Asian Legal Business Oct 2008

ISSUE 8.10

Asia’s maritime legal services boom Lawyers’ ships continue to come in

Islamic finance Sharia compliance brings golden opportunities

Information technology Innovation gives firms a leading edge

The move to the Middle East Lawyers seek the good life

FORTRESS ASIA IP protection takes hold

LATERAL MOVES DEALS ROUNDUP REGION-WIDE PERSPECTIVES UK, US REPORTS SIGN OFF

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EDITORIAL >>

Leading clients in new directions

I

t seemed like only yesterday that the standard model of law firm expansion read like a game of chase: law firms in Asia – perhaps preferring to err on the side of caution – stuck to the tried and tested, only branching out into new areas of practice or new jurisdictions if led in that direction by their clients.

Hence, a law firm’s expansion plans were very much a function of its clients’ search for alternative avenues of profit.

This practice seems to have fallen by the wayside of late, replaced by what some say is a far more risky practice: lawyers taking the lead in identifying new opportunities for their clients.

What lies beneath this change? Is it adequate to suggest that lawyers have shrugged off the ‘risk averse’ stereotype and are now more predisposed to broadening their horizons? Or is it that clients are simply becoming more conservative as the effects of the global liquidity crisis start to take hold?

Both of these factors have been behind not just the transformation of lawyers from ‘followers’ to ‘leaders’, but a profound shift in the client-lawyer relationship.

In this issue of ALB, we look at the pace with which this change is occurring, and why, if not mastered by the region’s lawyers, it could precipitate Heller Ehrmantype consequences.

Firms must adapt to the changing demands and expectations of their clients.

So much is evident in our profile of the shipping law market in Asia (page 54).

For years, shipping lawyers in the region would simply follow their clients as they set sail into new opportunities. However, sinking economic conditions have profoundly reshaped this practice. As Dato’ Jude Benny of JTJB points out, “These days it’s not just about law … but being part of the business process.”

Our cover story, which catalogues the leading IP firms in Asia (page 38), serves as yet another example of growing client expectations. Businesses are no longer content for their IP lawyers merely to provide legal advice. They expect leadership in pushing their operations, products, inventions and innovations into new areas. Our analysis of the burgeoning opportunities in the area of sports law in the subcontinent (page 12) provides another pertinent example. Lawyers are increasingly expected to look at the bigger picture for their clients and ensure that their opportunities are maximised even after retirement.

We should remember that the change in the client-lawyer relationship started long before the likes of WaMu, Lehman Brothers, and Freddie and Fannie and will continue long after investor confidence has returned and stocks are soaring.

Businesses are no longer content for their IP lawyers merely to provide legal advice. They expect leadership in pushing [them] into new areas

2

IN THE FIRST PERSON “After the 1997 financial crisis

the reaction was to stockpile cash. Now people are looking for investment opportunities” Pil-Kook Lee, Kim & Chang, on Korean outbound investment (p16)

“It’s all coming out of this region; it’s a place to rival New York and London… Dubai is where the M&A is happening” Andrew Abernethy, Norton Rose, on opportunities in the UAE (p62)

“The government of Singapore has been pushing for some years to make Singapore a maritime hub. This has led many ship owners to move their business to Singapore” Bazul Ashhab, TS Oon & Bazul, on the boom in the shipping industry (p54)

ALB ASIAN LEGAL BUSINESS

Asian Legal Business ISSUE 8.10

NEWS | deals>> >> CONTENTS

contents

ALB ISSUE 8.10 54

66

38 60

COVER STORY 38 Asia’s top IP firms Once considered ‘soft,’ IP regimes throughout Asia are now amongst the most complex and sophisticated in the world. Find out who’s leading the pack in each jurisdiction

REGULARS

ANALYSIS 12

Sports law in India: The next big thing?

What was once considered a ‘niche’ practice area for Indian law firms is very rapidly evolving into a major area of law

14

The new HKMEX ALB reports on the newest futures exchange that intends to bridge international commodities markets and China

FEATURES 54 Shipping While lawyers in other sectors are preparing for a slow-down, shipping practices are booming 60 Law firms & technology ‘The medium is the message’ is becoming increasingly relevant to law firms as technology converges knowledge, communication, and information storage and retrieval 62 International relocation: Middle East ALB discovers what practitioners can expect if they make the desert dash 66 Islamic finance These days, a law firm with a finance team that can structure and execute Sharia-compliant deals is bound to stay ahead

4

6 • • • • • • • •

NEWS Thomas Man joins Lovells Who’s acting for who in the English Premier League?

Infrastructure deals to thrive in India CC advises on watershed nuclear JV Coca-Cola & Huiyuan Juice merger – Skadden, Freshfields provide the fizz Jones Day confirms Singapore interest Latham & Watkins and A&O in Middle East hiring spree The acquisitive KhattarWong at it again

80 Sign off

32 REGIONAL UPDATES • China PAUL WEISS • Philippines SYCIP SALAZAR HERNANDEZ & GATMAITAN • Malaysia TAY & PARTNERS • Singapore LOO & PARTNERS • India SINGH & ASSOCIATES

PROFILES 11

Blancpain

36 Azure Tax

COLUMNS

68 Mori Hamada & Matsumoto

24 UK report 26 US report 18 International tax AZURE TAX 20 IP ALBAN TAY MAHTANI & DE SILVA 27 International arbitration DREW & NAPIER

ALB ASIAN LEGAL BUSINESS

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 8.10

NEWS | deals >>

► ARC – SHAANXI EDUCATION EQUITY ACQUISITION

deals in brief

US$71m Firm: Tian Yuan Law Firm Client: Arc Education Firm: Guantao Law Firm Client: Shaanxi Education Lead lawyers: Cui Liguo, Hong Yuhao • ARC Education Investment Management acquired 45% equity interests of Shaanxi Da De Education Development, which holds direct interests in Xi’an International University and Xinhua Institute of Chang’an University, two private education institutions in China. Sixty per cent of the consideration has been paid at the first closing • Guantao Law Firm, as the legal counsel for Shaanxi Da De, was responsible for the legal due diligence and advice on the financing structure and documentation

| CHINA | ► CHINA SOUTH LOCOMOTIVE IPO US$1.5bn Firm: Grandall Legal Group (Beijing) Client: China South Locomotive Lead lawyers: Wang Weidong and Shen Tianfeng

US$2.4bn Firm: Skadden Client: Coca-Cola Lead lawyers: Martha McGarry, Greg Miao, Nick Norris

Wang Weidong, Grandall

Firm: Baker & McKenzie Client: China South Locomotive Firm: Jiayuan Client: A-share underwriters – CICC and Industrial Securities Firm: Herbert Smith Client: H-share underwriters – CICC and Macquarie Bank • China South Locomotive & Rolling Stock Corp, the largest train maker in China, has raised US$1.5bn through its A-share and H-share IPO • Its H-share IPO is the third largest in Hong Kong so far this year, after CRCC and Want Want • The offering has drawn interest from investors looking to tap into rapid development of China's railway network, which is driving demand for new rail vehicles as well as vehicle upgrade and refurbishment services

6

► COCA-COLA – CHINA HUIYUAN JUICE BID

Firm: Freshfields Bruckhaus Deringer Client: China Huiyuan Juice • The bid is the largest foreign acquisition of a Chinese company and is the most significant since the country's anti-monopoly law took effect in August 2008 • The deal is subject to regulatory approval, but on successful completion the new entity will control 37% of the nation's juice market • It is expected that Chinese demand for concentrated juices will increase with income rises and better lifestyles, hence the move by Coca-Cola to move beyond carbonated drinks • The two firms re-instate their client relationships; Freshfields has previously advised China Huiyuan on its IPO in Feb 2007, while Coca-Cola has engaged Skadden for a variety of work, including its US$1.75bn sale of bonds and the acquisition of VitaminWater brand for US$4.1bn

► OLD MUTUAL – ABN AMRO TEDA FUND MANAGEMENT ACQUISITION US$245m Firm: Baker & McKenzie, King & Wood Client: Fortis Bank S.A./N.V

► ELECTRICITÉ DE FRANCE – CHINA GUANGDONG NUCLEAR POWER COMPANY JV Firm: Clifford Chance Client: Electricité de France Lead lawyers: Peiji Gao, Bruce Schulberg, Geraint Hughes

Firm: Herbert Smith Client: Old Mutual Lead lawyers: Gary Lock, Su Hao, Karen Ip

Firm: Grandall Legal Group (Shenzhen) Client: China Guangdong Nuclear Power Company Lead lawyer: Eric Wu

• Old Mutual plc acquired a 49% interest in ABN AMRO TEDA Fund Management Co, a major sino-foreign joint venture asset management company in China, from Fortis Bank/ ABN AMRO

• French energy company Electricité de France agreed to a joint venture with China Guangdong Nuclear Power Company to construct, operate and maintain two thirdgeneration reactors in the city of Taishan

• Recently acquired by Fortis, ABN AMRO Asset Management (Asia) Limited has held a 49% interest in AATEDA since 2003. The other 51% is owned by a Chinese company controlled by TEDA

• EDF will control about 30% of the French-Chinese nuclear partnership for 50 years • This project is one of the largest JV investments in China to date

"We’re pleased to have been involved in this important acquisition for Old Mutual. The successful conclusion of the negotiations of the deal structure and transaction documents further demonstrates our ability in advising on complex regulatory and compliance issues in cross-border M&A transactions“ GARY LOCK, HERBERT SMITH Asian Legal Business ISSUE 8.10

NEWS | deals >>

► CHINA UNICOM – CHINA NETCOM MERGER US$5.6bn Firm: Freshfields Client: China Unicom Lead lawyer: Teresa Ko Firm: Shearman & Sterling Client: China Netcom Lead lawyer: Lee Edwards • Proposed merger would see each share of Netcom exchanged for 1.508 shares of Unicom, and each American Depository Share of Netcom exchanged for 3.016 American Depository Shares of Unicom • Transaction would close by end of 2008 and would be subject to customary closing conditions, including the approval of shareholders of both Netcom and Unicom and receipt of required regulatory approvals

► YOUR MONTH AT GLANCE Firm

Jurisdiction

Deal name

Value($USm)

Deal type

Allen & Gledhill

Singapore

Singapore Telecommunications – Singapore Computer Systems acquisition

166

M&A

Singapore

United Overseas Bank share offer

Undisc

Banking/ finance

Singapore/Hong Kong

OCBC Capital share offer

Undisc

Finance

Allen & Overy

Singapore

Lion Power Holdings – Senoko Power bid

Undisc

M&A

Ali Budiardjo, Nugroho, Reksodiputro

Singapore/Malaysia

Qualitas Medical Group IPO

n/a

Finance

Amarchand Mangaldas

India/USA

Vornado – Reliance Industries JV

500

Infrastructure/ banking

Baker & McKenzie

China

Old Mutual plc – ABN AMRO TEDA Fund Management Co acquisition

245

Finance

China

China South Locomotive IPO

1500

Finance

Hong Kong

Star Cruises – Travellers International Hotel Group acquisition

335

Equity market, finance

China, France

Electricité de France – China Guangdong Nuclear Power Company JV

Undisc

Energy & resources

Clifford Chance

Chiu & Partners

China

Trump Dragon Distillers IPO

Undisc

Finance

• Merger between Unicom and Netcom is in line with industry trend of convergence between fixed line and wireless businesses. After the transaction is completed, Unicom intends to consolidate the resources and strengths of the two companies to achieve economies of scale

Colin Ng & Partners LLP

Singapore/Malaysia

Hai Leck Holdings share offer

Undisc

Finance

Conyers Dill & Pearman

China

Trump Dragon Distillers IPO

Undisc

Finance

Singapore

Qian Feng Fabric Tech IPO

15

Finance

Davis Polk & Wardwell

Japan/USA

Shionogi & Co – Sciele Pharma acquisition

1000

M&A

DC Law

Singapore/Malaysia

Hai Leck Holdings share offer

Undisc

Finance

• Deal sees re-partnership between Freshfields and China Unicom, previously working on the issuance of Unicom’s shares in 2004

Drew & Napier

Singapore

Albedo – Healthtrends takeover

281

Finance

Singapore/Malaysia

Qualitas Medical Group IPO

n/a

Finance

Australia/Singapore

UOB Singapore deposit programme restatement

Undisc

Finance

Fangda Partners

China

Old Mutual plc – ABN AMRO TEDA Fund Management Co acquisition

245

Finance

Foo Kon Tan

China/Singapore

FSYM Construction – Beijing Yongmao Holdings acquisition

Undisc

Equity/M&A

FoxMandal Little

India/USA

Vornado – Reliance Industries JV

500

Infrastructure/ banking

Freshfields

China

China Unicom China Netcom merger

5630

M&A

China

China Mengniu Diary share placement

Undisc

Finance

China

International Finance Corporation equity sale

135

Equity

China

China Communications Services – China International Telecommunications Construction acquisition

Undisc

M&A

China

Coca-Cola – China Huiyuan Juice bid

2400

M&A

Singapore

Qian Feng Fabric Tech IPO

15

Finance

China

China South Locomotive IPO

1500

Finance

Guantao Law Firm

China

ARC – Shaanxi Education equity acquisition

71

Equity/M&A

Firm: V & T Law firm (PRC counsel) Client: Capital Airports Holding Company

Herbert Smith

China

Old Mutual plc – ABN AMRO TEDA Fund Management Co acquisition

245

Finance

China

China South Locomotive IPO

1500

Finance

• Beijing Capital International Airport Company acquired the airport's Terminal No. 3, which includes airfield assets, from Capital Airports Holding Company

Henry Davis York

India/Australia

Security and Intelligence Services acquisition of Australian Manned Guarding and Mobile Guarding

Undisc

M&A

Hendra Soenardi & Rekan

Indonesia

Saptaindra Sejati five-year term loan

300

Finance

Huen Wong & Co. Fried Frank

China

Beijing Capital International Airport Company – Terminal No. 3 acquisition

345

M&A

► BEIJING CAPITAL INTERNATIONAL AIRPORT COMPANY – TERMINAL NO. 3 ACQUISITION US$335m Firm: Huen Wong & Co. in association with Fried Frank Harris (Hong Kong counsel) Client: Beijing Capital International Airport Company Lead lawyer: Stephen Mok Firm: Tianyuan Law Firm (PRC counsel) Client: Beijing Capital International Airport

www.legalbusinessonline.com

Grandall Legal Group

7

NEWS | deals >>

| JAPAN | ► SHIONOGI & CO – SCIELE PHARMA ACQUISITION US$1.1bn Firm: Paul, Hastings, Janofsky & Walker Client: Sciele Pharma Lead lawyer: Tinley Anderson Firm: Davis Polk & Wardwell Client: Shinogi

Firm: Richards Butler Client: Zhongwang Group Limited • Private equity firm Olympus Capital Holdings Asia has invested US$100m in Zhongwang International Group Ltd, an aluminium manufacturer • Olympus Capital will appoint one director to the board of China Zhongwang Holdings Ltd, the holding company of Zhongwang

• Japanese pharmaceutical manufacturer Shionogi & Co acquired Sciele Pharma in a definitive agreement which included a cash tender offer at a price of $31 per share

• This is the third investment in China by Olympus Capital; prior investments include the Sichuan Emeishan Special Cement Co, China Minzhong, and Tamarisk

• The acquisition will be completed through a merger, where the remaining shares would be converted into the right to receive the same $31 cash per share price paid in the tender offer

► STAR CRUISES – TRAVELLERS INTERNATIONAL HOTEL GROUP ACQUISITION

• In the subsequent merger, Shionogi's newly established wholly-owned subsidiary, Tall Bridge, Inc, will be merged with and into Sciele • The new entity, Sciele Pharma, will be an indirect wholly-owned subsidiary of Shionogi, and will continue operations in Atlanta as a standalone business unit

| HONG KONG | ► OLYMPUS CAPITAL INVESTMENT IN ZHONGWANG US$100m Firm: Paul Weiss Rifkind Wharton & Garrison Client: Olympus Capital Holdings Lead lawyers: John E Lange, Gloria Liu-Luster

US$335m Firm: Clifford Chance Client: Star Cruises Lead lawyers: Cherry Chan, Darren Savage • Through its wholly-owned subsidiaries, Star Cruises Limited acquired a total 50% (direct and indirect) interest in the share capital of Travellers International Hotel Group

Cherry Chan, Clifford Chance

US$2.7bn

Darren Savage, Clifford Chance

• Travellers Group was advised by in-house counsel

“We believe Olympus Capital, as our partner, will provide important support for Zhongwang’s sustained growth in industrial aluminium profile production and continued improvement of corporate governance. In addition, Olympus Capital will continue to support us as Zhongwang explores new markets, both domestic and international, and seeks vertical integration opportunities in the future” LU CHANGQING, ZHONGWANG 8

| SINGAPORE | ► LION POWER HOLDINGS – SENOKO POWER BID

• The acquisition allows Star Cruises to pursue strategic and collaborative arrangements in relation to the development and operation of hotel and casino complexes in the Philippines John E Lange, Paul Weiss

“[Lion Power Holdings – Senoko Power bid] is a particularly significant transaction in the current market conditions and it is a tribute to the clients, advisors and lawyers involved that everyone worked together to achieve a successful closing within an intensive period” ALED DAVIES, ALLEN & OVERY

Firm: Latham & Watkins Client: Lion Power consortium Lead lawyers: Joseph Bevash, Michael Yoshii, Clarinda TjiaDharmadi

• The consortium won the bidding process which began in July 2008

► BRUNEI GAS CARRIERS ISLAMIC FINANCE FACILITY US$505m Firm: Watson, Farley & Williams Client: Brunei Gas Carriers Lead lawyer: Chris Lowe

Joseph Bevash, Latham & Watkins

Firm: Allen & Overy Client: Commercial banks Lead lawyers: Aled Davies, Jason Humphreys • Lion Power Holdings signed a Share Purchase Agreement with Temasek Holdings for the purchase of Senoko Power Limited • Senoko Power Limited is Singapore's largest power generation company, providing more than 30% of the nation's electricity needs • The Lion Power Holdings consortium comprises Marubeni Corporation, GDF Suez S.A, The Kansai Electric Power, Kyushu Electric Power, and Japan Bank for International Cooperation

• Brunei Gas Carriers raised US$505m to fund its new building program • The Shariah compliant, longterm facility was arranged with Fortis Bank S.A./N.V. Singapore Branch, Standard Chartered Bank and Brunei Investment & Commercial Bank • The purpose of the loan is to finance two Duel Fuel Diesel Electric Engine Type LNG vessels for BGC. The vessels are being constructed at Daewoo Shipbuilding and Marine Engineering Co. Ltd. in South Korea, the largest shipbuilder in the world, and will be delivered in 2011

► ALBEDO – HEALTHTRENDS TAKEOVER US$281m Firm: Drew & Napier Client: Albedo Limited Lead lawyer: Benedict Teo Lip Hua Asian Legal Business ISSUE 8.10

NEWS | deals >>

► YOUR MONTH AT GLANCE (CONT) Firm

Jurisdiction

Deal name

Value($USm)

Deal type

Indochine Counsel

Indonesia

Truong Hai Auto Corp – Jardine Cycle & Carriage stake sale

77

Equity market

Jiayuan

China

China South Locomotive IPO

1500

Finance

JSM

Hong Kong

Dah Chong Hong Holdings – Silver Precious International acquisition

18

M&A

Jingtian & Gongcheng

China

Trump Dragon Distillers IPO

Undisc

Finance

Kadir Andri & Partners

Singapore/Malaysia

Qualitas Medical Group IPO

n/a

Finance

King & Wood

China

Old Mutual plc – ABN AMRO TEDA Fund Management Co acquisition

245

Finance

Khattar Wong

Singapore

Qian Feng Fabric Tech IPO

15

Finance

Singapore

Artivision Technologies IPO

10

Finance

Latham & Watkins

Firm: Shook Lin & Bok Client: Healthtrends • Albedo Limited launched a takeover of the entire issued and paid-up share capital of HealthTrends Medical Investments Pte Ltd • Purchase consideration is priced at $0.25 per share, payable in two tranches • The acquisition will allow Albedo to expand into the medical and wellness tourism industry in Singapore and Asia

► WAN HAI LINES SALE AND LEASEBACK US$286m Firm: Watson Farley & Williams Client: Mega International Commercial Bank Co, Citibank NA Lead Lawyer: Andrew Nimmo, Chris Lowe, Hannah Forrest Firm: Lee & Li Client: Wan Hai Lines

Singapore/Malaysia

Qualitas Medical Group IPO

n/a

Finance

Indonesia

Saptaindra Sejati five year term loan

300

Finance

Singapore

Lion Power Holdings – Senoko Power bid

Undisc

M&A

Makes & Partners

Indonesia

Tunas Baru Lampung loan

70

Finance

Maples & Calder

Singapore/Hong Kong

OCBC Capital share offer

Undisc

Finance

Milbank Tweed

Indonesia

Saptaindra Sejati five year term loan

300

Finance

Middletons

India/Australia

Lupin – Generic Health acquisition

Undisc

Equity, M&A

Nataraj, Rao, Raghu & Sundaram

Singapore/Malaysia

Qualitas Medical Group IPO

n/a

Finance

Paul Weiss

Hong Kong

Olympus Capital Investment in Zhongwang

100

Equity/M&A

Paul, Hastings

Japan/USA

Shionogi & Co – Sciele Pharma acquisition

1000

M&A

Rajah & Tann

China/Singapore

FSYM Construction – Beijing Yongmao Holdings acquisition

Undisc

Equity/M&A

Rajani Associates

India/Australia

Lupin – Generic Health acquisition

Undisc

Equity, M&A

Raslan Loong

Malaysia

Al Rajhi & Investment Corporation property purchase

Undisc

Banking

Richards Butler

Hong Kong

Olympus Capital Investment in Zhongwang

100

Equity/M&A

Shook Lin & Bok

Singapore

Albedo – Healthtrends takeover

281

Finance

Siam International Legal Group

Singapore/Malaysia

Hai Leck Holdings share offer

Undisc

Finance

Skadden

China

Coca-Cola – China Huiyuan Juice bid

2400

M&A

Tian Yuan Law Firm

China

ARC – Shaanxi Education equity acquisition

71

Equity/M&A

Watson, Farley & Williams

Brunei Darussalam, Singapore

Brunei Gas Carriers Islamic finance facility

505

Finance

Singapore

Wan Hai Lines sale and leaseback

286

Finance

Yuan Tai

China/Singapore

FSYM Construction – Beijing Yongmao Holdings acquisition

Undisc

Equity/M&A

Yeap & Yong

Malaysia

Al Rajhi & Investment Corporation property purchase

Undisc

Banking

Zaid Ibrahim & Co.

Singapore/Malaysia

Hai Leck Holdings share offer

Undisc

Finance

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

Please contact

alb@keymedia.com.au

61 2 8437 4700

• Citibank NA was lease arranger and a syndicate of international banks led by Mega International Commercial Bank acted as agent and loan arranger in this US$286m sale and leaseback of four 6,000 TEU containerships by Wan Hai Lines www.legalbusinessonline.com

9

NEWS | deals >>

| CHINA/SINGAPORE |

| INDIA |

► FSYM CONSTRUCTION – BEIJING YONGMAO HOLDINGS ACQUISITION

► RELIANCE INDUSTRIES – VORNADO JV

Firm: Rajah & Tann Client: Yongmao Holdings Limited Lead lawyers: Dexter Chee, Soh Chai Lih, Serene Yeo

Firm: FoxMandal Little Client: Vornado Lead lawyer: Sudish Sharma

• Fushun Yongmao Industry Group acquired 66% equity interest in Beijing Yongmao Jiangong Machinery Manufacturing (Beijian) from Fushun Yongmao Construction Machinery (FSYM Construction) • Beijian manufactures towercranes for FSYM Construction. FSYM construction is a wholly-owned subsidiary of Yongmao Holdings Ltd, which is listed on the Singapore Exchange Securities Trading Limited

| INDONESIA | ► SAPTAINDRA SEJATI FIVE-YEAR TERM LOAN US$300m Firm: Latham & Watkins Client: Mandated lead arrangers Lead lawyer: Clarinda Tjia Firm: Hendra Soenardi & Rekan, Milbank Tweed Client: PT Saptaindra Sejati Lead lawyers: Eddy Hendra (Hendra), David Zemens (Milbank Tweed) • PT Saptaindra Sejati, one of the largest coal mining contractors in Indonesia, was loaned a US$300m facility from mandated lead arrangers including ANZ Banking Group, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, Bank of TokyoMitsubishi, DBS Bank, OCBC, UOB, Bank Mandiri and Bank Export Indonesia • The loan will go towards refinancing existing debt facilities and the company's corporate purposes

US$500m

Firm: Amarchand Mangaldas Client: Reliance Industries • Vornado Realty Trust, a US real estate company, formed a 50:50 joint venture with Reliance Industries to set up real estate development projects including malls and shopping centres in India • FoxMandal Little advised Vornado on finalising the joint venture agreement along with ancillary documentation of the joint venture company • FML also negotiated with Reliance Industries’ lawyers on the structure and operations of the joint venture company as well as finalising the closing requirements for the transaction

► LUPIN – GENERIC HEALTH ACQUISITION Firm: Middletons Client: Generic Health Lead lawyers: Adam Levine, Caroline Carnegie, Georgina Labropoulos

Adam Levine, Middletons

Firm: Rajani Associates Client: Lupin Lead lawyers: Prem Rajani, Reena Grover • Indian pharmaceutical company Lupin acquired a minority stake in Generic Health, an Australian generic pharmaceutical company • The sale was a combination of cash and ‘in kind’ under a new supply

“This [Lupin–Generic Health deal] brought a unique solution, which has the potential to assist not only Indian investors who will benefit from the option to ‘step up or be taken out’, but also local targets looking to maintain a controlling interest” ADAM LEVINE, MIDDLETONS 10

agreement, and a liquidity option structure was established which allowed Lupin to increase its equity or drop the investment should Lupin not acquire control over a specified period

| MALAYSIA | ► AL RAJHI & INVESTMENT CORPORATION PROPERTY PURCHASE Firm: Raslan Loong Client: Al Rajhi & Investment Corporation Lead lawyer: Loong Caesar Firm: Yeap and Yong Client: I-Berhad • Al Rajhi Banking & Investment Corporation purchases 36 units of i-City Cybercentre 1 Office Suites • The transaction was completed in accordance with Shariah principles, including the documentation which was governed by Malaysian laws but designed to meet stringent Shariah principles approved by Al Rajhi's Shariah Committee • The purchase was also structured to enable the bank to lease the properties at a future date using instruments which comply with Shariah principles of ijarah

“This was an important transaction for both the vendors as well as the bank, not only because of its boost for i-City’s Cybercity concept and the promotion of Malaysia’s Multimedia Super Corridor, but because of the innovative investment structure adopted by the parties which complied with Islamic principles” LOONG CAESAR, RASLAN LOONG

Asian Legal Business ISSUE 8.10

Profile

Blancpain

Blancpain carrousel volant une minute A major patented evolution

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he new Carrousel Volant Une Minute

by Blancpain stems from a parallel process. Invented in 1892 by the watchmaker Bahne Bonniksen, the karussel features a system driving the carriage by a differential effect. Long ignored by watchmaker, it has not been updated by the Manufacture which is offering a major patented evolution of the mechanism. While the early karussels took several minutes to perform a complete rotation, the one introduced by Blancpain takes exactly 60 seconds to cover the same distance – an impressive feat in itself. This swift movement and the effort devoted to reviving this invention are entirely in tune with the pioneering spirit of the Manufacture in Le Brassus.

Code-named 225, the self-winding calibre comprises 262 parts and is endowed with a 100-hour power reserve. It is housed within a platinum case measuring 43.5 mm in diameter and enhanced by a semi-skeleton dial revealing an array of toothed wheels, bridges and plates. A «light shaft» at 12 o’clock unveils the fascinating palpitations of the flying karussel, on which one of the carriage

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bridges indicates the seconds. The power reserve is displayed at 6 o’clock by a hand moving over an arc of a circle between the signs “+” and “-”. A double hand with arms of different lengths indicates the date on two graduated and staggered rows at 9 o’clock.

Renewing the Kaussel After revolutionising the tourbillon in 1989 with the presentation of an ultra-thin flying model equipped with an off-centred balance, Blancpain now presents an unprecedented interpretation of the karussel complication in the shape of its Carrousel Volant Une Minute. This refined technical device, the equivalent of the tourbillon in terms of its function, is distinguished in this version by its eminent complexity.

Blancpain thereby confirms its peerless innovative status by rehabilitating and enhancing the karussel, a complication that had been virtually relegated into oblivion shortly after it was presented in 1992 by its creator Bahne Bonniksen. By taking up the principles established by its inventor and presenting them in a considerably more evolved version, the Manufacture again demonstrates its dynamic momentum – and in doing so puts an end to a controversy that has nurtured heated debates among specialists. specia Tourbillons and karussels share the property Tour compensating for the effects of gravity of com watch movement. By making the on a w entire mechanism spin on its axis within a carriage, the movement itself manages c to compensate for the detrimental effects of gravity by acting as an authentic regulator of time.

Karussels and tourbillons differ however in the manner in which they perform this function. In a tourbillon, the carriage is connected to the barrel tthrough a single gear train. This means that if this mechanical connection is th iinterrupted, the tourbillon itself stops rotating.

The karussel on the other ro hand han is linked to the barrel by two gear trains. The first provides the energy required to run the escapement, while the second controls contro the rotation speed of the carriage.

The difference between the two systems dif thereby thereb consists in a more sophisticated and component-rich construction in the case of compo the karussel. ka

Blancpain the pioneer 2008: the Carrousel Volant Une Minute With its Carrousel Volant Une Minute located at the centre of the mechanism, Blancpain once again redefines the characteristics of an ancient innovation. When Bahne Bonniksen invented the karussel, he was mostly interested in offering an extremely accurate pocket-watch with a very reasonable production cost. Once his discovery was patented, several of his watches won various chronometry prizes. Nonetheless, the very nature of his invention with the large number of components it comprised did not actually help to keep costs down. Moreover, Bonniksen was not at all concerned with the rotation speed of the carriage.

Watchmaking connoisseurs would doubtless have totally forgotten this ultrarare complication if Blancpain had not decided to give it such a superlative new lease on life. Just as it had done with the tourbillon, the Manufacture in Le Brassus kept the function as such, while seeking to fundamentally improve it.

As the world’s first karussel wristwatch, Blancpain’s innovation consists first and foremost in its capacity to miniaturise this extremely complex mechanism. Another major innovative feature lies in the fact that the Blancpain watchmakers poured all their expertise and all their inventive abilities into placing the balance of this karussel at the very centre of the carriage. Finally, Blancpain’s Carrousel Volant Une Minute features an exclusive differential gear system that precisely controls the rotation speed of the carriage.

By performing a complete revolution in one minute, this new world-first calibre heralds a whole new line of timepieces.

Above and beyond the technical challenges, the Manufacture from Le Brassus is taking an amusing revenge on history. Whereas several self-proclaimed specialists explained in 1989 that Blancpain’s tourbillon was in fact a karussel (due to its off-centred balance), they also stated in no uncertain terms that the central position of the balance was the very signature of a tourbillon.

The Manufacture Blancpain is therefore all the more delighted to present its undeniable karussel with a balance... at the centre of the carriage! Watchmaking textbooks will need to be adjusted in this respect!

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NEWS | news analysis >>

ANALYSIS

Sports law in India: The next big thing?

In a country where cricketers, tennis players, trap-shooters, soccer stars and hockey players are worshipped, sport has always assumed a special significance. What was once considered a ‘niche’ practice area for Indian law firms is very rapidly evolving into a major area of law. ALB investigates how Indian firms are moving to secure a share of this lucrative market and how the whole process is fundamentally reshaping the role of the lawyer in the subcontinent

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he news recently that the Indian 2010 Commonwealth Games Organising Committee (CGOC) and the Indian Government has begun sifting through submissions lodged by the country’s law firms to provide legal support to the games was odd for a number of reasons.

Not only has the government started assessing applications with a hastiness never before seen, but the number of submissions lodged by Indian law firms was unexpectedly high, according to various sources. And while this may be seen as simply indicative of India’s unquenchable thirst for anything sporting, it is also significant on a much deeper level.

“The tender process for the Commonwealth Games legal work is definitely a strong signifier of the importance that law firms are attaching to sports law as an area of practice,” said the managing partner at one of India’s largest law firms. “Sports law as an area has been growing steadily over the past year or so, and this whole process will deliver further growth into the future.” ► LEGAL WORK FOR 2010 COMMONWEALTH GAMES – DELHI: WHO SUBMITTED AN EOI? • • • • • • • • • • • •

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Amarchand & Mangaldas (definite) Dhir & Dhir (definite) Luthra & Luthra (definite) Kochchar & Kochchar (definite) FoxMandal Little (unconfirmed) Khaitan & Co (unconfirmed) AZB Partners (unconfirmed) Singh & Associates (unconfirmed) Crawford Bayley (unconfirmed) ELP (unconfirmed) LexOrbis (unconfirmed) Paras Kuhad (unconfirmed)

Further growth expected Sports law is already one of the fastest growing practice areas in India. Not only did it account for nearly 8% of all lateral hires made by Indian law firms in the last six months, it is also the market sector with the second highest number of boutique players, outranked only by India’s burgeoning legal process outsourcing (LPO) sector – something which in itself demonstrates the high profile of sport as an area of law.

Amrut Joshi, an advocate at the Bangalore-based boutique sports practice MMB Legal, notes that although the area of sports law has increased in scope over the last few months, growth in the area is still very much a work-in-progress. “Sports law will grow exponentially in the next five years, faster then we have ever seen it move before.” MMB represents several of the country’s big-name cricketers, tennis players and sports management companies.

But just what is driving this growth?

The changing definition of the lawyer One of the growth drivers identified by those ALB spoke to was the expansion in the type of work lawyers are doing in this area, with a prime example of this trend being athlete endorsement deals and sponsorship contracts.

In the past, the role of counsel was confined to sorting out the finer details of such agreements and intermediating between the two parties involved: the celebrity and the corporate entity.

But now, according to a partner at one of India’s largest firms, lawyers in the area are required to guide their athlete clients more closely and play a more active role in laying the groundwork for the facilitation of such deals in the Asian Legal Business ISSUE 8.10

NEWS | news analysis >>

context of their corporate advisory work.

“Lawyers are now being called on to strategically position their athlete clients for life after sport. It’s well known that athletes only have a limited window within which to make a living from sport, so lawyers have to be very proactive here,” the source said, specifically pointing out that this relatively new trend was apparent in cricket stars’ Sachin Tendulkar and Mahendra Singh Dhoni’s agreements with Canon, Pepsi and Adidas and Reebok and GE Money respectively.

Although the expanded prerogative of lawyers in the area has increased the amount of work on offer, it brings advocates into closer contact with sports agents throughout the world.

“Working with these ‘pseudo clients’ [sports agents] can bring another layer of difficulty to transactions,” said the managing partner at a Mumbai-based full service law firm. “In some instances the involvement of sports agents in deals, while vital, can actually be a little bit of a hindrance,” the source said.

External stimuli: The sports law market and societal attitudes However, as much as the presence of sports agents and the ever-increasing role of lawyers are critical in ensuring a steady stream of work for lawyers active in the space, broader societal factors could prove as important to the viability

of the industry in the medium to short term.

Attitudinal shifts concerning sportspeople are sorely needed according to Raghavendra Patnaik, a legal advisor at Globosport. “At the moment there is an undervaluation of sportspersons in India, even cricketers,” he said. Patnaik notes that sport as a profession is frowned upon, and making money from it through endorsement and sponsorship deals even more so.

According to him, these attitudes could hinder or even completely derail the development of sports law practices in India. Others agree, citing how shifts in public perceptions of the country’s ‘Bollywood’ entertainment industry were vital in paving the way for the establishment of media and entertainment law practices in India.

And there are signs emerging that attitudes towards athletes are shifting in the subcontinent. “The undervaluation of sportspeople is

gradually declining,” said one sports lawyer. “I think in part due to people realising the relative importance of sport in the grander scheme of things and also due to the success of Indian sportspeople on the world stage.”

Notwithstanding the importance of shifting social attitudes and the like in affecting the development of sports law as an area of practice, the success of lawyers in the area may turn on more fundamental issues according to all of those ALB spoke to. “The legal side of things is important for sportspeople but ultimately a distraction,” said a source close to ALB. Patnaik agreed, noting that sports lawyers should not only ensure that contractual obligations of athlete clients and their concomitant rights and liabilities are tailored to fit each individual, but also “that all legal ends are well secured and the athlete faces no encumbrance in doing what he or she does best – performing on the field.” ALB

“The tender process for the Commonwealth Games legal work is definitely a strong signifier of the importance that law firms are attaching to sports law as an area of practice”

ANALYSIS

Korean legal market liberalisation – foreign lawyers’ gain to be domestic lawyers’ pain Legal services market liberalisation is welcome news for foreign law firms seeking to enter new markets, but it often exacerbates age-old problems. As ALB discovers, the situation in South Korea is no different

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he number of lawyers practising in South Korea is expected to double over the next seven years as the government steps up moves to liberalise its legal services market in preparation for ratification of the FTA. But while liberalisation is expected to raise standards in the industry and bolster the number of lawyers able to handle the complex

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M&A and cross-border work that is driving the development of South Korea’s nascent financial services industry, it is also set to drastically affect domestic ‘independent’ lawyers – those attorneys who do not operate within this corporate space – with many expected to either leave the profession or enter bankruptcy.

In 2007, the Korean Bar Association stated that there were 10,176 attorneys

registered to practise in Korea, of which less than 200 were foreign. Both numbers are expected to increase by as much as 20% in the years ahead due to the influx of foreign attorneys and changes to law school testing, which would see the admission of 2,000 new lawyers by 2012, instead of 1,000 as previously predicted.

These statistics do not bode well for domestic lawyers. “The market for lawyers is one of the most competitive in the world,” said a senior partner at one of Korea’s largest firms. “Because of the nature of transactions happening in Korea at the moment, there’s no real need for counsel to be admitted in Korea, so unless some of the younger lawyers are particularly brilliant they may find themselves having to serve independently.” Of the lawyers that pass 13

NEWS | news analysis >>

the Korean bar exam each year, only the top 30–40% find gainful employment as either state prosecutors or judges, or associates at one of the top seven firms.

However, while the top seven law firms – Kim & Chang; Kwangjang; Bae, Kim & Lee; Hwawoo (aka Yoon Yang Kim Shin & Yu); Shin & Kim; Yulchon and Lee & Ko – account for more than half of the KRW1.3trn legal market, they only employ about 10% of Korea’s lawyers. “It’s really tough for lawyers at the moment,” the source said. “We see a lot of them having to resort to street peddling and eventually falling into bankruptcy … many lose face and can’t go on.”

Korea Times research indicates that the number of matters handled by independent lawyers is in freefall. In 1997, the average was around 57.2 per year. Now the figure is closer to 31.5

and is only expected to fall further in the years ahead.

“This is certainly regrettable, but it’s part of the liberalisation process,” ALB’s source said. “What needs to be done is to change the nature of legal education in this country to make Korean lawyers more internationally marketable.” And indeed, the Korean government and Bar Association are making moves in this direction, moving to increase the standards and reputation of Korean law schools with a view to making English instruction mandatory in the long term. “The legal establishment has realised the need to make the skills gained by lawyers more portable, so if we have problems like this in the future, there will be nothing stopping young lawyers from seeking employment overseas or, ideally, right here in Korea,” the source said. ALB

ANALYSIS

New China-focused commodities exchange for Hong Kong ALB reports on the newest futures exchange that intends to bridge international commodities markets and China, in the process strengthening Hong Kong’s position as a major trading centre

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n the back of booming commodity markets and China’s growing appetite for resources, a new commodities futures exchange will be established in Hong Kong this year. The new exchange, to be called the Hong Kong Mercantile Exchange (HKMEx), will enable oil importers, in the first instance, to better hedge their exposure to movements in commodity prices.

“With rapid commodity imports comes the need for customers to be able to hedge their pricing exposure,” said Barry Cheung, chairman of the new HKMEx, when announcing the new exchange at a June press conference in Hong Kong.

The Hong Kong government, which published in January this year a study that identified the opportunity to develop a new exchange catering to China, supports the new exchange.

Due to open for business during Q1 2009 if regulatory approval is received

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by the end of 2008, the exchange will begin operations by trading US-dollar oil contracts. Future plans involve expanding its scope by adding additional products to its board, including futures tied to other fuels, metals and cotton. The exchange may also create its own indices.

Said Minny Siu, a banking & finance partner with Mallesons based in Hong Kong: “This exchange is intended to be very industry focused. Those trading will be institutional investors or companies who need to hedge their exposure by trading the relevant contracts. The participants will be very focused, and a limited number at the outset.”

Another futures exchange?

While oil futures in China are already traded on the Shanghai Futures Exchange, there are distinct opportunities for the HKMEx.

“There’s no real need for counsel to be admitted in Korea, so unless some of the younger lawyers are particularly brilliant they may find themselves having to serve independently”

The new exchange intends to bridge the international commodities markets and China, and thus provide an “efficient and transparent pricing platform for endusers and the global trading community to trade tailor-made contracts, hedge pricing risks in China and across the region, lower transaction costs and increase participation by Chinese commodities traders,” said the HKMEx in a statement.

“Many Asian markets already trade several types of futures … and already do a brisk trade in physical delivery. But most of the world’s biggest commodities markets are [in] New York, Chicago and London,” said Nazia Vasi of Dezan Shira & Associates, a boutique professional services firm that advises on foreign direct investment into Asia.

The Shanghai Futures Exchange only deals with contracts for imported oil, meaning that it is not fully integrated into international pricing.

In addition, the Shanghai exchange is priced in Yuan, which excludes international traders. “For oil traders or importers in China, these contracts don’t meet their needs,” said Cheung.

These factors, among others, mean that “it’s becoming increasingly important for China to have its own fully fledged oil market platform,” said John Tsang, financial secretary, Hong Kong SAR. Tsang believes that Hong Kong is ideally placed to “help bridge that gap. We can Asian Legal Business ISSUE 8.10

NEWS | news analysis >>

readily house an oil derivatives market under our existing robust regulatory system [and] our robust legal system. And this will enable the mainland to have more control over the price discovery process of the world’s commodity markets and related derivative markets”. Further, as commodity prices become more volatile the exchange will become even more important because, as Cheung said, “the need to manage risk becomes greater”.

Physical delivery Physical delivery will be stipulated and the exchange is believed to have secured infrastructure essential to supporting the delivery of the oil contracts. The exchange’s ability to handle physical settlement is one of its unique characteristics and is understood to be setting up storage facilities in mainland China.

However, there are rumours that the Chinese regulator may take steps to ban foreign exchanges from setting up warehouses for physical delivery.

Accordingly, the exchange is believed to be in negotiation with PRC officials.

Prices for fuels such as oil and coal are tightly controlled in China, given the internal pressure to keep pricing stable. Fluctuations due to market speculation have the potential to contribute to social problems.

Behind the scenes Several high-profile executives have been hand-picked to guide the establishment of the exchange. Cheung was formerly the deputy chairman of Hong Konglisted Titan Petrochemicals Group, and Thomas McMahon, a former vice president and director of NYMEX (Asia), has been selected as president.

Cheung’s involvement comes as no surprise – Titan Petrochemicals Group is the organisation that initiated the exchange. But Titan will not be the sole backer for long. Its funding will soon be replaced by approximately US$50m to be supplied by up to 70 shareholders.

Many high-profile names have signed letters of intent to be involved, whether as investors or end-users, including Merrill Lynch, Morgan Stanley, Lehman Brothers, Barclay Capital, Cantor Fitzgerald, CITIC Group and Noble Group.

For investors, the potential upside is significant, as global turnover of commodity derivatives contracts continues to rise. The Wall Street Journal reported recently that the number of contacts traded in Q1 2008 increased by 52% over the same period last year.

Several of the world’s leading exchange technology partners will be involved. Nasdaq OMX will be

news in brief >> LENDING A HAND: LEX MUNDI CELEBRATES 300TH PRO BONO PROJECT

Within just two years, the US-headquartered Lex Mundi Pro Bono Foundation has worked on no fewer than 300 pro bono projects.

The projects engaged 70 member law firms located in 40 countries around the world and included creating Indonesia’s first microfinance wholesale bank using a grant from the Bill & Melinda Gates Foundation and Mercy Corps, and drafting and negotiating a contract to install off-grid solar systems for South African public schools.

Some of the collaborating organisations included the Skoll Foundation, Ashoka Innovators for the Public, Draper Richards Foundation, Global Fund for Children and Schwab Foundation for Social Entrepreneurship.

CHAN PASSES THROUGH THE GATE AT K&L

The expansionist K&L Gates announced that it has secured the services of corporate partner Michael KS Chan in its Hong Kong office Chan, who was previously a partner at Jones Day, is a noted M&A and securities specialist who has particular expertise in venture capital and private equity investments, corporate restructurings and finance.

The move is not only expected to bolster the firm’s offering in these areas but also be a shot in the arm for its China cross-border capabilities. The firm opened its second office in China in May this year and more recently absorbed nine lawyers from Taipeibased firm J&J Attorneys-at-law.

COTTY VIVANT CONTINUES ASIA PUSH LAUNCHING INDIA PRACTICE Parisian firm Cotty Vivant Marchisio & Lauzeral has announced that it plans to launch an India practice at its offices in Singapore and Paris later this month in a move designed to further its Asia expansion strategy.

The India practice will be headed up by Shubhada Bhave, who joins as partner from Indian firm Advani & Co and will advise on all areas of corporate and commercial law. The firm opened a Korea desk out of its Paris office in January this year.

Cotty Vivant made headlines earlier this year when Singapore managing partner Philippe Taverne declared that his firm would be applying for a Qualifying Foreign Law Practice (QFLP) licence which would allow it to practise Singapore law in commercial areas through its own Singapore-qualified lawyers without entering into a joint law venture.

Cotty Vivant remains the only firm to have confirmed its interest in applying for a QFLP.

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NEWS >>

“Without liquidity you can move the market with a small trade” NAZIA VASI, DEZAN SHIRA & ASSOCIATES the main technology provider, LCH Clearnet will provide clearing services for the platform (subject to regulatory approval) and Patsystems will provide front-end interfaces and risk management solutions.

Success requires liquidity Liquidity will be the key to the HKMEx’s success. “It’s hard to create new benchmark commodity contracts because traders are hesitant to trade in significant size in a new contract without proven liquidity,” said Vasi. A New York-based hedge fund research analyst interviewed by ALB agreed.

“Without liquidity you can move the market with a small trade,” he said.

And with no shortage of competitors – there are dozens of established futures exchanges in Asia looking to broaden the range of products traded in order to get a slice of the commodities boom – liquidity may be difficult to guarantee.

Just weeks after the launch of the HKMEx, India’s Financial Technologies announced that it planned to set up a direct competitor in Singapore, to be called the Singapore Mercantile Exchange. An advisory board has been appointed and the exchange plans to trade a broad range of commodities

derivatives with a pan-Asian focus.

The Hong Kong Exchange is also known to be investigating commodities futures and may proceed with gold futures and futures in the near future.

In addition, one of the world’s oldest and most established commodities exchanges, the Chicago Mercantile Exchange, recently set up Asia-Pacific operations with offices in Hong Kong.

It appears that none of these participants are concerned about the risk of an economic downturn in Asia.

“Even with an economic slow-down, we don’t think the importation of commodities into China will drop off significantly,” said Cheung.

Legal framework The HKMEx is in the process of appointing advisors to help it set up, with at least three contenders known to be vying for prime advisory roles.

In these early stages, the exchange will continue to assess the regulatory framework and instruct lawyers and consultants to assist with this process.

Some advisors note that it is interesting that the HKMEx appears to be backed by a private company that is lobbying support from market players. While approval by Hong

KOREA

FDI: destination South Korea After the 1997 financial crisis, South Korea was forced to depend on IMF loans and direct foreign investment in order to rebuild. Ten years later, South Korea is becoming the source of investment capital, rather than its destination. ALB investigates

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ollowing the 1997 Asian financial crisis, South Korea fell into a deep recession. Several of its large industrial conglomerates collapsed, as did the country’s currency.

As confidence fell and capital departed, the IMF bailed out South Korea with US$52bn in loans tied to conditions

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that mandated major economic reforms.

As a result, foreign direct investment flooded in.

As John Walker, chairman of the Macquarie Group of Companies in Korea puts it, Korea’s “inability to invest created the market for foreign direct investment”. In its weakened state, South

Kong’s financial secretary and the Securities and Futures Commission will be required, this is seemingly a formality since John Tsang, the financial secretary, is vocal in his support for the exchange.

As the process continues, legal advice will be required as operational and trading rules are developed and agreed. A standard form of exchange traded contract will also be developed and input from financial institutions likely to deal with the exchange will be solicited before the templates are settled.

Law firms will assist with negotiating master agreements, collateral arrangements, and payment and settlement systems with the core three technology providers as well as documents governing equity investments by prospective shareholders.

Final hurdles Despite the confidence in the commodities markets, the obvious advantages that the new futures exchange will bring to region and the likelihood of regulatory approval, the exchange still has several hurdles to overcome. Mallesons’ Siu sums up the main issues: “The Asia-Pacific already has similar exchanges. China has its own commodities exchange but because of the forex restrictions, foreigners cannot participate. And whether China will support the new exchange is yet to be seen. It will be interesting to see how the new exchange develops.” ALB

Korea drastically relaxed investment restrictions. Over the eight-year period between 1998 and 2006, US$102bn entered the South Korean economy, which accounted for 80% of total inbound investment since 1962. By 2004, 30% of the country’s banking industry was owned by foreign companies. Two years later, those interests had been sold to the tune of profits in the region of US$2bn.

The tide turns In a best-case scenario, FDI results in a win-win for both the foreign investor and the recipient country because it brings with it not just capital but access to new markets, technology, skills and products. Critics, however, highlight the risks of exploitation.

Asian Legal Business ISSUE 8.10

NEWS >>

news in brief >> FIRST CENTRAL-AMERICAN LAW FIRM OPENS SINGAPORE OFFICE Panama-based firm Morgan & Morgan has announced that it has opened an office Singapore in a move designed to kick-off its Asia presence.

The firm will relocate several partners from its Panama base to head up its Singapore operation including name partners Juan David Morgan V and Eduardo E Morgan B, with Alexis Medina to be named executive director.

The firm currently has offices throughout Central America in addition to its offices in Madrid and London.

RIVERS FLOWS INTO HONG KONG

For South Korea, FDI was a success story, and the country has experienced steady and consistent economic growth ever since. However, by 2007, FDI had declined for the third consecutive year, largely due to a decrease in large-scale investments, with commitments falling 6.5% to US$10.5bn.

Michael Chang of Allens Arthur Robinson, who spent nearly six years seconded to Shin & Kim in Seoul, has witnessed the shift first-hand. “The amount of foreign direct investment going into Korea has fallen significantly, but there’s still a lot of domestic activity.

Big ticket deals for foreign investors have dropped off. It’s actually now the reverse.

Korean companies are using the strong Won to invest offshore,” he said.

On a world scale, Korea’s FDI as a percentage of GDP is low. “Foreign investment in advanced countries such as the UK and France accounts for almost 30% of the domestic economy. Thus, the Korean figure is comparatively far too low,” Kim Jong Kap, vice minister of Commerce, Industry and Energy, told Invest Korea Journal. In addition, the OECD downgraded South Korea’s FDI growth forecast in June this year to 4.3% and recommended that measures be implemented to attract more FDI. South Korea’s new president, Lee Myung-bak, has pledged to boost inward investment levels. Recently, the Minister of Knowledge Economy, Lee Youn-ho, revised the previous government’s forecast for 2008 www.legalbusinessonline.com

upwards from US$10bn to US$12bn.

Despite government optimism, economists believe the figures are likely to continue the downward trend.

Emerging markets as engines of growth If M&A figures are any indication, South Korea’s progress since the 1997 financial crisis is staggering and activity over the past 12 months is especially remarkable. In 2007, M&A activity in South Korea reached a record high of US$73.8bn (total deal value), a 78% increase over 2006, according to Thomson Financial. Significantly, crossborder outbound volume almost tripled to US$14.2bn in the same period.

Foreign companies are now permitted to list on Korea’s stock exchanges. In August 2007 China’s 3 NOD Digital Group became the first foreign company to list on KOSDAQ (the Korea Securities Dealers Automated Quotation), the fourth-biggest stock market in Asia by value. The exchange is actively searching for other potential listings by Asian companies. In addition, the listing of Hua Feng Textile International Group, a Chinese company already listed in Hong Kong, has been approved for the Korea Exchange, South Korea’s main bourse.

All of the world’s international investment banks have operations in South Korea and their footprints are likely to increase as the financial markets are further reformed.

Macquarie, which entered the country in 2000 by establishing itself in niche

DLA Piper announced today that Susheela Rivers has joined its real estate group in Hong Kong as partner in a move designed to reinforce its real estate group in Asia.

Previously with the London office of Clifford Chance, Rivers has worked extensively on acquisitions and disposals, financing, developments, leases and private funding initiatives.

Earlier this month the firm secured the services of Daniel Lee as head of its Tokyo-based Korean practice after launching a pan-Asian transactional fund practice headed up by Luke Gannon.

CLIFFORD CHANCE NAMES NEW ASIA HEAD Clifford Chance has named global corporate chief Peter Charlton as its next Asia head. The position was vacated after the former Asia head Jim Baird fell ill.

After the last six months there have been no less than five high-profile partners joining the firm – more than all of the firm’s Magic Circle counterparts.

It is understood that although others signaled interest in standing for the position only Charlton was nominated and ran for the election uncontested.

HELLER EHRMAN: IS 28 NOV THE LAST DAY? 28 November is the end of the line for Heller Ehrman according to a leaked memo obtained at the time of publication.

The firm has formed a dissolution committee chaired by bankruptcy partner Peter Benvenutti. Meanwhile, Baker & McKenzie, Mayer Brown and Orrick Herrington & Sutcliffe have all been variously tipped to acquire segments of the ailing firm. Bakers, of course, pulled out of full-scale merger negotiations last month.

In December last year, Heller Ehrman seemed on the cusp of a new era with the opening of a Shanghai office to accompany its Singapore, Beijing and Hong Kong operations. But many of the firm’s partners have decided to vote with their feet following the failure of merger talks with Baker & McKenzie.

HONG KONG, SINGAPORE TOP POLL FOR BEST ASIA JUDICIAL SYSTEM Hong Kong and Singapore have the best judicial systems in Asia, according to a survey of expatriate business executives. The survey, conducted by Hong Kong consulting firm PERC, was based on responses from over 1,500 Asia-based executives, taking into account factors such as education standards of lawyers and judges, the transparency and independence of judicial systems and protection of IP rights.

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NEWS >>

UPDATE >>

International Tax New UK Tax Chamber replaces Commissioners Hearings

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he new UK Tax Chamber has been made possible, by the UK Tribunals, Courts and Enforcement Act 2007.

The Act creates a two tier structure with a First-tier and Upper Tribunal. Individual tribunal jurisdictions doing similar work will be brought together into this simplified two tier system. The new system is headed by Lord Justice Carnwath as Senior President.

HMRC was formed in April 2005, following the merger of the UK Inland Revenue and HM Customs and Excise. The new department is responsible for enforcing and administering the payment of both direct and indirect taxes, and in this context it was inconsistent to maintain four separate tax tribunals (the General Commissioners, the Special Commissioners, the VAT & Duties Tribunal and the Section 702/706 Tribunal) and three different sets of legal Rules for those tribunals.

What will the new system look like?

In short, the new system will have its own judiciary, Rules of Procedure and a new location for processing direct tax appeals. It will be independent of HMRC, who currently control listing and other aspects of case management.

The Judiciary The Commissioners and their clerks have given years, and in some cases decades, of service and their commitment and dedication are apparent to all who meet them. However, it is also clear that the time has come for a fairly compensated and independently appointed judiciary to deal with tax appeals, and which reflects the diversity of the community. To assist the existing tax judiciary when the Tribunals Service takes on responsibility for direct tax appeals, the Judicial Appointments Commission has recruited 18 legal Members, four of whom will be full time, and 75 non-legal Member positions. The new judiciary will be recruited by early 2009, so that they can be trained fully in time for the launch in April 2009.

Onward appeals An appeal from the First-tier will be to the Upper Tribunal, which is a superior court of record akin to the High Court.

Appeal to the Upper Tribunal will be on a point of law only, and with permission of the First-tier or the Upper Tribunal.

The exception to this will be those extremely rare cases which start in the Upper Tribunal, where onward appeals will be to the Court of Appeal or the Court of Sessions in Scotland.

Conclusion Despite all of the changes, it is hoped to retain the best features of the current system of UK tax appeals in the new system: for example, local access to hearings, with a network of 130 hearing centres across the country, and the facility to use privately hired venues. The new judiciary are being recruited from a wide geographical area so that local business knowledge is still a key part of the system.

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

markets (for example, infrastructure) before branching out into more competitive sectors, now competes directly with other international investment banks in sectors such as cash equities and M&A advisory. Such has been Macquarie’s success that it was ranked by Bloomberg as the number one M&A advisor for Korean transactions for the first six months of 2008, advising on five deals worth US$7bn.

Cashed-up The tables have indeed turned. “Korean companies are considering going offshore to extend their businesses through acquisitions,” said Eui Jong Chung, citing the July 2007 acquisition by South Korea’s largest construction machinery maker, Doosan Infracore Co, of Ingersoll-Rand Co’s earthmoving equipment businesses for US$4.9bn as an example.

Jonathan Stone, a partner with Skadden in Hong Kong, sees the rise in outbound investment as a trend that is consistent with other Asian countries, such as China, India and Korea. “These countries have accumulated large amounts of reserves and there’s an increase in outbound investment across the board.” Combine these reserves with the strong Won, and “you’re going to see opportunities being chased by cashed-up companies in developing markets,” said Stone, highlighting the resources sector as one destination.

Pil-Kook Lee, a foreign legal consultant with Kim & Chang, is another lawyer whose firm has seen an increase in outbound investment. “After the 1997 financial crisis the reaction was to stockpile cash. Now people are looking for investment opportunities.”

And there’s certainly no shortage of cash. In addition to corporate war-chests, South Korea’s National Pension Service has US$224bn in assets under management and expects to be the world’s second-largest pension fund by 2012.

Investment opportunities related to the massive cash reserves, are “very much on our radar”, according to Walker.

Macquarie has already teamed up with domestic companies to invest offshore, for example Macquarie Opportunities Korea Infrastructure Fund’s purchase of a 40% interest in Hanjin Shipping’s non-Korean terminals. Macquarie’s operations in Korea are focused on helping Korean institutions invest in the domestic market, said Walker, and the “logical extension is to invest in international markets”.

Walker believes as the market develops, “outbound investment will be key to Korea’s success”.

Promoting FDI through bilateral trade As domestic growth slows due to South Korea’s strengthening currency, the rise in oil prices and an overheated property market, South Korea is focusing on bilateral trading relationships.

While recent negotiations with the US have occupied the headlines with protests and criticism, the KorUS FTA is only one part of an aggressive program of trading agreements. South Korea has already signed FTAs with Chile, Singapore, the European Free Trade Association and a partial FTA with most ASEAN members.

During negotiations, it was estimated that the KorUS FTA could boost trade by US$29bn annually, according to US International Trade Commission forecasts. However, the KorUS FTA is yet to be ratified by either country, an event that may be pushed to 2009.

Asian Legal Business ISSUE 8.10

NEWS >>

news in brief >>

► KOREA ANNOUNCED DEALS Firm Kim & Chang Shin & Kim Lee & Ko Bae Kim & Lee Yulchon Yoon Yang Kim Shin & Yu

2008 Rank

2008 Market share 1 2 3 4 5 6

29.2 38.7 3.5 31.5 2.1 0.4

2008 Volume (US$m) 8,556 11,345 1,036 9,242 612 105

2008 Deal count

2007 Rank 44 20 16 11 6 3

Market share 1 2 2 4 5 5

Market share change

25.4 4.3 23.0 16.1 4.2 1.2

3.8 34.4 (19.5) 15.4 (2.1) (0.8)

Source: Bloomberg

For South Korea’s other major trading partners, similar agreements are essential in order to reduce any competitive edge that the US may receive if and when the KorUS FTA is ratified.

The European Union entered into FTA talks with Korea in 2007 and Australia agreed to enter into preparatory discussions regarding an FTA with South Korea in August this year.

“Free trade agreements have a lot of detail,” said John Walker, “but what’s also important is the sentiment they create.” Walker is optimistic about the benefits for both countries, noting that Macquarie’s business has grown rapidly without the benefit of an FTA.

New challenges for foreign investors Offshore companies weighing up their options in South Korea are finding that the country is much changed. “The financial landscape of Korea post 1997 is radically different to what it is today.

The kinds of quick capital gain returns that the private equity investors received for up to eight or nine years after the crisis were large. You’re unlikely to see this size of quick return now,” said Michael Chang.

Additionally, investors cite concerns about South Korea’s strong labour union movement, a perceived lack of transparency in the application of regulation and slowing economic growth.

Others perceive bottlenecks, such

as deals being delayed by a shortage of commercial lawyers with high-end experience, and resent additional transaction costs due to the need to have dual deal teams because of the restrictions against foreign law operating in South Korea. Some cite the Lone Star private equity dispute as an example of the government’s supposed anti-investment attitude.

Walker reports that Macquarie has not found that the regulations have prevented it from setting up its fastgrowing operations. “It’s a very adaptive environment” he said. “We’re confident that if we wanted to launch a new product we wouldn’t face any problems.”

As to Lone Star, Walker does not believe the dispute will have negative consequences for foreign investors. “Its predominance in the media is out of kilter with reality. There hasn’t been a slowing of activity. [Lone Star] tends to become a bit of a lightning rod for people who want to be critical.”

Partner Eui Jong Chung of Bae, Kim & Lee agrees with Walker, saying “that the statement that the Korean government is negative about foreign investment is overstated”. Lee Pil-Kook puts it down to the global financial crisis, which has contributed to the slow-down in FDI. “To some degree hedge funds and private equity funds are interested in investing in Korea but they might be a little more wary,” he said. ALB

“After the 1997 financial crisis the reaction was to stockpile cash. Now people are looking for investment opportunities” PIL-KOOK LEE, KIM & CHANG www.legalbusinessonline.com

BOND BETWEEN HR AND MARKETING VITAL TO LAW FIRM SUCCESS The level of teamwork and integrated vision between HR and marketing is essential to the survival of any law firm, and as far as Australian firms are concerned, they have hit the nail on the head – almost.

These are the conclusions of a recent survey by House Communication, which reported that more than half of Australian law firms (64%) believe their marketing and HR work together closely enough to achieve their firm’s business objectives.

This is in distinct contrast to the 53% of other law firms around the world who said their HR and marketing components were not as in sync as they should be.

Either way, there is always room for improvement and firms would do well to encourage greater communication between the two departments, according to House director Alicia Patterson, who said that close alignment between HR and marketing is critical for attracting and retaining staff in the ‘war for talent’

HONG KONG LAWYERS JAILED FOR HK$2.15BN SCAM Three lawyers who were charged with conspiracy to defraud in a scam involving HK$2.15bn have been jailed for up to 33 months. The two partners of Koo and Partners, Fan Cho-man and Donald Koo Hoi-yan, were sentenced to 33 months and 24 months in jail respectively. Partner of Deacons Simon Lai Saucheong received a 30-month jail sentence.

All of them allegedly conspired with Zhou Zhengyi – ex-property tycoon in Shanghai – to defraud Hong Kong’s stock exchange, the Securities and Futures Commission and the shareholders of ImGo in relation to the “false representation they made in the joint announcement and composite offer and response document regarding the acquisition of ImGo,” ICAC said.

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NEWS >>

UPDATE >>

VIETNAM

Intellectual Property

FDI into Vietnam: the Korean wave

Court Upholds Patent Exhaustion Defense

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he U.S. Supreme Court issued Quanta Computer v. LG Electronics on June 9, 2008 upholding the patent exhaustion defense.

Patent exhaustion (the “first sale doctrine”) is a judicially created defense to patent infringement. As the Supreme Court articulated over 150 years ago, exhaustion prevents a patent holder from obtaining subsequent royalties or use restrictions on a patented device after an authorized sale. In other words, the patent holder’s rights in the patented device are exhausted after the first sale.

LG Electronics (“LGE”) granted Intel a license to microprocessors and chipsets. The license expressly disclaimed third party rights to combine licensed products with non-Intel products. Quanta purchased licensed microprocessors and chipsets from Intel and received notice from Intel of the third party restrictions. However, Quanta manufactured and sold computers using the licensed products in combination with unlicensed products.

LGE sued Quanta for patent infringement. The U.S. District Court for the Northern District of California held that the system claims were exhausted but the method claims were not. The U.S. Court of Appeals for the Federal Circuit agreed with the District Court that the device sales did not exhaust the method claims, but held that the device sales were conditional and therefore did not exhaust the system claims.

The Supreme Court reversed the Federal Circuit. The Supreme Court unanimously held that (1) patent exhaustion applies to method claims, (2) patent exhaustion applies to the sale of an incomplete item that substantially embodies the patent, and (3) patent exhaustion is triggered only by an authorized sale. The Court found that carving out method claims would provide an end-run around exhaustion. The Court also found that a product substantially embodies the patent if it provides the only reasonable and intended use of the patent.

In this case, the Intel products all but completely practiced the LGE patents except for the application of common processes or the addition of standard parts, and therefore sufficiently embodied the LGE patents to trigger exhaustion. The Court also found that the license did not condition Intel’s authority to sell licensed products despite the notice requirement.

The Quanta decision has important implications. A patent holder may have more difficulty asserting infringement against downstream users of a licensed product in a larger system and cannot avoid exhaustion with method claims. However, suitable license restrictions can avoid exhaustion. For instance, exhaustion may not have applied if the license prohibited Intel from selling licensed products later combined with unlicensed products. Likewise, field-of-use restrictions such as post-sale single-use restriction on a medical device are enforceable.

David Sigmond, Patent Attorney Intellectual Property and Technology Group Alban Tay Mahtani & de Silva LLP Phone 65 6428 9804 Email davidsigmond@atmdlaw.com.sg

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David Sigmond

S

ince its ascension to the WTO in 2007, Asia’s new ‘tiger’ – Vietnam – has become a hot spot for foreign investment. And with the Vietnamese government increasingly becoming more liberal and open, particularly when it concerns allowing wholly foreign-owned companies to invest in Vietnam, many multinational and global corporations have put their faith in the market.

And you need look no further than the skyline of the capital, Hanoi, or the business hub, Ho Chi Minh City, to see the evidence.

Some of today’s biggest investors in the new Asian tiger are South Korean companies, who are attracted to the market thanks to cheap labour and Korea’s geographical location which makes export routes convenient.

Hundreds of South Korean companies are investing a total of more than US$10bn in Vietnam, making South Korea the leading foreign investor in the country.

Some of the big name companies investing in Vietnam include Kumho Asiana Group, steelmaker POSCO and South Korea’s largest retailer Lotte Shopping. Representing these clients is one of South Korea’s largest full-service law firms, Lee & Ko, which is based in and services clients from Seoul.

Leading law firm Baker & McKenzie, which opened in Vietnam in 1993, has been providing legal services across the spectrum of corporate law to businesses engaged in international trade and investment.

Frederick Burke, managing partner of Bakers in Vietnam, has been living there for more than 15 years and has extensive experience in advising multi-national companies on their foreign investment projects. Burke has seen first hand the remarkable increase in foreign investment and the shifting of capital inflows.

“In the early 1990s, all foreign investment was direct investment, most of it in joint ventures. Then the government started to become more liberal. By 2005, it was allowing minority foreign stakes in ► MAJOR SOUTH KOREAN INVESTMENTS Vietnamese joint IN VIETNAM stock companies in • Kumho Asiana Group – Asian Plaza, Ho Chi Minh a few selected fields, City; Giang Vo Cultural & Trade Center, Hanoi; and as the local Me Tri Exhibition Center, Hanoi (total investment: securities markets more than US$4bn) got up and running, • Lotte Shopping Company – first Lotte supermarket in Vietnam foreign investors • POSCO – Hoa Lac highway construction projects took up much of the maximum 49% allowed for foreign ► TOP ASIAN FDI INTO VIETNAM participation,” BETWEEN JANUARY AND SEPTEMBER 2008 (US$M) he said.

A lot of that investment has poured into the property market – and a number of big South Korean companies are Source: World Bank and IMF figures doing the pouring.

Asian Legal Business ISSUE 8.10

NEWS >>

“We find Korean companies, like those of some other regional neighbours, are particularly interested in Vietnam as a supplement or as an alternative to China. While Korean companies may feel a bit threatened in China by the size of the economy and the local competition, in Vietnam they are very much ‘big fish’ with a lot to offer, especially in terms of infrastructure development, natural resource exploitation and manufacturing,” said Burke.

South Korean firm Kumho Asiana is building the highly anticipated US$223m Asiana Plaza complex in

the heart of Ho Chi Minh City, which includes a high-end luxury apartment block, five-star hotel, retail stores and restaurants. Despite a few hiccups, particularly during the 1997 Asian financial crisis when the project – originally a joint venture between Kumho and two local partners, including state-run Saigon Tourist – was temporarily shelved, construction is again underway and the massive complex is due to be completed in 2010.

Of course it is not just the property sector that is attracting the Korean investors – manufacturers are taking advantage of low labour costs and the

burgeoning economy. Kumho Industrial, one of the world’s top tyre manufacturers, has built a plant in the My Phuoc Industrial Zone in Binh Duong province to produce tyres and rubber, making an investment of more than US$150m.

“Recently, these capital inflows have become something of a sensitive issue and there has been a healthy discussion about the risks posed to the domestic economy by ‘hot money’ in the local capital markets. This is quite a different environment compared to the very limited role foreign capital played in the early days of Vietnam’s reform program,” said Burke. ALB

MIDDLE EAST

Jumping ship in the Gulf not the best tactic, says Magic Circle firm

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awyers lured by partnership promises to jump ship may not be on the best career route, despite the thriving market conditions in the Gulf. Clifford Chance’s managing partner in Dubai, Graham Lovett, told ALB that the game of musical chairs – as lawyers move from one firm to another – does not translate to a higher quality of work by the lawyer or the firm.

“Some start-up operations have new or lateral hires from other firms. You can get very good lawyers, but the process must be managed properly such that the lawyers are culturally aligned to the firm’s standards and management style. If not, the quality drops off,” said Lovett.

He added that a lawyer in Clifford Chance will “typically make partner within seven to 10 years” in the job. But with the buoyant market conditions in the Gulf, lawyers are making partner within five years. “Sometimes this can be slightly too early for the course of events. The work here is getting more sophisticated. Experience in getting and doing these deals takes time to build up, as with the transition into being a partner,” said Lovett.

In recent months, many international law firms have set up shop in Dubai and Abu Dhabi, hoping to capture their share of the Gulf pie as economies in the UK and US slow down. Partners are parachuting in, while other lawyers are lured to other firms by the partnership promise. In one case, an entire team

www.legalbusinessonline.com

comprising three finance experts left to join another firm, leaving a big gap in one of the most profitable practice areas of their former firm.

Magic Circle firms such as Allen & Overy, Clifford Chance, Linklaters and Freshfields Bruckhaus Deringer each billed in excess of US$1.85bn last year in the UK. Clifford Chance’s UK operations recorded a turnover of US$2.45bn, closely followed by Linklaters and Freshfields. The going still looks good, but the impact of the economic slowdown is slowly being felt as law firms continue to look to the Middle East for deep pockets.

“The big firms like Lovells, Linklaters and Freshfields target the clients they want, and are looking to do bigger and more complex deals. Others

set up representative offices here and have lawyers on the ground to pass off work to their offices in the UK, US or Asia. They will struggle to make it work,” said Lovett.

Magic Circle firm Clifford Chance set up operations in Dubai in 2005 and its Abu Dhabi office in June. Lovett said that the firm’s Dubai office has 85 feeearners that operate at 100% utilisation and that it was six times more profitable than when it first started.

“We will continue to grow our practice as a leading international law firm in the Middle East and maintain our distance from the pack, in the likes of Allen & Overy, Linklaters and Freshfields. I would like to think we can stay ahead of them. It requires bloody hard work and that’s what we will continue to do,” said Lovett. ALB 21

NEWS >>

CHINA

Microsoft introduces novel piracy defence Cracking down on monopolies is serious business in China, but as ALB discovered, the proliferation of pirated goods in the country is proving to be the perfect defence for conglomerates

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icrosoft may have a viable legal defence in the first ever anti-monopoly claim lodged in China, given the prevalence of pirated Microsoft products in the country and how ‘market share’ is defined by Chinese authorities.

When lawyer Dong Zhengwei, a partner with Beijing-based Zhongyin Law Firm, grabbed the headlines by alleging that Microsoft was using its dominant market share to manipulate software prices in China and calling for a US$1bn fine to be imposed on the global software giant, Microsoft global vice president Zhang Yaqin was quick to reply with an interesting counterargument: “Microsoft did not even have the preconditions of conducting monopoly activities in China,” he said.

“Genuine Microsoft products have a very low market share in China because its products are widely pirated.”

Pirated goods According to 2006 figures from the Business Software Alliance (BSA), an industry group that tracks the illegal software trade, an estimated 82% of software installed on computers in China were pirated. The BSA calculated that sales revenue lost due

to software piracy in China was about US$3.9bn in 2005 alone.

Lawyers interviewed by ALB said that in determining a ‘dominant market position’, the Anti-Monopoly Law (AML) will focus mainly on whether a company has the power to control the price, sales volume and other trading conditions of its products. “Obviously, a sale of fake goods is beyond the control of the genuine producers, and it’s unreasonable to count fake goods into the determination of market share.

Thus, as a victim of fake goods, I won’t be surprised if Microsoft’s market margin in China is much smaller than what most people have expected,” said Michael Zhang of Sheppard, Mullin, Richter & Hampton’s Shanghai office.

Relevant market Dominant market position is also determined by the company’s ‘relevant market’. “There is a presumption of single firm dominance with a market share of 50%, though dominance may also be found where a lower market share exists. In order to establish the market share, it is necessary to define the ‘relevant market’,” said Kirstie Nicholson, of counsel at Lovells in Shanghai. “It is not clear whether the

relevant software market in China comprises only genuine products or includes fakes. With no case law to look to for guidance, it is not clear at this stage how the Anti-Monopoly Enforcement Agency will approach the question of market definition,” she said.

The case has sparked global interest for several reasons. China’s AML – which took effect on 1 August – is closely based on competition law in the European Union, where Microsoft faced a series of antitrust investigations in the past decade and was fined more than US$613m in 2004 by the European Commission.

As China finds its feet with the new AML and gives more teeth to intellectual property law, this case will be one to watch closely as the software giant is both an alleged perpetrator of software monopoly and a victim of pirates.

The AML’s provisions relate mainly to anti-competitive monopoly agreements, abuse of dominant position and abuse of administrative power. Interestingly, abuse of property rights is also provided for under section 55 of the AML. Business operators can be prosecuted for eliminating or restricting market competition by abusing intellectual property rights ALB

CHINA

Clifford Chance and Grandall Legal Group get in on French-Chinese nuclear energy deal

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lifford Chance is advising French energy company Electricite de France (EDF) on its joint venture agreement with the China Guangdong Nuclear Power Co (CGNPC) to construct, operate and maintain two third-generation reactors in Taishan city. Chinese firm Grandall Legal Group is representing the CGNPC. About US$45bn in scientific and industrial contracts between the two

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countries were signed and EDF will control about 30% of the French-Chinese nuclear partnership for 50 years.

The deal is significant in terms of the knowledge and technology transfer to China, where the development of nuclear power will help China manage its power shortages, as well as reduce pollution.

The deal may set a precedent for future JVs, something other international firms would no doubt pay attention to.

“This project is one of the largest JV investments in China to date and involves the very latest nuclear technology. We advised EDF on every aspect of the joint venture, from the corporate structure of the investment, to employment law, financing, regulatory issues and the transfer of technology that will occur as the project progresses,” said Geraint Hughes, head of Clifford Chance’s energy & infrastructure practice in Asia. ALB Asian Legal Business ISSUE 8.10

NEWS >>

MIDDLE EAST

► WHO’S ACTING FOR WHO IN THE EPL

Man City sale close to full time

Firm Allen & Overy Arnold & Porter Bird & Bird Denton Wilde Sapte DLA Piper Freshfields

Clubs advised Manchester United Aston Villa EPL Newcastle United EPL Newcastle United

Hammonds

Arsenal; Aston Villa; Chelsea; Everton; Fulham; Liverpool; Manchester City; Newcastle United Liverpool Tottenham Hotspur Manchester United Tottenham Hotspur Chelsea Arsenal; Tottenham Hotspur Aston Villa; West Ham United

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he big firms were on hand this week as the Abu Dhabi royal family stepped up its interest in acquiring English Premier League (EPL) club Manchester City Football Club (MCFC).

Hammonds was retained as lead counsel for the MCFC’s current owner, former Thailand Prime Minister Thaksin Shinawatra while Shearman & Sterling are acting for the Abu Dhabi United Group (ADUG), an entity created by members of Abu Dhabi’s royal family to finance the acquisition.

MCFC said that the club and the ADUG had signed a memorandum of understanding to see through the

£200m deal, but media reports suggest that it is still unclear whether or not the deal will go through.

The structure of the deal has a bearing.

ADUG has designs on completely taking over the club while Shinawatra is keen to retain a minority share. The ADUG’s willingness to finance the transfer of Brazilian star Robinho for an EPL record £34.2m suggests, however, that closure of the deal could be just around the corner.

Hammonds’ lead partner on the deal, David Hull, is well acquainted with deals of this kind. Not only did he act for Shinawatra in his original takeover of the club and its appointment of Mark Hughes as manager, but has advised

Hill Dickinson Olswang Pinsent Masons SJ Berwin Skadden Slaughter and May Travers Smith

fellow EPL club Aston Villa on its £66m recommended takeover by US billionaire Randy Lerner.

Hammonds counts no fewer than eight of the 20 teams that play in the EPL as regular clients. ALB

CHINA

Lovells snares its Man in China

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ecently crowned International Law Firm of the Year at the 2008 ALB China Law Awards, Lovells has signalled its desire for further growth today with the announcement that Thomas Man will join as a partner in its Beijing office. Man, a Shandong native, comes to the firm from Orrick, where he acted on high-profile M&A, divestitures, and joint venture projects. Widely known as a “greenfields” expert, Man was also formerly a corporate and securities partner in the Chicago, Beijing and Shanghai offices of Baker & McKenzie.

Man currently serves as one of only two foreign legal advisors appointed to the drafting committee of China’s Institute of Evidence Law and Forensic Science, which was commissioned by the Supreme People’s Court to draft the first Uniform Rules of Evidence for all Chinese courts.

Lovells’ Asia regional managing partner Crispin Rapinet was understandably thrilled with the move which comes on the back of recent additions to the firm’s corporate finance, competition law, dispute resolution and IP practices. According to Rapinet,

Man’s hire will not only open up further opportunities but deliver the local knowledge that is the key ingredient for cracking the China market.

“For our China strategy to be fully realised, it is imperative that we have native Chinese partners, fully conversant in both the international and Chinese corporate environment … these are very rare qualities to find,” said Rapinet.

The move marks the third time this year that a high-profile partner has made the move to Lovells. Last month, banking & finance guru Owen Chan joined the firm from Stephen Harwood & Lo and earlier this year corporate partner Fred Chang defected from White & Case. ALB

MIDDLE EAST

Latham & Watkins fills its Abu Dhabi and Doha offices

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atham & Watkins’ Abu Dhabi and Doha offices – yet to see any partner presence – are now manned by Mark Godfrey from Allen & Overy and Craig Stoehr, a lawyer/businessman.

Godfrey specialises in project fi nance transactions and has expertise in the energy, transport, infrastructure and communications sectors. Stoehr, who was an associate

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with the fi rm in New York between 1994 and 2000, focuses on capital markets, M&A, strategic investments and corporate counselling.

He was previously chief executive officer of the World Powerboat Championship and an international soccer-related media company.

Latham announced its plan to open offices in Dubai, Abu Dhabi and Doha

in February this year and relocated four partners from London, New York and Silicon Valley to Dubai.

It is understood that 55–60% of Middle Eastern sovereign funds investment goes directly to the US, putting the US firm in a strong position in the region.

Latham has been the first US-based law firm in history to announce over US$2bn in annual revenue last year. ALB 23

NEWS >>

SOUTHEAST ASIA uk report Eversheds joins the list of UK firm layoffs Eversheds has joined the (increasingly long) list of UK firms cutting staff in the wake of the credit crunch.

The firm is reportedly on the verge of making as many as 33 lawyers across the firm plus related support staff redundant, and is also said to be shutting down its Norwich office due to the downturn in property work.

As ALB recently reported, the redundancy consultation process, launched in September, has been dubbed “Project August”. Those lawyers and support staff that are not made redundant from the Norwich office closure will be transferred to the firm’s Cambridge office.

Credit crunch fallout continues The impact of the credit crunch is still affecting deal volumes in the UK, according to fresh data on UK M&A published by the Office of National Statistics. The report suggests that the number and value of UK deals for the first half of this year have decreased by around a quarter compared to the same period a year ago.

The figures show a drop 26% in volume and of 24% in value (555 transactions in the first half of 2008, valued at £72.6bn) when compared to same period last year. Q2 2008 showed a further decrease to 240 deals with a value of

£31.8bn, down 39% from Q2 2007 and 60% from Q2 2007 respectively.

UK lawyers are loving life Most lawyers are happy go lucky, despite recent increases in workload and having to work an extra day a week, according to data from UK recruitment consultants Badenoch & Clark.

The report found that one in five employees claim to have an increased workload, due to firms failing to fill spaces left by departing staff members.

Yet despite the extra work, the research suggests lawyers remain content with their roles and current employers, with 82% of lawyers implying that are happy in their jobs, and 73% of respondents saying they do not plan to change jobs this year.

US firms top City trainee retention rates Earlier plans to focus on organic growth in London have paid off for US law firms wanting to ramp up their presence in the City.

US firms such as Bingham McCutchen, Cleary Gottlieb Steen & Hamilton, Covington & Burling, Debevoise & Plimpton and Dewey & LeBoeuf are reportedly leading the way on London trainee retention, with the five firms boasting a retention rate of 100% for their qualifying trainees.

¨ ROUNDUP • Allen & Overy has pledged to put litigation growth at the centre of its global strategy and is reportedly aiming to increase the practice’s contribution to global revenue by 50% over the next four years • A study from Deloitte recently revealed a fall in Q1 revenue growth for UK firms from 15.1% last year to just 6.3% on average this year • Bird & Bird has launched four offices in Central and Eastern Europe (Bratislava, Budapest, Prague and Warsaw) in a bid to gain work from new growth markets. Technology and media partner Stephen Kines is leading the initiative • Simmons & Simmons 10 international practice group (IPG) heads are now based in the City after corporate chief Damon Le Maitre-George (based in Hong Kong) and information, communications and technology (ICT) head Job Rietkerk stood down this month to focus on practice groups in their respective jurisdictions and were replaced by London-based partners Mark Curtis and Tom Wheadon respectively • The London office of Australian firm Mallesons Stephen Jaques recently poached Robert Hanley, UK managing partner of Minter Ellison – the only other Australian firm with an office in the City • US firm Howrey has re-jigged its management and named intellectual property (IP) partner Mark Hodgson as its new London head

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KhattarWong and KK Chong form crossborder alliance

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o tap a wider pool of clients in South East Asia, Singapore law firm KhattarWong and Malaysia firm KK Chong and Co have signed an alliance that will see resources and networks shared across the Johor Baru causeway.

“The move will place KhattarWong in a better position to serve its growing clientele in Malaysia, while KK Chong & Co will tap into KhattarWong’s expertise, resources and network to develop into a first-tier law firm with branches in Johor and Penang,” said KhattarWong’s managing partner Tan Chong Huat.

Such an alliance will serve both firms well. KhattarWong hopes to capture part of a Malaysian market that has tended to exclude foreign law firms and KK Chong & Co hopes to develop a more international practice.

KhattarWong has regional practice groups which work closely with law firms and clients in countries such as China, Malaysia, Vietnam, India, Middle East, Japan, Brunei and Indonesia.

It has 150 lawyers and its areas of practice include banking, finance & property, corporate & securities laws, litigation, tax, intellectual property & technology, shipping, construction and criminal law.

The Singapore and Malaysia legal services market seem to be moving rapidly Tan Chong Huat, closer. Allen & KhattarWong Gledhill announced a major alliance agreement with Zaid Ibrahim & Co in October last year, while Alban Tay Mahtani & de Silva (ATMD) continue to draw on its 2005 arrangement with Tay & Partners through their joint venture, AxcelAsia Group. ALB Asian Legal Business ISSUE 8.10

NEWS >>

INDIA

Booming infrastructure to boost deals in India

E

ven though the latest Thomson figures state that Indian transactional activity for the first half of 2008 is down by almost 27%, law firms are bracing themselves for a dramatic increase in foreign direct investment (FDI), M&A and private equity (PE) work in the months ahead as the Indian government reaffirms its commitment to improving the country’s infrastructure.

Prasanth Sabeshan of Freehills notes that vital infrastructure such as transportation, telecommunications, power and water are all areas which are expected to take off in the short to midterm, thanks largely to the PE injections of heavy hitters like Babcock & Brown and Macquarie Bank.

“We are beginning to see more and more interest in foreign infrastructure ventures and clients are already pitching for them,” he says.

SINGAPORE

Babcock & Brown recently announced its intention to invest US$2bn in Indian property and infrastructure, and Macquarie Bank floated its US$1bn India Infrastructure Opportunities Fund in the last quarter of 2007.

But, according to Sabeshan, it is not just a case of sitting tight for Indian law firms, as the work opportunities depend on a number of critical factors. “Although more legal work is anticipated in the next six months, it’s reliant on the success of these foreign infrastructure ventures,” he said.

The key element, it seems, rests on whether the impending general elections will deliver the promised easing of foreign investment restrictions.

“The government departments will be keen to introduce positive measures to ease restrictions on foreign investment and create more opportunities for foreign

Jones Day gears up for Singapore foreign law practice licence

I

nternational law firm Jones Day has been invited to apply for a Qualifying Foreign Law Practice (QFLP) licence in Singapore and has taken onboard capital markets lawyer Brian Wesol to further boost its Singapore office capital markets team.

Wesol, a capital markets specialist with 15 years’ experience, is expected to anchor Jones Day’s capital markets team in its bid for the firm’s QFLP licence. He represented Indonesia in its single largest US$2.2bn bond offering, which was completed in a record time of five weeks and won him “Debt Market Deal of the Year” at the ALB Southeast Asia Law Awards in 2007.

Singapore’s Ministry of Law has announced that it will accept QFLP applications. Only five licences will be

www.legalbusinessonline.com

players to have stakes in Indian industry,” says Sabeshan.

If this happens, the amount of work on offer is set to remain steady for Indian firms and for firms in countries with a history of strong investment in India, such as Australia. Sabeshan is already witnessing this trend.

“We are anticipating more deals in Australia. Corporate India has increased balance sheets by undertaking M&A activity outside of India” he says. “It is interesting [that it’s happening] both ways – Aussie companies wanting to test out the waters in India, especially in the mining and resources sector, and Indian companies into Australia, which was actually more than what Australia invested in Indian business. That is likely to increase with more access to capital as the market develops.” ALB

granted initially. The QFLP is part of Singapore’s plan to liberalise its legal market to support its financial services sector in the city state. Currently, foreign law practices are permitted to practise Singapore law only in a Joint Law Venture with a Singapore law practice. Under the new QFLP scheme, selected foreign law practices will be allowed to practise Singapore law in permitted areas and employ Singapore-qualified lawyers.

Selection criteria for foreign law firms applying for QFLP licences in Singapore: • Ability to draw international clients and investments into Singapore • Ability to grow and help develop Singapore’s legal infrastructure • Ability to support Singapore as a regional financial hub and legal • centre of choice ALB 25

NEWS >>

us report Fried Frank retrenches staff Fried Frank is the latest US law firm to slash staff – but this time the credit crunch is not to blame.

The layoffs, which affect almost 10% of the firm’s total of 730 global support staff, are part of a two-year efficiency review, according to the firm, and will primarily affect floating secretaries, part-time assistants, and paralegals and library personnel in the New York and Washington DC offices of the US firm.

None of the firm’s 650 lawyers are currently facing redundancy – for now.

Eight partners, six of whom are in the equity, have chosen to stay at Taylor Wessing France.

Taylor Wessing partner exodus Taylor Wessing France (TWF) has lost 12 nonequity partners, after the group resigned to join US firm Nixon Peabody.

The two firms are involved in ongoing New York legal battles after Nixon Peabody allegedly violated a non-disclosure agreement that the firms would not poach staff if merger talks fell apart.

Thelen Reid and Nixon Peabody may join forces There has been widespread speculation that Thelen Reid Brown Raysman & Steiner and Nixon Peabody are in merger talks, with a possible agreement pending. Although neither firm would confirm the reports, Nixon Peabody demonstrated an interest in international growth with the recent recruitment of the eight-partner team from Taylor Wessing France.

Heller moves on to Mayer Brown Heller Erhman seems to have bounced back quickly from botched merger plans with Baker & McKenzie. Reports are circulating that the US firm is in merger talks with Mayer Brown, although the firm has made no official comment to support or deny the rumors.

Other possible merger candidates are thought to have included Winston & Strawn and Proskauer Rose.

BAHRAIN

Freshfields powers up presence in Bahrain

D

¨ ROUNDUP • Michael Lyle will soon replace David Berz as managing partner of the Weil Gotshal & Manges DC office • Baker & McKenzie is doing well, despite the collapse of merger talks with Heller Erhman. The firm recently reported revenues of US$2.19bn for the year to the end of June, up from US$1.83bn last year • Cadwalader Wickersham & Taft has taken advantage of the developing covered bond market in the US and launched a transatlantic covered bond practice group made up of 12 partners across the firm’s London, New York and Charlotte offices • DLA Piper’s US operations will receive steady leadership until at least 2013 with the recent re-election of joint chief executive Lee Miller to serve another four years in the position • US powerhouses Shearman & Sterling and Sullivan & Cromwell recently bagged top roles on insurance giant Allianz’s Euro9.8bn (£7.9bn) sale of Dresdner Bank to German rival Commerzbank • A study of 165 US firms by Citi Private Bank recently revealed that, while expense growth has remained high at most US firms, revenue growth over the first half of 2008 fell to its weakest point in seven years, with profits per equity partner (PEP) decreasing by 9.1% over the period • Recent reports suggest that sitting chair Arthur Culvahouse, who is currently completing his second four-year term, is tipped to win out over the other four candidates competing for the chair of O’Melveny & Myers

26

eep connections and goodwill have gone a long way for Freshfields Bruckhaus Deringer in Bahrain as it picked up its third power deal from the Bahrain government. The firm advised them on the development of the US$2bn Al Dur Independent Water and Power Project, consisting of a power plant and a desalination facility.

Last year, the firm advised the Bahrain government on the US$738.2m sale of the Al Hidd water and power plant to a consortium comprised of International Power, Sumitomo Corporation and Suez Tractebal (the first privatisation of a power and water generation asset in Bahrain) and in 2005 the firm represented the Bahrain government on the development of the Al Ezzel independent power plant.

Freshfields’ close relationship with the Bahrain government began 10 years ago, when it acted for them in a land and maritime border dispute with the State of Qatar and gained a successful resolution of the matter for the Bahrain government. Since then, it has had the ears of the Bahrain government – including the Ministry of Finance and National Oil & Gas Authority – and the Royal Court of Bahrain. ALB Asian Legal Business ISSUE 8.10

NEWS >>

CHINA

UPDATE >>

Skadden, Freshfields put fizz in Coca-Cola’s US$2.4bn bid for Chinese juice maker

International Arbitration

I

n what may be the largest-ever foreign takeover of a Chinese company, Coca-Cola has made a US$2.5bn cash bid for the China Huiyuan Juice Group, the dominant brand in China’s fast-growing fruit juice market.

The US soft drinks giant instructed Skadden and local firm Dacheng Law Office for corporate work on the deal, while Huiyuan used Freshfields Bruckhaus Deringer.

Skadden lawyers Martha McGarry in New York, Greg Miao in Beijing and Nick Norris in Hong Kong are leading the deal.

None the various firms involved has made comments regarding the deal, given the possibility that it could come under the scrutiny of China’s new anti-monopoly law, which came into effect on 1 August. The provisions relate mainly to anti-competitive monopoly agreements, abuse of dominant position and abuse of administrative power.

Having just been listed among the top 25 domestic brands last year by China Brand Union Association, Huiyuan has the largest share of the Chinese juice market. The company was listed on the main Board of the Hong Kong Stock Exchange last year.

Talk of the takeover bid has roused nationalistic sentiment among locals. In an online poll posted by major portal Sina.com, more than 80% of the over 76,000 interviewees voted against the acquisition of the leading domestic juice maker. A similar proportion held the opinion that the successful acquisition of Huiyuan would cede the local brand’s integrity to a foreign investor.

Huiyuan was established in China’s Shandong province in 1992, and has a nationwide network and an annual output capacity of 2.2 million tonnes. ALB

Interim Injunctive Relief in International Arbitration

I

t is not uncommon for parties to an arbitration to have to seek interim injunctive relief. Under s 12 of the International Arbitration Act (IAA), an arbitral tribunal has the primary power to make orders for injunctive relief, with the Singapore Court being granted a supportive role to assist in the process. This is to be contrasted with the domestic arbitration regime where the power to grant injunctive relief is vested in the court alone.

The concurrent jurisdiction of the court and the arbitral tribunal in granting injunctive relief in international arbitrations means that arbitral parties can choose to make their application to either body as they deem expedient.

But how should an arbitral party determine “expediency” in this context?

Recently, in NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR 565 (“Alliance Concrete”), the Singapore Court of Appeal examined the drafting history of s 12 of the IAA and concluded that the Court’s role in international arbitration proceedings was intended to be a narrow one, operating only in situations of urgency, where third parties over whom the arbitral tribunal has no jurisdiction are involved or where the court’s coercive powers of enforcement are required. The Singapore Court will, in the words of Justice V K Rajah, “scrupulously avoid usurping the functions of the arbitral tribunal” to which parties have willingly submitted their dispute.

Limiting the Court’s powers serves two purposes – first, to maintain certainty in international commercial arbitration so parties know when to expect curial intervention; and second, to guard against the abuse of judicial process arising from a party to an arbitration agreement delaying arbitration proceedings by taking out interim applications in Court. The latter occurred in Alliance Concrete, where the appellant applied to Court for an interlocutory mandatory injunction to compel specific performance on the ostensible basis that it was intending to commence arbitration; but it never did. The Court held the appellant’s conduct to be an abuse of process as the appellant was effectively using the curial process as a backdoor method to resolve its dispute with the respondent.

The availability of interim injunctive relief is often vitally important in achieving a satisfactory result in an arbitration.

It is helpful that the Singapore Courts have clarified the role of the arbitral tribunal and that of the Courts in granting such relief.

Mr Cavinder Bull SC is a Director of Drew & Napier’s Litigation and Dispute Resolution Department. He is one of the few Senior Counsel appointed before the age of 40. Asia Pacific Legal 500 describes Cavinder as “held in the highest esteem by clients and rivals alike” and recommends him for International Arbitration and Dispute Resolution. He can be contacted at +65 6531 2416 or Cavinder.Bull@drewnapier.com. For his full CV, please visit http://www.drewnapier.com/directors.html

www.legalbusinessonline.com

Cavinder Bull, SC

27

NEWS | appointments >>

APPOINTMENTS ► LATERAL HIRES

Cadwalader

Name

Leaving

Going to

Practice

Location

Mark Godfrey

Allen & Overy

Latham & Watkins

Banking & finance

Abu Dhabi

Mark Roppel

Cadwalader Wickersham & Taft

Allen & Overy

M&A

Beijing

James Luo

Motorola

Bird & Bird

Intellectual property

Beijing

Thomas Man

Orrick

Lovells

M&A

Beijing

Mark Allen Cohen

US Embassy

Jones Day

Intellectual property

Beijing

Henry Wang

General Motors – Shanghai

Dechert

Executive

Beijing

Joseph Cha

Heller Ehrman

Proskauer Rose

Private equity

Beijing

Ying Li

Heller Ehrman

Proskauer Rose

China practice

Beijing

Julie Zhang

Baker & McKenzie

JSM Mayer Brown

Tax

Beijing

Eric Milne

Freshfields

Simmons & Simmons

Banking & finance

Dubai

Andrew Chvatal

Simpson Thacher & Bartlett

Abraaj Capital

Private equity

Dubai

Darius Jannat

Simpson Thacher & Bartlett

Abraaj Capital

Private equity

Dubai

Pervez Akhtar

Allen & Overy

Abraaj Capital

Private equity

Dubai

Richard Keenan

Milbank

Chadbourne & Parke

Projects

Dubai

Tim Ross

Linklaters

Latham & Watkins

Banking & finance

Dubai

Stephen Birkett

Hong Kong Securities and Futures Commission

Morrison & Foerster

Capital markets, securities

Hong Kong

Michael KS Chan

Jones Day

K&L Gates

M&A, securities

Hong Kong

Gavin Lewis

UBS AG

Herbert Smith

Litigation

Hong Kong

Susheela Rivers

Clifford Chance

DLA Piper

Real estate

Hong Kong

Meiling Yip

Simmons & Simmons

Kennedys

Insurance

Hong Kong

Shubhada Bhave

Advani & Co

Cotty Vivant Marchisio & Lauzeral

India practice

Singapore

Eric Chan

Monetary Authority of Singapore

Drew & Napier

Banking & corporate

Singapore

Rahul Guptan

Amarchand & Mangaldas & Suresh A Shroff & Co

Clifford Chance

Capital markets

Singapore Singapore

Leigh Borrello

Clyde & Co

Norton Rose

Aviation

Tang Siau Yan

Inland Revenue Authority

Allen & Gledhill

Tax

Singapore

Kenju Watanabe

Skadden

Paul Hastings

Corporate

Tokyo

Daniel Lee

IBM Korea

DLA Piper

Korea practice

Tokyo

Greg Buhyoff

Baker & McKenzie

Lovells

IP

Vietnam

Nasir PKM Abdul

Ngo Migueres & Associes

Lovells

Inbound investment

Vietnam

▲ RELOCATIONS Firm

Partner

To

Allen & Overy

Andrew Schoorlemmer

London

Dubai

Allen & Overy

Chris Thornes

London

Dubai

Allen & Overy

Nicholas Crossin

Singapore

Abu Dhabi

Allen & Overy

Tom Levine

London

Abu Dhabi

Allen & Overy

Johannes Bruski

Frankfurt

Riyadh

Chadbourne & Parke

Sohail Barkatali

London

UAE

Chadbourne & Parke

Mark Pring

London

UAE

DLA Piper

Duncan Pickering

London

Dubai Shanghai

Freshfields

Heiner Braun

Frankfurt

Linklaters

James Martin

London

Dubai

Linklaters

Richard O’Callaghan

London

Dubai

Linklaters

William Liu

Hong Kong

Shanghai

Paul Hastings

Christian Petersen

Hong Kong

Tokyo

Proskauer Rose

Yuval Tal

New York

Hong Kong

See also News section for further news on partnership expansion

28

From

Allen & Overy

Allen & Overy takes Cadwalader’s sole Beijing partner Allen & Overy (A&O) has bolstered its capital markets offering with the hire of Mark Roppel, the former managing partner of Wall Street firm Cadwalader Wickersham & Taft’s Beijing office.

Roppel, who took the helm at Cadwalader’s Beijing office in 2006, is now based in A&O’s Shanghai office as a corporate practice partner, but is also expected to split his time between Beijing and Hong Kong.

A&O’s head of US law, David Johnson said: “With his immense experience, Mark will immediately broaden our US M&A capabilities and significantly strengthen our existing capital markets practice in Hong Kong, China and across the region.”

Motorola

Bird & Bird

Bird & Bird gets IP specialist from Motorola Intellectual property (IP) veteran James Luo is now heading Bird & Bird’s Asian enforcement practice in Beijing. He was previously Motorola’s senior IP counsel and in charge of IP enforcement and litigation in mainland China, Hong Kong, Taiwan, Japan, South Korea James Luo and Vietnam.

Luo has extensive experience in all types of contentious and non-contentious IP work covering patents, trademarks, copyright and design, preparation of IP enforcement strategies, handling lobbying efforts with law makers and IP enforcement authorities, and negotiation of royalty licences with Chinese multinationals.

Bird & Bird’s intellectual property team in Hong Kong and Beijing provides the full range of contentious and non-contentious IP services. The firm is able to file trademarks directly in China through its own trade mark agency Bird & Bird IP (Beijing) Co. UBS AG

Herbert Smith

Bank in-house counsel returns to Herbert Smith Making the move in-house has become somewhat commonplace for today’s corporate lawyer, but a move in the other direction – from in-house to private practice – is something that is much harder to pull off.

Not so for Gavin Lewis, who has joined Herbert Smith’s Hong Kong office as a partner. Lewis’ move brings the number of partners in Herbies’ Hong Kong litigation team up to five. Lewis will link up with Herbies’ litigation and contentious regulatory practice after having spent the last two years at UBS AG heading up the investment bank’s litigation and regulatory inquiries unit for Asia-Pacific.

Lewis, who first joined the firm in 1996, had advised Asian Legal Business ISSUE 8.10

NEWS | appointments >>

clients involved in investigations by the Securities and Futures Commission and the Independent Commission Against Corruption (ICAC) in Hong Kong.

US Embassy

Jones Day

Intellectual property expert hops to Jones Day Mark Allen Cohen, senior intellectual property attache at the US Embassy in Beijing, has joined Jones Day’s Beijing office as of counsel, focusing on intellectual property and technology transfer matters.

Cohen served as an attorney-adviser for the Office of International Relations of the US Patent and Trademark Office, and was involved in bilateral patent and trademark prosecution, Internet copyright enforcement, civil litigation technical assistance, anti-monopoly law, domain name dispute resolution, standards setting and technology transfer initiatives.

The Hong Kong SFC

Morrison & Foerster

Morrison & Foerster hires corporate finance veteran Morrison & Foerster’s securities presence in the region is getting a boost through the addition of Stephen Birkett to its Hong Kong team.

Birkett’s expertise includes securities regulatory matters, Stephen Birkett and he joins the firm from the Securities and Futures Commission (SFC) in Hong Kong, where he served for three years as Senior Director of Corporate Finance. Before that, he was a partner in Johnson Stokes & Master (now Mayer Brown JSM), where he was head of corporate finance.

He has more than 20 years' experience in corporate finance transactions in Hong Kong and London.

various

Lovells

Lovells captures two lawyers in Vietnam There was no slowing down for the acquisitive Lovells this week. The firm not only snared Thomas Man for its Beijing office but also announced that it has signed up two senior consultants for its flourishing Vietnam office.

Greg Buhyoff, formerly of Baker & McKenzie, will spearhead the firm’s IP practice while Nasir PKM Abdul, formerly of local firm Ngo Migueres & Associes, will guide European, US and Asian clients through their inbound investment activities.

Earlier this year, the firm brought on board international arbitrator Richard Tan in its Singapore office, IP specialist Chung Nian Lam and leading energy specialist Brad Roach. www.legalbusinessonline.com

Jones Day

K&L Gates

K&L Gates lures Chan from Jones Day K&L Gates announced that it has secured the services of corporate partner Michael KS Chan in its Hong Kong office.

Chan, who was previously a partner at Jones Day, is a noted M&A and securities specialist who has particular expertise in venture capital and private equity investments, corporate restructurings and finance.

The move is expected to bolster the firm’s offering in these areas and be a shot in the arm for its China cross-border capabilities. The firm opened its second office in China in May this year and more recently absorbed nine lawyers from Taipei-based firm J&J Attorneys-at-law.

IBM Korea

DLA Piper

Lee to lead DLA Piper’s Korean practice in Asia DLA Piper recently has announced that it has secured the services of M&A specialist, Daniel W Lee. Lee, who will work out of the firm’s Tokyo office, was previously general counsel at IBM Korea and a foreign legal consultant with Korean firm Kim & Chang. Lee has acted on a number of billion-dollar investments by some of Korea’s largest companies.

It is expected that his extensive M&A, compliance and forensic & regulatory expertise will heighten the firm’s ability to service Japanese companies and other clients who have investment interests in Korea.

Tokyo managing partner Lance Miller says Lee’s move will round off the firm’s Korea-related team. “With Daniel on board, we now have Korean practitioners in a number of regional markets to counsel clients in Korearelated legal and business matters.”

At present, DLA Piper cannot have an office in Korea, but Lee’s move may well be read as preparing the ground for the time when foreign firms are allowed to set up Seoul offices.

various

“Having an office in the region is already helping us further develop our practice. Our continuing work with sponsors and our appointment as lenders counsel on some of the region’s projects is indicative of how the market perceives us,” said Barkatali.

Among its many energy & resources projects, its project finance team in London is currently advising Veolia and the Besix Group on the development and financing of two wastewater projects in Abu Dhabi.

Denton Wilde Sapte

Commercial pilot

Denton Wilde Sapte’s aviation partner takes to new heights While other lawyers rush in droves to the Middle East in jumbo jets, Denton Wilde Sapte’s aviation partner Owain Jones – who already has a private pilot’s licence – is flying the coop to pursue a career as a commercial pilot.

Jones, who has been flying solo at the firm’s Abu Dhabi office in 2006 as its only aviation partner, has been with Denton Wilde Sapte for 12 years. He specialises in aviation, covering aircraft and asset finance and aviation regulatory matters for banks, export credit agencies, airlines, operating and finance lessors, manufacturers and ground service companies.

He has worked on a number of the largest exportcredit backed aircraft deals over the last few years, including fleet renewals in Air Canada and Lan Chile. Denton’s aviation team comprises seven partners, most of whom are located in the firm’s London head office.

Freehills

DLA Piper

Head of funds from Freehills moves to DLA In setting up a new transactional funds practice dedicated to its clients on equity capital markets and M&A in Asia, DLA Piper has hired Freehills’ partner and head of funds Luke Gannon to head the practice in Hong Kong. Gannon said he decided to join DLA Piper because it would give him more opportunity to work cross-border and experience a new culture. “Hong Kong is one of the biggest financial centres in the world; it’s still the gateway to China,” he said.

Chadbourne & Parke

Chadbourne & Parke latest to energise Middle East presence Expectations of a continuing surge in Middle East energy & infrastructure projects have spurred Chadbourne & Parke to transfer Sohail Barkatali and Mark Pring from its London office and poach Richard Keenan from Milbank for its Dubai office. Although the firm opened its office in May 2007, it has serviced most of its Gulf projects practice out of its London office. The three partners are expected to boost its project finance, insurance and arbitration capabilities in the energy sector on the ground.

Allens

JSM Indochina

Allens lawyer swings over to the client Allens lawyer Chau Ta has taken up a company secretary role with JSM Indochina.

Chau, a qualified Australian lawyer, said she had acted for JSM when she was working for Allens’ Ho Chi Minh City office, and liked JSM’s approach and area of investment enough to apply for work.

She said her new job requires her to provide legal advice in the best commercial interests of the company, and her colleagues are more specialised in their work.

29

NEWS | regional update >>

Regional updates

CHINA

32

CHINA Paul Weiss

PHILIPPINES SyCip Salazar Hernandez & Gatmaitan

MALAYSIA Tay & Partners

SINGAPORE Loo & Partners

INDIA Singh & Associates

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

China Issues Filing Standards for Business Concentrations On August 3, 2008, two days after China’s Anti-Monopoly Law (the “AML”) came into effect, the State Council determined the thresholds above which business concentrations must be reported to the Anti-Monopoly Bureau of the Ministry of Commerce (“MOFCOM”) under the AML. This rule has been eagerly awaited: from now on, mergers, acquisitions and other transactions through which one undertaking obtains control over another – both inside and outside China – are subject to a new government procedure, if the thresholds are exceeded.

Under the State Council Provisions of Filing Standards for Concentrations of Operators (the “Provisions”), any of the following two tests triggers the reporting obligation under the AML: • during the fiscal year preceding the concentration, the (aggregate) worldwide turnover of all enterprises participating in the transaction exceeded RMB 10 billion and the turnover within China of at least two participating enterprises individually exceeded RMB 400 million; or • during the fiscal year preceding the concentration, the (aggregate) turnover within China of all participating enterprises exceeded RMB 2 billion and the turnover within China of at least two participating enterprises individually exceeded RMB 400 million.

The Provisions do not specify how turnover should be calculated, and therefore some key determinations will need to be made by the Anti-Monopoly Bureau. When deciding whether a filing is required, parties should assume that turnover is calculated by consolidating

the party to the transaction and its subsidiaries. However, it is not yet clear how MOFCOM will define “subsidiary” for this purpose and whether the turnover of parent and other affiliated companies needs to be included as well.

Even when the thresholds are not met, the Provisions authorize the Anti-Monopoly Bureau to conduct investigations if “the facts and evidence collected in accordance with prescribed procedures show that such concentration has or may have the effect of excluding or restricting competition.” Again, it is not yet clear what these procedures are and how the Anti-Monopoly Bureau will exercise this power.

As many global transactions are between corporations with substantial operations in China, MOFCOM has the potential of becoming one of the antitrust regulators that can make or break deals hatched in another continent, like its counterparts in the United States and the European Union. But it will take time and experience for MOFCOM and practitioners to figure out when a mandatory filing is required, whether voluntary filings are advisable and how anti-monopoly review under the AML will affect the shape and timing of deals.

Written by Hans-Günther Herrmann, counsel Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong Email: hherrmann@paulweiss.com Ph: (852) 2846-0331

PHILIPPINES

The PERA Act: Towards a Secured Retirement On August 22, 2008, President Gloria Macapagal-Arroyo signed into law Asian Legal Business ISSUE 8.10

NEWS | regional update >>

Republic Act No. 9505 or the Personal Equity and Retirement Account (PERA) Act of 2008. The PERA Act provides for a legal and regulatory framework on retirement plans, comprised of voluntary personal savings and investments.

Under the law, a contributor, of legal age, may establish a Personal Equity and Retirement Account (PERA) in order to invest in PERA Investment Products in the Philippines. He or she may maintain a maximum of five (5) PERA, at any one time. These PERA Investment Products include among others, unit investment trust funds, mutual funds, annuity contracts, insurance pension products, pre-need pensions plans, shares of stocks and other securities listed and traded in a local exchange.

A contributor may make an annual maximum contribution of one hundred thousand pesos or its equivalent in any foreign currency. For married individuals, each spouse may annually contribute up to one hundred thousand pesos or its equivalent foreign currency. Overseas Filipino workers can contribute up to a maximum of two hundred thousand pesos in any given year. Also, to encourage private sector involvement, employers may also contribute to his or her employee’s PERA. Earnings may be withdrawn and distributed when the contributor has reached the age of fifty-five (55) years provided at least five (5) annual contributions have been made. The contributor has the option to choose the distribution scheme, which can be in one lump sum or on a pension for a definite period or during the lifetime of the contributor. Nonetheless, complete distribution will be made upon the death of the contributor irrespective of his or her age at the time of death.

To discourage withdrawals prior to the distribution of the retirement proceeds, early withdrawals are generally subject to penalties. This notwithstanding, no early withdrawal penalty is imposed where the contributor is totally disabled or when the funds are withdrawn to pay for accident or illness-related hospitalization exceeding thirty days.

In order to encourage savings, the PERA Act provides a number of tax incentives for contributors and www.legalbusinessonline.com

employers alike. It gives a contributor an income tax credit of five percent (5%) of the total PERA contributions, plus a tax exemption for all the income that he or she will earn from the investments and reinvestments.

Moreover, withdrawals upon reaching the age of fifty-five (55) or upon a contributor’s death are also tax exempt.

It also considers as allowable deductions from the gross income, voluntary contributions of employers to the employee’s PERA. Written by Leighna Katrina S. Sitoy Associate SyCip Salazar Hernandez & Gatmaitan SSHG Law Centre 105 Paseo de Roxas, Makati City 1226 Philippines Phone: (632) 817-98-11 loc. 326 Fax: (632) 817-3896 Email: sshg@syciplaw.com syciplaw@globenet.com.ph Website: www.syciplaw.com

MALAYSIA

managers are given more freedom to acquire foreign real estates. In managing their funds, they are also allowed to obtain a general mandate from unit holders to issue up to 20% of its fund size – a significant departure from the mandatory requirement to first obtain approval from unit holders in a unit holders’ meeting each and every time new units are to be issued.

The other boost came in the form of tax reduction. The Minister of Finance, when announcing the Budget in Parliament, answered the prayers of many investors when he declared a reduction of tax rate payable on dividends given by REIT. Foreigners’ erstwhile tax rate of 20% was reduced by half whilst tax rate applicable to local investors was reduced to 15%.

The liberalisation policies and the culling of tax rates will together generate more keen interest into the REIT industry and trigger an influx of foreign direct investments. If it materialises, market intermediaries and investors alike can certainly brace themselves for exciting and promising times ahead.

Written by David Lee Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia

BOOSTER JABS

Tel: +603 - 2050 1888 DID: +603-2050 1953 Fax: +603 - 2031 8618 Email: david.lee@taypartners.com.my

The real estate investment trusts (“REIT”) industry received 2 massive boosts within a space of seven days.

First, the Securities Commission (“SC”), the main regulator of REIT in Malaysia with an eye to make the REIT industry a vibrant and competitive industry domestically and internationally, announced a series of changes to its Guidelines on Real Estate Investment Trusts (“SC’s Guidelines”) that culminated in greater flexibility for market intermediaries. By doing so, SC now allows foreign shareholding in REIT managers at a high level of 70%. Previously, SC’s Guidelines only allowed foreigners to hold up to 49% of the share capital of a REIT manager.

Besides liberalising foreign participation, SC also granted more flexibility to REIT managers in their investment and management of portfolio. Now, REIT

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NEWS | regional update >>

INDIA

SINGAPORE to their preference if the suspended company is unable find an investment within the timeframe granted.

Prolonged suspension not in interest of shareholders and market “Cash companies” (companies which have sold their operations so that their assets comprise wholly or substantially of cash) and “distressed companies” (companies facing persistent financial difficulties) are given a reasonable period of time under the listing rules to submit proposals for very substantial acquisitions or reverse takeovers (“RTOs”) with a view to resuming trading (“resumption proposals”). Such companies are given an extension of time to implement resumption proposals already approved by the Exchange. Continuation of listing is contingent on companies complying with the listing rules.

Safeguard interest of shareholders Companies should submit satisfactory resumption proposals as soon as they can, to keep their suspension to the shortest period possible. A longer suspension is not necessarily helpful in the search for viable alternatives. Companies under suspension incur expenses, draw down on assets and the return of remaining cash to investors will be delayed. This in turn causes the financial position of such companies deteriorates.

From the past experience, proposals hurriedly put together near the delisting deadline are unlikely to satisfy SGX listing criteria. The prolonged wait for shareholders would have been in vain.

Hence, the Exchange reminds suspended companies to take constructive steps towards the resumption of trading. The Exchange undertakes to process wellprepared proposals rapidly.

Suspended companies and directors should be aware of the opportunity cost for shareholders from prolonged suspension. Besides, cash should be returned to shareholders who can deploy the funds or re-invest according

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Resumption of Trading via RTOs The resumption proposals which involve very substantial acquisitions or RTOs have to comply with the standards and scrutiny applicable to initial public offering applications, in order to ensure consistent application of listing standards. Otherwise, unqualified listing applicants may obtain listing status by acquiring suspended companies.

RTOs often involve significant dilution of shareholding level of the incumbent minority shareholders. The directors of suspended companies have the responsibility to evaluate whether RTOs will benefit incumbent minority shareholders vis-à-vis returning the cash earlier to shareholders.

Extension to implement viable resumption proposals For the reasons outlined above, the Exchange does not have strong grounds for granting extensions of time without clear signs of distressed and cash companies submitting viable resumption proposals. An extension will be granted where it is necessary to implement viable proposals that would restore the companies to compliance with continuing listing obligations on a sustained basis.

Maintaining Listing Standards The Exchange prescribes minimum entry requirements and continuing listing obligations, in order to maintain quality and foster an enduring marketplace.

Maintaining listings standards is critical in upholding the integrity of the market and safeguarding the interest of shareholders.

Written by Ms Eng Hui Ting and Mr Nicholas Chang Corporate Finance Executive Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg and Mr Nicholas Chang Corporate Finance Executive, Ph: (65) 6322-2236 Fax: (65) 6534-0833 E-mail: nicholaschang@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

Singh & Associates

Currency Futures Contract: A new player in capital market of India.

In the context towards the continued expansion of the financial market, the financial regulating bodies of India, Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) have always initiated various kinds of steps whether it is introducing short selling activities or issuing guidelines for listing of Debentures or reducing the time span in issuing right shares to 43 days, etc. Now they have added a new tool to the existing menu of foreign exchange hedging tools available to the residents, i.e. ‘Exchange traded currency futures contract’. It has been felt by the regulators that wider hedging opportunities could enhance the flexibility for the residents to manage their currency risk dynamically, so this move is a step towards mitigating the risk.

Exchange traded currency futures contract shall facilitate efficient price discovery, enable better counterparty credit risk management, wider participation, trading of standardized product, reduce transactions costs, etc.

Permission to participate in the currency future market in India is subject to directions contained in the currency futures (Reserve Bank) directions, 2008.

Currency Futures can be described as a standardized foreign exchange derivative contract traded on a recognized stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of contract, but does not include a forward contract and currency future market means the market in which currency futures are traded.

The General Permission has been given for currency futures in US DollarIndian Rupee or any other currency pairs, as may be approved by the Reserve Bank from time to time. At Asian Legal Business ISSUE 8.10

NEWS | regional update >>

present the Reserve Bank of India has only allowed US Dollar-Indian Rupee currency pairs.

Future contract in the form of currency is exactly like a futures contract on Nifty.

A future price F is traded on the screen.

That pertains to the INR/USD exchange rate at a future date. If the spot price goes up, the futures buyer (the long) makes a profit at the expense of the futures seller (the short). The futures will be cash settled. The gainer will be paid in rupees by the loser. No foreign exchange will change hands. No foreign exchange will cross the boundary of India.

It is important to mention that at present only persons resident in India as defined under Section 2(v) Foreign Exchange Management Act, 1999 shall participate in the currency futures market and can purchase or sell currency futures to hedge an exposure to foreign exchange rate risk or otherwise.

To begin with, Foreign Institutional Investors (FIIs) and Non-Resident Indians (NRIs) would not be permitted to

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participate in currency futures market.

Among the various other features of the directions, 2008 the main features are that only USD-INR contracts are allowed to be traded. The size of each contract shall be USD 1000. The contracts shall be quoted and settled in Indian Rupees. The maturity of the contracts shall not exceed 12 months. The settlement price shall be the Reserve Bank’s reference rate on the last trading day.

The Reserve Bank of India from time to time shall modify the eligibility criteria for the participants, participant wise position limits, prescribe margins and/ or impose specific margins and/or impose specific margins for indentified participants, fix any other prudential limits, or take such other actions as deemed necessary in public interest or in the interest of financial stability and orderly development and maintenance of foreign exchange.

As far as participation of banks are concerned, to enable Banks to become clearing members and/or Trading

Members of the currency derivative segment of an Exchange, an exchange shall amend its bye laws as suggested by RBI and SEBI. It is expected that after curing the initial hiccups which may be caused in the functioning currency futures the regulators will not wait for long to allow the FIIs and NRIs to join the arena of currency futures.

Written By Mr. Manoj K Singh, Managing Partner, and Ms. Daizy Chawla.

For more information, please contact:Singh & Associates, Advocates and Solicitors N-30, Malviya Nagar, New Delhi-110017 Ph: 91-11-26680927, 26687993, 26680331 Fax: 91-11-26682883 Website: www.singhassociates.in Email: newdelhi@singhassociates.in

35

Firm Profile

AzureTax

Trusts: myths explored Deborah Annells of Azure tax speaks to ALB about some of the common myths about trusts Q: What are some of the common myths about trusts and trustees?

A: In the past, trustees sometimes got a bad reputation because they disclaimed responsibility for advising on tax issues.

Nowadays trustees generally can’t rely on such disclaimers. For example, there’s a myth that trusts don’t report for tax. In fact most trusts have reporting obligations. So the perception that there is a blanket “nondisclosure” approach to items being held in a trust is becoming less and less valid. There are many good reasons for setting up trusts, and these are not just limited to tax. Tax efficiency is important, but often not the main reason for setting up a trust.

Q: So the nature of trusts and trust professionals has changed?

A: Yes. There are more trustees who handle tax issues and these are becoming more and more common in the market. There’s also more scrutiny of the opening of bank accounts and investment holding accounts within trust arrangements. When a trust bank account is opened, there will be a thorough due diligence process looking at the people behind the trust structure.

Q: What kind of work is Azure engaged with?

A: We run an international tax practice, but we also have first hand experience as trustees. We often advise trustee’s, settlors and beneficiaries on the filing of taxes in situations where we’re not necessarily the trustee – we’re the tax adviser. We often do give professional advice to other trustees or indeed settlors or beneficiaries on their tax reporting requirements, in many jurisdictions.

36

Q: Is there a difference between the trust regulatory landscape in HK and Singapore?

A: HK has a far more rigorous/anti-money laundering regime and is on par with the UK and the US in this regard. HK has adopted international anti-money laundering laws, so that trusts have to be fully compliant in the same way individuals and companies have to be. By contrast, Singapore is more relaxed, and deliberately so. They have always said that they want to be the Switzerland of the Far East. So people might use a Singapore trust if, for example, they can’t or won’t disclose the source of the funds. Of course as tax and trust professionals, we would never condone that. Our job in life is to help people comply with the relevant laws.

Q: Do clients from particular countries prefer to set up trusts in particular jurisdictions?

A: We have observed that Mainland Chinese are more often comfortable with trust business in HK - more so than in Singapore.

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.

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

► CHINA Top 10 domestic firms: An, Tian, Zhang & Partners; CCPIT Patent and Trademark Law Office; Chang Tsi & Partners; Hylands; King & Wood; Lifang; Liu, Shen & Associates; Watson & Band; Zhonglun; Zhongzi Top 5 International firms: Baker & McKenzie; Bird & Bird; Gide Loyrette & Nouel; Lovells; Simmons & Simmons

► HONG KONG Top 10 domestic firms: Deacons; Eccles & Lee; Ella Cheong; Lloyd Wise; Marks & Clerk; Mayer Brown JSM; Rebecca Lo & Co; Sit, Fung, Kwong & Shum; So Keung Yip & Sin; Wilkinson & Grist Top 5 International firms: Baker & McKenzie; Bird & Bird; Freshfields Bruckhaus Deringer; Jones Day; Lovells; Simmons & Simmons

► VIETNAM Top 5 firms: Gintasset IP Law Firm; Investconsult Group; Le & Le; Pham & Associates; Vision & Associates

► PHILIPPINES Top 5 firms: Buenaventura Sayoc & De Los Angeles; Poblador Azada & Bucoy; Quasha Ancheta Peña & Nolasco; Romulo Mabanta SyCip Salazar Hernandez & Gatmaitan; Villaraza & Angangco

► THAILAND Top 5 firms: Domnern Somgiat & Boonma; LawPlus; Rouse & Co International; Satyapon & Partners; Tilleke & Gibbins

► INDIA Top 10 firms: Amarchand & Mangaldas & Suresh Shroff & Co; Amarjit & Associates; Anand & Anand; AZB & Partners; Chandrakant M Joshi; FoxMandal Little; K&S Partners; Kan & Krishme; Khaitan & Co; Lex Orbis IP Practice

► MALAYSIA

► INDONESIA

Top 5 firms: Henry Goh & Co Sdn Bhd; Shearn Delamore & Co; Tay & Partners; Wong & Partners; Wong Jin Yee & Teo

Top 5 firms: Am Badar; Amroos & Partners; Biro Oktroi Roosseno; Lubis, Santosa & Maulana; Pacific Patent

► SINGAPORE

► METHODOLOGY

Top 5 firms: Amica Law; ATMD; Drew & Napier; Lee & Lee; Rodyk & Davidson

In the preparation of this report, ALB’s editorial team conducted telephone interviews with, and invited submissions from, corporates and in-house counsel throughout the region. The recommendations put forward by firms as part of the ALB Award series were also considered.

The information gathered was then collated and tallied to produce ALB’s Asia’s leading IP firms.

Note that the recommendations of in-house counsel and corporates were weighted against the recommendations of firms by a ratio of 2:1.

Firms are listed alphabetically.

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Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

► KOREA Top 5 firms: Kim & Chang; Lee International; Shin & Kim; You Me; YP Lee, Mock & Partners

► JAPAN Top 10 firms: Abe, Ikubo & Katayama; Anderson Mori & Tomotsune; H Okada; Momo-O, Matsuo & Namba; Mori Hamada & Matsumoto; Nakamura & Partners; Nishimura & Asahi; Seiwa Patent & Law; TMI; Yuasa and Hara Top 5 International firms: Baker & McKenzie GJBJ; Foley & Lardner; Hogan & Hartson; Lovells; Morrison & Foerster

► TAIWAN Top 5 firms: Lee & Li; Saint Island Patent & Law Offices; Taiwan International Patent & Law Office; Tsai, Lee & Chen; Tsar & Tsai

Asia’s leading IP firms The Asian region was once thought to be ‘weak on IP’. How things have changed. Asia now boasts some of the most complex and sophisticated IP regimes in the world. But, as ALB reports, there is still more change to come and the region’s lawyers are leading the charge

T

he importance of intellectual property issues in Asia has never been higher. Once considered to be lagging behind the US and European IP markets in terms of registration and enforcement, Asia has quickly caught up.

Spurred on by, among other things, the increased flow of international business flowing into and out of the Asian region, more and more businesses have been re-evaluating the business paradigm that saw IP as a means to an end.

As a result, they have come to see that protecting IP should not be discretionary but, rather, should be viewed as a commercial necessity. IP is very much an end in itself.

And it is not just businesses that have been change agents –

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governments in the region have also played a crucial role. The promulgation of domestic laws and regulations, and the institution of IP-related courts and ratification of multilateral conventions and international agreements – as part of a much broader attitudinal groundswell – have assisted those doing business in and out of the region to come to the realisation that good IP protection is a prerequisite of the innovation and foreign investment that is at the heart of a nation’s economic competitiveness, so much so that even those countries with rudimentary IP regimes – the likes of Thailand, Vietnam and the Philippines – are realising there is a need to act.

If Asian governments have proved pivotal in altering business cultures 39

FEATURE | Asia’s leading IP firms >>

and practices, then the same must be said of the region’s IP lawyers.

It would have been almost unthinkable 10 or 15 years ago to suggest that the extent to which a company’s IP portfolio is developed and protected could make or break a multi-billion-dollar M&A, or that IP could be vested as capital into joint ventures or strategic alliances, or even less so be the stuff of capital market investment.

Yet these types of transactions are commonplace, so much so that to dwell on the novelty of them is banal. But this is not to say that mastering these elements alone is the key to success for the region’s lawyers. A common sentiment identified by a number of in-house counsel surveyed as part of this report was that lawyers needed to be proactive rather than reactive when it comes to IP issues.

Says the in-house counsel at a multinational IT company: “Our IP is our business’ competitive advantage, but it’s always under threat. When we do business into Asia, we just don’t want to know what is happening; we want to know

what will happen, and how we can asset manage effectively.”

As can be seen below, the indication is that international law fi rms still maintain an advantage over domestic law firms, despite restrictions being placed on them in relation to practising local law in some jurisdictions like China, Korea and Japan.

But there are distinct signs that the tide is turning and domestic fi rms are beginning to capture a greater market share, the key being local knowledge.

“International fi rms can advise on international aspects of transactions,” says the general counsel at an Australian-based company. “And that is important, yes, but local market knowledge, local legal, cultural and historical knowledge are arguably more important.”

He adds: “Lawyers need to balance the importance of the international with the importance of the domestic.”

And this is advice that is certainly relevant to all IP lawyers operating in and out of the region.

“International firms can advise on international aspects of transactions. And that is important, yes, but local market knowledge, local legal, cultural and historical knowledge are arguably more important” 40

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

“We’re seeing more help from the government and this is extremely important for the country’s economic development. The Beijing and Shanghai courts are strong jurisdictions and we are beginning to see some high damages …”

SUSAN MUNRO, O’MELVENY & MYERS

CHINA: The world’s factory finally gets serious about IP enforcement It may have taken an event the scale of the Olympic Games to bring the importance of IP enforcement in China home to bear, but lawyers throughout the country have adopted the posture that it is better late than never, believing that moves such as the promulgation of a national IP strategy are sure signs that the country is committed to keeping its legal infrastructure on the same track as its economic development.

But this is only part of the challenge, according to IP lawyers in the country.

For while governmental endorsement of the importance of IP is vitally important, the far greater challenge, it seems, rests on convincing the greater majority of the country’s companies that IP enforcement is a winnable battle, not to mention a commercial necessity.

The conventional wisdom, according to sources close to ALB, is that many companies operating in and out of China see minimal value in investing the manpower and capital required of dedicated and effective IP enforcement regimes.

“In my experience, many of the companies operating here have trouble seeing the forest from the trees,” our source says.

“Some perceive IP enforcement as a waste of money.”

This attitude prevails, despite the importance of good IP protection www.legalbusinessonline.com

for attracting FDI, encouraging innovation and developing selfowned brands that increase the competitive power of the domestic industry.

But the groundswell of enforcement activity that took place in the lead up to the Beijing Olympics is considered to be catalyst for attitudinal change, particularly for the willingness of Chinese courts to enforce IP protection.

Susan Munro, of O’Melveny & Myers’ Shanghai office, notes that such moves send a strong signal to the business community as to the utility of Susan Munro, protecting IP. O’Melveny & Myers “We are seeing more help from the government and this is extremely important for the country’s economic development. The Beijing and Shanghai IP courts are strong jurisdictions and we are beginning to see some high damages coming out of these courts,” she says.

The temptation of high damage awards, it seems, is hard to pass up for most companies and may see the IP legal services market grow exponentially in the short to medium term.

While this is certainly an exciting prospect for the nation’s IP lawyers, profiting in the boom in this area is by no means a fait accompli.

For while the need to deliver commercially oriented yet pragmatic advice will remain a permanent fi xture, the key to successful longerterm enforcement plans will turn

on the ability of lawyers to deliver focused enforcement strategies which are malleable enough to preempt, or at least predict, the course of regulatory change in the area.

HONG KONG: Specialists shadowing established players High-end counterfeiting, the flow of fake goods from mainland China and so-called ‘shadow’ companies continue to remain the topical issues in Hong Kong that are major impediments to the protection and enforcement of IP rights.

Despite the gravity of the situation, however, there are signs that the tide may be turning.

The Hong Kong Customs and Excise Department has been extremely active in cracking down on counterfeit syndicates, having established cooperative agreements with the General Administration of Customs in Beijing and the Customs officials in Guangdong province, both of which have yielded immediate results.

The issue of ‘shadow’ companies – a company whose registered name includes a trademark belonging to another party – also continues to loom large on Hong Kong’s IP landscape, with enforcement litigation often being protracted and proving costly.

In this regard, the Hong Kong government has announced that it plans to amend the Companies Ordinance to assist trademark owners combat this problem.

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FEATURE | Asia’s leading IP firms >>

“Our IP is our business’ competitive advantage, but it is always under threat. When we do business into Asia, we just don’t want to know what is happening; we want to know what will happen, and how we can asset manage effectively” But according to sources close to ALB, even if this does go ahead, judicial discretion as to which ‘shadow’ companies should be struck off the company register will remain.

And, judging from the courts’ past interpretation of this provision, this presents difficulties for companies wanting to enforce their IP rights.

However, this has not stopped companies such as Anheuser-Busch, Panasonic, Toshiba and Adidas from launching action against trademarkinfringing companies.

Apart from the high volume of work in this area, pharmaceutical product work also remains high and will only grow as both the mainland government gets serious about enforcement and Hong Kong’s status as the nexus between east and west deepens.

4 42

And while these areas alone will provide more than enough work for Hong Kong’s IP lawyers, the decreasing segmentation of the IP legal services market indicates that specialist IP law fi rms are challenging the market share held by full-service fi rms.

✹

TAIWAN: Creative counsel needed Although Taiwan is recognised as one of the world’s leading electronics manufacturers, IP has remained relatively undervalued by the country’s corporate sector.

Perhaps it has something to do with the structure of Taiwan’s economy: a strong export-led model dominated by the manufacture of products such as LCD parts, computer monitors and semiconductors for use by European and US companies. The standard argument has thus been that it is quite hard to establish a culture of IP protection, much less brand development, in such a situation.

Nonetheless, a change is underway, according to those that ALB spoke to, and is being catalysed by Taiwanese companies outsourcing more work than they receive.

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

For instance, as Taiwanese companies increase their international presence and explore emerging markets in Asia, Russia and the Middle East, companies are realising the need to protect their IP through brand development, building patent portfolios and enforcing rights through international litigation. Companies such as ASUSTek Computer, HTC Corporation and Foxconn are but three examples of this.

Yet, at this stage, it seems that IP activities of this kind are limited to Taiwan’s larger companies, with the majority of the country’s small and medium enterprises (SMEs) possessing no dedicated IP regimes, largely due to the costs involved.

Those ALB spoke to, however, believe that this is an area where IP lawyers need to be more proactive in encouraging Taiwan’s SMEs to see IP as a sound investment, at least in the long term. “IP lawyers need to assume the role of business

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“IP lawyers need to assume the role of business advisors when dealing with smaller clients to lead them through the fact that profiting from good IP may not be a short-term proposition but a lifelong one” advisors when dealing with smaller clients to lead them through the fact that profiting from good IP may not be a short-term proposition but a lifelong one,” said a partner at one of Taiwan’s leading IP law fi rms, noting that even those SMEs which do have a well-developed IP program will need further assistance.

“Smaller companies in Taiwan have operated under a few false assumptions regarding their IP, the biggest of which has been that the relative size of one’s patent portfolio is an important element

in IP protection. Developed patent portfolios are important but may be counterproductive.”

According to this partner, however, some handholding by the country’s IP lawyers, government regulation and cost factors have all seen this trend being challenged at the moment.

“Companies are realising that it’s better to aim for quality rather than quantity in a patent portfolio.

In fact, they’ll probably fi nd that trimming it will make the costs of maintaining it more manageable.”

43

FEATURE | Asia’s leading IP firms >>

INDIA: Liberalisation to open India in more ways than one The Indian IP market is growing at a rate similar to that of India’s economy – rapidly.

Spurred on, inter alia, both by Indian companies seeking to gain the seemingly immediate competitiveness that comes from strategic acquisitions and alliances, and India’s ratification of international IP agreements and bilateral agreements, the IP law market is fast becoming big business for the nation’s lawyers.

And, according to those that ALB spoke to, the growth of the market is anything but fi nalised, with many tipping the area could grow by as much as 15% in the years ahead on the back of regulatory changes designed to stimulate both foreign investment from abroad and innovation and invention at home.

The Public Funded R&D Projects (Protection of Intellectual Property) Bill 2007 and the proposed Innovation Act are two examples of such legislative strategies.

In addition, while the growth of the Internet may have complicated IP landscapes throughout the world, the Indian government is at the forefront of restoring clarity, especially in relation to the issues that arise from the use of domain names.

Unlike most other jurisdictions in Asia, however, it is the smaller boutique practices that dominate the IP legal services market, with the larger full-service fi rms having a minimal presence.

But is this likely to change? ALB’s research suggests that whereas the

smaller specialist fi rms have client portfolios bursting with a variety of domestic clients, it is the larger fi rms in India that daily instruct international clients on their operations in the subcontinent on a daily basis.

And as the importance of international corporations in the driving India’s economic development deepens, this could be the key to shifting the balance of power in the Indian IP legal services market.

KOREA: Globalising IP Of all the countries profi led as part of his survey, Korea is arguably the one in which IP issues have the highest public profi le.

And with good reason, according to Chun Yang, a senior foreign attorney with Kim & Chang.

“Korean companies know that to survive on the international stage IP protection is the way to go,” he says.

He adds that, for Korea, a sound enforcement regime is the key to international competitiveness.

“For Korean companies to catch up with more advanced nations, they need to be more cost effective, especially when compared to countries like China where business costs are much lower.”

And while domestic companies have always known of the commercial utility of protecting IP, the same has not always been the case for international companies operating into and out of Korea, where enforcement has proved either too cumbersome or too costly to implement.

“For Korean companies to catch up with more advanced nations, they need to be more cost effective, especially when compared to countries like China where business costs are much lower” CHUN YANG, KIM & CHANG 44

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

Yet whereas the number of foreign clients seeking advice on Korean IP issues in the past was relatively low, IP practitioners now highlight a distinct upturn in quantum and sophistication of the work.

This is especially the case in terms of patent litigation, a trend tipped to continue as Korea’s IP regulations become more closely aligned with international standards and the Korean Intellectual Property Office (KIPO) shows its willingness to take more of an international lead.

“Foreign clients are instructing more and more in patent litigation,” says Yang. “These matters used to be solely Korean based, but now they are part of multinational patent litigation cases involving corporations based not only in Korea but also in the US, Taiwan and Japan.”

As to the challenges facing the legal services market, Yang believes these are likely to stem from how successfully lawyers are able to

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“There is a mismatch between TLO provisions and regulations elsewhere which is affecting investment into the sector” grapple with the globalised nature of IP in Korea. “No IP issues are local, any more. They are all international and, to succeed, counsel has to adopt an international outlook” JAPAN: IP Flexibility is the cornerstone of innovation Widely recognised as the cradle of innovation in Asia, Japan is one of the most dynamic IP markets in the region. Over the last five years, in particular, the market has undergone growth greater than that experienced by the two IP heavyweights, the US and Europe,

through the creation of the Strategic Council on Intellectual Property, and reform of its regulatory landscape including amendments to its Patent Law, the Patents Attorney Law and introduction of numerous Patent Courts However, while IP may be relatively well developed in Japan compared to other countries in the region, further changes are required to ensure that IP remains flexible in light of changing client demands and technological advances, according to those ALB spoke to.

One area in need of an overhaul is the country’s TLO Laws that have been in effect since 1998. While

45

FEATURE | Asia’s leading IP firms >>

“There is a mismatch between TLO provisions and regulations elsewhere which is affecting investment into the sector” these laws have heightened the protection of university–industry technology transfers and served as an engine for economic development, the consensus is that they are poorly aligned with overarching fi nancial and labour policies.

“There is a mismatch between TLO provisions and regulations elsewhere which is affecting investment into the sector,” said one partner at a specialist IP practice.

Another area of importance is the training offered to patent lawyers in Japan. The current model, although requiring lawyers to pass an examination on current IP regulations, does not equip them to deal with further changes, let alone the practical ramifications of these.

Indeed, sources close to ALB indicate that this change may involve fundamental changes to the relationship between benrishi (patent attorneys) and bengoshi (attorneys-at-law).

4 46

SINGAPORE: Boutique law firms mounting a challenge The IP regime in Singapore is arguably one of the most highly developed in the region with government, business and IP holders working together to establish dedicated IP frameworks over the last five years.

The sophistication of IP in Singapore has made the legal services market in the area an extremely lucrative business, according to Alban Kang, name partner at ATMD. “IP is a thriving practice area in Singapore. Business is so big in that area that all fi rms are trying to get involved,” he says, noting that the Singapore government has played an instrumental role in fostering the growth of IP. However, while the greater majority of work handled by Singapore IP law fi rms originates in Singapore, lawyers have observed an unmistakable increase in the quantum of regional and international work – something which is explained in terms of the proactive stance that the government adopts vis-à-vis IP Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

issues and also in terms of the broader policy that seeks to establish Singapore as the ‘choice of law’ in the region.

“Not only are Alban Kang, ATMD Singapore’s regulatory mechanisms very strong, the court system and enforcement provisions are among the best in the region,” says Kang. “We are seeing a lot of multinational corporations seeking to protect their IP rights through enforcement in Singapore courts.”

Singapore, according to Kang, serves as a microcosm of the broader attitudinal shift occurring in the region, a shift that fundamentally challenges the long-held conventional view which hitherto saw the devaluation of IP by businesses.

“I think many clients have learnt their lessons from the past.

Many had got their fi ngers burnt

“I think many clients have learnt their lessons from the past. Many had got their fingers burnt before, and have now realised the commercial value of IP and prefer to address these issues at the outset” ALBAN K ANG, ATMD before, and have now realised the commercial value of IP and prefer to address these issues at the outset.”

But while there may be plenty of work on offer for IP lawyers, and plenty more of the same to come, it is not all plain sailing for the country’s established players, as, according to Kang, larger firms will be expected to act more like their boutique counterparts, in as much they will need to tailor their counsel.

In fact, Singapore has the highest number of boutique or specialist IP

law practices of any jurisdiction in Asia and these are challenging the ascendancy of the larger fi rms.

In Kang’s opinion, this puts the onus on the larger fi rms in the market to remain flexible.

“Advisory work in terms of strategy is needed and you have to be really clued up in terms of changes as to the technological changes guiding IP. “Clients are looking for solutions that are practical, not just what the textbook says.”

INTELLECTUAL PROPERTY & TECHNOLOGY

L Address : 5 Shenton Way #07-00 UIC Building Singapore 068808 Tel : +65 62200666 (Main Line) Fax : +65 63241638 Email : ipdept@leenlee.com.sg Website : www.leenlee.com.sg

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ee & Lee is one of Singapore's best established and leading law firms. The firm provides a comprehensive range of legal services to serve the differing needs of corporations, financial institutions and individuals.

Led by Senior Counsel, Mr Tan Tee Jim, the department has extensive experience in advising clients in a wide variety of contentious and noncontentious intellectual property (IP) and technology matters. In particular, it has been involved in : • IP litigation, prosecution and enforcement • Registration and management of portfolios of trademarks, patents and design • Brand protection strategies • Franchising and distribution agreements • Research and development agreements

• Technology transfer agreements • Telecommunications and information technology agreements • Domain name disputes For further information, please contact any of our partners below.

CONTACT PARTNERS : Tan Tee Jim, S.C. Email : tanteejim@leenlee.com.sg DID : +65 65574615 Toh Kok Seng Email : tohkokseng@leenlee.com.sg DID : +65 65574619 Boo Yee Swan Email : booyeeswan@leenlee.com.sg DID : +65 65574869 Margaret Law Email : margaretlaw@leenlee.com.sg DID : +65 65574886

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FEATURE | Asia’s leading IP firms >>

MALAYSIA: Taking SMEs to school While the IP market is relatively well advanced in Malaysia, it is only international companies that are making use of it, with many domestic companies operating in the country, especially small and medium enterprises (SMEs), lacking both an appreciation and understanding of the commercial utility of protecting IP rights.

In a detailed report on IP in Malaysia, the Malaysian Intellectual Property Office (MYPO) noted that, despite realising the vital role that IP generation plays in revenue growth, domestic companies have routinely failed to develop their IP to safeguard product innovations and brands.

This is despite fierce regional and global competition – an issue of national importance, considering

W

ong Jin Nee & Teo (WJNT) is an IP & Technology boutique firm, providing a full spectrum, integrated, high-quality, proactive and value-add services to organizations in their creation, clearance, protection, portfolio management, enforcement and exploitation of IP and technology.

WJNT prides itself as a firm which strives to be the best service provider in IP and technology related fields to its many clients. It endeavours to first understand the clients’ needs, goals and corporate policies and then formulate and provide proactive and creative solutions to achieve the results sought in the most cost-effective manner.

WJNT is in the forefront of brand protection and anti-counterfeiting efforts in Malaysia. It assists clients to develop audit plans to determine the ownership, scope and status of IPR, coordinate trade mark filing and managing their trade mark portfolios worldwide. In addition, WJNT implements holistic and strategic

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anti-piracy/anti-counterfeiting and other brand protection programs. It has also represented many clients both multinationals and local corporations, in numerous litigations involving trade marks, trade names, copyrights, patents, industrial designs, confidential information and other intellectual property issues.

WJNT is very active in public policy and engagement work including lobbying for reform of legislation and procedural requirements for enhancement of IPR protection in Malaysia. It advises clients on various aspects of commercial exploitation of IPR including manufacturing, ICT, biotechnology and license and franchise agreements. It also assists clients in obtaining approval and registration of their franchises with the relevant authority.

WJNT has an extensive experience in advising clients in areas of cyber laws, digital integrity and e-commerce, food, drugs, consumer protection, advertising, media and entertainment laws.

that the SME sector contributes over 35% to the nation’s Gross National Product (GNP).

David Llewelyn, of MYPO, agrees that the current situation is certainly a cause for concern.

“Malaysia is probably behind some of the other countries in recognising IP, but we have to play the IP game or margins will come down,” he says.

However, he does concede that practices are starting to shift.

“There is an increasing awareness of the importance of IP around the region among SMEs in the last two years or so, as many SMEs have started implementing IP, especially when operating in China.”

The Malaysian government certainly has been proactive in raising the profi le of IP issues throughout the last year, including hosting a number of international IP conferences and symposiums and instituting a dedicated IP court.

But, according to a source close to ALB, IP lawyers have an extremely

CONTACTS Ms Jin Nee Wong wjn@wjnt-law.com Mr Bong Kwang Teo tbk@wjnt-law.com Address: 13A-5, Level 13A Menara Milenium 8, Jalan Damanlela Bukit Damansara 50490 Kuala Lumpur Malaysia Phone +603 2092 3322 Fax +603 2092 3366 Email: info@wjnt-law.com Website: www.wjnt-law.com

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

important role to play. “Educating clients and, to some extent, the business community at large as to the fi nancial utility of protecting their IP and how it can be used positively is the challenge for IP lawyers ahead,” the source said.

“It’s always a battle as a lawyer when you know you will have to spend half of your time convincing your client that they need IP protection. But if that’s framed in a commercially sound way, then it’s a battle that can be won.”

THAILAND: Criminal enforcement vs civil action The biggest pipeline issues at the moment, according to Edward Kelly of Tilleke & Gibbins, are the changes to the registration of IP which will stem from the ratification of multilateral agreements such as the Paris convention and the Madrid protocol,

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“Law firms will find that there is a need to professionalise staff rather quickly so that they have a capacity to handle more contentious work” EDWARD KELLY, TILLEKE & GIBBINS with the latter expected to be ratified in the months ahead.

And – while the closer alignment of Thailand’s domestic regime with the international IP landscape will herald significant changes and serve to bring in more international business – lawyers, especially in domestic fi rms, need to adapt quickly to this new world order or face extinction.

“These changes will require adaptation by fi rms when it comes to registering patents and trademarks,” says Kelly.

This suggests that being forced to move from a model which relies heavily on criminal law to enforce IP to a more ‘western’ model based

on arbitration, mediation and civil litigation would be one of the sternest tests ahead for IP lawyers in Thailand, most notably because very few fi rms possess the capability to handle contentious issues.

“Law fi rms will fi nd that there is a need to professionalise staff rather quickly so that they have a capacity to handle more contentious work,” he says, noting that these changes should yield an increase in the volume of international fi lings which should, in turn, lead to an increase in the amount of contentious work in the market.

As the focus of attention turns from criminal enforcement to civil

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FEATURE | Asia’s leading IP firms >>

enforcement, costs will become a major issue for IP practitioners.

“Lawyers need to be more valueadd: they have to be more business oriented,” says Kelly.

“They have to think through what the costs will be and whether there is a cost benefit in favour of taking a civil action.”

INDONESIA: IP needs TLC Despite boasting relatively robust legal and judicial systems, Indonesia has one of the most underdeveloped IP regimes in the region.

And progress is tipped to be slow and tedious, according to lawyers who spoke to ALB.

“Although there have been concentrated efforts on improving IP administration in Indonesia, other areas closely aligned to this, such as resource management and protection, are sorely lacking,”

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said a partner at one Indonesian IP practice.

Yet, despite being a signatory to WIPO Copyright Treaty and other international agreements, the government department responsible for coordinating IP at the national level – the Directorate General of Intellectual Property Rights (DGIPR) – is still believed to be ill-equipped to deal with IP issues “owing largely to under-resourcing and elementary public knowledge as to what IP entails”.

Plans by the EC-ASEAN Intellectual Property Rights Programme to overhaul the DGIPR and improve civil enforcement may just be the tonic that is needed.

The challenges are slightly different for the nation’s IP lawyers.

For while IP infrastructures may be lacking, local lawyers will play a large part in allaying the fears of international companies who are doing business in the resourcerich archipelago.

Asian Legal Business ISSUE 8.10

FEATURE | Asia’s leading IP firms >>

According to one in-house counsel: “Doing business in Indonesia is a little tricky as there is always the possibility that intangible assets can vaporise, but this is where local knowledge is the key.

“If a company has this sort of counsel, then investment risks can be allocated accordingly.”

“Doing business in Indonesia is a little tricky as there is always the possibility that intangible assets can vaporize, but this is where local knowledge is the key. If a company has this sort of counsel, then investment risks can be allocated accordingly”

PHILIPPINES: IP needs PR Fostering public awareness of IP rights is the key to the further development of IP regimes in the Philippines, as articulated by one source that ALB spoke to.

At present, according to a number of IP lawyers, rights holders and businesses operating out of the Philippines have, at best, an embryonic knowledge of the enforcement and registration of IP. The agency responsible for all matter of IP issues in the country,

IP Philippines (IPP), has been extremely active in working towards this end, in addition to its other mandates as the nation’s rights administration authority and the coordinator of the nationwide enforcement.

The IPP has been instrumental in pushing to establish a dedicated IP enforcement unit in the Bureau of Customs and is leading calls for local government units to play a more active role in the enforcement of IP. But lawyers need to shoulder some of the burden of the changes.

VIETNAM: Knowledge base needed Intellectual property laws in Vietnam have come a long way since the embryonic stages of the early 1980s. Most notably, the country has recently taken huge strides to strengthen its legislation in order to comply with the TRIPs agreement.

In recent years, new laws have been passed for the protection of copyright, industrial property rights and rights in plant varieties to name

We thank our clients for making us SINGAPORE ƒ SHANGHAI

A leading IP & Technology practice and one of the Top 5 IP firms in Singapore

Partners LEE Ai Ming Ɣ Gilbert LEONG Ɣ YEW Woon Chooi (Woon C. YEW) Ɣ Catherine LEE Ɣ Elaine LEW

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FEATURE | Asia’s leading IP firms >>

but a few. And providing guidance to overall reform process has been a vision to codify and simplify the many pre-existing provisions.

Ever since this new legislation was passed in mid-2006, fi rms and clients have been coming to terms with how the new rights are to be implemented and enforced.

Some commentators have observed that progress has been somewhat disappointing. As with many other jurisdictions, it is the enforcement –

and not the law itself – which is the sticking point.

The commercial pressure to make the system work is on, but there is a recognition that these aims can be realised through cooperation.

An example of this is a recent agreement signed by representatives of both the Vietnamese and the Australian government to help facilitate the protection of the IP of Australian exporters doing business with Vietnam.

The action plan includes public education and awareness, IP resource development, examiner training and provision of information on administration and the developing of Vietnam’s plant breeders’ rights system.

The focus on education addresses one of the great challenges of IP in Vietnam – building on the country’s knowledge base and increasing the number of people with the expertise to handle IP matters. ALB

ADVOCATES & SOLICITORS – THAILAND

T

illeke & Gibbins (T&G) is the oldest and one of the largest independent multi-service law firms in Thailand with offices in Bangkok and Phuket, Thailand, and in Hanoi and Ho Chi Minh City, Vietnam.

T&G and its affiliates presently employ over 300 persons consisting of attorneys, consultants, legal assistants and support personnel committed to providing clients with high-quality legal advice and services. T&G won the International Law Office Client Choice award for Thailand in 2007 in recognition of its excellent client care and quality of services.

T&G engages in a diversified practice encompassing many areas of the law.

Its corporate/commercial and litigation/ dispute resolution practices are highly regarded in the legal community.

However, T&G is best known for its award-winning IP practice—one of the largest and most active in Thailand—

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which handles all aspects of IP work and enjoys an international reputation in areas including anti-counterfeiting, IP litigation, strategic filing advice and commercial IP work. T&G is consistently ranked by global peers and clients as the top IP firm in Thailand and to date has won the following awards, in addition to top-tier ranking by other publishing firms.

• Thailand IP Firm of 2004, 2005, 2006, & 2007 – AsiaLaw • Thailand IP Firm of the Year 2007 & 2008 – Managing Intellectual Property • Firm of the Year 2007 for Intellectual Property in Thailand – Asian-Counsel T&G acts as external counsel for PReMA (Pharmaceutical Research and Manufacturers Association in Thailand), advising on pharmaceutical and US-Thailand Free Trade Agreement issues, and lead counsel for Pfizer, AstraZeneca, Novartis, Bristol-Myers

Squibb, GSK, Sanofi-Aventis, Abbott Laboratories and Merck & Co., among others, in planning and execution of a defensive strategy to respond to the Royal Thai Government’s Ministry of Public Health imposition of compulsory licenses on patented medications.

CONTACTS Mrs Darani Vachanavuttivong darani.v@tillekeandgibbins.com Mr Edward J. Kelly edward.k@tillekeandgibbins.com Mr Alan Adcock alan.a@tillekeandgibbins.com Address: Grand Supalai Tower, 26th Floor, 1011 Rama 3 Road, Chongnonsi, Yannawa, Bangkok 10120, Thailand Phone: +66 2653 5555 Fax: +66 2653 5678 E-mail: bangkok@tillekeandgibbins.com Website: www.tillekeandgibbins.com

Asian Legal Business ISSUE 8.10

FEATURE | shipping >>

The shipping news Asia’s A Asia As sia a’s ’s sshipping hiipp h hipp ppin pin ing ng le llegal lega ega gal sse services erv rvic ices ices ic es m market a ke ar k t ma m mayy ju just just st b bee re rece recession ce essssio ion p pr proof. rroo oo o of. f. W While hiile llaw h lawyers awye y rs iin ye n ot o other th he er ssectors aare ar re preparing prep pr epar arin ng ffo for o orr a sl sslow-down, low ow-d dow wn, n, sshipping h pp hi ppin pin ing pr p practices raaccttiice ces ar aare ree b bo booming. oo om min ing. g B But utt tthis u his iss n hi not ot tto o sa say ay tth that haatt changes are not looming large on the horizon. ALB reports

A

ccording to shipping lawyers in Asia, the outlook has never been better. Traditional areas such as maritime disputes, admiralty and wet work are up by almost 15% on 2006/07, and finance is not slowing down despite the worldwide liquidity crisis. And the boom in aligned areas such as commodities, energy, and oil and gas continues.

Shipping law practitioners in the region may well think that their own ship has come in. However, a closer look at the reasons behind the upturn in work in this area reveals that significant changes continue. And while these changes may not be as far reaching or as deep as the global financial crisis, the early signs indicate that they are just as profound.

Wet and admiralty work resurgence If 2006 and 2007 were the years in which traditional areas of shipping law sunk to record lows, then 2008 is, by 54

comparison, the year it experienced a renaissance. All firms that ALB spoke to noted a e in maritime dispute work, and the forecast is for more of the same in the months ahead.

What are the reasons behind the resurgence?

According to Dato’ Jude Benny, name partner at Singapore-based Joseph Tan Jude Benny, there are many but the most important is the increase in maritime activity occurring throughout Asia.

“The increased tonnage moving through the Asian region at the moment is driving the resurgence in the purist areas of shipping law.

Dato’ Jude Benny, With 40% of the world’s JTJB tonnage owned and operated out of Asia, it follows that the propensity for incidents such as collisions, groundings, fires will also increase,” he says.

And admiralty and wet work are tipped to further grow on the back of increased maritime trade into and between countries in the Asian region.

Goh Mei Lin, a Singapore-based partner at Watson, Farley & Williams, agrees, but says the increase in work in these areas is as much due to the strength of ship building as it is about increased tonnage moving through Asian ports.

“When fleets expand and more building is being done, this tends to result in a proportional increase in the number of casualties occurring,” she says, noting that such activity is substantially up on previous years, and not necessarily being done by ship building powerhouses such as Japan and Korea but “happening more and more in India, China and Southeast Asia”.

Goh’s Singapore-based colleague Jon Ray adopts a slightly more pragmatic approach. For Ray, the amount of Asian Legal Business ISSUE 8.10

FEATURE | shipping >>

“The government of Singapore has been pushing for some years to make Singapore a maritime hub. This has led many ship owners to move their business to Singapore” BAZUL ASHHAB, TS OON & BAZUL work on offer for admiralty and wet work lawyers in Asia ebbs and flows simply because of historical cycles.

“It is either feast or famine; you can find yourself very busy or going for a long period without much work,” says Ray, highlighting that the latter was the case during much of the Asian financial crisis of the 1990s.

But if the current economic situation gives way to a similar situation to that of the 1990s, how might the region’s shipping lawyers fare? According to Ray and others, the lessons learnt by shipping practitioners in the 1990s stand them in good stead should such a slowdown occur. And according to those ALB spoke to, the key, as always, is diversification.

Broadening horizons “Most shipping law practices in Asia are now diversified enough to be able to weather economic troubles that may arise,” says Ray, giving the expansion of his own firm’s shipping practice. For Watson, Farley & Williams, expansion has seen the alignment of its shipping practice with areas such as energy and commodities, especially oil and gas, noted by Goh as being a wholly “logical process” and one that seemingly guarantees a steady stream of work in all areas of the firm’s shipping practice.

However, expanding the scope of shipping practices need not only prepare for economic tumultuousness.

It can also be a function of either economic globalisation or the broader policy of ‘balanced organic growth’ in law firms.

Both are applicable for Stephenson Harwood’s fleet of shipping lawyers in Hong Kong and Singapore. Durai www.legalbusinessonline.com

Shunmugam, a Singapore-based partner, explains that expansion of his firm’s shipping practice into areas such as commodities, energy and oil and gas strives for balance.

“Unless you’re a firm like the Clyde & Cos or Holman Fenwick & Willans of the world, then you know you can’t subsist solely on admiralty and wet work. You need to broaden your practice and get into those newly emerging areas quickly.”

Shunmugam’s colleagues at Stephenson Harwood & Lo in Hong Kong have followed a similar expansion formula, although for them diversification has taken a different course, owing largely to the structural characteristics of Hong Kong’s economy. Partners Mark Reed and Jason Toms are handling much more offshore and delivery dispute work than previously.

“Our practice expansion has been more about getting into the flurry of offshore business happening at the moment,” says Reed.

Toms notes that both the heightened activity of banks in jurisdictions like Taiwan and China’s ever-increasing involvement in shipbuilding have also pushed the firm’s involvement in ship building-related disputes to new highs.

“As China’s capacity to deliver vessels on time is coming under increasing pressure, our practice is being pushed to expand in this direction.”

Meanwhile, in Korea post-materialist concerns such as Corporate Social Responsibility (CSR) have played a large part in guiding the expansion of Kim & Chang’s shipping practice.

Tam Hee Kim, a partner at the firm, notes that environmental issues such

as “going green” are starting to figure more commonly in her daily practice.

“With so much public attention on environmental issues, there is a definite focus on those sectors of the industry which have traditionally not been known for having strong environmental credentials.” She adds that these issues are likely to “become a permanent fi xture for lawyers”.

Clients take the reins As much as those that ALB spoke to believed that the diversification of shipping practices was firm led, they also felt that the course, complexion and speed of expansion are underscored by a profound shift in client behaviour.

“Our shipping clients are becoming more global,” says Kim. “Client demands are changing; they are moving into areas they have not really been active in before and this has certainly pulled our practice into these areas.”

Reed has also felt a similar impetus coming Goh Mei Lin, from his clients. “While Watson Farley adding on new areas Williams to our practice is about synergy, it’s also about moving into areas where our clients are headed.

We’ve expanded in no small part due to our clients pushing into new areas,” he says, citing the firm’s offshore oil and gas shipping practice as an example.

Hence, while the expanded scope of client activity certainly bodes well for shipping lawyers in the region and almost guarantees firms a seemingly endless flow of work, the rationale underpinning this change in client behaviour suggests that, as always, lawyers may have to do a little leading of their own. For while the global economic crisis may not drastically affect the face of the shipping legal services market, there are distinctive signs that it is already affecting client behaviour.

One such area where this has been apparent is ship finance. And it has always been so, according to Dato’ 55

FEATURE | shipping >>

Benny. “Shipping finance is always one of the first areas that clients become more conservative about when concerns about liquidity arise.” But, whereas in the past, Shunmugam notes, clients may have been willing to pull deals in light of such difficulties, they are now more willing to push them through – with a little bit of from their lawyers.

“Practitioners are becoming more innovative, and need to be as client demands are changing. Lawyers are now thinking more inventively about how to get deals done.” This is apparent no more noticeably, according to Reed, than in transaction structure. “Although it’s now harder to come up with an acceptable deal profile, this has been overcome of late by deriving more complexly structured deals,” he says. He adds that sale and lease-back transactions are quickly becoming the preferred choice for both shipping and non-shipping clients.

However, in addition to Asia’s shipping lawyers being called upon

by their clients to push through deals hitherto thought impossible, their counsel is being sought to deliver clients greater control of their operations in an environment that is at times conducive to the opposite.

This has been an increasing feature of Goh’s practice in the last few months.

“We have transactions at the moment where power producers are looking to buy ships – they don’t want to have to rely on third party ship owners but instead take as much control of the supply chain as possible.”

Shipping lawyers: a changing role “These days it’s not just about law,” says Dato’ Benny. “Advising on the law per se is not a particularly difficult thing to do, but lending your experience is the key.”

This was also mentioned by other lawyers ALB spoke to.

“Clients want to try and tap whatever knowledge you may have on trends,

on the market and where it’s going,” Dato’ Benny says, noting that this is a conversation he has with the vast majority of his clients at the outset of every matter.

Reed and Toms agree, noting that clients in the industry almost always defer to the counsel of the more experienced shipping practitioners in the market, yet this need not always mean hiring large firms’ counsel.

“One of the things that we are seeing is that many clients are coming to the older, more experienced lawyers in the market,” says Reed.

“We see a lot of people coming to our

5 Shenton Way, #35-01 UIC Building, Singapore 068808, Tel: 65-6220 9388 Fax: 65-6225 7827, e-mail: jtjbs@singnet.com.sg, and website: www.jtjb.com

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Asian Legal Business ISSUE 8.10

FEATURE | shipping >>

“The role of the shipping lawyer is not just about giving advice per se … we are part of the business process” DATO’ JUDE BENNY, JTJB practice to seek advice about trends, market cycles and the like – to get some sort of counsel in the truest sense of the world,” says Dato’ Benny, for whom adapting to this changed role is critical and may involve becoming more involved in the business interests of clients.

“I find that the role of the shipping lawyer is not just about giving advice per se, but has evolved so that we are part of the business process for them.

This is something which will only deepen as time goes on.”

And according to Dato’ Benny, this may place the younger players in the market at a disadvantage.

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“When clients talk to someone who has been in the market for a long time and seen it evolve and progress, they feel more comfortable,” he says.

“Some clients active in the market today are quite young, and a lot of them value talking to some of the older lawyers.”

Turning tide: the rise of Singapore While the volume of work on offer for shipping law practices in Asia may be booming – and shows no signs of abating in the months ahead – Hong Kong’s position as the region’s preeminent shipping centre is being

challenged by Singapore, with practitioners in both the Lion City and Hong Kong noting that there has been a distinct shift in work towards Singapore in some key areas of practice, with asset financing and underwriting identified as two such areas.

“As more and more banks and financial institutions increase their Singapore presence, the country is beginning to challenge Hong Kong’s position as the region’s shipping law epicentre,” says Dato’ Benny.

Other practitioners agree, noting that various cultural and geographical

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FEATURE | shipping >>

factors make Singapore the first choice for many owners and operators in Asia.

“Singapore is like a one-stop shop for ship owners,” says Goh. “Its location as a regional hub and international gateway is crucial for ship owners,” she says. She says she has witnessed a number of clients cite this very reason as the rationale guiding their choice of Singapore as opposed to Hong Kong.

According to Ray, preferred language also plays a large part: “Our experience has shown that people choose Singapore over Hong Kong for a number of reasons. The use of English is especially important for foreign operators and it’s used more widely in Singapore than in Hong Kong where there are smaller domestic operators.”

Shunmugam says the drift of legal work from Hong Kong to Singapore began after Hong Kong’s transition from British to Chinese rule and says this was not the sole cause.

“There was a big swing away from

“… the Singapore government has really put its money where its mouth is” JON RAY, WATSON FARLEY & WILLIAMS Hong Kong to Singapore in 1997 and this was due, of course, to lifestyle choices but also because of the focused encouragement of Singapore government,” he explains.

This focused encouragement of the Singapore government has proved crucial in attracting business, according to Bazul Ashhab, name partner at TS Oon & Bazul. “The government of Singapore has been pushing for some years to make Singapore a maritime hub. This has led many ship owners to move their business to Singapore.”

“Singapore is a melting pot,” adds Dato’ Benny. “When looking at the market, people tend to conclude that Singapore is the appropriate place to

position themselves, thanks largely to the efforts of the Maritime Port Authority [MPA],” he says.

With the scope and activities of the MPA widening in the region and internationally, many feel it is only a matter of time before Singapore outdistances Hong Kong in terms of the volume and complexity of legal work.

“Singapore promotes itself as a centre of shipping excellence,” says Ray. “The government has introduced legislation to support mediation and arbitration, and ship owners and operators are now more inclined to put Singapore arbitration clauses in their contracts – the Singapore government has really put its money where its mouth is.” ALB

REPORTING SIGNIFICANT GROWTH IN A SINGAPORE SHIPPING AND ADMIRATLY PRACTICE: TS OON & BAZUL

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hen TS OON & BAZUL was interviewed about 3 years ago for an article in this publication, they had 4 lawyers. Today, they have 12 fee earners including 4 foreign called lawyers from China, India, Malaysia and Bangladesh. They have since recruited 11 new graduates which will make them 23 strong by 2009. The Partners say that they were able to achieve this significant growth so quickly because of the support from their clients. Their clients include large multi-national ship owning companies, P&I clubs and some of the largest insurers in Asia. Their clients in turn appreciate their quick, practical and commercially oriented advice. The Partners credit the Firm's success to their ability to attract the right people to join the team. The lawyers have a firm grasp of their clients' business needs which enables them to come up with legal solutions which are consistent with clients' commercial objectives. It is worth mentioning that Goush Marikan,

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a partner of the Firm, has had about 8 years of seafaring experience onboard foreign going vessels prior to the start of his legal career. He started sailing as a deck officer with Neptune Orient Lines and ended his seafaring career as a Chief Officer, having served on board cargo vessels, bulk carriers and container vessels. After Goush’s arrival, the firm has seen a substantial increase in "wet work" instructions. Goush and his team have been kept very busy with their travelling to investigate casualties.

One only has to look at T S OON & BAZUL’s portfolio of work to be left in awe as to the Firm's achievements to date. The Firm has advised clients on joint venture agreements in excess of USD 100 million as well as advised insurers on marine policy liability in the well known terrorist case of LIMBURG and the grounding of a container vessel, SELENDANG AYU, in Alaska, both of which had policy claims running in excess of several million US dollars. All these have certainly not

gone unnoticed. Asia Pacific Legal 500 has quoted their clients who say that T S OON & BAZUL provides ‘judicious solutions quickly’ and that they have ‘considerable in-depth strength’.

Oon Thian Seng is called to both the Malaysian and Singapore Bar and the Firm has an associate office in Kuala Lumpur. More information about the Firm can be found at http://www. oonbazul.com.

T S OON & BAZUL, SINGAPORE 3 Raffles Place #06-01 Bharat Building Singapore 048617 Tel (65) 62233893 Fax (65) 62236491 Email general@oonbazul.com In Association with TS Oon & Partners, Malaysia.

Asian Legal Business ISSUE 8.10

FEATURE | law firms & technology >>

On the cutting edge of technology “The m medium edium d is the message”, the phras phrase se coined by media theorist Marshall McLuhan in the 1960s, is becoming increasingly relevant to law firms as technology converges knowledge, communication, and information storage and retrieval. ALB takes a look at the cutting edge

I

n the technology age, the adage “knowledge is power” is given an extra dimension by technological information storage and retrieval.

Like government agencies, law firms have to deal with the tomes of case files and documents by the minute, resulting in a dire need for technology solutions to simplify storage and retrieval processes.

Efficiency, reliability and security are the three considerations for the choice of a business technology model by law firms. Cloud (as the Internet is sometimes referred to) computing is often used to sort through huge amounts of data, and from where data and services are provided online and accessed using a PC or another device. Terabytes of Internet data are stored in virtual space, and information is accessed from BlackBerries, mobile phones and laptops.

Cloud computing may provide e-avenues for parking truckloads of information and quick retrieval, but it is, at best, a back up. Operators like CrimsonLogic provide IT solutions that allow loads of documents to be filed electronically, authenticated and processed. The Singapore company is best known for operating the Singapore judicial system’s Electronic Filing System, where its software stores, retrieves and updates documents

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for court hearings, and allows the documents to be electronically served between law firms through a single, integrated and seamless system.

In a similar vein, LEAP Legal, the leading Australian supplier of legal software, has a practice suite that allows a plethora of information to be stored electronically. Bizibody, a Singapore legal technology company that distributes LEAP Office, provides automated legal forms – from affidavits to bankruptcy petitions – for firms in Singapore. In fact, the system allows one to search and get instant access to a case matter’s status, parties involved and extant documents.

LEAP Documents integrates with Microsoft Outlook, enabling incoming e-mails with the matter number in the subject line to be automatically duplicated, organised and stored.

Outgoing and incoming faxes are also associated with the matter. LEAP Accounting also stores time sheets and calculates legal fees. The system also complies with the accounting requirements of the Law Society of Singapore. Audit trails are thus easily accessible, mitigating the risk of creative accounting and financial mishaps.

Bizibody has also developed a webconferencing software system “Justice Online” that allows lawyers to attend pre-trial conferences virtually. Lawyers

can choose to attend a pre-trial conference using a webcam in their office.

It resembles premium grade Skype, but has the Singapore courts’ work processes built into it. It is phenomenal for lawyers who sometimes spend five minutes in chambers after a one-hour wait.

Justice Online is a collaborative effort between the legal community, Bizibody and the Singapore Law Courts, and Singapore prides itself on being one of the foremost countries using the technological super-highway to improve and support judicial workflow and processes.

The company has also set up a knowledge-sharing www.openlaw.com. sg that has social utility functions similar to www.facebook.com But it is a leap ahead as Open Law provides professional purpose with its “ask-andbe-answered” interactive forum for lawyers. This portal is believed to be the first in Asia.

Bizibody was set up in 2000 by the Lims, lawyer twin sisters who saw a need for law firms to keep up to date with technology. “Up to 80% of a firm’s information is already digitalised; through e-mail and fax.

The more effective way of organising the information is to create a paperless file from the front-end, rather than to leave it as a back-end process. Once it’s digitalised, the risk of losing files is greatly reduced. Retrieval is also at the fingertips with the added advantage of multiple access to the files,” says Serena Lim, lawyer-turned-technopreneur.

Although IT does not mean the factor of human error is eradicated, Lim maintains that the risk of error is reduced. “It definitely decreases the potential of human error. With IT, you store one version of the truth and you keep re-using that data over and over again.”

Information organisation has become as important as information itself. IT is relevant to the way lawyers capture, share and reuse knowledge, principally because time is money.

While it may not be possible to be completely paperless, the striving for this is a worthwhile investment. It is win-win for both trees and lawyers. ALB Asian Legal Business ISSUE 8.10

FEATURE | international relocation >>

Middle East: where it’s all happening The physical climate in the United Arab Emirates may be a put-off, but Australian and Kiwi lawyers are increasingly finding the business climate highly appealing.

ALB discovers what practitioners can expect if they make the desert dash

► NET MONTHLY SALARIES AT UK FIRMS IN DUBAI (A$) Qualification level Newly qualified One year PQE Two years PQE Three years PQE Four years PQE Five years PQE Six years PQE Seven years PQE

Basic salary Typical range (A$) (A$) $9,276–9,907 $9,436 $10,220–10,849 $10,301 $11,009–12,581 $11,480 $12,581–13,681 $13,211 $13,840–15,884 $14,157 $15,337–16,906 $15,333 $16,041–17,770 $15,883 $16,332–18,687 $17,509

Source: Hays Recruitment 2007/08

► NET MONTHLY SALARIES AT US FIRMS IN DUBAI (A$) Qualification level One year PQE Two years PQE Three years PQE Four years PQE Five years PQE Six years PQE Seven years PQE

Basic salary Typical range (A$) (A$) $12,581–14,157 $13,519 $14,157–15,725 $15,411 $15,725–18,870 $18,870 $18,870–20,443 $19,185 $21,072–24,217 $21,072 $23,591–26,736 $23,591 $26,736+ Source: Hays Recruitment 2007/08

► GROSS MONTHLY SALARIES AT AUSSIE TOP-TIER FIRMS (A$) Qualification level One year PQE Two years PQE Three years PQE Four years PQE Five years PQE Six years PQE Senior associate Salaried partner Equity partner

Basic salary Typical range (A$) (A$) $4,583 – 7,667 $5,967 $5,167 – 8,167 $6,800 $5,667–9,667 $7,667 $6,250–11,667 $8,917 $7,083–14,167 $10,450 $7,917–15,000 $11,467 $8,333–20,833 $14,083 $16,667–25,000 $20,833+ $33,333–62,500 $47,500+ Source: Hays Recruitment 2008

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W

hen Herbert Smith senior associate Jessie McDonald decided to move to Dubai two years ago, her intention was to join her husband who was stationed there and to stay in practice. The former inhouse counsel for a university found more than just a job opportunity with Herbert Smith – she got posted to Dubai, marrying the best of all worlds.

“The work here is of top quality, involving a lot of international work. The variety of work makes the job challenging as well as stimulating. I was also lucky enough to have colleagues from Australia who helped me to assimilate,” she said.

The pull factors in McDonald’s decision to move from Sydney to Dubai outweigh the push factors and the reasons for the flood of lawyer relocation to the United Arab Emirates in the last 12 months are apparent. New opportunities, overseas exposure, tax-free salaries and largely expatriate culture are commonly cited.

However, at the core of the issue is the ► HERBERT SMITH – FAST FACTS • 40 lawyers spread between Dubai and Abu Dhabi offices • Exclusive alliance with Al-Ghazzao Professional Association in Saudi Arabia

abundance of financial and career opportunities that the move provides.

“The Middle East is an exciting growth market where there is a huge amount of M&A activity. It is a lot more attractive than our [the New Zealand] market, which will remain more static,” said Norton Rose partner Andrew Lewis.

Neil Brimson, the managing partner of Herbert Smith in the Middle East, says that lawyers are increasingly coming to the UAE because they want to work in one of the most exciting markets in the world. The region has tremendous growth, second only to China, he says.

PE & equity capital market work is booming, says Brimson. The firm also handles deals involving both inbound and outbound investment of UAE funds, many of which are with the Indian subcontinent, Africa and South Asia, particularly Malaysia.

Norton Rose partner Andrew Abernethy, formerly a partner at Bell Gully, agrees that there is plenty of work available in the UAE because the oil, property, construction and finance industries are performing well despite the global credit crisis.

There has also been a lot of banking and property work since the region began to diversify its industries, says Asian Legal Business ISSUE 8.10

FEATURE | international relocation >>

Abernethy, pointing to outbound investment from sovereign wealth funds, stake acquisitions in a diverse portfolio of assets from North American banks to sports car manufacturers.

“It’s all coming out of this region; it’s a place to rival New York and London.

This is why a lot of lawyers from New York and London are flooding in. As an M&A lawyer, you want to be closer to the action and Dubai is where the M&A is happening,” he said.

More foreign firms to choose from The London and New York markets are currently “very quiet” for pure M&A, corporate and PE work, says Abernethy. By comparison, the UAE has not been so hard hit by the economic slump, and more large foreign firms have realised this and begun opening new offices.

Brimson believes that there will also be plenty of work in Abu Dhabi, since it is tipped to grow dramatically as a legal centre. He says that development plans for Abu Dhabi are extremely “ambitious”, particularly in the energy and infrastructure sectors.

Abernethy says that Abu Dhabi and Dubai will provide “massive” and “unrivalled” work opportunities for at least a decade. “I’m doing crossborder deals into India, Turkey the UK, Kuwait and Bahrain. A lot of the outbound investment we are working on is going into India, South Asia, Syria, Jordan and North Africa. Turkey is also a very popular destination,” he said.

Maria Coombe, manager of Hays Recruitment in Dubai, agrees that Abu Dhabi is “up and coming”. Although it is still a bit behind Dubai, it has oil and has begun to diversify, she says, creating demand for legal work.

She says that UAE law firms are looking to fill vacancies in practices

► A BETTER LIFESTYLE? Although finding accommodation can be a challenge in the Emirates, crime is low and people generally feel safe walking the streets.

“Dubai must be fairly unique in the sense that expatriates represent about 90% of the total population.

Abu Dhabi has fewer expatriates but it is a city that will make its mark on the world map,” said Neil Brimson, managing partner at Herbert Smith’s Middle East offices.

While most of the world remains shocked at rising fuel prices, most UAE residents can tank up their four-wheeldrive for about A$30. By comparison, in Australia it would cost over A$100, says Herbert Smith associate Brooke Lindsay in Abu Dhabi, formerly of McCullough Robertson in Australia.

Lindsay says that Dubai offers a more comprehensive expatriate social scene than Abu Dhabi. However, unlike some Middle Eastern cities, there are bars, pubs and restaurants that serve alcohol in both major cities. “One of the hotels in Dubai hosts the “Yalumba Brunch,” offering modern Australian cuisine,” she said.

Although in Saudi Arabia women are required to wear headscarves and cover their entire body, they are not required to do so in the UAE. This could have encouraged a significant number of female lawyers to enter the legal market. Norton Rose partner Andrew Abernethy says that the firm’s female to male ratio in the Middle East is not much different from its worldwide ratio of about 55:45.

In the summer months, the heat is a “shocker” and you are almost not able to go outside for two months, says Abernethy. It is, however, a pleasant 25 degrees for the rest of the year.

such as corporate, banking, real estate, construction, projects, energy, oil, gas, shipping, IT and telecommunications.

However, candidates must have a genuine reason for coming to the UAE. “It is not enough to be interested because there is strong economic growth… Organising a visit to Dubai on your own steam and looking around is really valuable in deciding whether it is what you are looking for. It definitely adds weight to an application,” she said.

Going by the number of lawyers who have moved to another law firm there and made partner, the prospects do seem bright.

The benefits and drawbacks One of the biggest selling points that firms use to attract lawyers is tax-

“It’s all coming out of this region; it’s a place to rival New York and London… Dubai is where the M&A is happening” ANDREW ABERNETHY, NORTON ROSE www.legalbusinessonline.com

free income, says Abernethy. UK firms generally pay salaries that are equivalent to the UK rate, which for an associate would amount to a significant increase on their after-tax income.

According to Hays’ Guide to Salaries, most lawyers with at least seven to eight years’ experience can expect a monthly net salary ranging from A$16,332–18,687 at UK firms, and at least A$26,736 at US firms.

However, the recruitment process for partners or managing partners has become quite complex, says Coombe, especially for candidates located overseas. Generally, senior level candidates must have Middle Eastern experience, a broad knowledge of the market or a portable client base.

“Partners are generally required to bring portable business with them, which typically starts from around the £1m (A$2.1m) mark. At the senior level, you really need to add value to the business and clients. This is not the case at the very junior level, but they might struggle at the beginning, because there is not 63

FEATURE | international relocation >> ► COMPARISON OF THE COST OF LIVING IN THE UAE WITH OTHER GLOBAL LOCATIONS Rank 2008

Rank 2007 1 3 6 15 20 22 36 52 65 78

City 1 2 5 21 20 38 64 N/A N/A 99

Country Moscow London Hong Kong Sydney Beijing New York Melbourne Dubai Abu Dhabi Auckland

Cost of living Cost of living Index 2008 Index 2007 Russia 142.4 134.4 UK 125.0 126.3 China 117.6 119.4 Australia 104.1 94.9 China 101.9 95.9 USA 100.0 100.0 Australia 94.2 82.5 UAE 89.3 N/A UAE 85.7 N/A New Zealand 81.0 73.9

Source: Mercer’s worldwide cost of living survey, March 2008

► DUBAI PROPERTY PRICES Cost (A$) Apartment To buy Monthly rent Yield (pa) To buy size 60sqm $435,420 $2,381 6.56% 120sqm $857,760 $3,935 5.50% 180sqm $1,198,440 $4,491 4.50% 330sqm $2,092,200 n/a n/a

Price/sqm (A$) Monthly rent $7,257 $7,148 $6,658 $6,340

$39.68 $32.79 $24.95 n/a

Source: Global Property Guide, September 2008

as much training as there would be in Sydney firms,” she said.

Lawyers should not get too excited without doing the necessary research, however, as the cost of living is expensive in Dubai. Abernethy says that Norton Rose’s external advisors have compared the cost of living in UAE to that of London.

“They found that it was less expensive to live in Dubai than London, but not significantly. It is certainly cheaper to run a car, buy electronics and clothes,” he said.

The 2008 Xpatulator international cost of living comparison reveals that Dubai was the most expensive city for restaurant dining and hotel accommodation. It was also the fourth most expensive city for clothing and fifth most expensive for rented accommodation.

Brimson agrees that the cost of living is expensive and the tax break is to some extent neutralised by high prices.

Even living in an apartment can be extremely expensive, he says, and rates are equivalent to those seen in downtown London or Paris. This is partly owing to rent taxes and high inflation, he adds.

Abernethy believes that restrictions preventing expatriates from owning property in designated zones have discouraged many from buying.

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“If you want to live near the beach you have to rent. Either way, renting or owning is expensive; property prices have skyrocketed over the past two years,” he says. “Some professional people may be concerned that their wealth is being eroded by inflation.”

Some senior lawyers can, however, be eligible for accommodation and food concessions. “Senior roles tend to include some sort of allowance towards education costs as well, and most companies provide good health care as well as an annual flight home for self and family,” said Coombe.

Weigh your options Exorbitant rental is one thing.

The largely work-in-progress road infrastructure has resulted in long traffic hours. Those with children are also to take heed. Not only are school fees more expensive.

“The culture is vibrant and exciting, so coming to this region is definitely not a hardship posting. But if you have a family with children, the long waiting list for schools is something to think about before making the move,” said McDonald, who has a child.

A lawyer considering a move would be wise not to ‘buy into the hype’. Many UK and US lawyers worried about the future of their jobs may consider a lateral move to Dubai to maintain or advance their careers.

Given the levels of activity in M&A work, and the boom in the construction and banking & finance industries, among others, the temptation to grab-first-thinklater is strong.

But lawyers should not substitute due diligence with desperation. “We are seeing more and higher quality résumés from lawyers worldwide in the last year. Some are from lawyers who have moved to Dubai, but have not been able to find quality or quantity in the kind of work they have been looking for,” said Jennifer Bibbings, a partner in Trowers & Hamlin’s Dubai office. Trowers, a UK firm, has been in the Middle East for 50 years.

“As the economies of the UK and US slow down, they are more likely to consider a move to Dubai. However, they should consider such a move carefully as relocating to a new region is a big step and some may find the move does not meet their expectations when they get here,” said Bibbings, who has been working in the Middle East for 15 years.

A decision to relocate would have pluses and minuses. But as it would likely change a person’s life, their due diligence would need to be comprehensive, including weather, banking facilities and long-term career prospects. As the first step, of taking the long view and avoiding pitfalls, it would be part of their job. ALB

“The culture is vibrant and exciting, so coming to this region is definitely not a hardship posting. But if you have a family with children, the long waiting list for schools is something to think about before making the move” JESSIE MCDONALD, HERBERT SMITH Asian Legal Business ISSUE 8.10

FEATURE | international relocation >>

www.legalbusinessonline.com

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FEATURE | Islamic finance >>

“There is a vast amount of wealth in the Middle East as a result of petrodollars and this is spurring tremendous growth in the area of Islamic finance. The idea is to develop more Sharia-compliant products to address the economic needs of these investors” ABRADAT K AMALPOUR, ASHURST challenging and time-consuming to say the least, the time is right for Korean market participants to start making efforts to understand the theoretical and practical implications of Islamic finance techniques. And, together with recent initiatives by the FSC, this would be a step in the right direction.”

Laying the foundations “What law firms really need are good finance lawyers who can structure and execute Sharia-compliant deals,” says Graham Lovett, managing partner of Clifford Chance’s Dubai office. “The skill is not in the execution of the deal, but in the structuring.”

Although the prohibition on riba is essentially what draws the line between Islamic and other finance, the complex issue of getting the transaction approved by a Sharia board is what can make or break a deal. Guanxi (close ties) with Islamic scholars who are on the Sharia board is all-important.

“The only way to get cutting-edge deals is to be constantly involved in Sharia-compliant ones and know the outcomes that the banks, clients and scholars want to achieve from them,” says Bryans. “In other words, we have to provide an ‘Islamic solution’.”

This is echoed by Shibeer Ahmed from Lovells. “We spend a lot of time discussing issues with banks and the leading Sharia scholars and developing solutions to those issues,” he says. The results show: Lovells’ Dubai office has scored 13 sukuk deals worth more than US$12bn since it started operations in Dubai in May last year. www.legalbusinessonline.com

Of bonds & bulls The market continues to be bullish when it comes to sukuk. With all the activity concentrated in the Gulf and Asia – particularly Malaysia – lawyers will have their antennae tuned to the region. According to a Standard & Poor’s Ratings Services report, the United Arab Emirates (UAE) dirham has emerged as the currency of choice for the issue of sukuk as the US dollar fades in popularity.

In the six months to July 2008, less than 15% of the total value of Islamic bonds issued were denominated in US dollars.

As the traditional interest-paying bond structure is not permissible under Sharia law, the issuer of sukuk sells an investor group the certificate, which then rents it back to the issuer for a pre-determined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value.

The dirham accounted for about 35% of all sukuk issuance globally in the first half of 2008, followed by the Malaysian ringgit (about 33%), US dollar (13%) and Saudi riyal (12%).

The shift from the dollar to other currencies, in particular the dirham, is partly due to the greenback’s weakness compared to other currencies but also the result of speculation about a change in the foreign exchange policy of some Gulf countries.

After the start of the global credit and liquidity crisis, sukuk issuers deserted global markets and concentrated on their own regions where liquidity was available and the appetite for Sharia-compliant instruments was strong.

In the first half of 2008, almost 70% of issuance was denominated in dirham and ringgit.

Mohamed Damak, S&P’s credit analyst and author of the Standard & Poor’s report, is of the opinion that sukuk issuance is expected to reach between US$20bn and US$25bn in 2008, and that – despite the rather gloomy market conditions – sukuk issuance is expected to surge to the US$100bn mark in 2009.

“There are a lot more inbound deals in the sense that many of the Middle East issuers are issuing sukuk instruments which are often bought by non-Middle East institutions,” says Ahmed. “Middle Eastern Islamic finance institutions are also active in providing Islamic finance to nonMiddle Eastern entities.”

Islamic finance: the new safe haven?

Whether Islamic finance is going to be a panacea for the global meltdown following the Wall Street collapse is anyone’s guess. If lack of liquidity is the main problem, cashrich investors from the Middle East might just be looking for a way they could maximise their opportunities right now.

For lawyers, it may mean that Islamic finance will no longer be treated as a ‘specialised area’.

Looking at the number of lawyers flooding in to the Middle East in recent months and the expansion of banking and finance teams in the region, it is apparent that law firms are increasingly shifting focus – away from the US and UK, and towards the Middle East. ALB 71

FEATURE | Islamic finance >>

broker to the Family Shari’ah Fund on its US$32m placing on the Alternative Investment Market (AIM) of the London Stock Exchange. It is the first Sharia-compliant, multiasset class fund to gain admission to AIM and will provide investors with exposure to a variety of Shariacompliant investments mainly outside the Gulf region. The placing attracted investment from wealthy individuals, families and institutional investors both in the Middle East and Europe.

“Islamic finance is very important as the sub-prime financing structures – which have been the root cause of the credit crunch – are not Shariacompliant, so Islamic banks have not been affected. Plus there is a great amount of liquidity in the Gulf-based Islamic banks because of the high oil prices in the recent past,” says Shibeer Ahmed, head of Lovells’ Dubai office.

Further afield Even economies that are traditionally closed like Japan are anxious to hop on the bandwagon. In September, the first Sharia-compliant real estate transaction was struck in Japan, with the asset manager, Atlas Partners Japan, partnering with Kuwait’s Boubyan Bank to buy three office buildings in Tokyo for ¥4.38bn (US$40m).

The buildings that Atlas and Boubyan bought were vetted according to the bedrock of Islamic finance, which bars tenants such as interest-taking ► WHAT ‘SHARIA-COMPLIANT’ MEANS IN ISLAMIC FINANCE Sharia compliance means that a particular investment or financial transaction has been conducted or structured in a manner that is considered ‘legal’ or ‘authorised’ pursuant to Islamic law. Compliance with Sharia is achieved by having a Sharia authority – either an individual or group of individuals possessing authority in matters relating to Islamic finance – approve a particular investment or type of transaction.

Most financial institutions retain a Sharia advisory board that consists of three or more scholars who are recognised as authorities in Sharia-compliant finance.

Sharia-compliant finance structures are achieved through the avoidance of interest and risk (typically understood as uncertainty or speculation) and certain types of prohibited (‘haram’) industries.

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financial institutions, restaurants that serve alcohol or pork, hotels, cinemas and record companies, and businesses dealing in arms, animal genetic engineering or pornography.

The transaction follows a recent decision by the Bank of Japan, the country’s central bank, to deepen its knowledge of Islamic finance by joining the Islamic Financial Services Board, an international standardsetting body, as an observer. Another government agency, the Japan Bank for International Cooperation, also sits on the board as an observer.

Naoki Ishikawa, a senior associate at the Japanese law firm, Mori Hamada & Matsumoto, is heading a newly formed Islamic finance team within the firm to look into how it can ride the wave. “Japan has been affected by the sub-prime mortgage crisis, and there is a liquidity shortfall in real estate financing. It is essential that we look to alternative financiers to inject new funds to maintain this area of practice,” says Ishikawa.

At the end of last year, Japan’s largest bank, Mitsubishi UFJ, forged an alliance with Malaysia’s CIMB Group to provide Islamic financial investment banking services, such as issuing Islamic bonds to Japanese companies operating in Malaysia.

Daiwa, Japan’s second-largest securities broker, announced in August that it would list a Sharia-compliant exchange-traded fund based in Singapore on an index benchmarked to the equities of the 100 largest Japanese companies by market capitalisation.

As well as the new cultural terrain that must be traversed and the financial fundamentals required to structure conventional finance instruments, lawyers also have to get the legal issues under their belts.

“The legal issues involved in looking at a deal that includes domestic Japanese banks and Islamic financiers as co-investors are much more complicated than in transactions just involving Japanese investors looking to invest in other countries.

One major concern is the variation in

the schools of thought among Sharia scholars, which vary from very strict to flexible. We need to know what level of compliance they would require for Japanese investors,” Ishikawa says.

Days after the first Sharia-compliant real estate transaction took place in Japan, ING Funds announced it would launch a new global Sharia-compliant Islamic funds unit in Malaysia during the first quarter of 2009 to sell Shariacompliant funds to investors across the Asia-Pacific. Key target markets for the new unit include China, Dubai and Hong Kong.

“We are looking to export Shariacompliant funds as the Malaysian market is not very big,” says ING Funds CEO Steve Ong. “This is the positioning we want because we would like to manufacture it for ING AsiaPacific, Europe and America.”

As of April 2008, Islamic banking assets in Malaysia totalled US$62bn, or 15.4% of the total banking assets, according to Moody’s Investors Service.

ING Funds’ existing Sharia-compliant asset portfolio is worth MYR1.56bn (US$449m).

The launch of ING Funds’ new Islamic finance unit aimed at global markets is in line with the Malaysian government’s goal to become a world hub for Islamic finance. In the 2009 budget, released in August, Malaysian Prime Minister Abdullah Ahmad Badawi announced a three-year tax holiday on fees and profits for Malaysia-based foreign currencydenominated sukuk sold overseas.

Even those in Korea are training their eyes on Islamic finance. In an effort to keep pace with global trends and take advantage of the potential for growth, the Korean Financial Supervisory Commission (FSC) has announced plans to make legislative changes to enable Korean banks to enter Islamic financial markets.

“There are many obstacles to be overcome before Korea can enjoy the fruits of the Islamic finance market,” says Chang Yong-Jae, partner at Lee & Ko. “While this is expected to be

Asian Legal Business ISSUE 8.10

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Mori Hamada & Matsumoto

model real estate financing structures the final tax on the profits distributed under the TK Agreement.

The underlying asset in Diagram 1 above is the trust beneficial interest (the ‘TBI’) to be transferred from the Originator to the SPV through a sale and purchase agreement. It is essential to convert the real estate into TBI in order to avoid the violation of the Real Estate Syndication Business Law (fudosan tokutei kyodo jigyo ho) (the ‘Law’) whereby the Operator engaging in the real estate transaction is subject to a stringent regulation that does not fit for a SPV. On the other hand, the use of TBI, as opposed to the tangible asset, is tax efficient for the SPV upon acquisition. The substantial tax payable by the SPV is only consumption tax (being 5% of the entrusted building’s element of the total TBI sales price). By contrast, in the case of a real estate sales transaction, real estate acquisition tax and registration license tax are levied in addition to consumption tax.

Murabaha is a particular kind of sale where the seller and the buyer agree to trade at a price equal to the cost plus profit.2 The Islamic investor would act as a middleman in the ordinary Murabaha transaction where it effectively provides finance to the ultimate purchaser by allowing deferred payment.

A Japanese model real estate finance structure that may substitute for Murabaha is described in Diagram 2. As explained below, this model aims to meet Sharia requirements whilst using financial leverage in the transaction as a whole.

In Diagram 2, the originator entrusts the real estate to a trustee in exchange for the TBI, and sells it to the SPV for the price of 100.

The SPV on-sells the same to Investorco at a price (the ‘Price’) of 100 plus cost, denoted by ‘α’ in the diagram. The SPV will finance the acquisition of the TBI by borrowing (70) with interest (α) from the CFI and receiving an upfront payment of the Price in part (30) from Investorco. Investorco will fund the upfront payment by TK contribution from the Islamic investor. The rest of the Price shall be deferred and will be paid by instalments resourced by the trust distributions with respect to the TBI and its sales proceeds upon exit. These deferred payments will finance the payment of interest and repayment of the loan by the SPV to the CFI. In terms of the security, the principle is that the SPV grants security over all of its assets, in favour of the CFI, for the repayment of the loan (the ‘SPV Security’), whilst the Investorco grants security over all of its assets, for the benefit of the SPV, for payment of the www.legalbusinessonline.com

instalments (the “Investorco Security”). As a matter of Japanese law, there is no need for the assignment of the Investorco Security from the SPV to the CFI since it is subject to the SPV Security by operation of law. As such, Islamic investor can remain remote from the debt facility. TK distributions should be subordinated to the payment of instalments

by Investorco, although mere subordination does not create any security interest by itself.

From the TK Investor’s perspective, it may take second raking security over the assets owned

by Investorco if necessary.

It is essential for the CFI to ensure that the debt service payments correspond to payments of the instalments. In order to facilitate such a mechanism, the sales agreement between the SPV and Investorco must have mandatory prepayment provisions that assure all outstanding instalments become due and payable when an event of default occurs under the facility agreement.

Moreover, additional cost indemnification by Investorco for the SPV should be implemented for the provision of funds to meet break costs and other expenses payable by the SPV to the CFI under the facility agreement.

Model 2 could be exempted from the application of the Law even on the basis of hard asset transaction as opposed to TBI transaction, if the sole TK Investor is an offshore entity.

However, a careful review should be conducted to determine whether such exemption applies, since it shall not apply where any solicitation takes place onshore. As such, Diagram 2 is discussed on the basis of TBI transactions.

Ijara is analogous to leasing in that it is a transfer of usufruct of a particular property to another person in exchange for rent claimed from him.3 In a situation where the Islamic investor acts as a lessor in the Ijara, coupled with a separate undertaking by the lessee to acquire the property upon termination of the lease term, the Islamic investor can effectively provide finance to the lessee in a similar form to a finance lease in conventional finance. The last model purports to implement such transaction into leveraged real estate financing.

Model 3 is based on the hard asset transaction rather than TBI since the underlying asset of the lease should be a tangible asset under Japanese law. Therefore, care should be taken to determine whether the TK is exempted from the application of the Law by the fact that the sole TK Investor is an offshore entity (see above).

In Model 3, the originator sells the real estate to the SPV that will then lease the

same to Investorco. The SPV will finance the acquisition by borrowing (70) with interest (α) from the CFI and receiving the rent (the “Master Lease Rent”) payable by Investorco (30) upfront. Investorco raises funds for the upfront payment by receiving the TK contribution whilst paying the periodical rent to the SPV from income under sublease.

Such rent will supply the source of the SPV’s interest payment. In addition, Investorco makes a separate undertaking to purchase the real estate at the end of the lease term at a price equal to the principal amount of the loan.

The security principle of Model 3 is the same as that of Model 2. In order to match the time and amount of payment of interest to the income flow of the SPV by way of rent, it would be sensible to determine the amount of the Master Lease Rent by using the same benchmark as the interest calculation under the facility agreement.

Moreover, the purchase undertaking should have certain mechanisms whereby the exercise of the undertaking shall be accelerated to ensure that it will take place simultaneously with the occurrence of the event of default under the facility agreement.

This study has described several feasible model structures that can be permissible from a Sharia perspective. Whilst the application of these models in individual transactions remains subject to further examination with Sharia scholars, this study indicates that such alternative finance arrangements under Japanese law can bolster Islamic investments in Japan and thus will help develop Japanese real estate financing.

Naoki Ishikawa is an associate focusing on banking and financial transactions at Mori Hamada & Matsumoto, a full-service law firm based in Tokyo. He read law at University of Tokyo and obtained a distinction at The London School of Economics and Political Science (LLM, Banking Law and Financial Regulation). He won the LSE Lawyers Prize for Best Dissertation and 1 Essex Court Prize for Finance Law. Naoki Ishikawa, Attorney-at-law of Mori Hamada & Matsumoto Marunouchi Kitaguchi Building, 1-6-5, Marunouchi Chiyoda-ku, Tokyo 100-8222 Japan tel: +81 3 5220 1815 email: naoki.ishikawa@mhmjapan.com website: www.mhmjapan.com 1 2 3

Justice Mufti Muhammad Taqi Usmani, An Introduction to Islamic Finance (Maktaba Ma’Ariful Qur’an, Karachi 2005) 47 Justice Usmani, 95 Justice Usmani, 158

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A blueprint of Islamic financing in Japan – tentative

T

he liquidity shortfall in the Japanese real estate finance market makes it increasingly important to seek alternative means of raising funds.

Islamic investors with strong financial capacity are undoubtedly one of the major candidates for such alternative financiers.

Albeit originating from Islamic jurisprudence, Sharia-compliant transactions are in fact achievable under Japanese law. That is, Islamic jurisprudence has developed some investment arrangements such as Mudarabah or Murabaha that are compliant with Sharia, in particular, the prohibition of Riba. These frameworks provide a solid conceptual platform to structure Japanese real estate financing that would be permissible for Islamic investors whilst using Japanese law building blocks. This study will propose some models of Japanese real estate financing with a view to help inject liquidity by raising funds from Islamic investors. The following analysis assumes that the Islamic investor would participate as an equity investor.

Mudarabah is a special kind of partnership where one partner gives money to another for investing it in a commercial enterprise.1 Amongst several Japanese legal instruments that share the key characteristics of Mudarabah, a tokumei kumiai (the ‘TK’) would be the most feasible option that may substitute Mudarabah. Under the TK, an operator (the ‘TK Operator’) conducts a certain business by using the funds contributed by a silent investor (the ‘TK Investor’). It is worthy of note that there are no material issues in differentiating each investor’s rights under the TK agreements from, not only the legal, but also the tax and accounting perspective.

As such, the TK can satisfy different type of investors seeking different positions in the same investment project.

Diagram 1 shows the structure to implement the TK in place of the Mudarabah. In Diagram 1, an Islamic investor will make TK contributions in exchange for a right to dividends, which is subordinated to that of the Preferred TK Investor. Despite the difference in the form of investment the preferred TK investment is intended to achieve similar economic outcome to the debt facility. Such substantial aspect of the arrangement provides valid grounds for the conventional financial institution (the ‘CFI’) to participate in the same transaction with the Islamic Investors. The relevant tax levied on the offshore TK Investors is a 20% withholding tax on its distributions, which is

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Asian Legal Business ISSUE 8.10

FEATURE | Islamic finance >>

T

he words ‘Islamic finance’ and ‘Sharia-compliant’ have been rolling off the tongues of lawyers around the world as the global gush on such deals deepens.

The Islamic finance market has posted strong growth everywhere in recent years. According to Standard & Poor’s, it has gone from US$500m worth of global sukuk – Islamic bonds – in 2001 to US$60bn in 2007. And, in 2007, there was about US$500bn in Shariacompliant assets worldwide.

“There is a vast amount of wealth in the Middle East as a result of petrodollars and this is spurring tremendous growth in the area of Islamic finance. And areas which did not traditionally see Islamic finance involvement, such as sukuk, are now reporting a substantial increase.

The idea is to develop more Shariacompliant products to address the economic needs of these investors,” says Abradat Kamalpour, partner in Ashurst’s London securities and structured finance (SSF) practice, specialising in Islamic finance.

The buzz about Islamic finance Sharia compliance means that a particular investment or financial transaction has been conducted or structured in a way considered ‘legal’ or ‘authorised’ pursuant to Islamic law.

Compliance with Sharia is achieved by having a Sharia authority – either an individual or group of individuals possessing authoritative status in matters relating to Sharia-compliant finance – approve the particular investment or type of transaction.

Most financial institutions retain a Sharia advisory board, which typically consists of three or more scholars who are recognised as authorities in Sharia-compliant finance and who decide whether a particular transaction is compliant.

Simply put, Sharia-compliant finance is achieved by the avoidance of interest or usury (‘riba’) and investment in prohibited (‘haram’) industries such as those to do with pork and alcoholic beverages, pornography and gambling. www.legalbusinessonline.com

“Religion governs every aspect of how this group of investors live, and that includes how they invest their money,” says Nick Bryans, managing partner of Ashurst’s Dubai office. “The purist approach in Islamic finance saw financial products that were largely uneconomic. The choice of financial instruments is more varied and more sophisticated now, compared to six or seven years ago.”

Several firms, such as Lovells, Clifford Chance, Allen & Overy and Linklaters, have finance practices that specialise in Islamic finance both in the Middle East and outside the region. For example, London has been positioning itself as Europe’s Islamic finance centre. One popular strategy currently employed by firms is to have a team – and others in capital cities, such as London – to ‘prepare’ the ground and transform non-compliant structures into financial instruments acceptable to Islamic investors.

Kamalpour advised Blomfield Cont p70 Corporate Finance as ► ISLAMIC FINANCE TERMS COMMONLY USED AND WHAT THEY MEAN • Riba: Also known as usury, it refers to interest charged, which is forbidden under Sharia, because it is thought to be exploitive.

• Haram: Means ‘prohibited’ and is usually used in Islamic banking to refer to industries such as those to do with pork and alcohol, as well as entertainment, gambling and interest-based financing. The haram lists are revised monthly

by Sharia authorities.

• Sukuk: Bonds that are Sharia-compliant. As the traditional interest-paying bond structure is not permissible under Sharia law, the issuer of a sukuk sells an investor group the certificate, which then rents it back to the issuer for a predetermined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value.

• Murubaha: A finance structure in which the seller expressly mentions the cost he has incurred on the commodities to be sold and sells it to another person by adding some profit or mark-up which is known to the buyer.

• Musharakah: A joint enterprise or partnership structure with profit-and-loss sharing instead of interest-bearing loans. Musharakah allows each party involved in a business to share in the profits and risks. Instead of charging interest as a creditor, the financier achieves a return in the form of a portion of the actual profits earned.

But unlike a traditional creditor, the financier also shares in any losses.

67

FEATURE | Islamic finance >>

Demystifying

Islamic finance Once the exclusive domain of countries in the Middle East, Islamic finance is seeing high activity as cash-rich investors from the region scout for opportunities to invest their money beyond its golden shores – just as Asian countries are rushing into Sharia-compliant deals and instruments to line their pockets with petrodollars. These days, a law firm with a finance team that can structure and execute Sharia-compliant deals is bound to stay ahead

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Asian Legal Business ISSUE 8.10

To view 4,500 jobs, free surveys and more visit

www.taylorroot.com.hk T: +852 2973 6333 For Practice roles contact Michael Luckett E: michaelluckett@taylorroot.com.hk For In-house roles contact Liam Richardson E: liamrichardson@taylorroot.com.hk

Private Practice RESTRUCTURING

HONG KONG

HONG KONG

Premier offshore firm is keen to recruit a mid-level finance lawyer for its Hong Kong office. The role offers a great opportunity for a high quality onshore lawyer to escape the long hours culture and work on a wide variety of crossborder finance deals. The team is headed up by 3 dynamic and ambitious partners making it a rewarding place to work. Ref: 5870.

3+ years

SHIPPING LITIGATION

HONG KONG

Premier shipping firm with a first class reputation in both dry and wet shipping litigation and arbitration matters is keen to recruit a mid to senior level lawyer for its Hong Kong office. The role offers an exciting opportunity to work with some of the leading names in the Asia shipping arena. Best salary package for shipping lawyers. Ref: 4412.

2-4 years

INSURANCE LITIGATION

HONG KONG

This firm has a strong reputation in the region and is looking for a litigator with at least 4 years of post qualification experience gained from well regarded law firms. The ideal candidate will have extensive insurance litigation experience and good academic qualifications. Excellent opportunity for career development. Ref: 5103.

3-7 years

REGULATORY

HONG KONG

This Magic Circle firm is looking for a junior lawyer with a keen interest in doing regulatory work. The ideal candidate will have regulatory/financial services experience, but this is not essential and candidates with a general finance background will also be considered. You will need to have excellent academics and have trained with a top firm. Ref: 5868.

0-3 years

CORPORATE PARTNER

HONG KONG

An opportunity has arisen for a senior corporate lawyer with solid M&A and FDI experience to join this US firm’s impressive and broad ranging China group.

The right candidate must have excellent English and client rapport to benefit from immediate partnership prospects and the established Fortune 500 client base. Ref: 3212.

6+ years

LITIGATION

HONG KONG

This is a rare opportunity to work with the leading litigation practice in Hong Kong. You will be involved in high profile international commercial litigation and arbitration and represent some of the biggest corporations in the world.

Chinese language skills are not needed but excellent academics are essential.

Ref: 3447.

2-5 years

COMMERCIAL IP

Liam Richardson

In-house

Leading offshore firm seeks a mid-level restructuring and insolvency lawyer for its Hong Kong office. The person would be the main R&I contact for the office and will ideally have both contentious and non-contentious insolvency experience and good contacts in the Hong Kong market. Some general corporate experience would be an advantage. Ref: 5865.

3+ years

FINANCE

Michael Luckett

HONG KONG

A large international firm with a top-tier practice is looking for a mid-level IP lawyer. You will need a good understanding of IP law and have experience in drafting various commercial contracts. The candidate will be remunerated at top of market and benefit from the low billable hours and work/life balance.

Ref: 5395.

3-6 years

SPORTS/MEDIA LAWYER

SINGAPORE

Asia’s leading sports marketing and media company now seeks an ambitious commercial lawyer to spearhead the cricket and golf businesses of the group in India, China and South East Asia. You will have solid commercial experience and proficiency in both written and spoken English. Previous experience in sports of media sector would be preferable. Ref: 5892.

3+ years

STRUCTURED CREDIT/LENDING LAWYER

HONG KONG

An opportunity to join one of the world’s leading banks awaits a lawyer with solid banking law fundamentals and experience dealing with credit and security matters. An ability to read/write Chinese, will be an advantage and experience in a common law jurisdiction is essential for this role. Opportunity arises at AVP or VP level. Ref: 5872.

4-8 years

FIXED INCOME CONTRACT

HONG KONG

Premier European investment bank is now looking for a mid-level lawyer with solid fixed income/debt capital markets experience to join the team on an initial fixed term contract of 3 months. You will ideally be available on short notice and will have strong derivatives experience, particularly structured debt securities. Great quality work. Ref: 5888.

4-6 years

PROJECTS

HONG KONG

Leading energy corporation now seeks a mid-level to senior projects lawyer to join the HK team. You will currently be working with a recognised project orientated firm with experience within the power sector highly desirable as you will be advising on acquisitions and greenfield projects in the APAC region.

Fluent Chinese highly desirable. Ref: 5862.

5+ years

HEAD OF LEGAL

HONG KONG

This rapidly expanding securities house is active in the areas of corporate finance, securities brokerage and asset management, particularly within the PRC. It now seeks a senior lawyer with solid M&A and listings experience to spearhead the legal team. Excellent alternative to partnership.

Fluent Mandarin, written and spoken, essential. Ref: 5694.

10+ years

PROPERTY

HONG KONG

Established HK based property group now seeks a junior commercial lawyer with strong property development, property leasing and estate management skills. You will have excellent drafting skills and a keen eye for detail as well as some exposure to handling contentious legal issues. Ability to read and write Chinese is essential. Ref: 5873.

3-5 years

SENIOR LAWYER - LUXURY HOTEL GROUP

HONG KONG

Prestigious hotel group with ambitious growth plans in Asia Pacific and globally is seeking an additional lawyer for its HK based legal team. Interested candidates must have previous hotel industry legal exp especially in negotiating hotel management agreements and other industry issues. Excellent opportunity. Ref: 5837.

5-8+ years

CONSTRUCTION

HONG KONG

Premier international construction group has an opening for a junior/mid-level lawyer with front end construction experience to join busy in-house team. You will gain commercial exposure to a broad range of big ticket construction and development projects throughout the region. Chinese languages a plus, good draft. Ref: 5724.

2-4 years

The SR Group | Brewer Morris | Carter Murray | Frazer Jones | SR Search | Taylor Root London | Birmingham | Manchester | Leeds | Edinburgh | Dubai | Hong Kong | Sydney | Melbourne

IN-HOUSE

PRIVATE PRACTICE

Deputy General Counsel – Leading Bank, Hong Kong

Employment Partner (8+ years’ PQE)

Rare opportunity to join this leading bank. You will focus primarily on corporate and retail banking products such as deposits, loans, credit cards, trade finance, custody, treasury, and derivatives. Candidates with at least 8 years' PQE and solid experience in banking/finance areas will be highly regarded. Excellent English and Chinese language skills are essential. Extremely competitive remuneration.

US law firm well-established in the region is seeking a senior employment lawyer (partner or senior associate level) to join its world renowned employment team.

You should have minimum 8 years’ PQE and be familiar with HK and PRC employment and labour law.

Legal Counsel – Regional Bank, Hong Kong Join this well-established regional bank as it seeks to hire a legal counsel. You will play the central role in providing legal advice to the corporate banking and treasury operations through working closely with external counsel and the compliance team. Candidates with minimum 4 years’ PQE and strong banking/financial services, investment products or regulatory experience are welcome. Fluent English and Chinese are crucial. Exciting prospects for the right candidate.

Head of Legal – Leading Financial Institution, Shanghai Superb opportunity to join this renowned US-based insurance company as the head of its legal department for all of China. Based in Shanghai, you will play the lead role in handling all legal matters and working in a truly multi-national and fast-paced setting. Candidates with at least 8 years' PQE who are PRC qualified and familiar with PRC insurance law will be in high demand. Those from both financial institutions and law firms are welcome to apply. Full Chinese and English language skills are crucial. Fantastic potential for career development.

General Counsel/Senior Legal Counsel – MNC, Hong Kong Our client is a Fortune 500 company and one of the world’s fastest growing MNCs in the manufacturing sector. It is seeking to recruit a general counsel to lead a team of lawyers. Candidates with minimum 10 yrs’ PQE and solid experience in corporate M&A, listings rules compliance and/or litigation are invited to apply. Alternatively, those with at least 5 yrs’ PQE will be considered for the Senior Legal Counsel post. Fluent English and full Chinese language skills are essential. Excellent opportunity with good work/life balance.

Head of Transaction Management – US PE Firm, Hong Kong Unique opportunity to join this rapidly expanding US-based private equity firm.

You will play the lead role in managing international real estate funds with particular focus on PRC. Candidates with solid experience in PRC-related capital markets, private equity, asset management and/or real estate investment work will be in high demand. Full set of Chinese and English language skills are essential. Exciting career prospects and unbelievable pay!

Head of Asset Management – Financial Institution, HK Join this highly-rated insurance company and take the lead to drive its continuing expansion. Candidates with at least 7 years’ experience in a reputable law firm or financial institution dealing with asset management and/or funds are sought after. Alternatively, those with solid banking & finance experience and a strong interest in funds will also be considered. Top pay for top candidates!

Vice President/Senior Manager, Compliance – Leading Bank, Hong Kong Our client is a leading retail and corporate bank in Hong Kong. It is seeking to recruit a VP in compliance to carry out the full range of compliance functions.

You will enforce all compliance controls, advise on compliance issues and develop anti-money laundering policies. Candidates with minimum 10 years' compliance and/or audit experience and knowledge of banking operations are preferred. Alternatively, those with at least 6 years' experience will be considered for the Senior Manager post.

Asset Finance Lawyer (3-5 years’ PQE) Terrific opportunity to specialise in an area of law which is currently in great demand. This global shipping firm boasts a pre-eminent asset finance practice and an impressive client list. You will provide ship and/or aircraft finance, purchase, registration etc. for a diverse range of clients throughout Asia and PRC. A very bright future awaits the right candidate.

Insurance Litigation Lawyer (3-6 years’ PQE) Our client is a reputable international law firm with a market-leading insurance practice. You will be involved in high-profile insurance litigation, arbitration and personal injury cases, often of an international nature. Candidates with minimum 3 years’ PQE and insurance litigation experience are sought after. Those with solid general litigation experience will also be considered. Fluency in English, Cantonese and Putonghua is essential.

Senior Construction Lawyer (7+ years’ PQE) International firm is looking to establish its growing construction practice. You will act for major real estate developers and potentially assist with business development in PRC. Candidates having at least 7 years’ PQE with extensive experience in PRC-related construction work and a book of business are preferred. Those with a litigation background and exposure to construction disputes will also be considered. Partnership role depending on your level of experience.

Intellectual Property Lawyer (3-6 years’ PQE) Grasp this exciting opportunity to join a prominent global law firm with its highlyregarded intellectual property practice. It is seeking a well-versed IP lawyer with solid experience of handling contentious and non-contentious trademark and/or patent work to contribute to its continued growth in the region. Preference would be given to candidates with good knowledge of IP law and commercial contracts. Diverse range of work and international clientele.

Employment Lawyer (3-5 years’ PQE) This leading City firm has a significant Asian presence. It is seeking to add a mid-ranking employment lawyer to join its employment team. You will be advising employers on issues relating to employment law, human rights, pensions and benefits. Candidates from other common law jurisdictions are extremely welcome. Fantastic remuneration scheme.

Commercial Real Estate Lawyer (3+ years’ PQE) Highly-rated international firm is looking to add a real estate lawyer to its expanding team. Working with a prestigious client base, you should have a thorough understanding of commercial leasing, sale and purchase, title review, and knowledge of property law and property finance. Excellent opportunity for an ambitious lawyer in a dynamic industry.

Please contact Eunice Chiu – Director, Head of Legal Practice, Asia at +852 2531 2209, Mb: +852 6077 1707 or email eunice.chiu@asia.psdgroup.com

PSD Group Hong Kong: 5107 Central Plaza, No. 18 Harbour Road, Wanchai, Hong Kong General Line: +852 2531 2200 Singapore : 77 Robinson Road, #14-02 Robinson 77, Singapore 068896 General Line: +65 6738 3088

http://asia.psdgroup.com PSD is part of the OPD Group & listed on LSE

Singapore • Hong Kong • Shanghai • Dubai • London • Paris • Munich • Frankfurt

9.0_la_alb_hk_hi-res.pdf

9/16/08

4:26:01 PM

PRIVATE PRACTICE

IN-HOUSE

CORP / CORP FINANCE – HONG KONG

DEPUTY HEAD OF LEGAL – HONG KONG

Prestigious firm with an established regional presence as well as a

This premier bank is seeking a highly experienced banking lawyer.

global reputation as a corporate powerhouse. They are seeking a

This is a senior product-driven position that covers both retail and

talented lawyer with solid M&A and/or corporate finance

corporate banking. You should have a strong banking and finance

experience. This is a great opportunity to join a leading practice with

background with a significant amount of time spent in-house. You

a recognized client base. Hong Kong qualification and have Chinese

must be able to read and write Chinese. This is a lucrative position

language skills – Cantonese or Mandarin is preferred but not

that will place you in a prime position for future career

mandatory. (PT1994)

advancement. (IS1061)

3 YRS+ PQE

8 YRS+ PQE

PROPERTY – JAPAN

WEALTH MANAGEMENT – HONG KONG

Our client is a global US law firm with outstanding credentials. Its

The success of our client‘s wealth management arm in Asia has led

M

highly successful real estate practice has an enviable international

to the need for an additional senior lawyer to be based in Hong

Y

and regional client list and they are seeking a dynamic and talented

Kong. You should have a banking and finance background and

CM

fund formation lawyer to join their team. Solid experience in real

candidates with private banking and structured products

MY

estate funds is essential but there is no Japanese language skill

experience are highly sought after. Chinese language skills are not

required. Great opportunity to work on sophisticated matters whilst

required. Excellent opportunity for development in a prime sector of

earning top tier salary. (PT1992)

financial services. (IS1063)

C

CY

3-5 YRS PQE

7 YRS+ PQE

CMY

K

ENERGY – HONG KONG

SENIOR GENERAL COUNSEL – TOKYO

Leading international firm renowned for its high caliber lawyers

Leading global industrial property conglomerate requires lawyer to

seeks an associate to help further develop their Energy practice.

lead the legal team of its Japanese joint venture. You will handle

Work in a newly formed team, with existing clients, on mandates to

the structuring and execution of transactions and investment

exploit opportunities for energy deals/projects in SE Asia.

management

Experience in cross border acquisitions and disposals, projects and

transactional and asset management is key. Exceptional and rare

financing in the energy sector required - M&A and Commercial

principal role in a highly anticipated and lucrative business endeavor

Contracts experience is essential. (PT1979)

in Japan. (IS1057)

3-5 YRS PQE

matters.

Real

estate

experience,

particularly

8 YRS+ PQE

LEVERAGE FINANCE – HONG KONG

FUNDS MANAGEMENT – HONG KONG

US law firm with outstanding finance credentials are now focused on

World class financial institution seeks funds lawyer to assist with

expanding their Hong Kong based leverage finance team and are

its growing investment requirements in Asia. You will be

seeking dynamic and talented banking/finance lawyers. Work within

responsible for new and existing fund matters. You will also handle

their close knit Hong Kong team on numerous advanced transactions

other investment management projects. Experience with the

with colleagues in Tokyo and London. You will ideally have banking

financial services industry is required. Exciting and lucrative career

experience from a leading international city firm. HK or UK qualified

progression with a growing financial conglomerate in a coveted

lawyers are essential for this role. (PT1993)

business sector. (IS1059)

3 YRS+ PQE

HONG KONG OFFICE Please contact James Garzon at (852) 2521 0306 or email hk@law-alliance.com

SINGAPORE OFFICE Please contact Jeremy Small at (65) 6829 7155 or email sing@law-alliance.com

5 YRS+ PQE

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

Sign off >> FoxMandal aims to keep its lawyers little

UK lawyers earning big bucks

I

A

ndian firm FoxMandal Little has launched a new yoga and gymnasium program for staff at its corporate office. The free initiative offers staff the option of either personalised or group yoga classes.

Managing partner Som Mandal says the facilities are intended to reduce stress and help employees lead happier lives, in addition to being beneficial to the firm’s bottom line. “The program is set to have a positive effect on employee commitment to work, staff turnover and recruitment, and performance productivity,” he says.

The ‘work-life balance’ mantra has been given a good run of late by law firms in Asia. Last month Singapore firm Rajah & Tann created a ‘chill-out’ room for its 600-plus employees fitted out with Nintendo Wii and Microsoft Xbox consoles and a pool table.

Top law firms excel in equality index L

aw firms Clifford Chance, Orrick Herrington & Sutcliffe, Wachtell Lipton Rosen & Katz and White & Case are among 64 firms who have boosted their chances of attracting and retaining top talent by appealing to all employees – regardless of sexual orientation.

The top four firms were part of a handful to receive a perfect score in the Human Rights Campaign Foundation’s 2009 Corporate Equality Index, billed as “a report card on lesbian, gay, bisexual and transgender (LGBT) equality in corporate America”.

Criteria considered by the foundation included nondiscrimination policies, domesticpartner benefits and diversity training, and firms such as Orrick – which earned the 100% rating for the third consecutive year – earned top scores by encouraging lawyers to participate in minority and LGBT professional associations and actively supporting the LGBT community through a combination of pro bono legal services, financial contributions and volunteerism.

80

report by Legal Business recently revealed that 2007 was a good year for UK’s corporate lawyers.

According to results, lawyers in the corporate field enjoyed an increase of 14% in profits from the previous year, with the top 100 commercial law firms earning combined revenues of £13.9bn (€17bn).

Slaughter and May nabbed first place as the most profitable firm, with a £1.7m profit per equity partner – with Freshfields (£1.4m), Linklaters (£1.2m) and Allen & Overy and Clifford Chance.(£1.1m) following closely.

2008 deal rankings to date ► TOP CHINA A-SHARE IPOs SO FAR 2008 Issue date

Issuer

28/01/2008 26/02/2008

China Coal Energy Co Ltd China Railway Construction Corp Zijin Mining Group Co Ltd Jinduicheng Molybdenum Group China South Locomotive Joyoung Co Ltd Binjiang Real Estate Group Co Guangdong Weihua Corporation Shaanxi Provincial Natural Gas Guangdong Tapai Group Co Ltd

18/04/2008 10/04/2008 6/08/2008 15/05/2008 24/05/2008 5/05/2008 31/07/2008 24/04/2008

Proceeds (US$m) 3,559 3,113 1,429 1,277 955 216 175 172 155 143

Source: Thomson Reuters

► TOP FIRMS FOR DEAL VOLUME – YEAR TO DATE (AS OF 5 SEP 2008) Legal advisor

# of deals

Value (US$m)

1. Skadden, Arps, Slate, Meagher & Flom

137

296,911

2. Latham & Watkins

180

292,436

3. Sullivan & Cromwell

94

255,712

4. Allen & Overy

162

229,472

5. Linklaters

161

196,705

41

191,958

7. Freshfields

196

188,648

8. Clifford Chance

182

180,926

9. Gibson Dunn & Crutcher

82

180,457

10. Weil Gotshal & Manges

78

174,374

25,528

2,209,456

6. Simpson Thacher & Bartlett

Industry total

Source: Thomson Reuters

Billable greeting cards L

awyers in the US now have an alternative to the monotonous greeting cards of old.

Leading US legal gift vendor The Billable Hour Company recently added 18 greeting cards and four books to its product range, featuring Law & Disorder cartoons by Australian legal humourist Paul Brennan.

The cards – which are print-on-demand – touch on a variety of legal topics and can be customised to include a personal message, logo or signature, and even a colour photo.

Asian Legal Business ISSUE 8.10