mention a lack of interest from foreign firms, have contributed to the delay. This is welcome news for the nation’s domestic firms, the majority of which oppose the presence of foreign firms. But as is the case with other legal markets on the verge of liberalisation, talk of increased competition, the mere potential for foreign law firms to enter the market is enough to spring domestic firms into action. Whether it be shoring up regional and international expansion plans,

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adjusting mindsets to the way firms are run or proactively seeking out the green shoots, Malaysia’s law firms are rising to the occasion.

Differing opinions

Something strange happened in the Malaysian legal services market earlier this year. Bank Negara Malaysia (BNM) – the country’s Central Bank – jumped the gun and announced that foreign law firms would be allowed to enter the previously closed legal market on a standalone basis, but that they would be allowed only to practice in the area of Islamic finance. It should be noted that the announcement was made without the knowledge of the Malaysian Bar Association or

the Attorney General’s Chambers. All three have been in talks about the subject of liberalisation for the best part of a decade and agree that liberalisation is sorely needed, most notably to help establish Malaysia as the hub of Islamic finance in Southeast Asia. But while all three bodies agree on this, each has differing views on whether liberalisation will actually work. “The Bar Council’s position is that a managed system of liberalisation, in which foreign law firms are required to enter into joint ventures with Malaysian law firms, represents the best of both worlds as the Malaysian Bar has, among its members, sufficient practitioners with experience in the area of Islamic Asian Legal Business ISSUE 9.7


ALB special report | Malaysia 09 >>

finance at the international level,” says Ragunath Kesavan, president of the Malaysian Bar. “The Bar Council has made known to the Government its preference for this method of liberalisation since November 2004 and have even prepared the relevant amendments and rules and regulations. It is therefore extremely disappointed that the views of BNM have prevailed.” The objections to the model advocated by BNM are threefold: first there is a concern that allowing foreign firms into Malaysia will adversely affect domestic law firms – the protectionist argument. Second, allowing foreign firms to establish standalone offices will mean that there is no need for them to, as Kesavan says, “share or transfer any technology or knowledge to Malaysian practitioners”. Third, and perhaps most important, not one foreign firm has expressed an interest in opening in Malaysia.

Ignored internationally

►► Malaysia’s key economic indicators 2008 Population

2009

27.7 million

28.3 million

MYR528.8bn (US$158.6bn)

MYR528.9bn (US$158.7bn)

4.6%

-1.0–1.0%

MYR25,796 (US$7,738)

MYR24,541 (US$6,812)

Inflation rate (CPI)

5.4%

1.5–2.0%

Labour force

12 million

12.1 million

3.7%

4.5%

Total exports (fob)

MYR663.5bn (US$199.0bn)

MYR495.8bn (US$148.7bn)

Total imports (cif)

MYR521.5bn (US$156.4bn)

MYR387.6bn (US$116.3bn)

GDP GDP Growth Per capita income

Unemployment

*Forecast Source Bank Negara Malaysia

www.legalbusinessonline.com

Two of the firms with the largest Islamic finance practices, Allen & Overy and Clifford Chance, have not warmed to the idea of a Malaysian presence, stating that making a business case for opening an office in just one practice area is less than compelling. “In terms of bond issuance there hasn’t been a high number of sukuk issues in Malaysia in recent years. You can’t expect an international firm to launch for just one practice that’s not particularly vibrant at the moment,” says a partner at one Magic Circle firm. Norton Rose, which has been one of the most active in the Malaysian Islamic finance market, concurs, saying that a full-service liberalisation model is needed to pique the interest of international firms. “We welcome the opening up of Asian legal markets and will always consider options to launch,” says Stephen Parish, Norton Rose’s chairman. “However, I think that the launching of a pure Islamic finance practice would be a difficult thing to

do. You need to have the opportunity to provide full-service capabilities for it to be a worthwhile venture.” Another partner at a UK-based firm adds: “It could potentially be a bit of a non-event. Local firms don’t seem to care for it and international firms don’t want to take the chance during Stephen Parish, such trying economic Norton Rose conditions. I can’t see many firms being interested.” The tremendous growth of the Malaysian Islamic finance market notwithstanding, the Gulf is still the place to be for Islamic finance lawyers. “If you have Middle East offices you probably don’t need to worry too much about Malaysia. International opportunities are always welcomed, but in this case they are not as exciting as they may first appear,” says Parish, whose firm has offices in Abu Dhabi, Bahrain, Dubai and Riyadh. The majority of domestic law firms are, of course, only too happy to hear such news. But putting aside their views as to the merits of liberalisation, they agree that BNM has gone about it in the wrong way. “There is no way that any foreign law firm would want to enter Malaysia under the model being advocated,” says Azmi Mohammed Ali, the founding partner Azmi Mohd Ali, of Azmi & Associates Azmi & Associates – one of only a handful of Malaysian firms to openly support liberalisation. Azmi says that to attract foreign firms into Malaysia, regulators must devise a model that absorbs some of the costs associated with opening international offices. “A joint venture model, which would make it less costly to open an office, would be favoured, I think. Also, it would allow our young lawyers to interface with internationally experienced lawyers,” he says. 51


ALB special report | Malaysia 09 >>

►► Sukuk Monitor: 1H2009: Lead Manager Leaderboard Rank

Lead manager

1

AmInvestment Bank

2 3 4 5 6 7 8 9 10

CIMB HSBC Bank Middle East Bank Indonesia Bank Negara Malaysia Standard Chartered (ME&SA) Calyon Corporate and Investment Bank Deutsche Bank Barclays Bank Central Bank of Bahrain

No. of Value (US$m) Market share Home country issues (%) 6 1,944 30 Malaysia 9 14 4 1 5 1 1 1 12

917 911 749 707 341 250 250 216 201

14 14 12 11 5 4 4 3 3

Malaysia UK Indonesia Malaysia UK France Germany UK Bahrain

Source: Citi

Leonard Tan, a partner with Tay & Partners, agrees with Azmi but cautions against Malaysia looking to mimic the joint-law venture scheme that has Ronald Tan, failed in Singapore. Tay & Partners “Singapore is proof that a conventional joint venture model doesn’t work and probably never can,” he says, noting that regulators may find the necessary guidance in the professional services industry, most notably the large accounting and auditing firms. “What needs to be looked at is the model similar to what the PwCs and KPMGs of the world have done. Local law firms in Malaysia could adopt the brand of international players,” he says. “The branding power of a big UK or US law firm would be tremendous and for some clients that is what they want to see; they want to see lawyers with international experience handling their international deals.”

The home front

As with liberalisation elsewhere, the opening up of the domestic legal sector (or at least talk of it) will only serve to encourage domestic law firms to broaden their own horizons. It will force them to look to internationalise and regionalise their practices despite a worldwide economic slowdown that is hitting Malaysia just as hard as other economies in the region. “There is no doubting that the Malaysian economy has suffered because of the financial tsunami and by extension so too has the legal market,” Azmi says. “But we have had another factor affect things domestically. For 52

much of this year the focus has been on elections and changes in government. This has distracted everyone a little from the economic situation.” But with the Najib Tun Razak now well and truly settled into his position as Prime Minister, the focus of the nation has reverted back to its stalling economy. The latest figures state that Malaysia’s economy shrank by 6.2% in the first quarter of this year and estimates for the full year predict further contraction – somewhere between 5–6%. It is figures like these which Azmi says should be the catalyst for domestic law firms to look outside Malaysia to sure up growth over the short- to mid-term. However, it is not necessarily about establishing branch offices in each corner of the region, but rather utilising resources that are already at domestic law firms’ disposal. “Economic problems here are forcing law firms to look to other parts of this region for growth, to embrace globalisation and compete on the international stage,” he says. For Azmi & Associates this has occurred through membership of international legal associations, such as Terralex, and the establishment of close working relationships with a number of international firms. Lee Hishammuddin Allen & Gledhill’s Muthanna Abdullah cites a similar trend sweeping through Malaysia’s legal community. For domestic firms to regionalise, he says, is difficult, but firms have a ready-made vehicle to this end in Islamic finance. “There is no huge investment into Malaysia like there is in other Asian countries – there are

no big-ticket items,” Muthanna says. “But what we do have is unrivalled expertise in Islamic finance, interest in it from countries throughout the region like Indonesia, Thailand, Vietnam, Singapore and even places in the Middle East. This interest should drive regionalisation of legal practice. Malaysia can be the hub of Islamic finance in ASEAN.” Malaysia is now virtually unchallenged as the largest Islamic banking and financial market. It boasts US$30.9bn in total Islamic banking assets, Takaful assets totaling US$1.7bn and the largest Islamic private debt securities (IPDS) market in the world, comprising of 45.5% or US$34bn of domestic corporate bonds. And the progressive nature of the industry in the country is only expected to consolidate this position in the short term. “2010/2011 should be when we see Malaysia established as the hub for Islamic finance in the region,” Muthanna says. “It is not overly ambitious when you have Khazannah [the investment holding arm of the Malaysian Government] already investing in the region very heavily.” To this end, all the lawyers that spoke to ALB refused to rule out the possibility of establishing a physical presence in emerging economies across the region. Indonesia, Thailand and Vietnam were all noted as possibilities, especially as the first two step up their efforts to claim a stake in the lucrative retail Islamic finance market. The role envisaged would be one of know-how and technical knowledge transfer. Just as Singapore has played a pivotal role in transferring its banking & finance and dispute resolution knowledge regionwide, so will Malaysia in Asian Legal Business ISSUE 9.7


Firm Profile ALB special report | Malaysia 09 >>

Tay & Partners

Redundancy and restructuring in Malaysia Legal issues to consider in Malaysia’s current employment market

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Leonard Yeoh Partner Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia www.taypartners.com.my DID: 603 2050 1973 Tel: 603 2050 1888 Fax: 603 2026 0995 leonard.yeoh@taypartners.com.my

www.legalbusinessonline.com

ith the US economy in dire straits, many Malaysian factories have been closed down almost overnight. Subsequently, our Industrial Court has seen an increase of employment-related cases— from wrongful dismissal to retrenchment related issues. Where a company is contemplating any cost-cutting measures within the organization, there are a few issues that should be considered before drastic measures are taken. Terminating an employment contract is one of the many options an organization can resort to as part of its cost-cutting exercise. Depending on the varying grounds in an employee’s termination, each has its repercussion and issues that should be addressed to prevent an employer being sought for legal redress. Certainly, in the current climate, every cent counts and employers do not wish to be sued and incur unnecessary expenses. The term “retrenchment” is not defined in any Malaysian legislation. However, it has been established by case laws that retrenchment is “the discharge of surplus labour or staff by an employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action”. Retrenchment is in fact one of the most contentious grounds of a contract of employment being terminated, compared to the usual grounds –for example; attainment of retirement age, voluntary resignation, breach of contract by employee, dismissal for poor performance or misconduct, frustration of contract, closure of business and the likes. Before carrying out any retrenchment exercise in Malaysia, the employer must ensure the following: a. there must be a legal basis and justification to carry out the reorganisation and restructuring; b. the position of the employee affected must be redundant as a result of the reorganisation;

c. the retrenchment exercise must generally be in accordance with the principle of Last-In-First-Out or other accepted standards of industrial relations practice, including the Code of Conduct for Industrial Harmony.

Employees and wrongful dismissal An employee who is wrongfully dismissed or where the contract of employment has been unjustly terminated may resort to the Industrial Court or the civil court to seek remedies. Generally, the Industrial Court offers a better recourse for employees who have been wrongfully dismissed as it is governed by principles of equity and good conscience. The employer bears a high burden of proof to show that the dismissal of an employee is with just cause or excuse. In the event that the employer fails to do so, it may end up paying the employee an award of backwages for the period from the date of dismissal until the date of the Industrial Court award subject to the prescribed cap. The burden of proof lies with the employer to prove actual redundancy on which the dismissal is grounded. There are several accepted justification for restructuring and retrenchment, such as: d. Business loss – The Industrial Court would require cogent proof to justify retrenchment on this ground. The Balance Sheet and Profit and Loss Accounts of the company may be used as proof to establish financial losses. However, paper loss are inconclusive and the employer must establish to that actual loss has been suffered as opposed to mere paper loss; e. Closure of a department or section; f. Significant reduction in turnover – The employer would need to establish that there is a declining trend of business over a period. g. Significant reduction in productivity; h. Adverse conditions and escalating expenditures.

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ALB special report | Malaysia 09 >>

Islamic finance. Much of the groundwork for this has already been laid out in a raft of industry initiatives under the MIFC. These include the establishment of an institute of Islamic banking and finance, an international centre for leadership in finance and an international centre for education in Islamic finance. “Malaysia will lead the region,” Azmi says. “We are already present in over 60 countries and that will only increase as more incentives appear and liberalisation takes place in the sector over the coming years. Each time a Malaysian lawyer interacts with lawyers from Indonesia, Thailand or other countries they will be playing a role in transferring what we know across the region.”

Diversification

If they look to spread internationally Malaysian firms will find there is a need to diversify their practice, or risk falling victim to the slowdown in staple areas of work such as M&A and corporate. It is a slowdown that not even a boom in the counter-cyclical

“Redundancies have not only been happening in the US or UK; they have also been happening in Malaysia. What is the cause of this? The financial crisis has had a role to play but it also due to some firms’ over-dependence on one or more practice areas” Azmi Mohd Ali, Azmi & Associates areas of litigation and insolvency & restructuring can compensate for. “M&A and capital markets work has certainly slowed down from the levels that it was at in 2007, following a worldwide trend,” Muthanna says. “Interest in debt capital markets have risen and the rates are high, but the markets are adjusting to this.” So the question is, have firms also adjusted to the changed environment? Azmi thinks that most have made good in-roads but there is plenty more work to be done. “Malaysian firms have generally had an ad hoc approach to practice

diversification. Many tend to rely on political or other connections and there perhaps is not enough time spent on forward planning,” he says, adding this is evident in the fact that all of the country’s major firms have had to shed staff in the past few months, some by as much as 20%. “Redundancies have not only been happening in the US or UK; they have also been happening in Malaysia, but no one has released any information on them,” Azmi says. “What is the cause of this? The financial crisis has had a role to play but it also due to some firms’ over-dependence on one or more

21 – 22 January 2010 Raffles City Convention Centre Singapore

“The Future for International Arbitration” Maxwell Chambers is pleased to present the inaugural Singapore International Arbitration Forum (SIAF) 2010 from 21 – 22 January 2010 at the Raffles City Convention Centre, Singapore. Co-organised by the Singapore International Arbitration Centre, the SIAF 2010 will bring together some of the world’s most respected and influential figures in international arbitration for an open dialogue and exchange of information, best practices, views and insights on critical issues facing the industry around the central theme - “The Future for International Arbitration”.

Visit www.siaf.sg or email secretariat@siaf.sg for more details. The event is supported by the International Chamber of Commerce, the International Centre for Dispute Resolution Singapore, the Permanent Court of Arbitration, the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Singapore Corporate Counsel Association, the Law Society of Singapore, and the Singapore Academy of Law.

Presented by

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Co-organised by

Asian Legal Business ISSUE 9.7


ALB ALB special special report report || Malaysia Malaysia >> 09 >>

practice areas. Over dependence of this kind is very common in Malaysia and reflects the developing nature of our legal market.” He believes that the key to weathering the financial crisis for many law firms in Malaysia is taking some risks rather than being risk averse. “Everyone is looking for socalled green shoots at the moment,” Azmi says. “But just how do you identify them and make business out of them? In some cases you can’t just sit back and wait for them to appear themselves and sometime you cannot even wait for clients to lead you there. You need to go out and find them for yourself.” Lee Hishammuddin Allen & Gledhill’s Muthanna agrees, citing his firm’s burgeoning technology and life sciences practices as evidence of this. “For firms to survive, they need to identify sectors that no other firms are in, or only a few are in; they need to make the commitment of manpower and resources and stick by it,” he says. “We looked at telcos – a sector in

56

which there are less than 10 specialist lawyers in Malaysia – and got in there. We’re now moving quite well.” Heavy government investment in the sector has no doubt helped Muthanna implement such diversification plans. Similarly, life sciences, biotech and agri-tech have all been earmarked for heavy government investment in the next five years and, along with continued efforts to stimulate the country’s manufacturing sector, are expected to help domestic firms on the road to diversifying their practices. “The Malaysian Government has said repeatedly that it plans to increase spending in these areas and has already established technology clusters to this end. This helps law firms expand the type of work they are doing and also opens up doors to practice in other areas,” Muthanna says. “What may start out as a joint venture contract can quickly turn into advising on funding work, litigation work, IP enforcement and protection and more general corporate work.” ALB

Asian Legal Business ISSUE 9.7


Profile ALB special report | Malaysia 09 >>

Ritz Carlton Kuala Lumpur

The Ritz Carlton Kuala Lumpur: Who could ask for anything more? Five-star hotels are swish, swanky and sumptuous and cater to almost every need but often lack that personal touch. Not so with the Ritz Carlton Kuala Lumpur who treat every guest as if they are their one and only, writes Vivian Cheah

T

oday’s business traveler couldn’t wish for anything more than the Ritz Carlton Kuala Lumpur. A five-star hotel, sumptuously appointed with the only the finest furnishings tucked away in a quiet yet central corner of the bustling metropolis of KL. A stay at the Ritz Carlton Kuala Lumpur can make even the most arduous of business trips seem like a holiday

The royal treatment From the moment you step foot in the palatial lobby to the time your check out, your experience is guaranteed to be grand. The hotel simply oozes class and style, really, just what you have come to expect from this award-winning franchise in any other city of the world. Its imperiously decked-out 251 rooms offer guests an ambiance that straddles old-world charm and modern functionality. Unbelievably comfortable beds, fitted with only the best feather duvets and goose down pillows are sure to take the weight of the world from your shoulders as you prepare yourself for the hectic day ahead. The result? A room which you could just as easily mistake for one in your own home; so great is the sense of permanency that you get when staying at the Ritz Carlton Kuala Lumpur.

The best for business Ritz Carlton Kuala Lumpur 168, Jalan Imbi, Kuala Lumpur 55100 Malaysia T: +603 2142 8000 F: +603 2143 8080 W: http://www.ritzcarlton.com

www.legalbusinessonline.com

Lets not forget what, for most, is the reason for most of our travel nowadays—business. But where this was once a daunting experience, the Ritz Carlton Kuala Lumpur has all your business needs covered. From a state-of-the-art executive lounge with

all the latest technology such as hi-speed broadband and Wifi internet access and USB ports (and some old fashion needs like a glass or two of your favorite Merlot or fresh barista-quality espresso to get you through those ‘all-nighters’) to professional conference and meeting facilities the Ritz Carlton Kuala Lumpur is just the place to seal a megabusiness contract or strengthen ties with your five-star clients.

The personal touch Ask any business traveler about their experiences of five-star hotels anywhere in the world and they will tell you that there is not much separating the world’s top hotels. They all provide everything guests could wish for but what they often lack is a personal touch— this can’t be said of the Ritz Carlton Kuala Lumpur however, who treat every guest as if they were their one and only. From a 24-hour personal butler service that will cheerfully assist in resolving in the smallest of problems at any hour of the day to hotel staff extremely knowledgeable about the sights, sounds and tastes of Malaysia guests’ experience is sure to be world-class. But think for a moment of the ‘attention-to-detail’ services that you don’t usually find in other business hotels. From the nightly draw down service and soothing aromatherapy baths with your very own ‘bath butler’ to the complimentary cookie or chocolate placed at one’s bedside daily—the Ritz Carlton Kuala Lumpur proves that as much as the big things matter, the little things are also just as important for today’s harried business traveler.

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►► The winners Deal awards Asset & Corporate Finance GMR - Intergen Financing and Acquisition Insolvency & Restructuring Nomura - Lehman Brothers (Asia) Acquisition Assetton Award Project Finance Resorts World Sentosa Project Finance Debt Market City Development Islamic Trust Certificate Program Equity Market Reliance Power IPO Chivas 18 Award SE Asia M&A Tata Motors - Jaguar/Land Rover Acquisition IPP Financial Advisers Award Singapore M&A Lion Power Holdings - Senoko Power Financing & Acquisition BMW Asia Award SE Asia Deal of the Year GMR - Intergen Financing and Acquisition Singapore Deal of the Year Resorts World Sentosa Project Finance In-house awards Banking & Financial Services DBS Braun Büffel Award Investment Bank JPMorgan IT/Telecommunications SingTel De Dietrich Award Real Estate & Construction CapitaLand Shipping Neptune Orient Lines Singapore In-house Lawyer of the Year Jeffrey Wong, UBS Gibson, Dunn & Crutcher Award Singapore In-house Team of the Year DBS Firm awards Commercial Litigation Drew & Napier Merrill Legal Solutions Award Construction Rajah & Tann Energy & Resources Linklaters Allen & Gledhill IP ATMD Bird & Bird Merrill Legal Solutions Award International Arbitration Drew & Napier Offshore Firm Conyers Dill & Pearman Real Estate WongPartnership SE Asia Shipping Ince & Co Singapore Shipping Rajah & Tann Tax & Trusts Allen & Gledhill India Deal Firm Armachand & Mangaldas; AZB & Partners Indonesia Deal Firm Hadiputranto, Hadinoto & Partners Malaysia Deal Firm Zaid Ibrahim & Co Philippines Deal Firm Romulo Mabanta Buenaventura Sayoc & De Los Angeles Thailand Deal Firm Baker & McKenzie Vietnam Deal Firm Vilaf Hong-Duc International Deal Firm Linklaters Singapore Deal Firm Allen & Gledhill

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The winner’s of this year’s BMW Asia ALB SE Asia Law Awards showcased the depth of expertise evident in the region’s legal profession today

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ome may say things returned to normal at this year’s BMW Asia ALB SE Asia Law Awards. Singapore giant Allen & Gledhill returned to the top of the winner’s list after slipping to second place behind Drew & Napier at last year’s event. In reclaiming its crown as the Lion Nation’s preeminent corporate law firm A&G scooped five trophies including the prestigious Singapore Deal Firm of the Year. But they weren’t solo atop the leader board. They had to share first place with Magic Circle powerhouse and new QFLP-licensee Allen & Overy whose work on some of 2008’s most high-profile deals ensured they took home their fair share of silverware. The rest of Singapore’s ‘big-four’ firms — Drew & Napier, Rajah & Tann and WongPartnership — all performed strongly snaring four awards apiece while offshore law firm Cains was the surprise packet of the evening coming in equal second place with four awards of its own. The night will also be remembered for the growing importance of emerging economies in the region, from India to Indonesia, Vietnam to Malaysia their rising stocks were highlighted by both by the number of deals hailing from such jurisdictions and the number of major local and international

firms that had a hand in them. Malaysia impressed with a number of high-value, high complexity deals while in recognition of a record transactional year there, India-related deals dominated. GMR’s simultaneous financing and acquisition of Intergen took home the SE Asia M&A Deal of the Year Award and the coveted Chivas 18 Award for SE Asia Deal of the Year. The wildly popular Resorts World at Sentosa Project Financing scooped the Singapore deal awards. The deal claimed the hotly-contested Assetton Award for Project Finance Deal of the Year in addition to being crowned the Singapore Deal of the Year. At close the deal was one of the largest nontraditional syndicated project financing deals ever undertaken in Singapore’s banking history with the first tranche successfully closed amidst the global financial crisis. A worthy winner by every measure. ALB wishes to thank the hundreds of legal and industry professionals who enthusiastically helped the Awards by assisting with our months of research into the industry. And ALB is also grateful for the continued support of this premier legal event by an evermore-impressive list of sponsors, and event partner BMW Group Asia. ALB

►► THE BIG WINNERS Firm: Allen & Gledhill Numbe of awards: 5 Awards: • IPP Financial Advisers Award Singapore M&A Deal of the Year • Debt Market Deal of the Year • Insolvency & Restructuring Deal of the Year • Singapore Deal Firm of the Year • Tax & Trusts Law Firm of the Year Firm: Allen & Overy Number of awards: 5 Awards: • Asset & Corporate Finance Deal of the Year • BMW Asia Award SE Asia Deal of the Year • IPP Financial Advisers Award Singapore M&A Deal of the Year • Insolvency & Restructuring Deal of the Year • Chivas 18 Award SE Asia M&A Deal of the Year

Firm: Cains Number of awards: 4 Awards: • Asset & Corporate Finance Deal of the Year • Assetton Award Project Finance Deal of the Year • Singapore Deal Of The Year • BMW Asia Award SE Asia Deal of The Year Firm: Drew & Napier Number of awards: 4 Awards: • Assetton Award Project Finance Deal of the Year • Singapore Deal of the Year • Commercial Litigation Law Firm of the Year • Merrill Legal Solutions Award International Arbitration Law Firm of the Year

Firm: Rajah & Tann Number of awards: 4 Awards: • Insolvency & Restructuring Deal of the Year • IPP Financial Advisers Award Singapore M&A Deal of the Year • Merrill Legal Solutions Award Construction Law Firm of the Year • Singapore Shipping Law Firm of the Year Firm: WongPartnership Number of awards: 4 Awards: • IPP Financial Advisers Award Singapore M&A Deal of the Year • Debt Market Deal of the Year • Insolvency & Restructuring Deal of the Year • Real Estate Law Firm of the Year Asian Legal Business ISSUE 9.7


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deal awards ASSET & CORPORATE FINANCE DEAL OF THE YEAR WINNER GMR - Intergen financing and acquisition

Finalists • Merrill Lynch & Symphony - DLF Group investment • MISC Capital loan facility • PT Profesional Telekomunikasi Indonesia Tbk senior and mezzanine financing

INSOLVENCY & RESTRUCTURING DEAL OF THE YEAR L-R: Joel Hogarth, Siew Kam Boon (White & Case LLP); Rajiv K Luthra (Luthra & Luthra Law Offices); Marilyn A. Victoria Aquino (SyCip Salazar Hernandez & Gatmaitan); Mike Edwards(Cains Advocates Limited)

Firms: Allen & Overy; Allen & Overy Shook Lin & Bok; Appleby; Cains; DeBreau Westbrook; Luthra & Luthra; Mallesons Stephen Jaques; Norton Rose; Sidley Austin; SyCip Salazar Hernandez & Gatmaitan; White & Case • Deal involved GMR securing term loan financing in for the acquisition of a substantial equity stake in Intergen NV • At approximately US$22bn, this was the largest ever acquisition of a global energy company by an Indian company

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Bank: Rothschild Accountant: KPMG • Deal saw Nomura acquire Lehman Brothers’ stock broking and investment banking operations in Asia following its collapse in September 2008 in which it filed for bankruptcy protection • Nomura emerged as the successful bidder; competing bids were submitted by Standard Chartered and Barclays Finalists • FR8 Holdings insolvency • IJM Land Corporation Restructuring • UEM World Restructuring

WINNER Nomura - Lehman Brothers (Asia) acquisition

Assetton Award PROJECT FINANCE DEAL OF THE YEAR

L-R: Damien Coles (White & Case LLP); Stuart Bedford (Linklaters Allen & Gledhill); Joe Teng (Amicorp Singapore Pte Ltd); Joy Tan (WongPartnership LLP); Dinesh Dhillon (Allen & Gledhill LLP); Bob Yap (KPMG Advisory Services Pte Ltd); Danny Ong (Rajah & Tann LLP)

Firms: Allen & Gledhill; Allen & Overy; AZB & Partners; Freshfields Bruckhaus Deringer; Khaitan & Co; Linklaters; Mallesons Stephen Jaques; Rajah & Tann; Skadden; Weil Gotshal & Manges; White & Case; WongPartnership

WINNER Resorts World Sentosa project finance

Firms: Cains; Conyers, Dill and Pearman; Drew & Napier; Lovells Lee & Lee Banks: Bangkok Bank; Bank of Tokyo MUFJ; BNP Paribas; Calyon; CIMB; Commerzbank; DBS; DZ Bank; HSBC; JPMorgan; Malayan Banking Berhad; NAB; OCBC; RBS; Sumitomo-Mitsui • US$3bn project financing is one of largest non-traditional syndicated project financing deals ever undertaken in Singapore’s banking history with first tranche successfully closed amidst global financial crisis • Project will allow construction and development of integrated resort (casino) Finalists • Adani Power project finance • ITE West College PPP • Mundra Power project finance • Tanjung Jati B Power Plant expansion

L-R: Ken Hawkes (Lovells Lee & Lee); Mike Edwards (Cains Advocates Limited); Terence Tay (Drew & Napier LLC); Valerie Kwok (Drew & Napier LLC); Syed Mashafuddin Syed Badarudin (CIMB Investment Bank Bhd); Peer Macketanz (Commerzbank AG); Mohan Nainan Nainan (Assetton Pte Ltd)

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DEBT MARKET DEAL OF THE YEAR WINNER City Development Islamic trust certificate program

Tang Siau Yan (Allen & Gledhill LLP); Mah Kah Loon (CIMB-GK Securities Pte Ltd); Hui Choon Yuen (WongPartnership LLP)

Firms: Allen & Gledhill; WongPartnership Banks: Bank of New York Mellon; CIMB • Deal saw City Development through its wholly owned SPV Citidev Nahdah enter into in Singapore’s first unsecured Islamic capital markets transaction involving a corporate issuer, through the establishment of a S$1bn Islamic Trust Certificate Programme • Deal involved fusion of traditional Islamic financing principles into conventional medium-term note framework, in order to create Islamic securities which replicate the economic features of unsecured conventional bonds Finalists • CapitaLand CB offering • CIMB stapled securities program • Standard Chartered Medium-Term Note program • Vedanta Securities CB offering

equity market DEAL OF THE YEAR WINNER Reliance Power IPO

was oversubscribed 73 times after having received applications from over 5 million retail investors Finalists • Transcu - Eng Wah Holdings RTO • Esso Thailand IPO • PT Adaro Energy IPO • PT Bakrie & Brothers rights issue & acquisition • Telekom Malaysia demerger - TM International listing

Chivas 18 Award SE ASIA M&A DEAL OF THE YEAR WINNER Tata Motors - Jaguar/Land Rover acquisition

IPP Financial Advisers Award SINGAPORE M&A DEAL OF THE YEAR WINNER Lion Power Holdings Senoko Power financing & acquisition

L-R: Michele Foo (Allen & Gledhill LLP); Mark Nelson (Latham & Watkins LLP); Rachel Eng (WongPartnership LLP); Ian Pryor (IPP Financial Advisers Pte Ltd)

Firms: Allen & Gledhill; Allen & Overy; Latham & Watkins; Rajah

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Finalists • Ascott Group privitisation • China Huaneng - Tuas Power acquisition • Gaz de France - Power Gas JV • The Cairns - Straits Trading acquisition

BMW Asia Award SE Asia Deal Of The Year WINNER GMR- Intergen financing and acquisition Rajan Menon (Chivas Regal Singapore); Jacqueline Loke (Rodyk & Davidson LLP)

Firms: Allen & Overy; Hogan & Hartson; Rodyk & Davidson Accountants: Deloitte • US$2.3bn deal saw Ford Motor Company sell two of its subsidiaries, Land Rover and Jaguar Cars, to Tata Motors • Deal was first acquisition by Indian company of auto business divisions relating to two marque brand name Finalists • Maybank - Bank Internasional Indonesia stake acquisition • Maybank - Kookmin Bank share acquisition • NTT DoCoMo - Tata Teleservices investment • PT Bank Lippo - PT Bank Niaga Tbk merger

L-R: Johannes Seibert (BMW Asia Pte Ltd); Damien Coles (White & Case LLP); Siew Kam Boon (White & Case LLP); Rajiv K Luthra (Luthra & Luthra Law Offices); Marilyn A. Victoria Aquino (SyCip Salazar Hernandez & Gatmaitan); Mike Edwards (Cains Advocates Limited); Doug Peel (White & Case LLP); Joel Hogarth (White & Case LLP)

Firms: Allen & Overy; Allen & Overy Shook Lin & Bok; Appleby; Cains; DeBreau Westbrook; Luthra & Luthra; Mallesons Stephen Jaques; Norton Rose; Sidley Austin; SyCip Salazar Hernandez & Gatmaitan; White & Case

Singapore Deal Of The Year WINNER Resorts World at Sentosa project finance

V. Umakanth on behalf of Amarchand & Mangaldas

Firms: Amarchand & Mangaldas; Cleary Gottlieb; J Sagar Associates • Ground breaking US$2.9bn listing was fully subscribed within one minute of opening and by close

& Tann; Rodyk & Davidson; WongPartnership Banks: ANZ; Bank of Tokyo-Mitsubishi UFJ; DBS; Dexia; Dresdner Bank; KBC Bank; Mizuho Bank; Natixis; Royal Bank of Scotland; OCBC Accountants: PwC • US$ 3.2bn deal saw Lion Power Holdings acquire Senoko Power from Temasek Holdings (Private) • Deal comprised of bridge loan facility and JPY67bn repowering loan • Deal was closed on expedited schedule, with only two days between bid submission and signing and additional seven days between signing and closing

Peer Macketanz (Commerzbank AG); Valerie Kwok (Drew & Napier LLC); Ken Hawkes (Lovells Lee & Lee); Karen Gan (DBS Bank); Syed Mashafuddin Syed Badarudin (CIMB Investment Bank Bhd)

Firms: Cains; Conyers Dill and Pearman; Drew & Napier; Lovells Lee & Lee Banks: Bangkok Bank; Bank of Tokyo MUFJ; BNP Paribas; Calyon; CIMB; Commerzbank AG; DBS; DZ Bank AG; HSBC; JPMorgan; Malayan Banking Berhad; NAB; OCBC; RBS; SumitomoMitsui Asian Legal Business ISSUE 9.7


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in-house awards Banking & Financial Services In-House Team of the Year WINNER DBS

Braun Büffel Award Investment Bank In-House Team of the Year WINNER JPMorgan

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WINNER Singtel

De Dietrich Award Real Estate & Construction In-House Team of the Year WINNER CapitaLand

Christine Chang (Maples & Calder); Chan Su Shan (SingTel)

Karen Gan and Nicole Mak (DBS Bank)

Finalists • Citi • HSBC • ICICI • Maybank • OCBC • Standard Chartered

IT/Telecommunications In-House Team of the Year

Rizvan Baig (JPMorgan Chase Bank, N. A.); Valencia Teo (Braun Büffel)

Finalists • Credit Suisse • Deutsche Bank • Goldman Sachs • Merrill Lynch • Morgan Stanley • UBS

Finalists • AT&T • Bharti Televentures • Nokia • StarHub • Telekom Malaysia Berhad

Patrice Charbon (De Dietrich); Low Sai-Choy (CapitaLand)

Finalists • DLF Group • Far East Organisation • Frasers Centrepoint • Unitech

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Shipping In-House Team of the Year WINNER Neptune Orient Lines

firm awards COMMERCIAL LITIGATION LAW FIRM OF THE YEAR WINNER Drew & Napier

ENERGY & RESOURCES LAW FIRM OF THE YEAR WINNER Linklaters Allen & Gledhill

Merrill Legal Solutions Award INTERNATIONAL ARBITRATION LAW FIRM OF THE YEAR WINNER Drew & Napier

L-R: Durai Shanmugam (Stephenson Harwood); Yeo Hui Ling (Neptune Orient Lines Ltd); Timothy Windle (APL Limited)

Finalists • MISC Berhad • Pacific Carriers • Shipping Corporation of India • Titan Orient Lines

Singapore In-House Lawyer of the Year WINNER Jeffrey Wong, UBS

Finalists • Boon Chin Aun, Golden Agri Resources • Damian Yeo, Nokia • Lena Chia, Temasek Holdings • Sharon Goh, Pacific Carriers

Abraham Vergis (Drew & Napier LLC)

• Powerhouse commercial litigation outfit and winner in this category for the previous four years • Boasts number of highly-regarded litigators, including Jimmy Yim SC, Cavinder Bull SC and Davinder Singh SC Finalists • Allen & Gledhill • Rajah & Tann • WongPartnership

Merrill Legal Solutions Award CONSTRUCTION LAW FIRM OF THE YEAR WINNER Rajah & Tann

Kelvin Wong (Allen & Gledhill LLP); Janet Taylor (Stats ChipPAC)

• Came highly recommended in peer review process for its work across gas and petrochemical industries and its ability to integrate banking, project finance and dispute resolution skills into this practice area where required Finalists • Clifford Chance • Latham & Watkins • Lovells Lee & Lee • Milbank, Tweed, Hadley & McCloy LLP • Norton Rose

IP LAW FIRM OF THE YEAR WINNER ATMD Bird & Bird

Gibson, Dunn & Crutcher Award Singapore In-house Team of the Year WINNER DBS

L-R: Karen Gan (DBS Bank); Jai Pathak (Gibson, Dunn & Crutcher LLP); Nicole Mak (DBS Bank)

Finalists • Nokia • Pacific Carriers • Temasek Private Holdings • UBS

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Chua Kee Loon (Rajah & Tann LLP); Lilian Goh (Merrill Legal Solutions)

• Winner in this category in 2006, firm is mainstay on construction law front • Sundaresh Menon held in high regard by respondents with many noting that since his appointment in 2007 firm has increased footprint in area Finalists • Allen & Gledhill • Drew & Napier • Harry Elias Partnership • WongPartnership

Low Sai-Choy (CapitaLand); Cyril Chua (ATMD Bird & Bird LLP)

• The winner in this category every year since 2005, this IP powerhouse became even stronger last year after striking global alliance with British firm Bird & Bird, a move which survey respondents felt will only enhance its reputation as one of Singapore’s premier IP firm Finalists • AMICA Law • Baker & McKenzie.Wong & Leow • Drew & Napier • Lee & Lee • Rodyk & Davidson

Abraham Vergis (Drew & Napier LLC); Lilian Goh (Merrill Legal Solutions); Manoj Sandrasegara (Drew & Napier LLC)

• International arbitration practice considered by many to be head and shoulders above others in Singapore • Highly regarded Jimmy Yim SC, managing director of the firm’s dispute resolution practice, and his team were regarded highly for their excellent service, poise and ability to handle highest of high-profile international disputes • Hri Kumar and Cavinder Bull were both appointed to SC post in 2008 Finalists • Allen & Gledhill • DLA Piper • Herbert Smith • Norton Rose • Rajah & Tann • Shearman & Sterling

OFFSHORE LAW FIRM OF THE YEAR WINNER Conyers Dill & Pearman

Jane Niven (Jones Lang Lasalle); Gerard Ng (Conyers Dill & Pearman)

• A winner in this category in 2006 and 2007, firm’s Singapore office is considered to be pivotal in Asia, as Asian Legal Business ISSUE 9.7


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evidenced by its work on Resorts World at Sentosa project financing deal • Singapore office head Tan Woong Tiang noted for his expertise in corporate finance transactions

• Head of international real estate Carol Anne Tan highly regarded for her work on REITS and her expertise in property related corporate disposals

Finalists • Appleby • Cains • Maples and Calder • Walkers

Finalists • Allen & Gledhill • Drew & Napier • KhattarWong • Lee & Lee • Rodyk & Davidson

REAL ESTATE LAW FIRM OF THE YEAR WINNER WongPartnership

SE ASIA SHIPPING LAW FIRM OF THE YEAR WINNER Ince & Co

& Co almost automatic inclusion in this category • Peers spoke very highly of firm’s wet practice where it regularly acts on most high-profile contractual and liability issues; Chris Greiveson, James Drummond and Richard Lovell all come highly recommended Finalists • Clyde & Co • Holman Fenwick Willan • Stephenson Harwood • Watson, Farley & Williams

SINGAPORE SHIPPING LAW FIRM OF THE YEAR

• Four-time winner of this award, firm widely recognised to be leader in field • Led by Senior Counsel Steven Chong, admiralty and shipping practice group is a dominant maritime law practice in Singapore Finalists • Allen & Gledhill • Drew & Napier • Haridass Ho & Partners • JTJB

TAX & TRUSTS LAW FIRM OF THE YEAR WINNER Allen & Gledhill

WINNER Rajah & Tann

Dorothy Marie Ng (WongPartnership LLP)

• Perennial nominee in this category, 2008 was another good year for WongPartnership

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Richard Lovell (Ince & Co)

• A name that is synonymous with all things shipping in the region, Ince

Jeffrey Wong (UBS); Tang Siau Yan (Allen & Gledhill LLP)

Lionel Tay (Rajah & Tann LLP)

• Four-partner tax practice includes highly regarded Nand Singh

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Gandhi who specializes in appeals and objections on tax issues for major corporations and financial institutions Finalists • Baker & McKenzie.Wong & Leow • Drew & Napier • KhattarWong • WongPartnership

INDIA DEAL FIRM OF THE YEAR

• Khaitan & Co • Luthra & Luthra • Talwar Thakore & Associates

INDONESIA DEAL FIRM OF THE YEAR

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WINNER Romulo Mabanta Buenaventura Sayoc & De Los Angeles

Eudora Tan (Allen & Gledhill LLP) on behalf of Zaid Ibrahim & Co

Indri Pramitaswari Guritno (Hadiputranto, Hadinoto & Partners)

Finalists • FoxMandal Little • J Sagar Associates

WINNER Zaid Ibrahim & co

PHILIPPINES DEAL FIRM OF THE YEAR

WINNER Hadiputranto, Hadinoto & Partners

JOINT WINNERS Amarchand & Mangaldas; AZB & Partners

V. Umakanth on behalf of Amarchand & Mangaldas

MALAYSIA DEAL FIRM OF THE YEAR

Finalists • Ali Budiardjo, Nugroho, Reksodiputro • Hendra Soenardi & Rekan • Lubis Ganie Surowidjojo • Makarim & Taira S • Makes & Partners • Melli Darsa & Co

Finalists • Albar & Partners • Azmi & Associates • Kadir Andri & Partners • Shearn Delamore • Zul Rafique & partners

Eleanor Kathryn G. Rabuy, Anna Christina CollantesGarcia (Romulo Mabanta Buenaventura Sayoc & De Los Angeles)

Finalists • Accra Law • Quisumbing Torres • SyCip Salazar Hernandez & Gatmaitan

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THAILAND DEAL FIRM OF THE YEAR WINNER Baker & McKenzie Finalists • Chandler & Thong-Ek • Clifford Chance • Hunton & Williams • Siam Premier

• Baker & McKenzie • Frasers • Freshfields Bruckhaus Deringer • YKVN

INTERNATIONAL DEAL FIRM OF THE YEAR

WINNER Allen & Gledhill

WINNER Linklaters

VIETNAM DEAL FIRM OF THE YEAR

Andrew M. Lim (Allen & Gledhill LLP); Dean Lockhart (Linklaters Allen & Gledhill)

WINNER VILAF Hong-Duc Dean Lockhart (Linklaters Allen & Gledhill)

Hien Nguyen Truc (Vilaf - Hong Duc)

SINGAPORE DEAL FIRM OF THE YEAR

Finalists • Drew & Napier • Rajah & Tann • WongPartnership

Finalists • Baker & McKenzie • Clifford Chance • Latham & Watkins • Milbank, Tweed, Hadley & McCloy LLP • White & Case

Finalists • Allens Arthur Robinson

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event partner About BMW Group Asia Established in 1985, Singapore is the regional office for BMW Group Asia, which has market responsibility for all importers in the Asia-Pacific region, as well as the BMW Group subsidiary in Indonesia. It is home to BMW Group’s subsidiaries DesignworksUSA and BMW Financial Services, as well as the regional office for Rolls-Royce Motor Cars. The Singapore office is also the regional centre for key corporate functions from purchasing and

corporate audit to treasury centre and financial services. BMW Group presents three brands – BMW, MINI and Rolls-Royce Motor Cars. Contact details: Cindy Chia P: (65) 6838 9629 | F: (65) 6838 9611 E: Cindy.Chia@bmwasia.com W: http://www.bmwgroup.com

sponsors Assetton Assetton is an investment company that focuses on Real Returns from Real Assets. We offer Bordeaux's (France) Blue Chip Wines, Alberta's (Canada) Developable Land, and the Baron of Batik's (Singapore) Limited Works of Art, to complement existing forms of investments offered by banks and financial advisories. Assetton caters to investors from all walks of life – with the common goal of financial portfolio diversification and capital growth. Learn how you, too, can invest in these safe & timeless Real Assets, for the most consistent returns and your peace of mind. Contact details: Mohan Nainan Nainan P: (65) 6532 7781 | F: (65) 6532 7785 E: info@assetton.com W: www.assetton.com BRAUN BÜFFEL Established in 1887 by Johann Braun in Kirn, Germany, Braun Büffel has built its tradition and reputation over the last century as a designer and producer of top quality leather goods and accessories. Today, it is a premium brand known for exceptional workmanship, superior leather, classic elegance and contemporary appeal. Recognised globally, the brand is exclusively distributed and managed in Southeast-Asia and the Asia-Pacific by Lianbee-Jeco. In Singapore, Braun Büffel is available at their boutiques in Suntec City Mall and Singapore Changi Airport (Departure/Transit Lounge North) as well as their counters in leading department stores. Contact details: Valencia Teo, Promotions Manager P: (65) 6322 1686 | F: (65) 6225 4727 E: valteopl@Lianbeejeco.com W: www.braunbuffel-asiapac.com ChivaS 18 The Art of the Blender is to select many different whiskies at the correct ages to create

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a blended Scotch whisky that has its own unique flavour and taste. Colin Scott is the Master Blender of Chivas Regal. It is all about experience, a passion for whisky and of course a good nose to maintain the highest standards of Chivas Regal. Colin Scott’s gold signature on the bottle reflects his family tradition of whisky blending. Having grown up in a family with over 100 years of whisky tradition, Colin Scott has dedicated his life to making fine Scotch whisky and the Chivas 18 is his legacy. Contact details: Pernod Ricard Singapore Pte Ltd P: (65) 6235 5055 | F: (65) 68366725 E: persing@singnet.com.sg W: www.chivas.com DE DIETRICH From the initial forge acquired in 1684, to today’s internationally acclaimed brand, De Dietrich continues to bring you a comprehensive range of kitchen and home appliances. Known for its products quality & innovations, the new range of cooking, washing & cooling appliances combine aesthetical appeal and avant-garde features. Visit La Galerie De Dietrich today to see to believe! Contact details: Claudia Ko P: (65) 6508 4600 | F: (65) 6273 0422 E: claudia.ko@fagorbrandt.com W: www.dedietrich.com.sg GIBSON, DUNN & CRUTCHER LLP Gibson, Dunn & Crutcher LLP is an international law firm with litigation, corporate, real estate and tax expertise. We have 15 offices located throughout Asia, the United States, Europe and the Middle East, and are consistently ranked among the world’s top law firms in industry surveys and major publications. Contact details: Henry Huang, Office Administrator P: (65) 6507 3600 | F: (65) 6507 3650 E: inquiries@gibsondunn.com W: www.gibsondunn.com

IPP FINANCIAL ADVISERS IPP Financial Advisers Pte Ltd is Singapore’s largest independently owned financial advisory. Founded in 1983, it is also Singapore’s oldest and most established, with a reputation for impartial advice and high levels of ongoing service rather than just simple product implementation. All representatives are licensed by MAS and offer clients the full range of services from life insurance and medical cover, to savings plans and wealth management, right through to legacy planning and will writing. Based in Singapore, IPP also has licensed offices in Hong Kong and Malaysia. Contact details: Ian Pryor P: (65) 6309 1038 | F: (65) 6309 0127 E: eag@ippfa.com W: www.ippfa.com MERRILL LEGAL SOLUTIONS Merrill Legal Solutions (WordWave International Asia Limited) is a global litigation support company specialising in high quality verbatim court reporting, transcription and document management services for court proceedings, arbitrations and depositions. We can produce transcripts in real-time - using the award winning LiveNote® service - or on a daily or next day basis. We also offer document scanning and coding for case materials, courtroom consultancy, digital audio recording and transcription services and can arrange interpreters and videographers. We are the appointed contractor in the Supreme Court of Singapore. Contact details: Lilian Goh, General Manager P: (65) 6720 0103 | F: (65) 6720 0104 E: singapore@merrillcorp.com W: www.wordwave.com.sg | www.merrillcorp.com/mls

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The abc of AZB

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umbai-based AZB & Partners has come a long way since the merger which combined Ajay Bahl & Co and CZB & Partners to establish the firm. Today, the firm has almost doubled its numbers, with approximately 240 lawyers under managing partners Zia Mody, Ajay Bahl and Bahram N Vakil, and has climbed into the top spots in the Indian deal league tables with a share of the most prominent deals – including the Nomura-Lehman Brothers (Asia) Acquisition, which garnered the firm top honours in ALB’s Insolvency & Restructuring Deal of the Year and the India Deal Firm of the Year award. Earlier this year, the firm made worldwide headlines after announcing that it had set up a best friends relationship with Magic Circle firm Clifford Chance. “It’s a non-exclusive best friends association and we hope

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to improve best practices so that the client experience is much better,” says AZB partner, Abhijit Joshi. “The bottom line is to improve the quality of the service to the client – that’s the synergy which any service provider would want to bring.” As the latest statistics emerge on the growth of the Indian economy; the debate on liberalisation of the Indian legal sector has also heated up. Despite the global financial crisis impacting severely on other economies, India seems to be ploughing on – its economy is expected grow by 6.6% this year, according to local think-tank, Centre for Monitoring Indian Economy. In the 2010-11 year it is forecasted to grow again by 9%, which provides sufficient background for why the global legal industry has their eyes on the prize. Indian corporates are increasingly stepping up to the global marketplace and embarking on several notable

acquisitions – from the likes of Tata to Bharti Airtel. “Our economy is more buoyant than some of the others but we don’t expect the reality to change overnight,” Joshi says. “We have seen the volume of matters pick up but not dramatically, and in that sense, we are well geared to meet the upsurge in volumes when it does come.” Part of that plan to meet the growth is through selective recruiting. “We’ve never concentrated on numbers in that sense as quality is paramount,” Joshi says. “We’ve never undergone euphoric recruitment drives, we’ve always believed in steady, solid and quality recruitment and have followed this policy even during the downturn.”

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FEATURE | M&A >>

The following are excerpts from the Thomson Reuters/JP Morgan study(title above), June 2009. Introduction

M&A Vs ECM

In this research document we have examined the M&A cycle from a period starting from 1990 through to May 31 2009 to quantify the effects of globalization on M&A and the impact of macroeconomics. This timeline covers two very distinct cycles of M&A deal activity, taking a look at the telecoms bubble of 1999-2000 and the leverage bubble of 20052007. The report aims to reaffirm that high valuation bubbles are the precursor to a swift downturn and that rapid consolidation across non-cyclical sectors are on the whole prevalent during peak M&A.

The correlation between the equity markets and global M&A was evident across global and regional analysis. Global deal value has been tracking the volatility of the equity markets, lagging on average by one quarter. This assessment is true by both value and number of transactions and has tracked the equities market since 1990. While growth in the equity markets encourages M&A to grow at similar rate, a consequence of falling confidence in the equity markets is that M&A activity dries up.

Datastream world index (monthly avg.)

1,600

1,800

1,400

1,600 1,400

1,200 1,000

500

400

1,000 800 800 600

300

600 200

400

400

200

200

0

100

0 0

Source: Thomson Reuters

Source: T

Cross-border Cross-border M&A

The era of cross-border M&A heralded in part the opportunity to grow Global M&A ($bn) Cross border M&A ($bn) % of total outside the domestic market with protectionism against national interests 50% 4,500 4,500 diluted in a number of key markets. Cross-border activity is more prevalent 50% 4,000 45% 4,000 in upturns as shown in the below exhibit, accounting for over 35% market 45% 40% 40% share 3,500 of all global M&A in 1999 and then accounting for 45% of all M&A in 3,500 35% 2007. 35% 3,000 3,000

30% The total number of cross-border deals peaked in both the dot.com bubble 30% 2,500 2,500 and the leverage bubble, topping out at around 3,500 transactions in both 25% 2,000 time periods. 20% 1,500

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1,500 European targeted cross-border activity by number of deals grew almost on15% a1,000 yearly basis from 1990 until 2000 tailing away until the upturn in activity 10% from 500 2005-2007. Emerging markets (EM) cross-border activity grew from 5% almost non-existent levels in 1990 and followed the same pattern of growth 0% 0 until 2000. North American cross-border activity has remained conservative in comparison to Europe and the emerging markets with the number of Source: Thomson Reuters transactions flat until around 1994.

US acquirors have also recorded lower cross-border M&A which accounted Cross-border M&A by acquiror ultimate parent nation/region for a high of 34% in 2003 but has fallen every year since 2006 despite the (US$mm) US in value ($mm) at the time. Western EU value ($mm) EM value ($mm) accelerated growth M&A European cross-border M&A as a (%) 1,800,000 US % of total Western EU % of total EM % of total percentage of the total peaked in 1991 with activity accounting for 75% of 80% 1,600,000 all M&A but in recent times has moderated to around 55% of total cross70% border deal activity. Emerging markets acquiror cross-border activity has 1,400,000 recorded year-on-year growth since 2004 with a marginal decline in 2007 60% 1,200,000 but post 2007, activity in cross-border deals has outstripped the US for a 50% 1,000,000 year in a row. Cross-border activity in 2009 year-to-date now stands second 40% at 800,000 28% of total M&A, with Europe falling to around 40%, we may yet see emerging markets become the leading region for acquisition based M&A. 30% 600,000

However despite the percentage gains in cross-border activity as a total of 400,000 M&A, as the market for deals declines further then value of cross-border 200,000 also falls. The number of European cross-border deals by acquiror has 0

70

All privat Buyout & (000’s) V 600

1,200

1993

The dot.com bubble origins can be traced back to around 1995 when venture capital spawned numerous technology companies which followed the rapid expansion of the internet. When these companies were IPO’d the demand from investors resulted in unrealistic valuations based on flawed earnings projections. The emergence of private equity in 2005 and highly leveraged transactions as a result of cheap debt was also accompanied by speculators fuelling real estate and driving up commodity prices. The tiger economies of Asia and the demand for oil and steel further added to the inflated commodity prices and sub-prime lending in the consumer market added to the dislocation in the credit markets. So the two M&A cycles we have identified were borne from very distinct bubbles and rapid global growth.

Private

Global M&A ($bn)

1992

Speculators have played a significant role in two cycles identified in this report. They contributed to the over-valuation of technology and telecoms stocks in the “dot.com” era and piled into commodities and real estate during the bull market of 2007 which again led to over valuation above normal inflationary rises.

M&A value v. equity markets performance

1Q90 3Q90 1Q91 3Q91 1Q92 3Q92 1Q93 3Q93 1Q94 3Q94 1Q95 3Q95 1Q96 3Q96 1Q97 3Q97 1Q98 3Q98 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09

ÆÆ The correlation between the equity markets and M&A is self-evident. When the stock markets rally, it is inevitable that M&A activity increases in line with the pace of the equity markets ÆÆ Bubbles are nearly always prevalent during peak M&A. We have seen this in the Japanese banking crisis which saw inflated real estate valuations. The dot.com bubble of 1999 and more recently the leverage and real estate bubble in 2007 have all fuelled M&A directly and indirectly ÆÆ We should expect to see further M&A activity in sectors like healthcare and TMT which appear to consolidate during downturns ÆÆ During the dot.com cycle, M&A contracted for approximately 8 quarters before M&A rebounded. The credit crunch cycle is so far through 7 quarters of contraction which could see total M&A bottom out during the second quarter of 2009 ÆÆ Cross-border M&A trends track those of total M&A trends ÆÆ In M&A cross-border activity tends to outgrow or decline at a faster rate than the general trends ÆÆ M&A is confidence-driven rather than opportunity driven as demonstrated by the surge and decline in activity relative to the broader macroeconomic environment ÆÆ The percentage of crossborder M&A activity has been demonstrably high (above 20%) for the last two decades ÆÆ Emerging markets demonstrates growing maturity and currently outpaces the US market both in terms of target and acquiror cross-border activity

Winds of change

1991

Several important trends have emerged during the globalization of M&A:

The era of globalised M&A

1990

Summary observations

20% 10% 0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Asian Legal Business ISSUE 9.7


2

20

2

2

2

2

2

2

2

2

1

1

1

1

1

1

1

1

1

1

Source: Thomson Reuters

Source: Thomson Reuters

FEATURE | M&A >>

Cross-border M&A Global M&A ($bn)

Cross border M&A ($bn)

% of total

4,500 4,500

50% 50%

4,000 4,000

45% 45%

recorded the highest fall of 56% from the second quarter 2007 until the end 3,000 of May 2009 while the US fell by 49% and emerging markets by 37%. 3,000 US cross-border deal value fell by 54% during the same time period with 2,500 2,500 emerging markets falling 48% and Europe with a less severe fall of 21%.

Private equity fund raising

40% 40%

3,500 3,500

Despite the fact that the PE buyout market was adversely impacted immediately as a consequence post June 30 2007, buyouts dropped away as the credit markets contracted and financing became difficult and expensive, however 2007 and 2008 were effectively the two largest years in history for PE and buyout fundraising in terms of capital committed to funds. Given that investors in PE are aware that PE investment is a comparatively long term game the shock to PE investment activity did not impact fund investment returns with anything like the same ferocity or velocity. Due to the cumulative effect of the PE boom in subsequent years of the decade PE firms were still delivering market leading returns post credit crunch, the driving force behind them being able to attract unprecedented levels of fund raising.

35% 35% 30% 30% 25%

2,000

20%

Deals consideration and valuation 1,500

15%

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

M&A as a percentage of GDP gives an indication of the relative overheating 1,000 10% of the mergers and acquisitions market compared to the rest of the 500 economy. Over the past two cycles global M&A activity consistently outgrew5% the0World economy during two key growth periods (1999-2000) and (2005- 0% 2007). Equally, the level of announced M&A activity collapsed at a much Source: Reutersthe World Economy upon each subsequent downturn. fasterThomson pace than Looking back at the 1999-2000 peak, M&A as a percentage of GDP reached its upper limit after 7 yearsultimate of continuous growth and stagnated for 2 years at Cross-border M&A by acquiror parent nation/region 10% to finally collapse and return within 2 years to 4%. In contrast, between (US$mm) (%) US value ($mm) Western EU value ($mm) EM value ($mm) 2006 and 2007, whilst M&A was at an all time high level, the same ratio found80% 1,800,000 US % of total Western EU % of total EM % of total a new upper limit at 8% and followed the same 2 year high-plateau pattern 1,600,000 70% before suddenly collapsing with the credit crisis in 2008. 1,400,000

Based on the hypothesis that the M&A/GDP pattern could repeat itself global 1,200,000 as % of GDP could reach 3.6%, 3.7% & 4.5% in 2009, 2010 and 2011 activity respectively, mirroring the upturn of 2002, 2003 and 2004. When matched 1,000,000 with IMF GDP forecast for the same years this could mean that M&A activity 800,000 could return to slow growth as early as this year and next and eventually reach 600,000 US$2,622bn by 2011.

60%

400,000 The global squeeze on the money markets from mid 2007 through to 2009 year-to-date has had major repercussions for M&A. Correlating against 200,000 previous downturns on a global scale proved difficult but looking at a 0 regional1990 level and saw1995 similarities between the Japanese banking crisis 1991 1992 we 1993 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 and the global credit crunch.

20%

Global M&A ($bn)

40% 30%

10% 0%

These conditions now leave PE firms in an extraordinary situation whereby they have never had more ‘dry powder’ (unspent fund commitments) yet have barely ever had a more challenging environment in which to try to invest and realise investments with the virtual disappearance of the IPO market, sales to strategic buyers hampered by uncertain markets and low M&A activity and little access to cheap and easy leverage, the tenant on which the buyout business model has thrived. The bulk of PE fundraising in the years leading up to, and subsequent to, the credit crisis,

Global M&A as % of world GDP 12% Estimates Based on 12% Previous M&A Cycle & IMF Forecast 10% 10%

4,500 4,500 4,000 4,000 3,500 3,500

8% 8%

3,000 3,000 2,500 2,500

6% 6%

2,000 2,000

4% 4%

1,500 1,500 1,000 1,000

2% 2%

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

500 500

0% 0%

Source: Thomson Reuters

The Japanese banking crisis of the 1990’s was caused by an overvalued Japanese stock market, financial liberalization and deregulation. By 1997 M&A value v. equity marketsinstitutions performance failed and went into bankruptcy with the several large financial Global M&A ($bn) world index (monthly avg.) recapitalization and fiscal cost of repairing the bankingDatastream industry estimated 1,600 at about 12% of GDP. Financials accounted for about 70% of all Japanese 1,800 targeted M&A in 1999, at the height of the crisis. The parallels between the 1,600 1,400 Japanese crisis and the credit crunch which started in the summer of 2007 1,400 1,200quite stark. Liberalization of the financial market and the abundance are of credit inflated a debt bubble which unbalanced the global economy. 1,200 1,000 Coupled with low interest rates, low unemployment above inflation year- 1,000 800 on-year growth in real estate, record earnings in the oil & gas industry and 800 strong equity markets, pushed M&A to record levels during the second 600 600 quarter 2007. 400

Private equity fund raising All private equity fund raising ($bn) Buyout & Mezzanine ($bn) (000’s) Venture capital ($bn) 600

No. of PE funds No. of Buyout & Mezzanine funds No. of VC funds 2,500

500

2,000

400 1,500 300 1,000 200

400 500

100

2009¹

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

0 1992

0 1990

1Q90 3Q90 1Q91 3Q91 1Q92 3Q92 1Q93 3Q93 1Q94 3Q94 1Q95 3Q95 1Q96 3Q96 1Q97 3Q97 1Q98 3Q98 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09

The cyclical nature of certain sectors has also had a profound impact on 200 global M&A. TMT at its height in 1999 accounted for over 55% of total M&A 200 deal value while the last peak of M&A in 2007, TMT deal value comprised of0 0 just 16% of total M&A. Financial institutions have on the other hand peaked eitherThomson prior Reuters or post the height of M&A in 1999 and again 2007. Source:

1991

00

50%

is buyout fundraising. In the dot. com boom, however, which peaked in 2000, the same year that the highest number of new funds have ever been raised, the majority of new funds were VC, and not buyouts. This was likely due to the desire to capitalize and invest in dot.com start ups. PE has, for a number of years, been considered to be a driver of M&A activity and this seems to be true in a negative as well as a positive sense as it is clear that PE fundraising strategy manifestly reflects the mistakes and does not predict or escape from the downturns in the market, but rather demonstrates clearly an over exuberance in the boom market rather than any prophetic insight prior to the subsequent busts. What is clear is that if anything like favourable conditions return to the credit markets there is all likelihood that PE activity will return as quickly as it disappeared as PE firms are finally able to spend the huge amounts of money for which they have commitments, and once again contribute something akin to the 20-25% of total M&A volume as per the years preceding the credit crisis. If they can take advantage of depressed exit multiples in the meantime and acquire assets at favourable values they may be able to offset somewhat the lack of leverage available which previously allowed for such successful returns.

Source: Thomson Reuters

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www.legalbusinessonline.com Cross-border M&A

Global M&A ($bn)

Cross border M&A ($bn)

% of total


feature | Shanghai In-house Legal Summit >>

ALB In-house Legal Summit: Shanghai 09 On 14 May, close to 200 of China’s highest profile in-house lawyers and executives went to the Hilton Hotel Shanghai to discuss the issues they face as China’s legal sectors move into top gear despite the GFC

A

s many corporate counsel will tell you, it is an odd time to be an in-house lawyer. There are the issues of shrinking teams, slashed legal budget, everincreasing workloads, closer attention to detail and more and more companies looking to their in-house lawyers to play lead counsel on multi-milliondollar corporate transactions. A classic dichotomy discussed at length in both the workshop presentations and the inhouse panel discussion at the ALB Inhouse Legal Summit: Shanghai 2009. Effectively managing relations with external legal counsel, cost and quality control were the main themes of the in-house panel discussion, which was chaired by Sharon Chen, VP and regional counsel for AIG General Insurance China, and comprised of David Du, a senior legal counsel for Bosch (China) Investments; Janet Lin, the China head of legal for DBS Bank; and Arrow Electronic’s Asia-Pacific legal director Margaret Ng. All panelists noted that while the task ahead for in-house legal teams remains a tough one, it is nonetheless achievable provided companies in China professionalise the

way they select external counsel and monitor their performance. The importance of operational efficiency was also a theme that figured heavily in the keynote address, which was delivered by Le Yinglei, director of legal at China Telecom’s Shanghai branch. She offered her perspective on the stresses and strains on in-house teams in Chinese SOEs, pointing out that while they may be subject to a differing set of demands and expectations, they too face the prospect of shrinking teams and having to handle more work internally. There was also a series of workshops, which contained information on trends, the market, and legal practice and procedure, as well as topical case studies such as Chinalco’s investment in Rio Tinto. Delegates were treated to in-depth workshops on topics such as how to make sure your company and its investments are FCPA compliant, the ins and outs of commercial arbitration, the opportunities and challenges in M&A in Europe, as well as ensuring that the complex tax issues that arise in crossborder transactions and private equity investments are all above board.

►► ALB In-house Summit: Beijing

Be sure to join us at the ALB In-house Summit: Beijing on 19 November 2009. For more information contact: Dara Yam, Tel: +852 2815 5988, Email: dara@kmimail.com Sponsorship and partnership enquiries: Joel Ulbricht, Tel: +852 2815 5988, Email: joel@kmimail.com

ALB In-house LEGAL summit: shanghai 2009 workshops How to avoid litigation: Tips on reviewing commercial contracts This workshop was split into three sections. In part one, delegates were given an overview of all phases of acquisitions and how to identify key issues, this presentation discussed practical issues to be considered to ensure successful acquisitions in China by foreign companies based on the speaker’s recent years’ handful of experiences in advising multinational clients. In part two, tax was established as a critical part of the M&A process, which if managed properly will help to ensure a successful deal. This presentation provided valuable insights on tax strategy throughout the entire M&A spectrum under China’s legal regime to maximize tax benefit in M&A. PE

deals are becoming more and more complex in China and in part three the presentation visited some of the latest trends and developments in the sector and provided a thorough comparison on various deal structures and their pros and cons. Speakers: Audry Li, partner; Zhou Yun, partner; Jeremy Dai, partner Audry Li

Zhou Yun

Guy Facey

Adam Duthie

Jeremy Dai

Product liability litigation and China’s new anti-monopoly laws This workshop looked in detail at the investment opportunities for Chinese companies throughout the US & UK. Topics talked about included making the most of low asset values and the depreciated sterling, overseas acquisitions by private Chinese companies and issues for the buyer a brief overview on buying from administrators/receivers in a bankruptcy situation. Delegates were stepped through a case study involving luxury brand

72

acquisition by Chinese companies that touched on these issues and more. Speakers: Guy Facey, partner; Adam Duthie, partner

Asian Legal Business ISSUE 9.7


feature | Shanghai In-house Legal Summit >>

Implementing an effective FCPA compliance program for FIEs in China In view of the rising number of prosecutions and actions against US companies for violation of FCPA, foreign subsidiaries of US companies should be more proactive in their FCPA compliance. This presentation included an overview of FCPA, its implication on the FIEs in China, PRC anti-bribery laws and regulations relevant to FCPA compliance, recent case studies, especially recent China-related cases, its implication on M&A activities and joint venture projects, as well as formulation and implementation of an effective FCPA compliance

program for FIEs in China, for example, arrangement of training programs, formulation of standard business conduct and internal reporting procedures. Speakers: Philips Zhenyu Ding, partner; Charles Fei Liang, executive partner; Kathy Lijun Yang, partner

Philips Zhenyu Ding

Charles Fei Liang

Philip Jeyaretnam SC

Lek Siang Pheng

Rupert Li

Kelly Gregory

Kathy Lijun Yang

Managing and rescue of troubled investments – the use and abuse of arbitration This workshop was broken up into three sections. Section one dealt with providing for trouble in your agreement: making the right choice in drafting. The second segment dealt with Navigating amid the perils and pitfalls of a typical investment dispute. Finally, delegates looked closely at a number of pertinent case studies which was followed by a discussion of the themes and issues discussed during the workshop.

Speakers: Philip Jeyaretnam, partner; Lek Siang Pheng, partner

Product liability litigation and China’s new anti-monopoly laws Ensuring a successful cross-border investment requires a deeper understanding of the economic and geopolitical forces at work than ever before. Drawing on their experience in complex China outbound transactions such as Chinalco’s investment in Rio Tinto, and on successful inbound acquisitions and joint ventures such as Airbus’ Tianjin aircraft assembly plant, these presenters explained the considerations and preparations required in order to ensure approvals, financing and the

successful completion of sizeable deals of these types. Speakers: Rupert Li, partner; Kelly Gregory, counsel; Jiajia Gao, lawyer

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STEP ASiA ConFErEnCE 20–21 oCTobEr 2009 FAirmonT SingAPorE SingAPorE

Trusts Across the Frontiers Programme highlights: ■ The use of trusts to protect assets in the current

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global environment ■ Regional jurisdictional trust updates – a dialogue between a draftsperson and trustees ■ Trusts – compliance versus confidentiality ■ Legal Reciprocity (Comity) issues across the frontiers as they affect trusts ■ Case study in respect of the use of trusts – trustees as shareholders in a family business

■ Panel session on the contribution that the

Offshore Financial Centres make to higher tax jurisdictions ■ Purpose Trusts, STAR Trusts and VISTA Trusts – how can they be best used? ■ Succession law case study using trusts

Delegate fee:

STEP Member GBP750

S$1,800

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Conference language: English Accredited for 12 hours CPD Law Society of England & Wales

Conference Partners: Gold

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For further information contact Laura Callicott on +44 (0) 1423 851157 or email laura.callicott@barkerbrooks.co.uk

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feature | serviced apartments >>

Top quality service Serviced apartments are a low-cost option during the downturn, without compromising on quality

T

he economic downturn may have had a negative impact on the travel industry, but for consumers, the benefits of increased competition means that savings and perks are increasingly evident. The serviced apartment industry is one sector that is now doing better than its luxury counterpart. Travellers looking for an inexpensive option, without the compromise on quality, have increasingly moved towards serviced apartments as an alternative. According to Colliers International, the serviced apartments have proved more resilient than the luxury residential market. According to a Colliers report, the luxury residential market expects to witness a 12% decline in rentals over the next 12 months and finds that price differences between luxury and serviced apartments have also expanded. Last year, the difference in price was HK$5.20,

74

but as of April 2009, the difference expanded to almost HK$10, which according to Colliers, “suggests that rentals in the serviced apartment sector have been holding up relatively well”. But even without the downturn, serviced apartments offer savings of almost 30% compared to regular hotel accommodation. This lower price coupled

with the standard benefits of more space, privacy and comfort, have seen more consumers considering the option as a home away from home. “An apartment is a bit more like normal home life. This leads to a happier worker, greater work productivity and fewer HR issues,” says Charles McCrow, managing director of The Apartment Service. Serviced apartments are also increasingly popular with expats. According to Manpower’s recent report on corporate relocation, China, Singapore and Tokyo all feature prominently in the list of most preferred destinations for corporate assignments and as more people live and work abroad, serviced apartments are now in demand in today’s modern working environment. Expats desiring a quick settling in process have come to realise that a comfortable, secure home is the foundation for productive work.

Asian Legal Business ISSUE 9.7


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REGIONAL M&A COUNSEL – HONG KONG

US law firm seeks junior energy lawyer to join its growing and

Our client is a leading global institution with a household name.

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They now require a senior lawyer with a strong background in

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www.law-alliance.com Visit our website to see the latest in-house and private practice vacancies worldwide.


CORPORATE FINANCE LAWYER Hong Kong 10+ PQE Well known financial institution is looking for a senior corporate finance lawyer who is well-versed with Hong Kong’s regulatory system. You should have a confident, hands-on approach and you must be able to speak Cantonese. Competitive salary on offer. (ALB 4114) INSURANCE Hong Kong 10+ PQE Premier global insurance group now seeks a senior lawyer to head the group’s legal team. You will have a strong financial services background combined with some in-house insurance experience. Attractive salary on offer. (ALB 4164) COMPLIANCE Hong Kong 10+ PQE Reputable financial service provider seeks senior compliance professional to support their rapidly expanding wealth management businesses. Solid knowledge of related rules and regulations required together with excellent business acumen and people skills. (ALB 3985) ASSOCIATE GENERAL COUNSEL Singapore 6-8 PQE A vibrant industry leader seeks a senior lawyer to join its expanding team. The candidate will be handling general corporate, general litigation and intellectual property matters for the group. (ALB 4140) SENIOR EMPLOYMENT COUNSEL Hong Kong 6+ PQE This well known multinational has over 20,000 employees covering Asia Pac. As the company continues to grow it has created a new role for a senior employment counsel to handle all the company’s employment issues. No language skills necessary. (ALB 4169)

COMMERCIAL LITIGATION Hong Kong Partner Top tier firm with solid litigation practice is looking for an ambitious Partner to join its team. This firm prides itself as being one of the most profitable yet collegiate partnerships in the region. The ideal candidate will have some following in the litigation/arbitration practice. (ALB 4171) SENIOR FINANCE LAWYER Hong Kong 6-8 PQE Top tier law firm seeks a senior finance lawyer with experience in either debt capital markets, structured finance, project finance and/or leveraged finance. Candidate should have top academics and HK or common law admission. Wide range of high quality finance work on offer. (ALB 4170) INSOLVENCY Hong Kong 5-8 PQE This top-tier firm is searching for lawyers with strong insolvency and restructuring experience to join its busy practice. This is an excellent opportunity to work for leading lawyers in this field. Work will cover both contentious and non-contentious work. (ALB 4162) COMMERCIAL LITIGATION Hong Kong 3-8 PQE International law firm is expanding its thriving commercial litigation practice and seeks a mid to senior level lawyer to handle a mix of commercial litigation and arbitration work. Candidates need to be Hong Kong admitted. No language skills required. (ALB 4126)

These are a small selection of our current vacancies. If you require further details or wish to have a confidential discussion about your career, market trends, or salary information then please contact one of our consultants: Denvy Lo, Nick Marett, Nisha Chugh, Lucy Li, or Andrew Skinner.

INSOLVENCY/ BANKING Hong Kong 1-5 PQE Our client is looking for a junior associate with experience in banking and/or insolvency matters. Experience acting for either debtors and creditors will suffice. Work will be broad in nature covering both mainstream banking as well as non-contentious insolvency matters. (ALB 4120)

Hong Kong

Singapore

Beijing

3305, 33/F, The Centrium, 60 Wyndham Street, Central, Hong Kong Phone: (852) 2973 0810 Evening/Weekends: (852) 9383 1819 Email: als@alsrecruit.com

20 Cecil Street, #20-03 Equity Plaza, 049705 Singapore Phone: (65) 6557 4163 Email: singapore@alsrecruit.com

Suite 85, L24, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang District, Beijing 100025, China Phone: (86) 10 8588 0040 Email: als@alsrecruit.com


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

We measure the market.

In-house

Private Practice

Private Client Relationship Manager Hong Kong Seeking a bright

Legal Counsel (5-7 yrs pqe) Beijing A US company seeks a sole legal counsel to be based in Beijing covering its businesses in China. The qualified candidate should have 5-7 years solid general corporate/commercial experience to provide legal advice to senior management. Good interpersonal and communication skills are essential. Willing to work proactively and independently with minimum supervision. LLB or LLM from reputable Chinese law school or overseas university is desired. PRC qualification is a must. Ref: 8183/AB

individual with tax/trust/private client management experience to manage client relationships within this trust leader. The company has international presence and needs someone to take up a front line position acting for the business. The incumbent will be entrepreneurial, eager and commercially savvy. A background in tax or trusts is ideal, and international structuring experience is also a benefit. While Chinese is not required, it will be a plus. Ref: 8182/AB

General Counsel (10-15 yrs pqe) Shanghai Serve as in-house General

Counsel for this integrated financial powerhouse. Covering all aspects of corporate and retail financial services, the role manages greater China and requires a China qualified lawyer with extensive PRC experience. Previous experience dealing with CBRC and PBOC is highly preferred. Financial services, banking, regulatory and/or a structured/corporate finance background is ideal. Must have proven ability to work in a bi-cultural environment, and candidates with a US law degree and international exposure will be favored. Required: demonstrated leadership skills and an outgoing personality. Ref: 8176/AB

Legal & Compliance Manager (5-10 yrs exp) Hong Kong Provide

compliance coverage for equity/fixed income sales and trading activities in the APac region for an eminent financial institution. Candidates need strong analytical skills to provide solid business advice. Must be detailed oriented, proactive and a good team player. Excellent English is required, but Chinese is not necessary. Ref: 8174/AB

Derivatives Lawyer (4-6 yrs pqe) Hong Kong This preeminent financial advisor is seeking an experienced and enthusiastic lawyer to work with the structuring desk in the Hong Kong office. The role will cover a mixture of equity and OTC derivatives matters. Our client desires a strong background in any of the following types of derivatives: equity, foreign exchange or interest rates. Chinese is not a requirement, but Mandarin skills will be a benefit. Ref: 8165/AB Private Equity (5-12 yrs pqe) Hong Kong & Singapore Unique opportunity for lawyers who seek to be closer to the business. Fast growing PE fund with a global brand name is looking for two senior lawyers to focus on deal execution in Greater China and SE Asia. Commercially oriented attorneys with solid training within a top international firm, investment bank or hedge or private equity fund and a strong deal list in relevant countries are sought. Native level English is required, and Mandarin is a strong asset for covering Greater China. The roles carry responsibility for heading the legal functions in the respective jurisdictions and offer competitive remuneration. Ref: 8213/8214/AB

Corporate Associate (3-6 yrs pqe) Hong Kong Focus on real estate matters for this international law firm with expertise in developing markets. Applicants need Hong Kong or China qualification, and an overseas LLM is preferred. The role will also involve M&A deals, so those with M&A/PE experience will also be considered. Must have fluent English along with native level Mandarin or Cantonese. Ref: 8181/AB Corporate Associate (4-6 yrs pqe) Hong Kong Recruiting lawyers to join an international firm. Hong Kong and/or China qualifications will be given priority, but all jurisdictions will be considered. Must have IPO/MA/PE experience along with general corporate knowledge. English fluency is needed along with native Mandarin or Cantonese. Ref: 8173/AB

Litigator (2-5 yrs pqe) Hong Kong This leading international law firm

seeks a qualified litigator with at least 2 years experience to join the team based in Hong Kong. In this role, you will primarily handle a variety of commercial litigation, contentious and banking work. Must have excellent training earned from a highly regarded litigation practice. Chinese language skills and HK qualification are preferred but not essential. Ref: 8206/AB

Patent Attorney Beijing/Shanghai/Hong Kong Highly regarded global law firm currently requires an experienced IP/patent lawyer, ideally, with an electrical engineering background. The ideal candidate will have stellar academics with solid international firm experience. Fluent Chinese and English language skills are essential. Ref: 8187/AB

IP Litigation Lawyer (5 yrs pqe) Beijing/Shanghai/Hong Kong Our client, a leading US law firm with a strong presence in Asia, seeks a China qualified IP lawyer who is familiar with litigation. The firm is building up its IP practice, and the incumbent could be located in either Beijing, Shanghai or Hong Kong. Chinese proficiency is a must. Ref: 8186/AB

HONG KONG Tel: (852) 2520 1168 Fax: (852) 2865 0925 Email: hughes@hughes-castell.com.hk SINGAPORE Tel: (65) 6220 2722 Fax: (65) 6220 7112 Email: hughes@hughes-castell.com.sg

www.hughescastell.com


ALB China is the leading magazine dedicated to the legal industry in China. Each issue is packed with news, analysis and features that are essential reading for anyone interested in the PRC’s rapidly developing legal scene. A team of dedicated journalists provide in-depth examinations of all the China issues facing lawyers and in-house counsel throughout the region.

SubSCRIbE noW and In YouR FIRSt CopY: China 20

Uncover China’s largest 20 firms – ALB China ranks the biggest firms in the country. Find out who leads the play among both domestic and international firms.

China’s Ipo Recovery

China’s A-share IPOs have resumed after an eightmonth suspension and overhaul of regulations. ALB China looks at the pipeline of deals and gets insight into the new IPO system from leading capital markets lawyers.

Game on: Legal services for the online game industry

As one of the sectors less affected by the GFC, China’s online game industry has seen a growing number of transaction being completed in recent months. With over 200 million young people, the world’s most promising market for online games also presents huge market potential for TMT, IP, and corporate legal services providers.

partner exodus to China

International firms have been relocating their partners from New York and London to Asia since earlier this year. ALB China finds out what are the motivations behind these moves and which areas of practice they feel have the most prospects of growth in the coming years.

Every issue of ALB China is packed with essential reading for anyone interested in one of the fastest growing and most important legal markets in the world. • • • • •

ALB China Watchlist – 10 firms to keep your eye on for 2010 In-house 10 – The top corporate lawyers in the country speak out Hot 25 – Legal movers and shakers who have made headlines in the industry this year ALB China Fast 10 – the fastest growing firms in China ALB Special Reports series – Beijing, Shanghai, Guangzhou, Tianjin, Shenzhen, Hong Kong, YRD, West China, Northeast China and Central China – unique insight into provincial powerhouses

“A quality publication providing informed, professional information about the legal services sector.”

Dr Liu Wei, Office Managing Partner, Beijing DLa PiPer

“With its in-depth insights, ALB China adds dimensions to China’s legal industry. This is a big plus for both our lawyers and clients.” DOng Shuguang, Partner cOMMerce & finance LaW OfficeS

“Provides us with invaluable access to information on issues affecting law firms in the region.” MichaeL gagie, PreSiDent Partner, hOng KOng harneyS

“Essential reading for those who want to keep abreast of legal developments in China.” DaviD BLuMentaL, Managing Partner, Shanghai vinSOn & eLKinS

Yes – start my 12-month subscription to ALB China and rush me the next issue as soon as it is available. Fill out the form below and fax to Michelle Chau at 852 2815 5225

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For further information, please contact Michelle Chau at 852 2815 5988 or michelle@kmimail.com


Sign off >> HK businesses lag behind global average in green thumb survey

B

usinesses that persist with their green agenda during a downturn will be “best placed to seize competitive advantage when the upturn comes”, according to Gary James, a tax partner at Grant Thornton Hong Kong. His comments come in the wake of a Grant Thornton International Business Report, which asked 7,200 senior executives in privately held businesses across 36 economies to rate the environmental friendliness of their business community. It found that 27% of respondents in Hong Kong consider their community environmentally friendly, followed by Shanghai (24%) and Taiwan (10%) – all below the global average of 30%. “Amid rising public concern with the environment, businesses are keeping a closer watch on green practices and environmental issues,” James said. “It is fascinating to see Hong Kong and

Shanghai… showing a good perception of environmental friendliness.” In comparison, fellow Asian countries including the Philippines (78%), India (69%) and Thailand (68%) topped the league table, with Singapore (58%), Japan (51%), Australia (45%) and New Zealand (34%) all in the top 20. ALB

Age is nothing but a number

Whatever floats your goat

U

A

K firm Bird & Bird recently welcomed former trainee Mary Smillie into the firm’s IP practice after she qualified six months ahead of schedule. The firm will be retaining all 16 trainees due to qualify in September this year, but Smillie managed to complete her training contract in March after work experience was taken into account – a feat made all the more amazing by the fact that, at 50 years old, she is one of London’s oldest trainees. ALB

You’re hired!

H

erbert Smith litigation partner Alan Watts recently made his first television appearance, interviewing candidates on UK reality show The Apprentice, starring Amstrad founder Sir Alan Sugar. Watts scored the live interviewer role through Sir Alan himself, who has been a client of Watts for the past 16 years. ALB

80

Cash call at Dentons

►► percentage of companies who think business community is eco-friendly

51%

Japan

54%

Germany

0

51%

Sweden

10

Finland

20

Denmark

30

Philippines

40

Canada

58%

56%

Singapore

50

62%

68%

65%

Thailand

78%

60

69%

70

India

80

s if his speciality, probate law, wasn’t diverting enough, lawyer Dr John de Groot has taken it upon himself to raise funds for a goat racing museum in Barcaldine, Queensland. Disturbingly, the museum will be the first of its kind in the world to celebrate the wonders of this often under-rated sport. Goat racing was popular in the depression and – watch out the NRL – is making a comeback in parts of Australia, according to de Groot. Quite whether the sport’s resurgence is GFC-linked is at this stage unclear. Nevertheless, the driven de Groot, having already penned a book on the subject, is pushing ahead with an attempt to raise the A$300,000 funding needed to establish the goat-racing museum which, he hopes, will celebrate the faster-moving episodes in the noble history of ‘the working man’s cow’. De Groot’s admirable motivation to establish a shrine – complete with a ‘Goat Racing Hall of Fame’ – to this long-overlooked yet essential facet of Australia’s rich cultural and sporting heritage may be explained by reports

L

ondon-headquartered Denton Wilde Sapte has reportedly asked partners to pitch in to keep the firm afloat in these tough financial times. The firm, which recently unveiled a 36% fall in partner profits, requested its partners put around £90,000 of capital back into the business to bolster the firm’s finances during the downturn. The request – which equates to £1,000 per equity point – was approved after a partnership vote at a recent conference and follows a round of redundancies this year which saw the loss of 76 jobs, including 37 fee-earners in March. The firm recently also asked for volunteers to defer their training contracts with the offer of £10,000 compensation. ALB

that as a child he could often be seen speeding recklessly through the streets on his champion racing goat, Thunder. ALB Asian Legal Business ISSUE 9.7



Asian Legal Business (Northern Asia) Jul 2009